The Law of Estoppel 9781509909384, 9781509909414, 9781509909407

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THE LAW OF ESTOPPEL This work contains an account of all the forms of estoppel in operation today, including estoppel by record (res iudicata), as well as of the associated doctrine of election. There can be few practitioners who do not at some time have to engage with estoppel. Estoppel applies across all, or nearly all, English civil law. In explaining each form of estoppel, an attempt is made to state the main elements that have to be proved to establish the estoppel and then to detail each element with its various components. At the end of each chapter, a brief summary of the estoppel is included to guide practitioners through the important questions of any particular case. The law of estoppel has considerably advanced over recent decades, and over the last 10 years alone there have been major changes, such as the clarification of the previously uncertain boundaries of proprietary estoppel, a statement of the exceptions to the principles of res iudicata, and the extension of estoppel by representation to cover statements of law as well as of fact. These and other subjects are explained in full.

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The Law of Estoppel Michael Barnes QC

HART PUBLISHING Bloomsbury Publishing Plc Kemp House, Chawley Park, Cumnor Hill, Oxford, OX2 9PH, UK 1385 Broadway, New York, NY 10018, USA HART PUBLISHING, the Hart/Stag logo, BLOOMSBURY and the Diana logo are trademarks of Bloomsbury Publishing Plc First published in Great Britain 2020 Copyright © Michael Barnes QC, 2020 Michael Barnes QC has asserted his right under the Copyright, Designs and Patents Act 1988 to be identified as Author of this work. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system, without prior permission in writing from the publishers. While every care has been taken to ensure the accuracy of this work, no responsibility for loss or damage occasioned to any person acting or refraining from action as a result of any statement in it can be accepted by the authors, editors or publishers. All UK Government legislation and other public sector information used in the work is Crown Copyright ©. All House of Lords and House of Commons information used in the work is Parliamentary Copyright ©. This information is reused under the terms of the Open Government Licence v3.0 (http://www. nationalarchives.gov.uk/doc/open-government-licence/version/3) except where otherwise stated. All Eur-lex material used in the work is © European Union, http://eur-lex.europa.eu/, 1998–2020. A catalogue record for this book is available from the British Library. A catalogue record for this book is available from the Library of Congress. ISBN: HB: 978-1-50990-938-4 ePDF: 978-1-50990-940-7 ePub: 978-1-50990-939-1 Typeset by Compuscript Ltd, Shannon To find out more about our authors and books visit www.hartpublishing.co.uk. Here you will find extracts, author information, details of forthcoming events and the option to sign up for our newsletters.

This book is for Rachel, who is so very far away.

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PREFACE The purpose of this book is to set out an account of the principles and rules which together make up the doctrine of estoppel in English law. An immediate question, and a question which I have asked myself, is: what is the justification for producing such an account when there already exist a number of books which give an excellent survey and analysis of the subject? In addition, leading textbooks on other legal subjects contain explanations of some forms of estoppel. An example is that a textbook on land law could today scarcely omit the topic of proprietary estoppel. The justification which in these circumstances I have put forward for this book is threefold. First, this book does seek to provide a comprehensive account within it of all forms and areas of the law of estoppel, including estoppel by record, together with the associated subject of election. Secondly, with an area of law as far-reaching in its effect as estoppel, there may always be some benefit from a new consideration of certain problems and from a new classification of the large number of rules and sub-rules which make up the subject. Thirdly, this book attempts an approach to explanation which has become more frequent in modern legal textbooks. That approach is to examine where possible the origin and justification of rules of law rather than stating the rules with little comment. Taken to its extreme such an approach can deteriorate into a legal polemic. I believe that applied moderately and reasonably such an approach can both assist in an understanding of the law and assist in clarifying the law where there are specific elements of uncertainty. To adopt this approach may sometimes have added to the length of the text but in my opinion it is a worthwhile approach. An initial decision taken in preparing this book was whether it should include estoppel by record, one of the three forms of estoppel described by Sir Edward Coke in his Commentaries on Littleton’s Tenures published in 1628. Estoppel by record, and its main component, estoppel per rem iudicatam, is different in nature from other forms of estoppel. Nonetheless, my view is that a comprehensive account of estoppel as a doctrine should include estoppel by record. In addition, the book considers the doctrine of election which is not an estoppel but has affinities to forms of estoppel and can be usefully compared with certain forms of estoppel. Estoppel is predominantly a case law subject. I have naturally tried to include all decisions in this country on estoppel which establish some point of principle, as well as a number of decisions from other countries which apply English common law, such as Australia and New Zealand. What I have not sought to do is to include in footnotes or elsewhere all reported decisions in which estoppel is mentioned where in many decisions no new point of principle is established or discussed. Such an attempt would not have been useful or perhaps even possible. In my own experience as a legal practitioner when some question of estoppel arises I have found it useful to look first at the main rules which govern a particular form of ­estoppel and then to examine more closely any particular aspect or aspects of these rules vii

Preface which are relevant to a particular case. With this process in mind I have included at the end of each chapter on the six main forms of estoppel, and at the end of the chapter on election, a brief summary of the main rules which comprise that particular area of law. A closer examination of that which is relevant to any particular case can of course be found in the preceding text. Estoppel has a long history in English law. It has been said by Lord Denning to have been introduced by the Normans and has also been said more than once to be ‘odious’. Estoppel in its six main forms has a vigorous modern life and the nature and the essential elements of three of those forms, promissory and proprietary estoppel and estoppel by convention, have been clearly articulated in leading decisions over the last half century. An approach taken in this book is to trace for these and other forms of estoppel their origins and the development of the clear principles which today govern how the forms of estoppels are to operate. This is usually followed by a statement and then an explanation of the essential elements of the form of estoppel. I would like to record the help given to me in the task of writing this book by Mr E Caws, barrister, of Landmark Chambers in London and Ms RJ Scott, barrister and solicitor of New Zealand, of McElroys in Auckland. As always I much appreciate the help and co-operation of the publishers. Finally I express my gratitude to Mrs Janet Steel who has, as always, typed the whole of this book with speed and accuracy. Without her help the production of this book would have been impossible. Michael Barnes QC Wilberforce Chambers London June 2019

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TABLE OF CONTENTS Preface����������������������������������������������������������������������������������������������������������������������������������������� vii Table of Cases������������������������������������������������������������������������������������������������������������������������� xxvii Table of Statutes������������������������������������������������������������������������������������������������������������������������� lxi Table of Statutory Instruments����������������������������������������������������������������������������������������������� lxvii Table of International Instruments������������������������������������������������������������������������������������������ lxix Table of Overseas Material������������������������������������������������������������������������������������������������������ lxxi 1. Introduction�����������������������������������������������������������������������������������������������������������������������������1 (A) The Legal and Moral Basis of Estoppel������������������������������������������������������������������������1 (B) The Forms of Estoppel and the Doctrine of Election������������������������������������������������4 1. A List of Estoppels��������������������������������������������������������������������������������������������������4 2. General Description�����������������������������������������������������������������������������������������������5 3. Estoppel by Representation�����������������������������������������������������������������������������������7 4. Estoppel by Deed����������������������������������������������������������������������������������������������������9 5. Estoppel by Convention�����������������������������������������������������������������������������������������9 6. The Two Forms of Equitable Estoppel���������������������������������������������������������������10 7. Three Doubtful Forms of Estoppel���������������������������������������������������������������������12 8. Estoppel by Record�����������������������������������������������������������������������������������������������13 9. Reliance-Based Estoppels������������������������������������������������������������������������������������14 10. Classifications of Estoppels���������������������������������������������������������������������������������14 11. The Doctrine of Election�������������������������������������������������������������������������������������15 (C) The Nature and Characteristics of Estoppel�������������������������������������������������������������15 1. The Three Main Questions����������������������������������������������������������������������������������16 2. The First Question: The Initial Statement���������������������������������������������������������16 3. The Second Question: Events Following the Initial Statement�����������������������17 4. The Third Question: Giving Effect to the Estoppel������������������������������������������18 5. Unconscionability�������������������������������������������������������������������������������������������������18 6. Mutuality���������������������������������������������������������������������������������������������������������������21 (D) General Factors Common to Estoppels��������������������������������������������������������������������22 1. The First Factor: Intention����������������������������������������������������������������������������������22 2. The Second Factor: Reasonableness�������������������������������������������������������������������23 3. The Third Factor: Objective Test������������������������������������������������������������������������23 4. The Fourth Factor: Substantiality�����������������������������������������������������������������������24 5. The Fifth Factor: The Burden of Proof���������������������������������������������������������������27 (E) General Questions of Principle Regarding Estoppel�����������������������������������������������28 (F) Terminology������������������������������������������������������������������������������������������������������������������30 (G) The Historical Basis of Estoppel���������������������������������������������������������������������������������31 (H) The Structure of the Book�������������������������������������������������������������������������������������������33 ix

Table of Contents 2. General Questions Relating to Estoppel�����������������������������������������������������������������������������39 (A) Introduction������������������������������������������������������������������������������������������������������������������39 (B) Sword or Shield������������������������������������������������������������������������������������������������������������42 1. The Issue����������������������������������������������������������������������������������������������������������������42 2. Cause of Action�����������������������������������������������������������������������������������������������������45 (i) The General Rule���������������������������������������������������������������������������������������45 (ii) Proprietary Estoppel���������������������������������������������������������������������������������48 3. The Principle: Three Propositions����������������������������������������������������������������������49 4. The Authorities�����������������������������������������������������������������������������������������������������50 (i) The General Weight of Authority������������������������������������������������������������50 (ii) Contrary Decisions on the First Proposition�����������������������������������������53 (iii) The Result of the Authorities�������������������������������������������������������������������56 5. Conclusion�������������������������������������������������������������������������������������������������������������56 (C) Evidence or Substantive Law��������������������������������������������������������������������������������������57 1. Introduction����������������������������������������������������������������������������������������������������������57 2. The Authorities�����������������������������������������������������������������������������������������������������59 (i) A Rule of Evidence������������������������������������������������������������������������������������59 (ii) A Doctrine of Substantive Law����������������������������������������������������������������60 3. Discussion of the Principle����������������������������������������������������������������������������������61 (i) Causes of Action: Their Components and their Proof�������������������������62 (ii) Adverse Results������������������������������������������������������������������������������������������64 (iii) Representations and Assumptions of Law����������������������������������������������66 4. Practical Impact of the Description�������������������������������������������������������������������66 5. Conclusion�������������������������������������������������������������������������������������������������������������68 (D) Public Law���������������������������������������������������������������������������������������������������������������������68 1. Introduction����������������������������������������������������������������������������������������������������������68 (i) The Underlying Problem��������������������������������������������������������������������������68 (ii) A Possible Solution������������������������������������������������������������������������������������71 (iii) Public Bodies����������������������������������������������������������������������������������������������74 2. Guidance from Conflicting Authorities������������������������������������������������������������75 (i) Public Functions: Estoppel Refused��������������������������������������������������������76 (ii) Public Functions: Estoppel Allowed�������������������������������������������������������77 (iii) Private Law Actions of Public Bodies�����������������������������������������������������79 (iv) A Possible Reconciliation of the Authorities�����������������������������������������81 (v) The Reprotech Decision�����������������������������������������������������������������������������82 3. Legitimate Expectation����������������������������������������������������������������������������������������84 4. Conclusion�������������������������������������������������������������������������������������������������������������86 (E) Estoppel and Jurisdiction��������������������������������������������������������������������������������������������87 1. Introduction����������������������������������������������������������������������������������������������������������87 2. The Fundamental Rule�����������������������������������������������������������������������������������������89 (i) The Rule of Law������������������������������������������������������������������������������������������89 (ii) Supervision of Solicitors by the High Court������������������������������������������93 3. Procedural Requirements������������������������������������������������������������������������������������94 (i) The Rule: Jurisdictional and Procedural Requirements�����������������������94 (ii) Distinguishing between Jurisdictional and Procedural Requirements����� 96 4. Conclusion�������������������������������������������������������������������������������������������������������������99 x

Table of Contents  (F) Estoppel: Conflict with Statutory Provisions and Other Rules of Law�����������������99 1. Introduction����������������������������������������������������������������������������������������������������������99 2. Protection of Occupation of Property�������������������������������������������������������������103 3. Formalities�����������������������������������������������������������������������������������������������������������104 (i) General�������������������������������������������������������������������������������������������������������104 (ii) Estoppel and Contracts for the Disposition of an Interest in Land���������105 (iii) The Actionstrength Decision�������������������������������������������������������������������106 4. Other Forms of Statutory Provision�����������������������������������������������������������������109 5. Conclusion on Statutory Provisions�����������������������������������������������������������������111 (i) The General Principle�������������������������������������������������������������������������������111 (ii) The First Possible Qualification���������������������������������������������������������������113 (iii) The Second Possible Qualification����������������������������������������������������������114 6. Persons Under Disabilities��������������������������������������������������������������������������������115 7. Non-Statutory Principles�����������������������������������������������������������������������������������116 (i) The General Approach������������������������������������������������������������������������������116 (ii) Public Policy����������������������������������������������������������������������������������������������117 (G) A Uniform Doctrine��������������������������������������������������������������������������������������������������119 1. The Underlying Substratum������������������������������������������������������������������������������119 2. The Proliferation of Forms of Estoppel������������������������������������������������������������121 3. Differences between Forms of Estoppel����������������������������������������������������������122 (i) Differences between Initial Statements, Areas of Use and Subject Matter������������������������������������������������������������������������������������122 (ii) Generally Clear Boundaries���������������������������������������������������������������������124 4. A Possible Unification����������������������������������������������������������������������������������������126 (i) The Authorities������������������������������������������������������������������������������������������126 (ii) The Theory�������������������������������������������������������������������������������������������������129 (iii) A More Modest Way Forward�����������������������������������������������������������������132 (iv) Further Advances in the Doctrine of Estoppel�������������������������������������136 5. Conclusion�����������������������������������������������������������������������������������������������������������136 (H) Waiver��������������������������������������������������������������������������������������������������������������������������137 1. The Concept and Definition of Waiver������������������������������������������������������������137 2. The Various Meanings of Waiver����������������������������������������������������������������������138 (i) The General Approach������������������������������������������������������������������������������138 (ii) Classification of Meanings�����������������������������������������������������������������������140 3. A Possible Separate Meaning����������������������������������������������������������������������������145 4. Conclusion�����������������������������������������������������������������������������������������������������������148 (I) Estoppel and Third Parties����������������������������������������������������������������������������������������148 1. Introduction��������������������������������������������������������������������������������������������������������148 (i) Different Forms of Estoppel���������������������������������������������������������������������150 (ii) The Burden and the Benefit���������������������������������������������������������������������151 (iii) Interests in Land����������������������������������������������������������������������������������������151 (iv) Registration������������������������������������������������������������������������������������������������153 2. Proprietary Estoppel������������������������������������������������������������������������������������������153 (i) General Considerations����������������������������������������������������������������������������153 (ii) The Transfer of the Burden Prior to Crystallisation: The General Rule�����154 (iii) The Transfer of the Burden Prior to Crystallisation: Registration������156 xi

Table of Contents (iv) The Transfer of the Burden after Crystallisation�������������������������������157 (v) The Transfer of the Burden: The Discretion of the Court����������������159 (vi) The Transfer of the Benefit�������������������������������������������������������������������160 (vii) Chattels and Other Rights��������������������������������������������������������������������160 (viii) Summary�������������������������������������������������������������������������������������������������161 3. Promissory Estoppel������������������������������������������������������������������������������������������162 (i) Rights in Land: Transfer of the Burden����������������������������������������������162 (ii) Rights in Land: Transfer of the Benefit�����������������������������������������������164 (iii) Other Rights�������������������������������������������������������������������������������������������164 4. Estoppel by Representation�������������������������������������������������������������������������������165 (i) General Rights: Transfer of the Burden����������������������������������������������166 (ii) General Rights: Transfer of the Benefit�����������������������������������������������168 (iii) Interests in Land������������������������������������������������������������������������������������168 (iv) Ownership of Chattels��������������������������������������������������������������������������170 (v) Insolvency�����������������������������������������������������������������������������������������������172 5. Estoppel by Convention�������������������������������������������������������������������������������������174 6. Estoppel by Deed������������������������������������������������������������������������������������������������175 (i) The Basic Rule����������������������������������������������������������������������������������������175 (ii) Privies������������������������������������������������������������������������������������������������������176 (iii) Transferees of Land and the Burden of the Estoppel������������������������177 7. Estoppel by Record���������������������������������������������������������������������������������������������178 8. Conclusion�����������������������������������������������������������������������������������������������������������179 3. Estoppel by Representation������������������������������������������������������������������������������������������������182 (A) Introduction����������������������������������������������������������������������������������������������������������������182 1. Nature and Origins���������������������������������������������������������������������������������������������182 2. Relationship to Other Forms of Estoppel and to Election����������������������������184 (i) Promissory Estoppel������������������������������������������������������������������������������185 (ii) Estoppel by Deed�����������������������������������������������������������������������������������186 (iii) Estoppel by Convention������������������������������������������������������������������������186 (iv) Proprietary Estoppel�����������������������������������������������������������������������������187 (v) Estoppel by Contract�����������������������������������������������������������������������������187 (vi) The Doctrine of Election����������������������������������������������������������������������188 (B) The Essential Elements of the Estoppel�������������������������������������������������������������������188 (C) The Representation����������������������������������������������������������������������������������������������������190 1. The Nature of the Representation���������������������������������������������������������������������190 (i) A False Statement����������������������������������������������������������������������������������190 (ii) Representations of Fact and of Law�����������������������������������������������������192 (iii) Distinction between Statements of Fact and of Law�������������������������196 (iv) Mixed Law and Fact������������������������������������������������������������������������������198 (v) Statements of Opinion��������������������������������������������������������������������������199 (vi) Promises��������������������������������������������������������������������������������������������������200 2. The Content of the Representation������������������������������������������������������������������202 (i) The Need for Clarity������������������������������������������������������������������������������202 (ii) The Rule as to Inferred Representations���������������������������������������������205 (iii) Illustrations of Inferred Representations��������������������������������������������206 (iv) An Objective Test�����������������������������������������������������������������������������������208 xii

Table of Contents  3. Other Aspects of Representations��������������������������������������������������������������������209 (i) Silence or Inaction: The General Principle�����������������������������������������209 (ii) Silence or Inaction: Duty to Speak������������������������������������������������������213 (iii) Duty to Speak: The Questions Which Arise��������������������������������������214 (iv) Duty to Speak: Moral Duty������������������������������������������������������������������216 (v) Contradictions and Withdrawals: The General Principle����������������219 (vi) Contradictions: Subsequent Acts��������������������������������������������������������220 (vii) Admissions���������������������������������������������������������������������������������������������221 (viii) The Identity of the Representee�����������������������������������������������������������223 (ix) Entire Agreement and No Oral Modification Clauses����������������������225 4. The Burden of Proof�������������������������������������������������������������������������������������������227 (D) The Intention of the Representor�����������������������������������������������������������������������������228 1. The Rule of Law��������������������������������������������������������������������������������������������������228 2. An Objective Test�����������������������������������������������������������������������������������������������229 3. Foreseeability and Probability of Reliance on the Representation���������������231 4. Knowledge of Falsity of Statement�������������������������������������������������������������������233 5. The Exact Intention and Knowledge of the Representor������������������������������234 (i) Type of Act Intended�����������������������������������������������������������������������������234 (ii) Knowledge of Subsequent Acts������������������������������������������������������������236 6. The Burden of Proof�������������������������������������������������������������������������������������������238 (E) Injustice or Unconscionability: Its Components of Reliance and Detriment������������������������������������������������������������������������������������������������������������238 1. Introduction��������������������������������������������������������������������������������������������������������238 2. Reliance����������������������������������������������������������������������������������������������������������������241 (i) The Rule of Law��������������������������������������������������������������������������������������241 (ii) Causation������������������������������������������������������������������������������������������������242 (iii) Reasonableness of Actions��������������������������������������������������������������������243 3. Detriment������������������������������������������������������������������������������������������������������������245 (i) The Rule of Law��������������������������������������������������������������������������������������245 (ii) The Time of the Detriment�������������������������������������������������������������������248 (iii) Risk of Detriment����������������������������������������������������������������������������������250 (iv) Loss of a Chance and ‘Pro Tanto’ Effect����������������������������������������������252 (v) The Amount of Detriment��������������������������������������������������������������������253 4. Substantiality�������������������������������������������������������������������������������������������������������254 5. Injustice or Unconscionability��������������������������������������������������������������������������255 (i) The Requirement of Injustice���������������������������������������������������������������255 (ii) The Purpose of the Requirement���������������������������������������������������������256 (iii) Two Further Questions�������������������������������������������������������������������������258 6. The Burden of Proof�������������������������������������������������������������������������������������������259 (F) The Effect of the Estoppel�����������������������������������������������������������������������������������������259 1. The Problem��������������������������������������������������������������������������������������������������������259 (i) The Nature of the Problem�������������������������������������������������������������������259 (ii) Three Preliminary Matters�������������������������������������������������������������������261 2. The Authorities���������������������������������������������������������������������������������������������������263 (i) Decisions Prior to Howlett��������������������������������������������������������������������263 (ii) The Howlett Decision����������������������������������������������������������������������������266 xiii

Table of Contents (iii) Decisions After Howlett��������������������������������������������������������������������������268 (iv) Conclusion on the Authorities���������������������������������������������������������������271 3. Estoppel and Restitution������������������������������������������������������������������������������������273 4. The Present Law��������������������������������������������������������������������������������������������������275 (i) The First Proposition: The General Effect of the Estoppel�����������������276 (ii) The Second Proposition: Risk of Detriment����������������������������������������276 (iii) The Third Proposition: General Rejection of the ‘Pro Tanto’ Effect����277 (iv) The Fourth Proposition: Return of a ‘Pro Tanto’ Effect����������������������277 (G) Contractual Estoppel�������������������������������������������������������������������������������������������������278 1. The Meaning and Origin of the Expression����������������������������������������������������278 (i) The Freedom of Contract Principle�������������������������������������������������������279 (ii) The Rise of Contractual Estoppel����������������������������������������������������������282 2. ‘No Representation’ or ‘No Inducement’ Clauses�������������������������������������������284 3. The Status of Contractual Estoppel������������������������������������������������������������������286 (H) Estoppel by Negligence����������������������������������������������������������������������������������������������289 1. The Meaning of Estoppel by Negligence���������������������������������������������������������289 2. Instances of the Estoppel�����������������������������������������������������������������������������������291 3. Conclusion�����������������������������������������������������������������������������������������������������������293 (I) Summary���������������������������������������������������������������������������������������������������������������������294 1. General�����������������������������������������������������������������������������������������������������������������294 2. The First Element: The Representation������������������������������������������������������������295 3. The Second Element: The Intention of the Representor��������������������������������296 4. The Third Element: Injustice or Unconscionability. The Components of Reliance and Detriment��������������������������������������������������������������������������������296 5. The Effect of the Estoppel����������������������������������������������������������������������������������297 6. Contractual Estoppel������������������������������������������������������������������������������������������298 7. Estoppel by Negligence��������������������������������������������������������������������������������������299

4. Estoppel by Deed�����������������������������������������������������������������������������������������������������������������300 (A) Introduction����������������������������������������������������������������������������������������������������������������300 (B) Deeds���������������������������������������������������������������������������������������������������������������������������303 1. Formalities of a Deed�����������������������������������������������������������������������������������������303 2. The Nature of, and the Requirement for, a Deed��������������������������������������������304 3. Defects in or Relating to Deeds������������������������������������������������������������������������306 (C) The First Aspect of Estoppel by Deed: Its Essential Requirements���������������������308 1. Statement of Fact������������������������������������������������������������������������������������������������309 2. Clear and Unambiguous Statement�����������������������������������������������������������������311 (i) The Rule of Law����������������������������������������������������������������������������������������311 (ii) Implied Statements����������������������������������������������������������������������������������312 (iii) Consequences of the Rule�����������������������������������������������������������������������314 3. Statement as the Agreed Basis of the Deed�����������������������������������������������������315 4. A Claim or an Action on the Deed������������������������������������������������������������������317 5. Statement of the Party Alleged to be Estopped����������������������������������������������318 6. Injustice����������������������������������������������������������������������������������������������������������������320 7. Estoppel by Deed and Other Estoppels�����������������������������������������������������������322 (i) Estoppel by Contract�������������������������������������������������������������������������������322 xiv

Table of Contents  (ii) Estoppel by Convention��������������������������������������������������������������������������325 (iii) Conclusion������������������������������������������������������������������������������������������������326 (D) The Second Aspect of Estoppel by Deed: Interests in Land Created by Estoppel������������������������������������������������������������������������������������������������������������������327 1. Introduction��������������������������������������������������������������������������������������������������������327 2. The Historical Basis of the Two Separate Doctrines��������������������������������������328 3. The Nature of the Two Separate Doctrines�����������������������������������������������������330 4. The Differences between the Two Separate Doctrines����������������������������������333 5. Equitable Interests and Other Rights���������������������������������������������������������������335 6. Conclusion�����������������������������������������������������������������������������������������������������������336 (E) Summary���������������������������������������������������������������������������������������������������������������������337 1. General�����������������������������������������������������������������������������������������������������������������337 2. The First Aspect��������������������������������������������������������������������������������������������������338 3. The Second Aspect���������������������������������������������������������������������������������������������338 (i) General������������������������������������������������������������������������������������������������������338 (ii) The First Doctrine�����������������������������������������������������������������������������������339 (iii) The Second Doctrine�������������������������������������������������������������������������������339 5. Estoppel by Convention������������������������������������������������������������������������������������������������������340 (A) The Nature and Basis of the Estoppel����������������������������������������������������������������������340 (B) The Development of the Estoppel����������������������������������������������������������������������������343 1. Introduction��������������������������������������������������������������������������������������������������������343 2. Amalgamated Property Co v Texas Bank������������������������������������������������������� 345 3. Keen v Holland������������������������������������������������������������������������������������������������� 346 4. The India Steamship Decision���������������������������������������������������������������������������349 5. The Status of the Estoppel���������������������������������������������������������������������������������350 (C) The Main Elements of the Estoppel�������������������������������������������������������������������������351 1. The Three Main Elements����������������������������������������������������������������������������������351 2. A Comparison with Other Forms of Estoppel������������������������������������������������353 (D) The First Element: Assumed State of Fact or Law�������������������������������������������������354 1. The Nature of the Assumption��������������������������������������������������������������������������354 (i) General Nature�����������������������������������������������������������������������������������������354 (ii) Assumption that an Agreement is Binding������������������������������������������357 (iii) The Need for a Specific Assumption�����������������������������������������������������360 (iv) The Reason for the Assumption������������������������������������������������������������361 2. Proof of the Assumption������������������������������������������������������������������������������������362 (i) The Clarity Required�������������������������������������������������������������������������������362 (ii) Method of Proof���������������������������������������������������������������������������������������363 (iii) An Assumption Distinguished from a Contract and a Promise�������364 3. Assumption Relating to an Existing Transaction�������������������������������������������365 (i) The Rule and the Authorities�����������������������������������������������������������������365 (ii) Types of Pre-Existing Transactions�������������������������������������������������������367 (E) The Second Element: A Shared Assumption����������������������������������������������������������369 1. The Four Factual Situations: Crossing the Line����������������������������������������������369 2. Rules as to Crossing the Line����������������������������������������������������������������������������372 3. Acquiescence�������������������������������������������������������������������������������������������������������373 xv

Table of Contents 4. The Mental Element in Estoppel by Convention�������������������������������������������374 (i) The Mental Element Generally��������������������������������������������������������������374 (ii) Intention���������������������������������������������������������������������������������������������������375 (iii) Foreseeability��������������������������������������������������������������������������������������������376 (iv) Summary���������������������������������������������������������������������������������������������������377 (F) The Third Element: Injustice or Unconscionability�����������������������������������������������377 1. The Requirement of Injustice����������������������������������������������������������������������������377 2. The Meaning of Injustice: The Three Relevant Matters���������������������������������379 (i) The Three Components��������������������������������������������������������������������������379 (ii) The First Component: Reliance�������������������������������������������������������������380 (iii) The Second Component: Prejudice or Detriment�������������������������������381 (iv) The Third Component: The Overall Test of Unconscionability��������383 (G) The Effect of the Estoppel�����������������������������������������������������������������������������������������386 1. The General Effect of the Estoppel�������������������������������������������������������������������386 (i) Parties��������������������������������������������������������������������������������������������������������386 (ii) Partial Effect���������������������������������������������������������������������������������������������386 2. The Duration of the Estoppel����������������������������������������������������������������������������388 (H) Summary���������������������������������������������������������������������������������������������������������������������390 1. The Nature of the Estoppel��������������������������������������������������������������������������������390 2. The Assumption��������������������������������������������������������������������������������������������������391 3. Common or Shared Assumption����������������������������������������������������������������������391 4. Injustice or Unconscionability��������������������������������������������������������������������������391 5. The Effect of the Estoppel����������������������������������������������������������������������������������392 6. Promissory Estoppel������������������������������������������������������������������������������������������������������������393 (A) The Principle and its Development��������������������������������������������������������������������������393 1. The Principle�������������������������������������������������������������������������������������������������������393 2. A Principle of Equity������������������������������������������������������������������������������������������395 3. The Victorian Origins����������������������������������������������������������������������������������������396 4. The High Trees Decision������������������������������������������������������������������������������������399 5. A Line of Subsequent Decisions�����������������������������������������������������������������������401 (i) The Main Decisions and the Development of the Principle��������������401 (ii) Australian Decisions�������������������������������������������������������������������������������404 6. General Acceptance of the Principle����������������������������������������������������������������406 (B) The Essential Elements of the Estoppel�������������������������������������������������������������������408 (C) The Place of Promissory Estoppel in the Law��������������������������������������������������������410 1. Status as an Estoppel������������������������������������������������������������������������������������������410 2. Relationship to Other Forms of Estoppel and to Election����������������������������412 (i) The Common Law Estoppels�����������������������������������������������������������������412 (ii) Proprietary Estoppel�������������������������������������������������������������������������������414 (iii) The Doctrine of Election������������������������������������������������������������������������415 3. One or More Principles�������������������������������������������������������������������������������������415 4. The Doctrine of Consideration�������������������������������������������������������������������������417 (i) Variation and Rescission of Contracts��������������������������������������������������418 (ii) The Rule in Pinnel’s Case�������������������������������������������������������������������������421 xvi

Table of Contents  (iii) Promissory Estoppel and the General Doctrine of Consideration�����424 (iv) The Stilk v Myrick Principle�������������������������������������������������������������������425 (v) ‘Practical’ Consideration�����������������������������������������������������������������������428 (vi) Promissory Estoppel and the Stilk v Myrick Principle�����������������������430 (vii) Summary�������������������������������������������������������������������������������������������������432 5. The Distinction between a Contract and an Estoppel�����������������������������������433 (D) Permanent or Suspensory Effect������������������������������������������������������������������������������434 1. The Principle�������������������������������������������������������������������������������������������������������434 2. The Three Categories������������������������������������������������������������������������������������������436 (i) The Categories Distinguished���������������������������������������������������������������436 (ii) Matters Most Relevant to the Distinction�������������������������������������������437 3. The First Category: Permanent Removal of Rights����������������������������������������439 4. The Second Category: Suspension of Rights���������������������������������������������������442 5. Distinguishing between a Permanent and a Suspensory Effect�������������������443 6. The Third Category: Postponement of Payment��������������������������������������������445 7. Flexibility and Discretion����������������������������������������������������������������������������������446 (E) A Clear Promise���������������������������������������������������������������������������������������������������������449 1. Introduction��������������������������������������������������������������������������������������������������������449 2. Clear and Unequivocal Promise�����������������������������������������������������������������������450 (i) The Need for a Promise�������������������������������������������������������������������������450 (ii) The Need for Clarity�������������������������������������������������������������������������������452 (iii) Withdrawal of Promise��������������������������������������������������������������������������455 3. Inferred Promises�����������������������������������������������������������������������������������������������456 (i) The Test for Inferences���������������������������������������������������������������������������456 (ii) Negotiations, Limitation Periods and Pleadings��������������������������������458 4. A Comparison with Contractual Terms����������������������������������������������������������460 (i) Contractual and Non-Contractual Promises��������������������������������������460 (ii) Analysis����������������������������������������������������������������������������������������������������461 5. Silence and Promises������������������������������������������������������������������������������������������462 (i) General�����������������������������������������������������������������������������������������������������462 (ii) Breach of Duty Generally����������������������������������������������������������������������465 (iii) Breach of Legal Duty������������������������������������������������������������������������������466 (iv) Breach of Moral Duty�����������������������������������������������������������������������������467 6. The Meaning of the Promise: An Objective Test��������������������������������������������468 (i) The Test����������������������������������������������������������������������������������������������������468 (ii) Justification for an Objective Test���������������������������������������������������������469 7. The Mental State of the Promisor���������������������������������������������������������������������472 (i) Intention that Promise be Acted Upon������������������������������������������������472 (ii) Objective Assessment of the Intention������������������������������������������������473 (iii) Probability of Reliance and its Foreseeability�������������������������������������474 (iv) Summary of the Necessary Intention��������������������������������������������������475 8. Knowledge by the Promisor of his Rights�������������������������������������������������������475 (i) The General Rule������������������������������������������������������������������������������������475 (ii) Justification of the Rule��������������������������������������������������������������������������476 9. A Comparison with the Doctrine of Election������������������������������������������������479 xvii

Table of Contents (F) Rights under an Existing Transaction���������������������������������������������������������������������480 1. The General Principle����������������������������������������������������������������������������������������480 2. Particular Instances��������������������������������������������������������������������������������������������483 (i) Promise Made in Advance of a Contract����������������������������������������������483 (ii) Promise that a Contract Exists���������������������������������������������������������������484 (iii) Public Law������������������������������������������������������������������������������������������������487 (iv) Trespassers������������������������������������������������������������������������������������������������488 (G) Injustice or Unconscionability���������������������������������������������������������������������������������489 1. The Requirement of Showing Injustice or Unconscionability and their Meaning����������������������������������������������������������������������������������������������489 2. Reliance����������������������������������������������������������������������������������������������������������������493 (i) The Need for Reliance�����������������������������������������������������������������������������493 (ii) The Meaning of Reliance������������������������������������������������������������������������494 (iii) The Reasonableness of the Actions of the Promisee���������������������������497 (iv) The Burden and Standard of Proof on Reliance����������������������������������498 (v) Methods of Proof�������������������������������������������������������������������������������������499 3. Detriment or Prejudice��������������������������������������������������������������������������������������500 (i) The Need for Detriment��������������������������������������������������������������������������500 (ii) The Relationship between Detriment and Injustice����������������������������502 (iii) The Time of the Detriment���������������������������������������������������������������������503 (iv) The Need for Additional Detriment������������������������������������������������������504 (v) The Risk of Detriment�����������������������������������������������������������������������������506 (vi) The Amount of Detriment����������������������������������������������������������������������508 (vii) Illustrations of Detriment�����������������������������������������������������������������������509 4. Form of Relief�����������������������������������������������������������������������������������������������������510 (i) Forms of Relief Available������������������������������������������������������������������������510 (ii) Resumption of Position��������������������������������������������������������������������������512 (iii) The Minimum Equity������������������������������������������������������������������������������513 5. Conclusion on Injustice�������������������������������������������������������������������������������������514 (H) Summary���������������������������������������������������������������������������������������������������������������������516 1. The Nature and Elements of the Estoppel�������������������������������������������������������516 2. The First Essential Element: The Promise�������������������������������������������������������516 3. The Second Essential Element: Existing Rights����������������������������������������������517 4. The Third Essential Element: Injustice or Unconscionability�����������������������517 5. The Burden and Standard of Proof�������������������������������������������������������������������518 6. Giving Effect to the Estoppel�����������������������������������������������������������������������������518 7. Proprietary Estoppel������������������������������������������������������������������������������������������������������������519 (A) Introduction����������������������������������������������������������������������������������������������������������������519 1. The Character and Statement of the Principle������������������������������������������������519 2. The Historical Development of the Principle�������������������������������������������������521 (i) Introduction���������������������������������������������������������������������������������������������521 (ii) The First Phase: The Authorities������������������������������������������������������������522 (iii) The First Phase: Characteristics and Principles�����������������������������������527 (iv) The Doctrine of Part Performance��������������������������������������������������������528 (v) The Second Phase: The Trilogy of Cases�����������������������������������������������529 xviii

Table of Contents 

(vi) The Second Phase: The Emergence of a Principle�����������������������������534 (vii) The ‘Five Probanda’�������������������������������������������������������������������������������535 (viii) The Third Phase�������������������������������������������������������������������������������������538 (ix) Two Recent Leading Cases: Cobbe’s Case�������������������������������������������539 (x) Two Recent Leading Cases: Thorner v Major����������������������������������� 543 (B) The Nature and Status of the Principle��������������������������������������������������������������������546 1. Description of the Principle������������������������������������������������������������������������������546 2. Possible Categories of the Principle�����������������������������������������������������������������547 3. The Status of the Principle���������������������������������������������������������������������������������550 4. The Relationship between Proprietary Estoppel and Other Areas of Law��������������������������������������������������������������������������������������������������������552 (i) Laches������������������������������������������������������������������������������������������������������554 (ii) Promissory Estoppel������������������������������������������������������������������������������554 (iii) Unjust Enrichment or Restitution�������������������������������������������������������556 (iv) The Law of Contract������������������������������������������������������������������������������558 5. Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989������559 (i) The Background�������������������������������������������������������������������������������������560 (ii) Constructive Trusts: Meaning��������������������������������������������������������������561 (iii) Constructive Trusts: Two Particular Categories��������������������������������562 (iv) Constructive Trusts: The Overlap��������������������������������������������������������565 (v) The Issue and the Authorities���������������������������������������������������������������567 (vi) A Suggested Resolution������������������������������������������������������������������������570 (vii) Conclusion����������������������������������������������������������������������������������������������574 6. Unconscionability�����������������������������������������������������������������������������������������������575 (C) The Essential Elements of the Estoppel�������������������������������������������������������������������578 1. Description����������������������������������������������������������������������������������������������������������578 2. The Eleven Components������������������������������������������������������������������������������������580 3. The Four Main Elements�����������������������������������������������������������������������������������581 (D) The First Element: The Assurance���������������������������������������������������������������������������583 1. Nature and Types of Assurance������������������������������������������������������������������������583 (i) The Types of Assurance������������������������������������������������������������������������583 (ii) A Possible Limitation����������������������������������������������������������������������������586 (iii) The Time of the Assurance�������������������������������������������������������������������587 (iv) An Assurance of Law�����������������������������������������������������������������������������588 2. Acquiescence�������������������������������������������������������������������������������������������������������589 3. The Intention of the Giver of the Assurance���������������������������������������������������591 4. The Expectation Created�����������������������������������������������������������������������������������593 (i) Expectation of an Interest in Land������������������������������������������������������593 (ii) The Nature of the Expectation: Entitlement��������������������������������������594 (iii) Subject to Contract Agreements����������������������������������������������������������598 (iv) Agreements ‘in Honour’ Only�������������������������������������������������������������600 (v) Events Following an Assurance�����������������������������������������������������������600 (vi) Reasonable Expectation������������������������������������������������������������������������602 5. The Clarity of the Assurance�����������������������������������������������������������������������������604 (i) The ‘Clear Enough’ Test������������������������������������������������������������������������604 (ii) Application of the Test��������������������������������������������������������������������������605 xix

Table of Contents 6. An Objective Test�����������������������������������������������������������������������������������������������607 (i) The Intention of the Giver of the Assurance��������������������������������������608 (ii) The Meaning of the Assurance�������������������������������������������������������������609 (iii) Summary of the Objective Test������������������������������������������������������������611 7. The Knowledge of the Giver of the Assurance������������������������������������������������612 (i) Introduction�������������������������������������������������������������������������������������������612 (ii) Knowledge by the Giver of the Assurance of His Rights������������������612 (iii) Knowledge of the Expectation�������������������������������������������������������������614 (iv) Knowledge by the Giver of the Assurance of the Actions of the Claimant���������������������������������������������������������������������������������������615 (v) Knowledge of Mistake of the Claimant����������������������������������������������619 (vi) Knowledge of Detriment����������������������������������������������������������������������619 (vii) Nature of the Necessary Knowledge���������������������������������������������������619 (viii) Summary of the Necessary Knowledge����������������������������������������������620 8. Revocation�����������������������������������������������������������������������������������������������������������620 (i) Introduction�������������������������������������������������������������������������������������������620 (ii) The Time of the Revocation�����������������������������������������������������������������622 (iii) Other Circumstances����������������������������������������������������������������������������623 (iv) Conclusion����������������������������������������������������������������������������������������������625 9. Certainty of Land and Certainty of Interest����������������������������������������������������626 (i) Introduction�������������������������������������������������������������������������������������������626 (ii) Certainty of Extent: The Time of the Assurance�������������������������������627 (iii) Certainty of Extent: Later Fluctuations in Area��������������������������������629 (iv) Certainty of Interest������������������������������������������������������������������������������631 10. The Burden of Proof�������������������������������������������������������������������������������������������633 (i) The Burden and Standard of Proof������������������������������������������������������633 (ii) Summary of Matters Requiring Proof������������������������������������������������634 (E) The Second Element: Reliance���������������������������������������������������������������������������������636 1. The Need for Reliance����������������������������������������������������������������������������������������636 2. The Meaning of Reliance�����������������������������������������������������������������������������������637 3. The Time of the Reliance�����������������������������������������������������������������������������������639 4. Reasonableness���������������������������������������������������������������������������������������������������640 5. The Burden of Proof�������������������������������������������������������������������������������������������641 (i) The Authorities��������������������������������������������������������������������������������������642 (ii) Discussion�����������������������������������������������������������������������������������������������644 (iii) Conclusion����������������������������������������������������������������������������������������������645 (F) The Third Element: Detriment���������������������������������������������������������������������������������646 1. The Need for Detriment������������������������������������������������������������������������������������646 2. The General Nature of Detriment��������������������������������������������������������������������648 (i) General Nature���������������������������������������������������������������������������������������648 (ii) The Risk and the Amount of Detriment���������������������������������������������649 3. Particular Aspects of Detriment�����������������������������������������������������������������������650 (i) Benefit to the Maker of the Assurance������������������������������������������������651 (ii) The Person Suffering the Detriment���������������������������������������������������652 (iii) Work or Services for Reward���������������������������������������������������������������654 xx

Table of Contents  (iv) The Time and Location of the Detriment������������������������������������������654 (v) Loss of Opportunity������������������������������������������������������������������������������655 4. The Burden of Proof�������������������������������������������������������������������������������������������656 (G) The Fourth Element: Unconscionability�����������������������������������������������������������������656 (H) Property Other Than Land���������������������������������������������������������������������������������������658 1. Introduction��������������������������������������������������������������������������������������������������������658 2. The Authorities���������������������������������������������������������������������������������������������������660 3. Conclusion�����������������������������������������������������������������������������������������������������������661 (I) Form of Relief or Remedy�����������������������������������������������������������������������������������������661 1. Introduction��������������������������������������������������������������������������������������������������������661 2. The Purpose of the Estoppel�����������������������������������������������������������������������������663 (i) Giving Effect to the Assurance�������������������������������������������������������������663 (ii) Compensation for Detriment��������������������������������������������������������������665 (iii) The Minimum Equity����������������������������������������������������������������������������667 (iv) Conclusion����������������������������������������������������������������������������������������������669 3. Forms of Order���������������������������������������������������������������������������������������������������670 (i) Proprietary Interests������������������������������������������������������������������������������671 (ii) Right to Occupy Land���������������������������������������������������������������������������672 (iii) Payment of a Sum of Money����������������������������������������������������������������673 4. Relevant Considerations������������������������������������������������������������������������������������674 (i) Effect on Third Parties��������������������������������������������������������������������������674 (ii) Financial Position and Needs of the Parties���������������������������������������675 (iii) Social Security Benefits�������������������������������������������������������������������������676 (iv) Taxation and Company Law����������������������������������������������������������������677 (v) The Conduct of the Parties�������������������������������������������������������������������678 5. Other Matters������������������������������������������������������������������������������������������������������679 (i) Events After the Order��������������������������������������������������������������������������679 (ii) The Nature of Rights of Occupation: The Three Possibilities����������680 (iii) The First Possibility: A Life Interest����������������������������������������������������681 (iv) The Second Possibility: A Lease�����������������������������������������������������������681 (v) The Third Possibility: A Licence����������������������������������������������������������682 (vi) Appeals����������������������������������������������������������������������������������������������������684 (vii) Refusal of Relief�������������������������������������������������������������������������������������685 (viii) The Wish of the Claimant���������������������������������������������������������������������686 (ix) Giving Effect to the Order��������������������������������������������������������������������686 (J) Summary���������������������������������������������������������������������������������������������������������������������687 1. The Nature of the Estoppel��������������������������������������������������������������������������������687 2. The Main Elements of the Estoppel�����������������������������������������������������������������688 3. The Assurance�����������������������������������������������������������������������������������������������������688 4. Identified Property���������������������������������������������������������������������������������������������689 5. Reliance����������������������������������������������������������������������������������������������������������������690 6. Detriment������������������������������������������������������������������������������������������������������������690 7. Unconscionability�����������������������������������������������������������������������������������������������690 8. The Burden of Proof�������������������������������������������������������������������������������������������690 9. Form of Relief�����������������������������������������������������������������������������������������������������691 xxi

Table of Contents 8. Election����������������������������������������������������������������������������������������������������������������������������������692 (A) Introduction����������������������������������������������������������������������������������������������������������������692 (B) Equitable Election������������������������������������������������������������������������������������������������������695 (C) Common Law Election���������������������������������������������������������������������������������������������696 1. The Nature of an Election����������������������������������������������������������������������������������696 (i) The Leading Authorities and the Background�����������������������������������696 (ii) Future Rights and Continuing or Repeated Breaches�����������������������701 (iii) General Irrevocability of an Election��������������������������������������������������702 (iv) Inference of a New Contract or Relationship������������������������������������703 (v) Election and Estoppel by Record���������������������������������������������������������703 2. The Definition of Common Law Election and its Four Essential Elements��������������������������������������������������������������������������������������������������������������704 (i) The Four Essential Elements����������������������������������������������������������������704 (ii) A Possible Extended Doctrine�������������������������������������������������������������706 3. The First Element: Inconsistent Rights or Remedies�������������������������������������708 (i) Types of Inconsistent Rights and Remedies���������������������������������������708 (ii) Two or More Inconsistent Rights��������������������������������������������������������711 (iii) The Distinction between Rights and Remedies���������������������������������712 (iv) Remedies: The Time of an Election�����������������������������������������������������714 (v) Remedies: Procedural Steps�����������������������������������������������������������������715 (vi) Remedies: The Ambit of Election��������������������������������������������������������717 (vii) Remedies: Summary������������������������������������������������������������������������������719 (viii) Statutory Provisions������������������������������������������������������������������������������720 4. The Second Element: The Decision to Elect���������������������������������������������������721 (i) The Need for a Decision�����������������������������������������������������������������������721 (ii) Decision and Intention: The Objective Test���������������������������������������721 (iii) The Burden of Proof������������������������������������������������������������������������������724 5. The Third Element: The Necessary Knowledge����������������������������������������������725 (i) Knowledge of Facts: The Rule of Law�������������������������������������������������725 (ii) Knowledge of Facts: Constructive Knowledge����������������������������������727 (iii) Knowledge of Facts: Imputed Knowledge������������������������������������������729 (iv) Knowledge of Facts: The Burden of Proof������������������������������������������730 (v) Knowledge of Rights: The Rule of Law�����������������������������������������������731 (vi) Knowledge of Rights: Constructive and Imputed Knowledge��������733 (vii) Knowledge of Rights: The Burden of Proof����������������������������������������735 6. The Fourth Element: Communication of the Decision���������������������������������736 (i) The Rule of Law��������������������������������������������������������������������������������������736 (ii) Clear and Unequivocal Evidence: The Principle�������������������������������736 (iii) Clear and Unequivocal Evidence: Illustrations of the Principle������738 (iv) Election to Terminate a Contract��������������������������������������������������������740 (v) Silence or Inactivity�������������������������������������������������������������������������������741 (vi) Reservation of Rights����������������������������������������������������������������������������742 7. No Requirement of Reliance or Detriment�����������������������������������������������������744 8. The Operation of the Doctrine�������������������������������������������������������������������������744

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Table of Contents  9. Contractual Provisions Affecting Election������������������������������������������������������746 (i) Express Provisions on Election��������������������������������������������������������������747 (ii) Determination of Contracts for Breach by Notice and at Common Law�������������������������������������������������������������������������������748 10. Election and Other Methods of Loss of Rights�����������������������������������������������750 (i) Loss of Rights Generally�������������������������������������������������������������������������750 (ii) Election and Promissory Estoppel��������������������������������������������������������752 (D) Summary���������������������������������������������������������������������������������������������������������������������755 1. The Underlying Nature of Election������������������������������������������������������������������755 2. Equitable Election�����������������������������������������������������������������������������������������������755 3. Common Law Election��������������������������������������������������������������������������������������755

9. Estoppel by Record��������������������������������������������������������������������������������������������������������������757 (A) Introduction����������������������������������������������������������������������������������������������������������������757 1. Nature and Categories of the Estoppel������������������������������������������������������������757 (i) Nature of the Estoppel�����������������������������������������������������������������������������757 (ii) Appeals and the Doctrine of Precedent������������������������������������������������760 (iii) Categories and Principles of the Estoppel��������������������������������������������761 (iv) Procedure��������������������������������������������������������������������������������������������������765 (B) Judgments�������������������������������������������������������������������������������������������������������������������766 1. General�����������������������������������������������������������������������������������������������������������������766 2. Judgments and Actions in Rem and in Personam�����������������������������������������768 (i) The General Distinction�������������������������������������������������������������������������768 (ii) Admiralty Actions in Rem����������������������������������������������������������������������770 3. Final Judgments��������������������������������������������������������������������������������������������������772 (i) Interlocutory Orders�������������������������������������������������������������������������������773 (ii) Declaratory Judgments���������������������������������������������������������������������������775 (iii) Other Matters�������������������������������������������������������������������������������������������776 4. Fraud or Collusion���������������������������������������������������������������������������������������������776 (i) Fraud or Perjury���������������������������������������������������������������������������������������776 (ii) Collusion or Bias��������������������������������������������������������������������������������������778 5. Judgments Not on the Merits and Procedural Orders�����������������������������������779 (i) Judgments on the Merits�������������������������������������������������������������������������779 (ii) Procedural and Other Similar Types of Order������������������������������������781 (iii) Procedural Orders: Summary����������������������������������������������������������������787 (iv) The Third Principle of Estoppel by Record������������������������������������������787 6. Lack of Jurisdiction��������������������������������������������������������������������������������������������788 (C) Cause of Action Estoppel������������������������������������������������������������������������������������������790 1. Introduction��������������������������������������������������������������������������������������������������������790 2. The Doctrine of Merger�������������������������������������������������������������������������������������792 3. Identity of Subject Matter����������������������������������������������������������������������������������795 (i) The Rule of Law����������������������������������������������������������������������������������������795 (ii) Continuing Breaches�������������������������������������������������������������������������������795 (iii) Meaning of Identity of Subject Matter��������������������������������������������������796 (iv) Judgments on Facts at a Particular Time����������������������������������������������799 xxiii

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(v) Categories of Decisions��������������������������������������������������������������������������800 (vi) Summary of Possible Defences�������������������������������������������������������������801 4. Cross-Estoppels and Counter-Estoppels���������������������������������������������������������802 (i) Cross-Estoppels��������������������������������������������������������������������������������������802 (ii) Counter-Estoppels����������������������������������������������������������������������������������805 (D) Issue Estoppel�������������������������������������������������������������������������������������������������������������805 1. Nature of the Estoppel���������������������������������������������������������������������������������������805 2. Aspects of Issue Estoppel�����������������������������������������������������������������������������������808 (i) Identity of the Issue��������������������������������������������������������������������������������808 (ii) Collateral Issues��������������������������������������������������������������������������������������812 (iii) Nature and Form of the Previous Decision�����������������������������������������814 (iv) An Issue and a Finding of Fact on an Issue�����������������������������������������814 (v) Reasons for a Decision���������������������������������������������������������������������������817 (vi) Different Types of Decision as Components of a Judgment�������������818 (vii) The Purpose and the Parties������������������������������������������������������������������818 3. Comparison with Other Principles������������������������������������������������������������������819 (i) The Rule in Henderson v Henderson���������������������������������������������������819 (ii) Common Law Election��������������������������������������������������������������������������820 (E) Parties and Privies������������������������������������������������������������������������������������������������������820 1. General Principles����������������������������������������������������������������������������������������������820 (i) Parties�������������������������������������������������������������������������������������������������������820 (ii) Capacity of Parties����������������������������������������������������������������������������������822 (iii) Privies�������������������������������������������������������������������������������������������������������823 2. Categories of Privity�������������������������������������������������������������������������������������������824 (i) Privity of Title or Estate�������������������������������������������������������������������������824 (ii) Privity of Interest: The General Rule����������������������������������������������������825 (iii) Privity of Interest: Illustrations of the Rule�����������������������������������������827 (F) Particular Areas of Law���������������������������������������������������������������������������������������������829 1. Public Law and Judicial Review������������������������������������������������������������������������830 (i) Public Law Generally�����������������������������������������������������������������������������830 (ii) Judicial Review: The Problem���������������������������������������������������������������831 (iii) Judicial Review: Analysis�����������������������������������������������������������������������834 2. Protection of Children���������������������������������������������������������������������������������������837 (G) Courts and Tribunals�������������������������������������������������������������������������������������������������837 1. Courts of Record������������������������������������������������������������������������������������������������838 2. Tribunals��������������������������������������������������������������������������������������������������������������838 3. Domestic and Disciplinary Tribunals��������������������������������������������������������������839 4. Ecclesiastical Courts�������������������������������������������������������������������������������������������841 5. Arbitrations���������������������������������������������������������������������������������������������������������841 (H) Foreign Judgments�����������������������������������������������������������������������������������������������������842 1. Introduction��������������������������������������������������������������������������������������������������������842 2. The Common Law Rules�����������������������������������������������������������������������������������843 3. The Statutory Provisions������������������������������������������������������������������������������������845 (i) The Judgments (Reciprocal Enforcement) Act 1933�������������������������845 (ii) Section 34 of the Civil Jurisdiction and Judgments Act 1982�����������848 xxiv

Table of Contents  (I) Exceptions�������������������������������������������������������������������������������������������������������������������850 1. Introduction��������������������������������������������������������������������������������������������������������850 2. The Two Exceptions�������������������������������������������������������������������������������������������851 (i) The First Exception: Cause of Action Estoppel�����������������������������������852 (ii) The Second Exception: Issue Estoppel��������������������������������������������������853 (iii) Summary of the Exceptions�������������������������������������������������������������������855 3. The Zodiac Decision�������������������������������������������������������������������������������������������856 (i) The Substance of the Decision���������������������������������������������������������������856 (ii) Other Matters�������������������������������������������������������������������������������������������858 4. The Patent Cases�������������������������������������������������������������������������������������������������861 (J) The Rule in Henderson v Henderson����������������������������������������������������������������������861 1. The Nature and Status of the Rule��������������������������������������������������������������������861 2. The Development of the Rule���������������������������������������������������������������������������864 3. Aspects of the Application of the Rule�������������������������������������������������������������867 (K) Summary���������������������������������������������������������������������������������������������������������������������870 1. Nature of Estoppel by Record���������������������������������������������������������������������������870 2. Judgments������������������������������������������������������������������������������������������������������������871 3. Cause of Action Estoppel����������������������������������������������������������������������������������872 4. Issue Estoppel������������������������������������������������������������������������������������������������������873 5. Parties and Privies����������������������������������������������������������������������������������������������874 6. Foreign Judgments���������������������������������������������������������������������������������������������874 7. Exceptions�����������������������������������������������������������������������������������������������������������875 8. The Rule in Henderson v Henderson���������������������������������������������������������������876 Glossary������������������������������������������������������������������������������������������������������������������������������������ 877 Index����������������������������������������������������������������������������������������������������������������������������������������� 889

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TABLE OF CASES References are to paragraph number Abbey National Building Society v Cann [1991] 1 AC 56, HL��������������������������������������������4.85 Abouloff v Oppenheimer & Co (1882) 10 QBD 295�������������������������������������������������������������9.38 Actionstrength Ltd v International Glass Engineering SpA [2003] UKHL 17, [2003] 2 AC 541���������������������������������������������� 2.141, 2.142, 2.143, 2.144, 2.151, 2.153, 3.82, 5.26, 5.30, 5.34, 7.16, 7.83, 7.85, 7.89 Adams v Naylor [1946] AC 543, HL�������������������������������������������������������������������������� 2.112, 3.162 AG Securities v Vaughan [1990] 1 AC 417, HL��������������������������������������������������������������������2.135 Ahmad Yar Khan v Secretary of State for India (1901) LR 28 LA 211������������������������������2.235 Ajayi (t/a Colony Carrier Co) v RT Briscoe (Nigeria) Ltd [1964] 1 WLR 1326, PC (Nig)������������������������������������������������������2.57, 6.17, 6.27, 6.89, 6.92, 6.95, 6.99, 6.111, 6.160, 6.191, 6.197, 6.210, 6.213 Ako v Rothschild Asset Management Ltd [2002] EWCA Civ 236, [2002] 2 All ER 693, [2002] ICR 899������������������������������������������������������������ 9.45, 9.54, 9.165 Aksionairnoye Obschestvo AM Luther v James Sagor and Co [1931] 3 KB 532�������������9.190 Aldi Stores Ltd v WSP London Ltd [2007] EWCA Civ 1260, [2008] 1 WLR 748�������������������������������������������������������������������������� 9.132, 9.226, 9.231, 9.232, 9.234, 9.237 Algar v Middlesex CC [1945] 2 All ER 243������������������������������������������������������������������ 2.85, 3.52 Alghussein Establishment v Eton College [1988] 1 WLR 587������������������������� 3.58, 3.95, 6.131 Allcard v Skinner (1887) 36 Ch D 145������������������������������������������������������������������������������������8.82 Allegheny College v National Chautauqua County Bank 246 NY 369 (1927)���������������������������������������������������������������������������������������������������������������6.53 Allen v Rescous (1676) 2 Lev 174�������������������������������������������������������������������������������������������2.163 Allen v Robles [1969] 1 WLR 1193������������������������������������������������������������������������������������������8.94 Allied Maples Group v Simmons & Simmons [1995] 1 WLR 1602 ��������������������� 3.134, 6.201 Allied Marine Transport Ltd v Vale Do Rio Doce Navegacao SA [1985] 1 WLR 925�����������������������������������������������������������������������������������������3.51, 6.125, 6.189 Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2011] UKPC 7, [2012] 1 WLR 1804, PC (Isle of Man)��������������������������������������������������������������9.98 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, [1981] 2 WLR 554, QBD���������2.184, 6.183, 6.184, 6.195, 7.2, 7.51, 7.53, 7.209, 8.120

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Table of Cases Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, CA; [1982] QB 84, [1981] 2 WLR 554, QBD�������������������������������� 1.2, 1.5, 1.72, 2.16, 2.27, 2.29, 2.32, 2.46, 2.56, 2.104, 2.127, 2.183, 2.189, 2.190, 3.114, 3.139, 3.188, 5.8, 5.9, 5.10, 5.16, 5.21, 5.28, 5.44, 5.45, 5.59, 5.64, 5.74, 5.79, 5.90, 6.183, 7.2, 7.51 American Cyanamid Co v Ethicon Ltd [1975] AC 396, HL�������������������������������������������������9.28 Amherst v James Walker Goldsmith & Silversmith Ltd [1983] Ch 305�����6.125, 6.181, 6.208 Andre & Cie SA v Euro Asian Investments Corporation [2001] All ER (D) 23 (Feb), QBD�������������������������������������������������������������������������������������������������9.178 Antaios Naviera SA v Salen Rederierna AB [1983] 1 WLR 1362����������������������������������������8.99 Aquis Estate Ltd v Minton [1975] 1 WLR 1452�����������������������������������������������������������������������8.1 Ardandhu, The (1887) 12 App Cas 256, HL���������������������������������������������������������������������������9.54 Argo Systems FZE v Liberty Insurance (Pte) Ltd [2011] EWCA Civ 1572, [2012] 2 All ER (Comm) 126������������������3.48, 3.51, 6.125, 6.133 Argy Trading Development Co Ltd v Lapid Developments Ltd [1977] 1 WLR 444�������6.139 Argyle Motors (Birkenhead) Ltd v Birkenhead Corporation [1975] AC 99, HL�����������������7.1 Aristocrat Property Investments v Harounoff (1982) 2 HLR 102, CA���������������������� 2.32, 5.16 Armagas Ltd v Mundogas SA (The Ocean Frost) [1986] AC 717, HL��������������������������������3.46 Armstrong v Sheppard & Short Ltd [1959] 2 QB 384, CA��������������������������������������� 7.29, 7.159 Armstrong v Whitfield [1974] QB 16, DC������������������������������������������������������������������ 9.22, 9.156 Arnold v Britton [2015] UKSC 36, [2015] AC 1619��������������������������� 3.40, 6.122, 6.123, 6.137 Arnold v National Westminster Bank Plc [1991] 2 AC 93, HL��������9.7, 9.10, 9.65, 9.71, 9.90, 9.196, 9.197, 9.198, 9.200, 9.201, 9.202, 9.203, 9.205, 9.206, 9.207, 9.210, 9.211, 9.213, 9.214, 9.215, 9.221, 9.224 Ashburn-Anstalt v Arnold [1989] Ch 1�������������������������������������������������2.227, 2.244, 4.87, 7.23, 7.121, 7.254, 7.306 Ashmore v British Coal Corporation [1990] 2 QB 338�������������������������������������������������������9.224 Ashpitel v Bryan (1863) 3 B & S 474, (1864) 5 B & S 723���������������������������������� 3.191, 4.33, 5.8 Assaubayev v Michael Wilson & Partners Ltd [2014] EWCA Civ 1491, [2015] CP Rep 10���������������������������������������������������������������������������������������������������������������2.113 Associated Electric and Gas Insurance Services Ltd v European Reinsurance Co of Zurich [2003] UKPC 11, [2003] 1 WLR 1041�����������������������������������������������������6.170 Associated Provincial Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223, CA������������������������������������������������������������������������������������������������������������2.97 Attorney General v Balliol College, Oxford (1744) 9 Mod 407����������������������������������������������7.6 Attorney General v Blake [2001] 1 AC 268, HL���������������������������������������������������������������������9.72 Attorney General v Codner [1973] 1 NZLR 545������������������������������������������������������������������6.160 A-G of Belize v Belize Telecom Ltd [2009] UKPC 10, [2009] 1 WLR 1988�����������������������4.28 Attorney General of Hong Kong v Fairfax Ltd [1997] 1 WLR 149, PC (HK) �������������������������������������������������������������������������������������������������������2.211, 7.114, 8.119 xxviii

Table of Cases  Attorney General of Hong Kong v Humphreys Estate (Queen’s Gardens) Ltd [1987] AC 114, PC (HK)������������������ 5.30, 5.32, 6.109, 6.168, 7.36, 7.125, 7.132, 7.134, 7.137 Attorney General to the Prince of Wales v Collom [1916] 2 KB 193��������������� 1.8, 7.30, 7.108 Attrill v Dresdner Kleinwort Ltd [2013] EWCA Civ 394, [2013] 3 All ER 607���������������6.138 Auckland Harbour Board v Kaihe [1962] NZLR 68������������������������������������������������������������6.107 Augier v Secretary of State for the Environment (1979) 38 P & CR 219�������������������������������������������������������������������������������������������������� 2.63, 2.82, 6.170 Avon County Council v Howlett [1983] 1 WLR 605, CA����������������������1.63, 2.53, 2.112, 3.26, 3.45, 3.141, 3.146, 3.152, 3.154, 3.156, 3.157, 3.158, 3.159, 3.160, 3.161, 3.162, 3.163, 3.164, 3.165, 3.166, 3.167, 3.168, 3.169, 3.170, 3.171, 3.175, 3.176, 3.178, 3.180, 3.181, 3.182, 3.184, 3.187, 3.212, 3.247, 3.248, 6.216, 9.40, 9.43 Ayr Harbour Trustees v Oswald (1883) 8 App Cas 623, HL (Scot)�������������������������������������2.64 Azov Shipping Co v Baltic Shipping Co (No 3) [1999] 2 All ER (Comm) 453, [1999] 2 Lloyd’s Rep 159, QBD������������������������������������������������������ 6.53, 6.133 Badar Bee v Habib Merican Noordin [1909] AC 615, PC (Straits Settlements)�������������������������������������������������������������������������������������������� 1.72, 9.1, 9.65 Baden v Societe Generale [1993] 1 WLR 509�������������������������������������������������������������������������8.69 Bader Properties v Linley Property Investments Ltd (1967) 19 P & CR 620����������� 8.91, 8.92 Bahia and San Francisco Railway Company, Re (1868) LR 3 QB 584���������������������������������2.28 Baird Textile Holdings Ltd v Marks & Spencer Plc [2001] EWCA Civ 274, [2002] 1 All ER (Comm) 737����������������������������������������2.20, 2.21, 2.22, 2.27, 2.31, 2.185, 3.89, 3.185, 5.64, 6.104, 6.107, 6.126, 6.139, 6.141, 6.165, 6.166, 7.257 Baker v Baker (1993) 25 HLR 408, CA������������������������������������� 2.247, 7.31, 7.266, 7.269, 7.271, 7.290, 7.292, 7.294, 7.309 Baker v Dewey (1823) 1 B & C 704������������������������������������������������������������������������������������������4.20 Baldock v Webster [2004] EWCA Civ 1869, [2006] QB 315������������������������������������������������9.63 Ballantyne v MacKinnon [1896] 2 QB 455�����������������������������������������������������������������������������9.19 Bandon v Becher (1853) 3 Cl & F 479�������������������������������������������������������������������������������������9.40 Bank of Scotland v Hussain [2010] EWHC 2812 (Ch)�������������������������������������������������������2.158 Bankart v Tennant (1870) LR 10 Eq 141��������������������������������������������������������7.192, 7.194, 7.206 Bankers Trust Co v Namdar [1997] (unreported)�����������������������������������������������������������������7.83 Bankruptcy Notice, Re A [1924] 2 Ch 76���������������������������������������������������������2.149, 2.153, 3.18 Banner Homes Plc v Luff Developments Ltd [2000] 2 All ER 117, CA������������������������������7.86 Banner Industrial & Commercial Properties Ltd v Clark Paterson Ltd [1990] 2 EGLR 139, [1990] 47 EG 64, ChD������������������� 6.191, 6.192, 6.204, 8.64, 8.80 Banning v Wright [1972] 1 WLR 972�������������������������������������������������������������2.200, 2.204, 2.211 Barnhart v Greenshields (1853) 9 Moo PC 1��������������������������������������������������������������������������8.65 Barratt (Bros) Ltd v Davies [1966] 1 WLR 1334������������������������������������������������������������������2.217 Barrow v Bankside Members Agency Ltd [1996] 1 WLR 257�������������������������������� 9.221, 9.224 Barton v London and North Western Rly Co (1889) 24 QBD 77����������������������������������������3.53 Basham decd, Re [1986] 1 WLR 1498�����������������������7.2, 7.76, 7.98, 7.106, 7.186, 7.219, 7.257 xxix

Table of Cases Bass Holdings v Morton Music [1988] Ch 493��������������������������������������������������������������������6.206 Bater v Bater [1906] P 209���������������������������������������������������������������������������������������������������������9.22 Battashill v Reed (1856) 18 CB 696������������������������������������������������������������������������������������������9.72 Bay of Plenty Electricity Ltd v Natural Gas Corporation Energy Ltd [2002] 1 NZLR 173, NZCA����������������������������� 1.75, 2.260, 2.265, 2.266, 2.267, 2.276, 2.279, 3.82, 9.130, 9.138 BDW Trading Ltd (t/a Barratt North London) v JM Rowe (Investments) Ltd [2011] EWCA Civ 548, [2011] 20 EG 113 (CS)�����������������������������8.100 Beale v Harvey [2003] EWCA Civ 1883, [2004] 2 P & CR 18�������������������������������� 7.236, 7.272 Beardsley v Beardsley [1899] 1 QB 746�����������������������������������������������������������������������������������9.22 Beawfage’s Case (1572) Co Rep 101a��������������������������������������������������������������������������� 2.215, 8.13 Bell v Holmes [1956] 1 WLR 1359�������������������������������������������������������������������������������������������9.95 Bell v Marsh [1903] 1 Ch 528, CA�������������������������������������������������������������2.41, 3.42, 3.52, 3.210 Bentsen v Taylor Sons & Co (No 2) [1893] 2 QB 274�����������������������������������������������������������3.29 Berezovsky v Abramouich [2011] EWCA Civ 153, [2011] 1 WLR 2290����������������������������2.19 Bernardi v Motreux (1781) 2 Doug 575����������������������������������������������������������������������������������9.19 Berridge v Benjies Business Centre [1997] 1 WLR 53, PC (Antigua)������������ 2.44, 2.48, 3.163 Berrisford v Mexfield Housing Co-operative Ltd [2011] UKSC 52, [2012] 1 AC 955������4.69 Bethell Construction Ltd v Deloitte & Touche [2011] EWCA Civ 1321��������������������������6.128 Bexley LBC v Maison Maurice Ltd [2006] EWHC 3192 (Ch), [2007] 1 EGLR 19������������2.85 Biddle v Bond (1865) 6 B & S 225��������������������������������������������������������������������������������������������4.86 Bignall Developments Ltd v Halil [1988] Ch 190������������������������������������������������������������������8.68 Billson v Residential Apartments Ltd [1992] 1 AC 494������������������������������������� 8.42, 8.51, 8.93 Birch v Wright (1786) 1 TR 378����������������������������������������������������������������������������������������8.1, 8.93 Bird v Hildage [1948] 1 KB 91������������������������������������������������������������������������������������������������6.117 Birkdale District Electric Supply Company v Southport Corporation [1926] AC 355�����2.64 Birkett v Acorn Business Machines Ltd [1999] 2 All ER (Comm) 429�����������������������������2.162 Birmingham v Kirwan (1805) 2 Sch & Lef 444������������������������������������������������������������������������8.2 Birmingham and District Land Co v London and North Western Rly Co (1889) 49 Ch D 268, CA������������������������������������������������ 2.223, 2.254, 6.7, 6.10, 6.11, 6.12, 6.13, 6.14, 6.27, 6.37, 6.50, 6.88, 6.90, 6.114, 6.115, 6.157, 6.173, 6.180, 6.206, 7.4 Bishop of Bath’s Case (1605) 6 Co Rep 34a���������������������������������������������������������������������������7.184 Bisset v Wilkinson [1927] AC 177, PC (NZ)���������������������������������������������������������������� 3.31, 3.33 Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591��������������������������������������������������������������������������� 9.181, 9.182, 9.183, 9.185 Bliss v South East Thames Regional Health Authority [1987] ICR 700������������������������������8.79 Blomqvist v Zavarco Plc [2016] EWHC 1143 (Ch), [2016] Bus LR 907, [2016] All ER (D) 146 (May)������������������������������������������������������������������������������������ 3.44, 3.77 Bloomenthal v Ford [1897] AC 156, HL���������������������2.275, 3.1, 3.15, 3.18, 3.74, 3.112, 3.139 Blundell v Baugh (1633) Jones W 315�������������������������������������������������������������������������������������4.68 Board v Board (1873) LR 9 QB 48�����������������������������������������������������������������������������������������9.130 Bocardo SA v Star Energy UK Onshore Ltd [2010] UKSC 35, [2011] 1 AC 380������������7.189 Bolkiah v State of Brunei Darussalam [2007] UKPC 63�������������������������������������������������������6.56 Bostock v Bryant (1991) 61 P & CR 23���������������������������������������������������������������������������������7.231 xxx

Table of Cases  Bottin International Investments Ltd v Venson Group plc [2006] EWHC 3112 (Ch), [2006] All ER (D) 111 (Dec)�����������������������������������������������3.194 Bowman v Taylor (1834) 2 Ad & E1 278�������������������������������������������������������������� 4.23, 4.24, 4.35 Boyter v Thomson [1995] 2 AC 628, HL���������������������������������������������������������������������������������8.15 BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783�������������������� 6.1, 6.24, 6.95, 6.105, 6.181 Bradford and Bingley Building Society v Seddon [1999] 1 WLR 1482�����������������������������9.224 Braithwaite v Winwood [1960] 3 All ER 642������������������������������������������������������������ 6.117, 6.139 Brampton v Scowles Cro Car 434��������������������������������������������������������������������������������������������4.68 Brandon v Robinson (1811) 18 Ves 429��������������������������������������������������������������������������������7.300 Bremer Handels GmbH v C Mackprang Jr (No 1) [1979] 1 Lloyd’s Rep 221������� 6.148, 6.151 Bremer Handels GmbH v Vanden-Avenne Izegem PVBA [1978] 2 Lloyd’s Rep 109, HL������������������������������������������������ 3.48, 6.133, 6.148, 6.149, 7.151 Bremer Vulkan Schiffbau Und Maschinenfabrik v South India Shipping Corporation Ltd [1981] AC 909, HL�����������������������������������������������������������������3.63 Brendon v Spiro [1938] 1 KB 176�������������������������������������������������������������������������������������������2.114 Brennan v Bolt Burdon [2004] EWCA Civ 1017, [2005] 1 QB 303�������������������������������������3.20 Briggs v Gleeds [2014] EWHC 1178 (Ch), [2015] Ch 212�������������������������������� 3.20, 3.23, 3.31 Brikom Investments Ltd v Carr [1979] QB 467, CA����������������������������2.181, 2.258, 3.80, 6.81, 6.162, 6.188 Brikom Investments Ltd v Seaford [1981] 1 WLR 863�������������������������3.29, 3.35, 3.156, 3.160, 6.100, 6.210 Brimnes, The [1975] QB 929, CA���������������������������������������������������������������������������������������������8.33 Brisbane City Council v Attorney General for Queensland [1979] AC 411, PC (Aus)���������������������������������������������������������������������������������������������������9.224 British Launderers’ Research Association v Hendon Borough Rating Authority [1949] 1 KB 462, CA������������������������������������������������������������������������������������������������������������3.28 British Steel Corporation v Cleveland Bridge and Engineering Co Ltd [1984] 1 All ER 504������������������������������������������������������������������������������������������������������������7.133 Brogden v Metropolitan Rly Co (1877) 2 App Cas 666, HL�����������������������������������������������6.126 Brooke v Haynes (1868) LR 6 Eq 25����������������������������������������������������������������������������������������4.17 Brooks and Burton Ltd v Secretary of State for the Environment [1977] 1 WLR 1294��������2.79 Brown v Gregson [1920] AC 860, HL����������������������������������������������������������������������������������������8.8 Brunsden v Humphrey (1884) 14 QBD 141����������������������������������������������������������������� 9.74, 9.76 Bruton v London & Quadrant Housing Trust [2000] 1 AC 406, HL����������������������������������4.69 Brutus v Cozens [1973] AC 854, HL����������������������������������������������������������������������������������������3.28 BskyB Ltd v BHP Enterprise Services UK Ltd [2010] EWHC 86 (TCC), [2010] BLR 267�������������������������������������������������������������������������������������������������������������������3.195 Burbery Mortgage Finance & Savings Ltd v Hindsbank Holdings Ltd [1989] 1 NZLR 356������������������������������������������������������������������������������������������������ 6.107, 6.157 Burgis v Constantine [1908] 2 KB 484, CA����������������������������������������������������������������������������4.34 Burkinshaw v Nicholls (1878) 3 App Cas 1004, HL������������������������������������������������ 2.275, 3.112 Burmah Oil Co Ltd v Lord Advocate [1965] AC 75, HL������������������������������������������������������2.63 Burman v Woods [1948] 1 KB 111�������������������������������������������������������������������������������� 9.80, 9.82 Business Environment Bow Lane Ltd v Deanwater Estates Ltd [2007] EWCA Civ 622, [2007] L & TR 26������������������������������������������������������������������������3.80 xxxi

Table of Cases Butcher v Stapley (1686) 1 Vern 363����������������������������������������������������������������������������������������7.16 Buttes Gas & Oil Co v Hammer (No 3) [1982] AC 888, HL������������������������������������������������9.29 Byrne v Frere (1828) 2 Mol 157������������������������������������������������������������������������������������������������9.54 C (A Minor) v Hackney LBC [1996] 1 WLR 789, CA���������������������������������������������������������9.224 Cairncross v Lorimer (1860) 3 LT 130, HL (Sc)���������������������������������������������������������������������6.11 Calabar Properties Ltd v Seagull Autos Ltd [1969] 1 Ch 451, ChD����������������� 8.42, 8.51, 8.93 Calgary Milling Co Ltd v American Surety Co of New York (1919) 3 WWR 98, PC (Can)���������������������������������������������������������������������������������������������������5.8, 5.41 Campbell v Griffin [2001] EWCA Civ 990, (2001) 82 P & CR DG23������������������� 7.281, 7.286 Canada and Dominion Sugar Co Ltd v Canadian National (West Indies) Steamships Ltd [1947]AC 46, PC (Can)����� 1.5, 2.15, 2.28, 2.42, 3.11, 3.38, 3.112, 3.121, 3.163, 7.98 Canadian Pacific Railway Co v The King [1931] AC 414, PC (Can)���������������������������� 7.23, 7.61, 7.109, 7.284 Canal Property Co Ltd v KL Television Services Ltd [1970] 2 QB 433�������������������������������8.93 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, HL���� 1.5, 9.1, 9.3, 9.7, 9.13, 9.15, 9.28, 9.29, 9.47, 9.50, 9.55, 9.70, 9.91, 9.97, 9.99, 9.106, 9.121, 9.123, 9.124, 9.127, 9.135, 9.139, 9.176, 9.177, 9.179, 9.184, 9.187, 9.190, 9.199 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 3) [1970] Ch 506, ChD�������� 9.4, 9.13, 9.14, 9.28, 9.29, 9.42, 9.65, 9.88, 9.91, 9.97, 9.101, 9.125, 9.133, 9.157, 9.177 Carltona v Commissioners of Works [1943] 2 All ER 560���������������������������������������������������2.65 Carmichael v National Power Plc [1999] 1 WLR 2042, HL�������� 3.29, 3.48, 6.137, 7.152, 8.58 Carpenter v Buller (1841) 8 M & W 209���������������������������������������������������������������� 4.40, 4.41, 5.8 Carr v London and North Western Rly Co (1875) LR 10 CP 307�������3.18, 3.98, 3.116, 3.121 Carter v Ahsan [2007] UKHL 51, [2008] 1 AC 696���������������������������������������������������������������2.44 Case at 1 Roll Abr 873, C25���������������������������������������������������������������������������������������������������������4.1 Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048, CA������������������������������������������������������� 8.22, 8.56, 8.60, 8.62, 8.73, 8.98 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, KBD���������������������������������������������������1.60, 1.73, 2.15, 2.19, 2.29, 2.66, 2.68, 2.183, 2.214, 2.223, 2.253, 2.257, 3.34, 3.36, 3.39, 3.89, 6.6, 6.11, 6.12, 6.13, 6.14, 6.15, 6.20, 6.21, 6.26, 6.27, 6.29, 6.31, 6.36, 6.37, 6.38, 6.40, 6.42, 6.50, 6.51, 6.53, 6.62, 6.86, 6.93, 6.98, 6.99, 6.111, 6.126, 6.134, 6.139, 6.160, 6.173, 6.181, 6.188, 6.190, 6.197, 6.198, 6.207, 6.210, 7.30, 7.140, 8.122, 9.16 Central Newbury Car Auctions Ltd v Unity Finance Ltd [1957] 1 QB 371����������� 1.75, 2.185 Chadwick v Abbotswood Properties Ltd [2004] EWHC 1058 (Ch), [2005] 1 P & CR 10������������������������������������������������������������������������������������������������������������7.123 xxxii

Table of Cases  Challis v Destination Marlborough Trust Board Inc [2003] 2 NZLR 107���������������� 2.91, 2.96 Chalmers v Pardoe [1963] 1 WLR 677, PC (Fiji)�������������������������������������������������������������������7.89 Chamber Colliery Ltd v Twyerould [1915] 1 Ch 268������������������������������������������������������������3.88 Chambers v Pardoe [1963] 1 WLR 677���������������������������������������������������������������������������������2.148 Chaplin v Hicks [1911] 2 KB 786������������������������������������������������������������������������������� 6.201, 7.269 Charles Rickards Ltd v Oppenheim [1950] 1 KB 616, CA��������������������������������� 6.14, 6.46, 6.84 Charlesworth v Relay Roads Ltd [2000] 1 WLR 230, ChD��������������������������������������� 7.297, 9.35 Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 58, [2009] 1 AC 1101����� 4.44, 5.50 Cheesman v Exall (1851) 6 Exch 341���������������������������������������������������������������������������������������4.86 Chesterfield and Midland Silkstone Colliery Co v Hawkins (1865) 3 H & C 677���������������4.6 Chestertons v Barone [1987] 1 EGLR 15, CA��������������������������������������������������������������� 8.24, 8.51 CHF Chevreau Haeute und Felle AG v Conceria Vigriola Nobile [2000] All ER (D) 1841������������������������������������������������������������������������������������������������������9.178 China National Foreign Trade Transportation Corporation v Evlogia Shipping Co SA of Panama [1979] 1 WLR 1018������������������������������������������� 8.40, 8.61, 8.88 China-Pacific SA v Food Corporation of India [1981] QB 403������������������6.104, 6.122, 6.135 China-Pacific SA v Food Corporation of India [1982] AC 939, HL��������������������� 6.122, 6.135 Chrisdell v Johnson (1987) 54 P & CR 257����������������������������������������������������������������� 6.153, 8.65 Christou v Haringey LBC [2013] EWCA Civ 178, [2014] QB 131������9.16, 9.28, 9.165, 9.235 Chun (Chan Pui) v Ho (Leung Kam) [2002] EWCA Civ 1075, [2003] 1 FLR 23������������7.147 Church of England Building Society v Piskor [1954] Ch 553����������������������������������������������4.85 Citizens’ Bank of Louisana v First National Bank of New Orleans (1873) LR 6 HL 352�������������������������������������������������������������������������������������� 3.2, 3.18, 6.7, 6.30 City and Westminster Properties (1954) Ltd v Mudd [1959] Ch 129�����������������������������������6.5 Clark v Clark [2006] EWHC 275 (Ch), [2006] 1 FCR 421���������������������������7.98, 7.229, 7.281, 7.283, 7.297, 7.310 Clarke v Cobley (1789) 2 Cox 173�����������������������������������������������������������������������������������������2.157 Clarke v Swaby [2007] UKPC 1, (2007) 2 P & CR 2������������������������������������������������������������7.231 Clarkson Booker Ltd v Andjel [1964] 2 QB 775��������������������������������������������������������������������8.24 Clough v London and North Western Rly Co (1871) LR 7 Exch 26�������8.13, 8.42, 8.61, 8.95 Clutterbuck v Cleghorn [2017] EWCA Civ 137, [2017] All ER (D) 222 (Mar)���������������9.232 Clyne v Yardley [1959] NZLR 617, NZSC������������������������������������������������������������������������������9.95 Coastal Estates Pty Ltd v Melevende [1965] VR 433�������������������������������������������������������������8.77 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752���������������������������������������������������������������������1.1, 1.2, 1.6, 1.23, 1.44, 1.45, 1.54, 1.70, 1.73, 2.21, 2.150, 2.169, 2.178, 2.179, 2.183, 2.185, 2.189, 3.30, 3.35, 3.110, 3.138, 3.208, 5.82, 6.27, 6.109, 6.176, 7.3, 7.13, 7.20, 7.24, 7.29, 7.30, 7.31, 7.32, 7.33, 7.34, 7.35, 7.36, 7.37, 7.38, 7.39, 7.42, 7.43, 7.44, 7.50, 7.54, 7.60, 7.61, 7.70, 7.71, 7.78, 7.81, 7.95, 7.100, 7.104, 7.109, 7.127, 7.128, 7.129, 7.131, 7.133, 7.135, 7.136, 7.137, 7.144, 7.193, 7.250, 7.257, 9.214 Cobbold v Greenwich LBC (1999, Court of Appeal, unreported, Peter Gibson LJ)��������������������������������������������������������������������������������������������������������� 3.71, 8.45 Codrington v Codrington (1875) LR 7 HL 854�����������������������������������������������������������������������8.1 xxxiii

Table of Cases Coflexip SA v Stolt Offshore MS Ltd (No 2) [2004] EWCA Civ 213, [2004] FSR 708��������9.217 Colchester Borough Council v Smith [1991] Ch 448����������������������������������������������������������3.192 Colchester Borough Council v Smith [1992] Ch 421, CA���������������������������3.192, 3.193, 3.195 Collier v P & MJ Wright (Holdings) Ltd [2007] EWCA Civ 1329, [2008] 1 WLR 643������������������������������������������������������������������������������������6.12, 6.47, 6.50, 6.85 Combe v Combe [1951] 2 KB 215����������������������������������������� 2.19, 2.161, 2.190, 6.3, 6.15, 6.26, 6.51, 6.68, 6.170, 7.57 Commissioners of Stamp Duties v Bone [1977] AC 511, PC (Aus)������������������������������������6.44 Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394, HCA����������������������������������������������������������1.23, 2.21, 2.85, 2.185, 2.204, 3.70, 3.170, 6.18, 6.19, 6.96, 6.100, 6.117, 6.119, 6.160, 6.197, 6.210, 6.214, 6.215, 7.193, 7.216, 7.273, 7.278, 8.5, 8.33, 8.49, 8.77, 8.116, 8.121 Conquer v Boot [1928] 2 KB 336�����������������������������������������������������������������9.8, 9.65, 9.74, 9.170 Constantine Steamship Line Ltd v Imperial Smelting Corp Ltd [1942] AC 154, HL�������������������������������������������������������������������� 1.60, 2.195, 3.83, 3.83, 3.108, 5.42, 6.187, 7.195, 8.85 Coombes v Smith [1986] 1 WLR 808, ChD����������������������������������������� 7.29, 7.227, 7.241, 7.249 Cooper v Cooper (1874) LR 7 HL 53����������������������������������������������������������������������������������������8.7 Co-operative Wholesale Society Ltd v Chester-le-Street District Council (1997) 73 P & CR 111, Lands Tr����������������������������������������������������������� 6.117, 6.160 Co-operative Wholesale Society Ltd v Chester-le-Street District Council [1998] 3 EGLR 11, CA������������������������������������������������������������������������������������������5.49 Co-operative Wholesale Society Ltd v Westminster Bank Plc [1995] 1 EGLR 97, CA�������������������������������������������������������������������������������������������������������������������6.123 Coote v Ford [1899] 2 Ch 93�����������������������������������������������������������������������������������������������������9.46 Cornillie v Saha (1996) 77 P & CR 147�����������������������������������������������������������������������������������8.70 Couchings v Bassett (1862) 32 Beav 101�����������������������������������������������������������������������������������7.9 Couldery v Bartrum (1881) 19 Ch D 394�������������������������������������������������������������������������������6.47 Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374��������������2.95 Covell v Sweetland [1968] 1 WLR 146������������������������������������������������������3.30, 3.43, 3.52, 3.124 Coventry, Sheppard & Co v Great Eastern Railway Co (1883) 11 QBD 776 ������ 3.114, 3.208 CP Holdings Ltd v Dugdale (1998) (unreported)�������������������������������������������������������� 4.18, 5.44 Crabb v Arun District Council [1976] Ch 179, CA�����������1.6, 2.85, 2.178, 2.179, 2.255, 4.53, 6.34, 6.78, 6.96, 6.99, 6.107, 6.115, 6.215, 7.4, 7.20, 7.28, 7.30, 7.37, 7.53, 7.58, 7.95, 7.98, 7.103, 7.106, 7.108, 7.109, 7.111, 7.121, 7.122, 7.150, 7.166, 7.167, 7.176, 7.193, 7.239, 7.254, 7.262, 7.273, 7.275, 7.281, 7.292 Crabbe v Townsend [2016] EWHC 2450 (Ch), [2017] WTLR 13����������������������������� 5.57, 5.70 Cracknall v Janson (1879) 11 Ch D 1����������������������������������������������������������������������������������������4.6 Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305, HCA����������������������������������������������������������������������������������������7.161, 7.169, 8.121 Craine v Colonial Mutual Fire Insurance Co Ltd [1922] 2 AC 541, PC (Aus)������������������������������������������������������������������������������������������������ 7.161, 8.121 xxxiv

Table of Cases  Credit Suisse v Allerdale Borough Council [1995] 1 Lloyd’s Rep 315 (aff ’d on other grounds [1997] QB 306, CA���������������������������������������������������������������������5.69 Creery v Summersell and Flowerdew & Co Ltd [1949] Ch 751������������������������ 8.19, 8.56, 8.60 Cristina, The; Compania Naviera Vascongado v SS Cristina [1938] AC 485, HL�������������9.26 Croft v Lumley (1858) 6 HL Cas 672���������������������������������������������������������6.155, 8.13, 8.93, 8.98 Cropper v Smith (1884) 24 Ch D 700, CA������������������������������������������������������������������������������4.14 Crossco No 4 Unlimited v Jolan Ltd [2011] EWCA Civ 1619, [2012] 2 All ER 754; [2011] EWHC 803 (Ch), [2011] NPC 38�����������1.54, 1.57, 5.6, 5.55, 5.70, 6.24, 6.144, 6.184 Cuthbertson v Irving (1859) 4 H & N 742�������������������������������������������������������������������� 4.66, 4.68 D & C Builders Ltd v Rees [1966] 2 QB 617, CA�����������������������������5.84, 6.16, 6.47, 6.48, 6.51, 6.72, 6.83, 6.178, 6.195, 7.252 Dalkia Utilities Services Plc v Celtech International Ltd [2006] EWHC 63 (Comm), [2006] 2 P & CR 9��������������������������������������������������������������������������8.111 Dalton v Fitzgerald [1897] 2 Ch 86�����������������������������������������������������������������2.264, 2.285, 9.130 Dann v Spurrier (1802) 7 Ves Jun 231���������������������������������������������������������7.9, 7.18, 7.25, 7.113 Daulia Ltd v Four Millbank Nominees Ltd [1978] Ch 231�������������������������������������������������7.134 Davenport v R (1877) 3 App Cas 115���������������������������������������������� 2.77, 2.84, 2.101, 8.17, 8.98 David Blackstone v Burnetts (West End) [1973] 1 WLR 1487����������������������������������� 8.60, 8.72 Davies v Davies [2016] EWCA Civ 463, [2017] 1 FLR 1286����������������������������������������������7.278 Davies v Taylor [1974] AC 207, HL���������������������������������������������������������������������������������������6.201 Dawson v Great Northern Rly Co [1905] 1 KB 260������������������������������������������������ 2.264, 2.286 De Bruyn v De Bruyn [2010] EWCA Civ 519, [2010] 2 FLR 1240��������������������������������������7.78 De Bussche v Alt (1878) 8 Ch D 286���������������������������������������������������������������������������������������7.50 De Lasalle v Guildford [1901] 2 KB 215��������������������������������������������������������������������������������6.162 De Tchihatchef v Salerni Coupling Ltd [1932] 1 Ch 330����� 2.27, 3.19, 3.29, 3.123, 3.126, 5.8 Dean v Bruce [1952] 1 KB 11����������������������������������������������������������������������������������������������������6.14 Debtor No 13-A10 of 1995, Re [1995] 1 WLR 1127������������������������������������������������������������8.102 Deeley’s Patent, Re [1896] AC 496, HL; [1895] 1 Ch 687, CA ������������������������������������������9.126 Delaforce v Simpson-Cook [2010] NSWCA 84, (2010) 78 NSWLR 483��������������������������7.278 Desert Sun Loan Corporation v Hill [1996] 2 All ER 847�������������������������������������� 9.102, 9.179 Deutsche Bank v Beriro & Co (1895) 73 LT 669 �����������������������������������������������������������������3.124 Dexter Ltd (In Administrative Receivership) v Vlieland-Boddy [2003] EWCA Civ 14, (2003) 147 SJLB 117, [2003] All ER (D) 221 (Jan)���������9.15, 9.226, 9.234 Dickinson v UK Acorn Finance Ltd [2015] EWCA Civ 1194, [2016] HLR 293, [2015] All ER (D) 226 (Nov)���������������������������������������������������������������������������2.131 Dillwyn v Llewelyn (1862) 4 De GF & J 517���������������������������������� 1.72, 2.235, 7.18, 7.19, 7.20, 7.22, 7.23, 7.24, 7.36, 7.100, 7.106, 7.109, 7.111, 7.130, 7.161, 7.165, 7.193, 7.281 Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 2 AC 111, PC (HK) ����������������������������������������������������������������������������������������������� 3.114, 7.213 Distributors and Warehousing Ltd, Re [1986] BCLC 129����������������������������������������������������4.26 District Bank Ltd v Webb [1958] 1 WLR 148�������������������������������������������������������������������������4.23 Dixon v Blindley Heath Investments Ltd [2015] EWCA Civ 1023, [2017] Ch 389������������������������������������� 1.9, 1.19, 2.36, 2.41, 2.51, 5.6, 5.8, 5.21, 5.38, 5.40, 5.41, 5.42, 5.58, 5.65 xxxv

Table of Cases Dixon v Kennaway [1900] 1 Ch 823����������������������������������������������������������������������������������������3.76 Doberman v Watson [2017] EWHC 1708 (Ch), [2017] 4 WLR 103�����������������������������������9.62 Dodsworth v Dodsworth [1993] 228 EG 1115, CA������������������������������������������������� 7.290, 7.295 Doe d Bailey v Foster (1846) 3 CB 215������������������������������������������������������������������������������������4.69 Doe d Johnson v Baytup (1835) 3 Ad & El 158����������������������������������������������������������������������4.87 Doe d Marchant v Errington (1839) 6 Bing (NC) 79�������������������������������������������������� 2.282, 4.6 Doe d Nash v Birch (1836) 1 M & W 402�������������������������������������������������������������������������������8.60 Doe d Sheppard v Allen (1810) 3 Taunt 78�����������������������������������������������������������������������������8.94 Doe v Derby (1834) 1 Ad & El 783����������������������������������������������������������������������������������������9.128 Downberry Construction Ltd v Secretary of State for Transport, Local Government and the Regions [2002] EWHC 2 (Admin), [2002] All ER (D) 01 (Jan)��������������������3.118 DPP v Humphrys [1977] AC 1, HL����������������������������������������������������������������������������������9.2, 9.38 Dreamgate Properties Ltd v Arnot (1998) 76 P & CR 25������������������������������������������������������8.22 Drexel Burnham Lambert International NV v El Nasr [1986] 1 Lloyd’s Rep 356�����������������������������������������������������������������������������6.104, 6.122, 6.158 Driscoll v Church Commissioners for England [1957] 1 QB 330���������������������������������������8.93 DSV Silo-und Verwaltungsgesellschaft mbH v Sennar (Owners), The Sennar (No 2) [1985] 1 WLR 490������������������������������ 9.5, 9.28, 9.42, 9.43, 9.178, 9.179 Duchess of Argyll v Duke of Argyll [1967] Ch 302�������������������������������������������������������������7.294 Duchess of Kingston’s Case (1776) 20 St Tr 355, (1776) 1 Leach 146�������1.72, 9.2, 9.16, 9.37, 9.89, 9.101, 9.168, 9.176 Duchess of Kingston’s Case (1776) 2 Sm L C 7th edn, 792�������������������������������������������������9.126 Duchess of Kingston’s Case (1776) 2 Sm L C 9th edn, 945 ������������������������������������������������3.153 Dudley Muslim Association v Dudley MBC [2015] EWCA Civ 1123, [2016] 1 P & CR 10��������������������������������������������������������������������������������������������������������������2.96 Duke of Beaufort v Patrick (1853) 17 Beav 60������������������������������������������2.234, 2.237, 7.3, 7.12 Duke of Devonshire v Eglin (1851) 14 Beav 530��������������������������������� 7.12, 7.273, 7.281, 7.310 Duke of Leeds v Earl of Amhurst (1846) 2 Ph 117�������������������������������������������������� 2.157, 7.113 Dun & Bradstreet Software Services (England) Ltd v Provident Mutual Life Assurance Association [1998] 2 EGLR 175, CA������������������������������������������� 6.34, 6.107 Dunhill v Burgin [2014] UKSC 18, [2014] 1 WLR 933�������������������������������������������������������2.158 Durham v EAI (Run Off) Ltd [2008] EWHC 2692 (QB), [2009] 2 All ER 26�������������������5.53 Durham Fancy Goods Ltd v Michael Jackson (Fancy Goods) Ltd [1968] 2 QB 839������������������������������������������������������������������������������������������������������ 6.159, 6.160 Eagle Trust Plc v SBC Securities Ltd [1993] 1 WLR 484�������������������������������������������������������8.68 Eaglesfield v Marquis of Londonderry (1876) 4 Ch D 693���������������������������������������������������3.30 Earl of Oxford’s Case (1615) 1 Rep Ch 1�����������������������������������������������������������������������������������7.8 Ease Faith Ltd v Leonis Marine Management [2006] EWHC 232 (Comm), [2006] 1 Lloyd’s Rep 673�������������������������������������������������������������������������������������������� 5.72, 5.81 East India Company v Vincent (1740) 2 Atk 84�����������������������������������������������������������������������7.8 Eastwood v Ashton [1915] AC 900, HL��������������������������������������������������������������������������������7.184 Eastwood v Kenyon (1840) 11 Ad & El 438������������������������������������������������������������������������������6.3 Eaves, Re [1940] Ch 169����������������������������������������������������������������������������������������������������������7.169 Edgington v Fitzmaurice (1885) 29 Ch D 459������������������������������������������3.36, 5.42, 6.31, 6.184 Edlin v Battaly (1674) 2 Levinz 152�������������������������������������������������������������������������������������������7.6 Edwards (Inspector of Taxes) v Bairstow [1956] AC 14, HL������������������������������������������������3.26 xxxvi

Table of Cases  E H Lewis & Son Ltd v Morelli [1948] 2 All ER 1021������������������������������������������������������������4.76 Eight Representative Claimants v MGN Ltd [2016] EWHC 855 (Ch), [2016] 3 Costs LO 413����������������������������������������������������������������������������������������������� 8.28, 8.29 Electrolux Ltd v Electrix Ltd (No 2) (1953) 71 RPC 23, CA�������������������������������������������������7.29 Ellis v Lambeth LBC (1999) 32 HLR 596, [1999] All ER (D) 768, CA�������������������������������3.53 Ely v Robson [2016] EWCA Civ 774, [2017] 1 FLR 1704, [2016] All ER (D) 140 (Jul)�������7.72 Emery v UCB Corporate Services Ltd [2001] EWCA Civ 675, [2001] All ER (D) 226 (Apr)���������������������������������������������������������������������������� 6.1, 6.24, 6.192 Empire Life Insurance Co v Neufeld Estate (unreported) 24 April 1998, British Columbia����������������������������������������������������������������������������������������������������������������3.170 Equity & Law Life Assurance Society Plc v Bodfield Ltd [1987] 1 EGLR 124, CA����������������������������������������������������������������������������������������������������� 9.196, 9.197 ER Ives (Investment) Ltd v High [1967] 2 QB 379, CA�����������������������2.146, 2.235, 7.30, 7.53, 7.108, 7.147, 7.169, 7.305 Ernst & Young v Butte Mining Plc [1996] 1 WLR 1605��������������������������������������������������������3.63 Essex County Council v Essex Incorporated Congregational Church Union [1963] AC 808, HL������������������������������������������������������������������������������������������������� 2.108, 2.116 Esso Petroleum Co Ltd v Mardon [1976] QB 801���������������������������������������������������������������6.162 Estate of Park, In the [1954] P 112�����������������������������������������������������������������������������������������2.158 Evans v Atticus Healthcare Ltd [2003] EWHC 2161 (Fam), [2004] 2 WLR 713�������������6.158 Evans v Bartlam [1937] AC 473, HL����������������������������������������������������������������������������������������8.77 Evans v Bicknell (1801) 6 Ves 174�������������������������������������������������������������������������������������3.2, 3.95 Evenden v Guildford City Association Football Club Ltd [1975] QB 917, CA����������������������������������������������������������������������������������������2.121, 6.71, 6.158 Evia Luck, The (No 2); Dimskal Shipping Co SA v International Transport Workers’ Federation [1992] 2 AC 152, HL������������������������������������������������������������� 6.16, 6.58 Ewart v Fryer [1902] AC 187, HL��������������������������������������������������������������������������������������������8.70 Exchange Securities & Commodities Ltd (In Liquidation), Re [1988] Ch 46��������������������������������������������������������������������������� 1.63, 2.41, 2.57, 2.79, 2.147, 2.276, 2.277, 2.285, 2.289, 2.294, 3.101, 3.164, 8.1 Expert Clothing Service & Sales Ltd v Hillgate House Ltd [1986] Ch 340���������8.32, 8.60, 8.91, 8.92, 8.98, 8.107 Express Newspapers Plc v News (UK) Ltd [1990] 1 WLR 1320������������������������� 8.1, 8.27, 8.28 Eyestorm Ltd v Hoptonacre Homes Ltd [2007] EWCA Civ 1366, [2007] All ER (D) 284 (Dec)������������������������������������������������������������������������������������� 5.22, 6.15 Farmer v Cotton’s Trustees [1915] AC 922, HL����������������������������������������������������������������������3.28 Farquharson v Morgan [1894] 1 QB 552�������������������������������������������������������������������������������2.108 Farquharson Brothers & Co v King & Co [1902] AC 325, HL�������������������������������������������6.125 Farrow v Orttewell [1943] Ch 480, CA�����������������������������������������������������2.30, 3.19, 3.44, 3.124 Fenner v Blake [1900] 1 QB 426����������������������������������������������������������������������������������� 6.11, 6.139 Ferrier v Stewart (1912) 15 CLR 32����������������������������������������������������������������������������� 3.191, 4.33 Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630�����������������������������������9.8, 9.18 Finch v Underwood (1876) 2 Ch D 310 ��������������������������������������������������������3.150, 6.206, 8.117 Finnigan v New Zealand Rugby Football Union Inc [1985] 2 NZLR 159��������������������������2.77 First National Bank Plc v Thompson [1996] Ch 231��������������������2.185, 3.2, 4.1, 4.2, 4.5, 4.67, 4.73, 4.74, 4.75, 4.76, 4.77, 4.78, 4.80, 4.82, 4.83, 4.84, 6.6 xxxvii

Table of Cases Fisher v Brooker [2006] EWHC 3239 (Ch), [2007] FSR 255���������������������������������������������7.231 Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764�������� 2.22, 2.223, 2.250, 3.122, 3.123, 6.192, 6.194, 6.208, 7.30, 7.32, 7.37, 7.45, 7.52, 7.55, 7.111, 7.112, 7.113, 7.114, 7.229, 7.231, 7.238, 7.258 Flattery v Secretary of State for Communities and Local Government [2010] EWHC 2868 (Admin), [2010] All ER (D) 01 (Dec)��������������������������������������������2.90 Flitters v Alfrey (1874) LR 10 CP 29�����������������������������������������������������������������9.16, 9.114, 9.115 Foakes v Beer (1884) 9 App Cas 605, HL������������������������������ 2.214, 6.13, 6.43, 6.48, 6.50, 6.51, 6.53, 6.61, 6.62, 6.64, 6.65, 6.66, 6.67, 6.69, 6.73, 6.83 Fontana NV v Mautner [1980] 1 EGLR 68��������������������������������������������������������������� 6.160, 6.189 FoodCo UK LLP (t/a Muffin Break) v Henry Boot Developments Ltd [2010] EWHC 358 (Ch)�����������������������������������������������������������������������������3.194, 3.197, 3.204 Football Dataco v Stan James (Abingdon) Ltd [2014] EWHC 504 (Ch), [2014] All ER (D) 38 (Mar)�����������������������������������������������������������������������������������������������9.232 Foster, Re; Hudson v Foster (No 2) [1938] 3 AllER 610������������������������������������������������������7.237 Foster v Mentor Life Assurance Co (1854) 3 E & B 48����������������������������������������������������������4.14 Freeman v Cooke (1848) 2 Exch 654���������������������������������� 3.1, 3.2, 3.42, 3.55, 3.56, 3.60, 3.84, 3.87, 3.95, 3.112, 3.210, 7.4 Friend v Civil Aviation Authority [2001] EWCA Civ 1204, [2002] ICR 525�������������������9.165 Frost v Frost [1968] 1 WLR 1221��������������������������������������������������������������������������������� 9.38, 9.160 Fry v Moore (1889) 23 QBD 395��������������������������������������������������������������������������������������������2.116 Fung Kai Sun v Chan Fui Hing [1951] AC 489, PC���������������� 1.55, 2.197, 3.121, 3.130, 3.131, 3.135, 3.146, 3.154, 3.180, 6.203 G v G (Minors: Custody Appeal) [1985] 1 WLR 647, HL��������������������������������������������������7.307 Gallie v Lee [1971] AC 1004, HL��������������������������������������������������������������������������������������������3.213 Garnac Grain Co Inc v HMF Faure and Fairclough Ltd [1968] AC 1130n, HL����������������8.42 General Assurance Society Ltd v General Mutual Assurance Ltd (1969) 20 P & CR 753����������������������������������������������������������������������������������������������������������8.22 General Finance, Mortgage, and Discount Company v Liberator Permanent Benefit Building Society (1878) 10 Ch D 15�����������������������1.72, 4.5, 4.26, 4.82 George Whitechurch Ltd v Cavanagh [1902] AC 117, HL ������������������������������������������������3.121 GF Fashions Ltd v B & Q Plc [1995] 4 All ER 899�����������������������������������������������������������������8.21 Gibson v Doeg (1857) 2 H&N 615�����������������������������������������������������������������������������������������2.211 Gillett v Holt [2000] EWCA Civ 66, [2001] Ch 210����������������� 1.44, 1.55, 2.192, 2.245, 2.247, 2.297, 3.122, 4.5, 5.82, 6.1, 6.103, 6.104, 6.175, 6.192, 6.196, 7.1, 7.2, 7.30, 7.31, 7.35, 7.46, 7.52, 7.76, 7.91, 7.96, 7.106, 7.111, 7.121, 7.126, 7.179, 7.190, 7.229, 7.236, 7.237, 7.238, 7.250, 7.252, 7.271, 7.281, 7.286, 7.293 Gissing v Gissing [1971] AC 886, HL��������������������������������������������������������������������������������������7.73 Giumelli v Giumelli (1999) 196 CLR 101, HCA�������������������������� 6.18, 6.71, 7.61, 7.271, 7.278 Gladman Commercial Properties v Fisher Hargreaves Proctor [2013] EWCA Civ 1466, [2014] PNLR 11����������������������������������������������������������������������9.232 xxxviii

Table of Cases  Gleeson v J Wippell & Co [1977] 1 WLR 510������������������������9.127, 9.131, 9.132, 9.133, 9.157 Glencore Grain Ltd v Flacker Shipping Ltd: The Happy Day [2002] EWCA Civ 1068, [2001] 1 All ER (Comm) 659������������������������������������������������2.215 Glover v Coleman (1874) LR 10 CP 108�������������������������������������������������������������������������������7.163 Gloyne v Richardson [2001] EWCA Civ 716, [2001] 2 BCLC 669, [2001] All ER (D) 239 (May)����������������������������������������������������������������������������������������������5.89 Godard v Gray (1870) LR 6 QB 139���������������������������������������������������������������������������������������9.176 Godden v Merthyr Tydfil Housing Association [1997] NPC 1��������������������������������������������5.34 Gold Star Insurance Co Ltd v Gaunt [1998] 3 NZLR 80, NZCA����������������2.183, 7.216, 7.229 Goldcorp Exchange Ltd (in Receivership), Re [1995] 1 AC 74, PC (NZ)��������� 1.2, 1.75, 2.57, 2.221, 2.250, 2.261, 2.273, 2.274, 2.292, 2.294, 3.130 Goldsworthy v Brickell [1987] Ch 378�����������������������������������������������������������6.124, 6.144, 6.192 Gonthier v Orange Contract Scaffolding Ltd [2003] EWCA Civ 873, [2003] All ER (D) 332 (Jun)����������������������������������������������������������������������������������������������7.132 Good Challenger Navegante SA v Metalexportimport SA; Good Challenger, The [2003] EWHC 10 (Comm), [2003] 1 Lloyd’s Rep 471�������������������������������������������9.178 Good Challenger Navegante SA v Metalexportimport SA; Good Challenger, The [2003] EWCA Civ 1668, [2004] 1 Lloyd’s Rep 67�����9.100, 9.178, 9.179, 9.193, 9.225 Goodtitle d Edwards v Bailey (1777) 2 Cowp 597������������������������������4.4, 4.46, 4.68, 4.72, 4.76 Gordon Derby v Scottish Equitable Plc [2001] EWCA Civ 369, [2001] 3 All ER 818 �������������������������������������������������������������� 3.96, 3.117, 3.123, 3.165, 3.166, 3.167, 3.174, 3.177, 3.182, 3.184, 6.216 Gordon’s Will Trusts, Re [1978] Ch 145������������������������������������������������������������������������������������8.6 Gotobed v Pridmore (1971) 217 EG 759�������������������������������������������������������������������������������2.211 Government of Penang v Oon [1972] AC 425, PC (Malaysia)��������������������������������������������4.87 Graham v Ingleby (1848) 1 Exch 651������������������������������������������������������������������������������������2.117 Grant v Edwards [1986] Ch 638, CA���������������������������������������������������� 7.72, 7.219, 7.226, 7.247 Grant v Wiseman (1836) 3 Bing (NC) 69������������������������������������������������������������������������������2.282 Graydon, Re [1896] 1 QB 417���������������������������������������������������������������������������������������������������9.89 Greasley v Cooke [1980] 1 WLR 1306, CA������������������������������ 1.60, 6.188, 6.189, 7.219, 7.220, 7.227, 7.229, 7.249 Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2003] QB 679�������������4.17 Great Western Railway v Smith (1876) 2 Ch D 235�������������������������������������������������������������3.190 Green v Britten & Gilson [1904] 1 KB 350�����������������������������������������������������������������������������3.30 Green v Rutherford (1750) 1 Ves Sen 462�����������������������������������������������������������������������������2.107 Green’s Case (1582) Cro Eliz���������������������������������������������������������������������������������������������������8.102 Greenhalgh v Mallard [1947] 2 All ER 255���������������������������������������������������������������������������9.224 Greenwood v Martins Bank Ltd [1932] 1 KB 371, CA����������������� 3.53, 3.56, 3.58, 3.59, 3.134, 3.155, 3.161, 3.170, 3.180, 3.211, 3.213 Greenwood v Martins Bank Ltd [1933] AC 51, HL�������������������� 3.53, 3.56, 3.58, 3.114, 3.118, 3.130, 3.134, 3.155, 3.170, 3.180, 3.210, 3.211, 3.213, 6.130, 7.115 Greenwood Reversions Ltd v World Environment Foundation Ltd [2008] EWCA Civ 47, [2009] L & TR 2�����������������������������������������������������������������������������8.91 xxxix

Table of Cases Greer v Kettle [1938] AC 156, HL������������������������������������� 2.41, 2.285, 4.5, 4.6, 4.16, 4.17, 4.18, 4.20, 4.23, 4.24, 4.35, 4.43 Gregg v Wells (1839) 10 Ad & El 90������������������������������������������������������������������� 3.56, 3.60, 3.210 Gregory v Mighell (1811) 18 Ves Jun 328������������������������������������������������������������������������7.2, 7.18 Grimwood v Moss (1872) LR 7 CP 360�����������������������������������������������������������������������������������8.93 Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641, HCA���������������������������������������1.75, 2.185, 3.127, 3.191, 4.33, 5.8, 6.18, 6.182, 6.196, 7.229, 7.233 Grundy v Ottey [2003] EWCA Civ 1176, [2003] WTLR 1253�������������������������������� 7.31, 7.147 Gwyther v Boslymon Quarries Ltd [1950] 2 KB 59�����3.19, 3.24, 3.45, 3.69, 3.104, 5.90, 6.47 GXL Royalties Ltd v Minister of Energy [2009] NZHC 1715, [2009] NZAR 478�������������2.96 H v H [1928] P 206, PDA����������������������������������������������������������������������������������������������������������1.72 H Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694����������������������������������������������� 3.72, 3.112 Habberfield v Habberfield [2019] EWCA Civ 890, 22 ITELR 96���������1.1, 7.55, 7.243, 7.266, 7.269, 7.272, 7.278, 7.294, 7.307 Habib Bank v Tufail [2006] EWCA Civ 374, [2006] 2 P & CR DG14������������������� 6.148, 6.189 Habib Bank Ltd v Habib Bank AG Zurich [1981] 1 WLR 1265���������������������������������������������7.3 Hall v Butler (1839) 10 A & E 204��������������������������������������������������������������������������������������������4.68 Hall v Simons [2000] UKHL 38, [2002] 1 AC 615��������������������������������������������������� 9.198, 9.238 Halsall v Brizell [1957] Ch 169�������������������������������������������������������������������������������������������������7.53 Hamed El Chiaty & Co v Thomas Cook Group Ltd (The Nile Rhapsody) [1992] 2 Lloyd’s Rep 399�������������������������������������������������������������������������������������������� 5.28, 5.44 Hamel-Smith v Pycroft & Jetsave Ltd [1987] Lexis Citation 1183, (1987 5 February) (unreported)������������������������������������������������������������������������������� 5.28, 5.89 Hammersmith and Fulham LBC v Top Shop Centres Ltd [1990] Ch 237����������� 2.270, 2.271, 3.41, 3.88, 7.219, 7.233, 7.235, 7.248 Hampshire County Council v Supportway Community Services Ltd [2006] EWCA Civ 1035, [2006] BLGR 836����������������������������������������������������������������������2.85 Haq v Island Homes Housing Association [2011] EWCA Civ 805, [2011] 2 P & CR 17������������������������������������������������������������������������������������������������������������7.132 Harnam Singh v Jamal Pirbhai [1951] AC 688, PC (Kenya)������������������������������������������������6.17 Harriman v Harriman [1909] P 123, CA����������������������������������������������������������� 2.34, 2.41, 9.141 Harris v Carter (1854) 3 E & B 559������������������������������������������������������������������������������������������6.56 Harris v Quine (1869) LR 4 QB 653��������������������������������������������������������������������������������������9.185 Harris v Truman (1882) 9 QBD 264��������������������������������������������������������������������������������������2.275 Harris v Watson (1791) Peake 102�������������������������������������������������������������������������������������������6.56 Harrison v Wells [1967] 1 QB 263�������������������������������������������������������������������������������������������4.69 Hart v O’Connor [1985] AC 1000, PC (NZ)�������������������������������������������������������������������������2.158 Hartley v Hymans [1920] 3 KB 475�����������������������������������������������������������������������������������������6.14 Hartog v Colin & Shields [1939] 3 All ER 566���������������������������������������������������������������������6.138 Harvey v Oswald (1595) Cro Eliz 5������������������������������������������������������������������������������������������8.63 Hastings (Lord) v Saddler (1898) 79 LT 355�������������������������������������������������������������������������6.207 Hawkes v Saunders (1782) 1 Cowp 289������������������������������������������������������������������������������������6.3 Hawksbee v Hawksbee (1853) 11 Hare 230��������������������������������������������������������������������������9.130 Hawksley v Outram [1892] 3 Ch 359������������������������������������������������������������������������������������2.215 HE Daniels Ltd v Carmel Exporters and Importers Ltd [1953] 2 QB 242�������������� 9.75, 9.170 xl

Table of Cases  Heane v Rogers (1829) 9 B & C 577����������������������������������������������������������������������������� 3.70, 7.233 Heath v Craddock (1874) 10 Ch App 72���������������������������������������������������������������������������������4.24 Henderson v Henderson (1843) 8 Hare 100����������������1.8, 1.32, 2.41, 2.43, 2.131, 5.49, 6.125, 8.23, 8.28, 9.7, 9.11, 9.12, 9.15, 9.28, 9.34, 9.58, 9.83, 9.87,9.116, 9.117, 9.119, 9.137, 9.155, 9.159, 9.166, 9.167, 9.176, 9.218, 9.219, 9.220, 9.221, 9.222, 9.223, 9.224, 9.225, 9.226, 9.227, 9.233, 9.234, 9.235, 9.236, 9.237, 9.242, 9.277, 9.279, Glossary Henley v Bloom [2010] EWCA Civ 202, [2010] 1 WLR 1770�������������������������������� 9.228, 9.232 Henry v Henry [2010] UKPC 3, [2010] 1 All ER 988, PC (St Lucia)�������������������� 7.241, 7.272 Hepworth v Pickles [1900] 1 Ch 108�������������������������������������������������������������������������������������2.211 Herbert v Pegrum [2005] EWCA Civ 120, [2005] All ER (D) 307 (Jan)����������������������������4.25 Heslop v Burns [1974] 1 WLR 1241����������������������������������������������������������������������������������������3.85 Higgs v Wilkinson (1903) 23 NZLR 74���������������������������������������������������������������������������������6.157 High v Billings (1903) 89 LT 550����������������������������������������������������������������������������������������������2.65 HIH Casualty Plc & General Insurance Ltd v AXA Corporate Solutions [2002] EWCA Civ 1253, [2002] 2 All ER (Comm) 1053������������������������������������ 5.41, 6.154 Hill v Clifford [1907] 2 Ch 236�����������������������������������������������������������������������������������������������9.167 Hirji Mulji v Cheong Yue Steamship Co Ltd [1926] AC 497, PC (HK)������������������������������8.36 Hiscox v Outhwaite [1991] 2 WLR 1321, CA�������������������������������������������������������������������������5.89 Hiscox v Outhwaite [1992] 1 AC 562, CA��������������������������������������������������������� 2.108, 5.28, 5.89 Hobbs v Norton (1682) 1 Vern 136��������������������������������������������������������������������������������������������3.2 Holiday Inns Inc v Broadhead (1974) 232 EG 951����������������������������������7.54, 7.71, 7.75, 7.137 Holland, Re, Gregg v Holland [1902] 2 Ch 360������������������������������������������������������������ 3.39, 4.25 Holman v Johnson (1775) 1 Cowp 341���������������������������������������������������������������������������������2.162 Holt v Markham [1923] 1 KB 504������������������������������3.29, 3.30, 3.52, 3.135, 3.156, 3.170, 5.28 Homburg Houtimport BV v Agrosin Private Ltd (The Starsin) [2003] UKHL 12, [2004] 1 AC 715������������������������������������������������������������������������ 6.137, 8.58 Hopgood v Brown [1955] 1 WLR 213������������������������������2.264, 2.269, 2.270, 2.271, 3.43, 7.28 Horton v Westminster Improvement Commissioners (1852) 7 Exch 780������������� 3.191, 4.33 Houlditch v Donegal (1834) 8 Bligh (NS) 301, HL (Ireland)���������������������������������������������9.176 House of Spring Gardens Ltd v Waite [1991] 1 QB 241������������������������������������������������������9.224 Houston v Marquis of Sligo (1885) 29 Ch D 448�������������������������������������������������������������������9.16 Howard v Hudson (1853) 2 E & B 1������������������������������������������������������������������������������������������1.5 Howell v Falmouth Boat Construction Co Ltd [1951] AC 837, HL����������������� 2.65, 2.79, 2.89 Howlett v Tarte (1861) 10 CBNS 813���������������������������������������������������������������������������������������9.50 Hoystead v Commissioner of Taxation [1926] AC 155, PC (Aus)����������9.45, 9.47, 9.50, 9.89, 9.100, 9.103, 9.224 Huffer v Allen (1866) LR 2 Exch 15�����������������������������������������������������������������������������������������9.16 Hughes v Metropolitan Rly Co (1877) 2 App Cas 439, HL; (1876) 1 CPD 120, CA����������������������������������������������1.72, 2.198, 2.223, 3.138, 5.21, 6.6, 6.8, 6.9, 6.10, 6.12, 6.13, 6.14, 6.16, 6.20, 6.27, 6.37, 6.38, 6.50, 6.73, 6.76, 6.80, 6.88, 6.90, 6.94, 6.98, 6.114, 6.126, 6.157, 6.160, 6.172, 6.173, 6.180, 6.181, 6.190, 6.199, 6.200, 6.206, 7.4, 7.29, 7.258 xli

Table of Cases Hull v Hull [1960] P 118����������������������������������������������������������������������������������������������������������9.160 Hulm & Lewis, Re [1892] 2 QB 261���������������������������������������������������������������������������������������2.113 Huning v Ferrers (1711) Gilb Rep 85������������������������������������ 3.60, 7.6, 7.48, 7.60, 7.112, 7.116, 7.121, 7.122, 7.193, 7.281 Hunsden v Cheyney (1690) 2 Vern 149����������������������������������������������������������������������������������3.60 Hunter v Chief Constable of the West Midlands [1982] AC 529, HL������������ 1.48, 1.72, 2.183 Hunter v Chief Constable of the West Midlands; sub nom McIlkenny v Chief Constable for the West Midlands [1980] QB 283, CA��������1.48, 1.49, 1.72, 2.170, 2.219, 3.2, 3.185 Hurst & Middleton Ltd, Re [1912] 2 Ch 520, CA����������������������������������������������������������������2.113 IMT Shipping & Chartering GmbH v Chansung Shipping Company Ltd (The Zenovia) [2009] EWHC 739, [2009] 2 All ER (Comm) 177 ������������������������������6.108 Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries [1977] QB 580���������������������������������������������������������4.5, 4.65, 4.69, 4.86 ING Bank NV v Ros Roca SA [2011] EWCA Civ 353, [2012] 1 WLR 472���������������������������������������������������������������� 1.1, 1.75, 2.185, 3.62, 5.17, 5.28, 5.40, 5.41, 5.46, 5.90 Inner City Businessmen’s Club v James Kirkpatrick [1975] 2 NZLR 636�������������������������8.108 Insurance Corporation of the Channel Islands Ltd v Royal Hotel Ltd (No 2) [1998] Lloyd’s Rep IR 151�������������������������������������������������������������������� 8.62, 8.65, 8.82 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, HL��������������������������������������� 3.40, 4.30, 6.122, 6.137, 7.151, 7.171, 8.58 Involnert Management Inc v Aprilgrange Ltd [2015] EWHC 2225 (Comm), [2015] 2 Lloyd’s Rep 289�������������������������������������8.18, 8.66, 8.77, 8.81, 8.83, 8.88, 8.90, 8.92 Inwards v Baker [1965] 2 QB 29, CA���������������������������������2.22, 2.96, 2.235, 2.244, 2.248, 7.23, 7.30, 7.31, 7.52, 7.91, 7.106, 7.127, 7.192, 7.194, 7.262, 7.266, 7.280, 7.284, 7.298, 7.304 J Willis & Son v Willis [1986] 1 EGLR 62, CA����������������������������������������������������������� 7.45, 7.294 J & F Stone Lighting and Radio Ltd v Levitt [1947] AC 209, HL��������������������������� 2.109, 2.135 JT Developments v Quinn (1991) 62 P & CR 33, [1991] 2 EGLR 257, CA����������� 6.107, 7.57, 7.117, 7.133, 7.142, 7.162, 7.165, 7.167 JT Sydenham & Co Ltd v Enrichem Elastometers Ltd [1989] 1 EGLR 257���������������������6.114 Jackson v Cator (1800) 5 Ves Jun 688����������������������������������������������������������7.9, 7.18, 7.28, 7.169 Jackson v Goldsmith (1950) 81 CLR 446, HCA���������������������������������������������������������������������9.95 Jaggard v Sawyer [1995] 1 WLR 269, CA��������������������������������������������������������������������������������9.72 James v Heim Gallery (London) Ltd (1981) 41 P & CR 269����������� 6.104, 6.118, 6.134, 6.139 James v James [1948] 1 All ER 214�����������������������������������������������������������������������������������������9.141 James v Landon (1581) Cro Eliz 36�����������������������������������������������������������������������������������4.1, 4.68 Javid v Aqil [1991] 1 All ER 243����������������������������������������������������������������������������������� 6.155, 8.22 Jennings v Great Northern Rly Co (1865) LR 1 QB 7�����������������������������������������������������������3.43 Jennings v Rice [2002] EWCA Civ 159, (2003) 1 P & CR 8������������� 7.31, 7.121, 7.127, 7.266, 7.272, 7.278, 7.285, 7.295 Jervis v Harris [1996] Ch 195���������������������������������������������������������������������������������������������������8.39 Jet2.com Ltd v Blackpool Airport Ltd [2010] EWHC 3166 (Comm), [2010] All ER (D) 58 (Dec)�������������������������������������������������������������������������������������������������5.51 John v George (1996) 71 P & CR 375������������������������������������� 5.44, 5.55, 5.57, 5.59, 5.82, 7.248 xlii

Table of Cases  Johnson v Agnew [1980] AC 367, HL������������������������������������������������������������������ 8.21, 8.50, 8.91 Johnson v Gore Wood & Co [2000] UKHL 65, [2002] 2 AC 1��� 1.44, 2.29, 2.41, 2.43, 2.183, 2.184, 2.186, 2.214, 3.189, 5.8, 5.49, 6.125, 8.28, 9.3, 9.11, 9.12, 9.43, 9.50, 9.87, 9.119, 9.132, 9.137, 9.219, 9.221, 9.222, 9.224, 9.225, 9.226, 9.227, 9.228, 9.229, 9.230, 9.231, 9.232, 9.233, 9.234 Johnson v Moreton [1980] AC 37, HL������������������������������������������������� 2.131, 2.151, 3.190, 5.14 Jones, Re, ex parte Jones (1881) 18 Ch D 109�����������������������������������������������������������������������2.157 Jones v Carter (1846) 15 M & W 718����������������������������������������������������������������������������� 8.13, 8.93 Jones v Jones [1977] 1 WLR 438��������������������������������������������������������������������������������� 7.247, 7.281 Jones v Kernott [2011] UKSC 53, [2012] 1 AC 776���������������������������������������������������������������7.74 Jones v Lewis [1919] 1 KB 328������������������������������������������������������������������������������������������������9.104 Jones v Watkins [1987] (unreported), CA Transcript No 1200������������������������������������������7.142 Jones Brothers (Holloway) Ltd v Woodhouse [1923] 2 KB 117�������������������������������������������3.53 Jones (RE) Ltd v Waring & Gillow Ltd [1926] AC 670, HL�������������������������������������� 3.55, 3.160 Jorden v Money (1854) 5 HLC 185, HL���������������������������������� 2.198, 3.2, 3.18, 3.34, 3.74, 3.78, 3.92, 3.112, 6.7, 6.12, 6.106, 7.4 Jumbo King Ltd v Faithful Properties Ltd (1999) 2 HKCFAR 279��������������������������������������3.88 Junior K, The; Star Steamship Society v Beogradska Plovidba [1988] 2 Lloyd’s Rep 583, QBD����������������������������������������������������������������������������������������7.132 K Lokumal & Sons (London) Ltd v Lotte Shipping Co Pte Ltd (The August Leonhardt) [1985] 2 Lloyd’s Rep 28, CA���������������������2.185, 4.46, 5.41, 5.55, 5.72, 5.82, 7.51, 8.14 K v P (Children Act Proceedings: Estoppel) [1995] 1 FLR 248, FD����������������������������������9.160 Kai Nam v Ma Kam Chan [1956] AC 358, PC (HK) �������������������������������������������������� 3.18, 3.28 Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, HL������������������������������������ 1.12, 1.26, 2.9, 2.118, 2.119, 2.120, 2.122, 2.124, 2.200, 2.201, 2.204, 2.208, 2.209, 2.210, 2.217, 6.27, 6.30, 7.28, 7.45, 7.52, 8.4, 8.11, 8.12, 8.16, 8.56, 8.64, 8.78, 8.116, 8.128 Kaufman v Gerson [1904] 1 KB 591��������������������������������������������������������������������������������������9.190 Keen v Holland [1984] 1 WLR 251, CA���������������������������������2.128, 2.131, 2.151, 2.178, 2.280, 3.73, 3.190, 4.58, 5.6, 5.8, 5.12, 5.13, 5.14, 5.15, 5.16, 5.29, 5.33, 5.34, 5.44, 5.45, 5.46, 5.47, 5.64, 7.85, 7.89 Keighley, Maxsted & Co v Durant [1901] AC 240, HL���������������������������������������������������������3.60 Keith v R Gancia & Co Ltd [1904] 1 Ch 774������������������������������������������������������������������������7.235 Kendall v Hamilton (1879) 4 App Cas 504������������������������������������������������������������������� 8.77, 9.68 Kenneth Allison Ltd v AE Limehouse & Co [1992] 2 AC 105, HL��������������������������� 5.28, 5.44 Kenn’s Case (1606) 7 Co Rep 42b�������������������������������������������������������������������������������������������9.168 Ker v Wauchope (1819) 1 Bligh 1����������������������������������������������������������������������������������������8.1, 8.6 Kilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd [2004] EWHC 2547 (Ch), [2005] 2 P & CR 8�������������������������������������������������������� 7.36, 7.71 Kilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd [2005] EWCA Civ 1355, [2006] 1 P & CR DG20������������������������������������������������������������7.71 xliii

Table of Cases Kim v Chasewood Park Residents Ltd [2013] EWCA Civ 239, [2013] HLR 24�����������������������������������������������������������������������������������������������6.73, 6.124, 6.182 Kinane v Mackie-Conteh [2005] EWCA Civ 45, [2005] WTLR 345��������������� 7.79, 7.80, 7.89 Kinch v Walcott [1929] AC 482, PC (Barbados)��������������������������������������������������������������������9.45 King v Hoare (1844) 13 M & W 494����������������������������������������������������������������������������������������9.68 King v Jackson (t/a Jackson Flower Co) [1998] 1 EGLR 30, CA������������������������������������������7.83 King’s Leasehold Estate, Re (1873) LR 16 Eq 521����������������������������������������������������������������7.106 King’s Settlement, Re [1931] 2 Ch 294��������������������������������������������������������������� 2.284, 3.44, 4.15 Kinnersley v Orpe (1780) 2 Doug KB 517����������������������������������������������������������������������������9.135 Kirin-Angem Inc v Boehinger Mannheim GmbH [1997] FSR 289����������������������������������9.134 Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349, HL�������������� 2.16, 3.20, 3.26, 3.52, 3.151, 3.158 Knights v Wiffen (1870) LR 5 QB 660����������������������������������� 2.221, 3.1, 3.18, 3.74, 3.84, 3.130, 3.139, 3.180, 5.8, 7.4, 7.234, 7.235 Knightsbridge Estates Trust Ltd v Byrne [1939] Ch 41 ������������������������������������������������������3.110 Koenigsberg, Re [1948] Ch 727, ChD�����������������������������������������������������������������������������������9.224 Koenigsberg, Re [1949] Ch 348, CA���������������������������������������������������������������9.100, 9.109, 9.224 Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993, PC (Malaysia)������������������������������������������2.41, 2.149, 2.153, 2.154, 7.65, 9.49, 9.50 Kosmar Villa Holidays Plc v Trustees of Syndicate 1243 [2008] EWCA Civ 147, [2008] 2 All ER (Comm) 14���������������������������������������������� 8.92, 8.94, 8.123 Kulamma v Manadan [1968] AC 1062, PC (Fiji)�����������������������������������������������������������������2.148 Kusel v Watson (1879) 11 Ch D 129��������������������������������������������������������������������������������������7.106 Lainson v Tremere (1834) 1 Ad & E1 792��������������������������������������������������������������������� 4.23, 4.24 Laird v Birkenhead Railway Co (1859) John 500�����������������������������������������������������������������7.136 Laker Airways Ltd v Department of Trade [1977] QB 643���������������������������������������������������2.79 Lala Beni Ram v Kundun Lall (1899) LR 26 IA 58, PC (NW Provinces, Allahabad)������������������������������������������������������������������������������������ 7.61, 7.284 Langdon v Richards (1917) 33 TLR 325����������������������������������������������������������������������������������9.86 Lark v Outhwaite [1991] 2 Lloyd’ s Rep 132�������������������������������������������������������������������������6.183 Last, Re; Wilkinson v Blades [1896] 2 Ch 788����������������������������������������������������������������������9.130 Law v Jones [1974] Ch 112������������������������������������������������������������������������������������������ 6.168, 7.134 Layton v Martin [1986] 2 FLR 227������������������������������������������������������������������7.147, 7.186, 7.187 Lazarus-Barlow v Regent Estates Co Ltd [1949] 2 KB 465���������������������������������������������������9.19 Leathley v John Fowler & Co Ltd [1946] KB 579��������������������������������������������������������� 8.33, 8.77 Ledingham and Others v Bermejo Estancia Co Ltd [1947] 1 All ER 749���������������������������6.14 Lee-Parker v Izzet (No 2) [1972] 1 WLR 775����������������������������������������������������������� 2.235, 2.240 Leggott v Great Northern Rly Co (1876) 1 QBD 599����������������������������������������������������������9.126 Legione v Hateley (1983) 152 CLR 406����������������������������������������������������������������������������5.8, 6.18 Leila, The [1985] 2 Lloyd’s Rep 175������������������������������������������������������������������������������������������5.59 Lep Air Services Ltd v Rolloswin Ltd [1973] AC 331������������������������������������������������������������8.39 Lesley & Co v Works Commissioners (1914) 78 JP 462�������������������������������������������������������3.53 Lesschke v Jeffs [1955] QWN 67����������������������������������������������������������������������������������������������9.82 Lester v Foxcroft (1700) Colles PC 108�����������������������������������������������������������������������������������7.16 Lester v Woodgate [2010] EWCA Civ 199, [2010] 2 P & CR 21������������������������������������������7.60 Letang v Cooper [1965] 1 QB 232��������������������������������������������������������������������������� 2.17, 9.8, 9.75 xliv

Table of Cases  Lever Finance Ltd v Westminster City Council [1971] 1 QB 222��������������������� 2.81, 2.86, 2.89 Levingston v Somers [1941] IR 183, Irish Sup Ct������������������������������������������������������������������4.65 Leyland Shipping Co v Norwich Union Fire Insurance Society Ltd [1918] AC 350, HL�������������������������������������������������������������������������������������������������������������6.182 Liden v Burton [2016] EWCA Civ 275, [2017] 1 FLR 310������������������������������������� 7.273, 7.307 Lindsay Petroleum v Hurd (1874) LR 5 PC 221���������������������������������������������������������������������7.55 Lim Teng Huan v Ang Swee Chuan [1992] 1 WLR 113, PC (Brunei Darussalam)����������������������������������������������������������������������������������7.221, 7.281, 7.310 Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548, HL��������������� 3.45, 3.52, 3.139, 3.164, 3.165 Lissenden v CAV Bosch Ltd [1940] AC 412, HL����������������������������������8.1, 8.2, 8.28, 8.34, 8.52 Lissimore v Downing [2003] 2 FLR 308, ChD�����������������������������������������������������������������������7.31 Litchfield v Ready (1850) 5 Exch 939��������������������������������������������������������������������������������������9.86 Lloyd v Dugdale [2002] 2 P & CR 13������������������������������������������������������������������������� 2.235, 2.240 Lloyd v Great Western Dairies Co [1907] 2 KB 727������������������������������������������������������������2.116 Lloyd v Nowell [1895] 2 Ch 744����������������������������������������������������������������������������������� 2.212, 5.32 Lloyd v Sutcliffe Ltd [2007] EWCA Civ 153, [2007] 2 EGLR 13�������������������5.51, 6.104, 7.118 Lloyds Bank Plc v Carrick [1994] 4 All ER 630��������������������������������������������������������������������2.235 Lloyds Bank Plc v Rosset [1991] 1 AC 107, HL�����������������������������������������������7.72, 7.233, 7.236 Lockyer v Ferryman (1877) 2 App Cas 519������������������������������������������������������������������������������9.3 London and County (A & D) Ltd v Wilfred Sportsman Ltd [1971] Ch 764����������������������8.19 London & Regional Investments Ltd v TBI Plc [2002] EWCA Civ 355, [2002] All ER (D) 360 (Mar)��������������������������������������������������������������������������������������������7.133 London Borough of Brent, ex parte Gunning (1985) 8 4 LGR 168�������������������������������������2.93 London Borough of Hillingdon v ARC Ltd (No 2) [2000] EWCA Civ 191, [2000] 3 EGLR 97������������������������������������������5.49, 5.55, 5.92, 6.117 London Celluloid Company, Re (1888) 39 Ch D 190����������������������������������������������������������2.275 London Joint Stock Bank v Macmillan and Arthur [1918] AC 777, HL��������������������������������������������������������������������������3.43, 3.55, 3.56, 3.58, 3.87 Longman v Viscount Chelsea [1989] 2 EGLR 242, (1989) 58 P & CR 189������������������������4.11 Lord Cawdor v Lewis (1835) 1 Y&C Ex 427�������������������������������������������7.11, 7.59, 7.266, 7.285 Lothian v Henderson [1803] 3 Bos & Pul 499������������������������������������������������������������������������9.86 Lovett v Fairclough (1990) 61 P & CR 385���������������������������������������� 7.121, 7.229, 7.245, 7.254 Low v Bouverie [1891] 3 Ch 82, CA��������������������������������� 2.28, 2.29, 2.41, 3.2, 3.38, 3.40, 3.84, 3.95, 3.112, 4.25, 4.31, 5.40, 6.21, 6.107, 6.123, 6.133, 7.140, 7.141, 8.88 Lowe v Lombank Ltd [1966] 1 WLR 196, CA ���������������������������������������������������������������������3.146 Lucking v Denning (1701) 1 Salk 201������������������������������������������������������������������� 2.92, 8.16, 8.54 Lucy v Anderson (1581–82) Choyce Cases in Chancery������������������������������������� 8.2, 8.13, 8.28 Lunn Poly Ltd v Liverpool & Lancashire Properties Ltd [2006] EWCA Civ 430, [2006] 2 EGLR 29������������������������������������������������������������������������1.73 Lyle-Meller v A Lewis & Co Ltd [1956] 1 WLR 29��������������������������2.19, 2.29, 3.18, 3.19, 5.22, 5.28, 6.15, 6.27, 6.98 Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749, HL��������8.58 Mackley v Nutting [1949] 2 KB 55�������������������������������������������������������������������������������������������4.66 Maclaine v Gatty [1921] 1 AC 376, HL ��������������������������������������������������������������������������������3.121 Maddison v Alderson (1883) 8 App Cas 467, HL������������������������������������������������������������������7.65 xlv

Table of Cases Maddy’s Estate, Re [1901] 2 Ch 820�����������������������������������������������������������������������������������������4.25 Magnus v National Bank of Scotland Ltd (1888) 58 LT 617, ChD��������������������������������������9.54 Magrath v Hardy (1838) 4 Bing (NC) 787������������������������������������������������������������������������������9.86 Maharaj v Chand [1986] AC 898, PC (Fiji)��������������������������������� 2.148, 2.152, 6.84, 6.89, 6.92, 6.160, 6.163, 6.173 Mahesan S/O Thambiah v Malaysia Government Officers’ Co-operative Housing Society Ltd [1979] AC 374, PC (Malaysia)��������������������������������������������� 8.46, 8.48 Mahon v Air New Zealand [1984] AC 808, PC (NZ)������������������������������������������������������������2.94 Mangles v Dixon (1852) 3 HL Cas 702, HL��������������������������������������������������������������������������2.264 Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749, HL��������8.58 Manson v Vooght [1999] BPIR 376���������������������������������������������������������������������������������������9.224 Marche v Christodoulakis (1948) 64 TLR 466���������������������������������������������������������������������8.114 Mardorf Peach & Co Ltd v Attica Sea Carriers Corporation of Liberia; Laconia, The [1977] AC 850, HL������������������������������������������������������������������� 6.117, 8.88, 8.94 Marginson v Blackburn Borough Council [1939] 2 KB 426, CA������������������������������ 9.94, 9.95 Maritime Electric Co Ltd v General Utilities Ltd [1937] AC 610, PC (Can)����������������������������������������������������������������������������������2.77, 2.79, 2.89, 2.276 Marks & Spencer Plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72, [2016] AC 742���������������������������������������������������������������������������������4.28 Marquess of Bute v Barclays Bank Ltd [1955] 1 QB 202�����������������������������������������������������6.133 Matharu v Matharu (1994) 68 P & CR 93, CA������������������������������ 1.44, 7.23, 7.29, 7.30, 7.243, 7.254, 7.302 Matthews v Smallwood [1910] 1 Ch 777 ����������������������������3.109, 6.190, 8.13, 8.61, 8.64, 8.70, 8.76, 8.85, 8.98 Mattu v University Hospitals Coventry and Warwickshire NHS Trust [2012] EWCA Civ 641, [2013] ICR 270����������������������������������������������������������������������������9.28 McCall v Abelesz [1976] QB 585��������������������������������������������������������������������������������������������2.135 McCausland v Duncan Lawrie Ltd [1997] 1 WLR 38�����������������������������������������������������������7.83 McDonald v A-G 20/6/91, High Court Invercargill CP 13/86, p 33������������������������������������2.36 McIlkenny v Chief Constable for the West Midlands. See Hunter v Chief Constable for the West Midlands����������������������������������������������������������������������������������� M’Kenzie v British Linen Co (1881) 6 App Cas 82��������������������������������3.55, 3.56, 3.121, 3.210 McManus v Cooke (1887) 35 Ch D 681����������������������������������������������������������������������������������7.18 MCP Pension Trustees Ltd v AON Pension Trustees Ltd [2010] EWCA Civ 377, [2012] Ch 1������������������������������������������������������������� 6.153, 8.68, 8.69 Mears Ltd v Shoreline Housing Partnership Ltd [2015] EWHC 1396 (TCC), (2015) 160 Con LR 157�������������������2.27, 2.36, 3.21, 5.6, 5.71 Mellor v Watkins (1874) LR 9 QB 400�����������������������������������������������������������������������������������2.160 Mengel’s Will Trusts, Re [1962] Ch 791�����������������������������������������������������������������������������8.6, 8.7 Mercantile Bank of India Ltd v Central Bank of India Ltd [1938] AC 287, PC����������������������������������������������������������������������� 3.51, 3.52, 3.55, 3.59, 6.128 Mercantile Investment and General Trust Co v River Plate Trust, Loan and Agency Co [1894] 1 Ch 578����������������������������������������������������������������������������9.128 Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500, PC (NZ)�������������������������������������������������������������������������������������� 2.77, 9.136 Metropolitan Properties Co v Cordery (1979) 39 P & CR 10������������������������������������ 8.70, 8.72 xlvi

Table of Cases  Mexfield Housing Co-operative Ltd v Berrisford [2011] UKSC 52, [2011] 3 WLR 1091������������������������������������������������������������������������������������������������������������7.302 Midland Bank Trust Co v Green [1980] Ch 590��������������������������������������������������������������������9.93 Miles v Cooper [1967] 2 QB 459��������������������������������������������������������������������������������������������9.196 Milford Haven UDC v Foster (1961) 13 P & CR 289�������������������������������������������������� 2.63, 3.37 Milroy v Lord (1862) 4 De GF & J 264������������������������������������������������������������������������������������7.19 Minister for Immigration and Ethnic Affairs v Ah Teoh (1995) 183 CLR 273, HCA�������2.96 Mitchell v Watkinson [2014] EWCA Civ 1472, [2015] L & TR 22�������������������������������5.6, 5.49 Montagu’s Settlement Trusts, Re [1987] Ch 264��������������������������������������������������������������������8.68 Montefiori v Montefiori (1762) 1 Black W 363������������������������������������������3.2, 3.74, 3.95, 3.102 Moore v Gamgee (1890) 25 QBD 244�����������������������������������������������������������������������������������2.116 Moore v Moore [2018] EWCA Civ 2669, [2019] 1 FLR 1277�������������������������������� 7.293, 7.307 Moore v Ullcoats Mining Co Ltd [1908] 1 Ch 575������������������������������������������������������ 8.42, 8.93 Moore Large & Co v Hermes Credit Guarantee Plc [2003] EWHC 26 (Comm), [2003] 1 Lloyd’s Rep IR 315�����������������������������������������������8.84 Moorgate Mercantile Co Ltd v Twitchings [1976] 1 QB 225, CA���������1.2, 2.42, 2.183, 3.163, 3.213, 7.108, 7.150, 7.257 Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890, HL�����2.42, 3.16, 3.51, 3.55, 3.62, 3.75, 3.77, 3.213, 5.41, 6.125, 6.128, 7.100, 7.115, 8.94 Morgan, ex parte; Re Simpson (1876) 2 Ch D 72�������������������������������������������������������������������4.40 Morrell v Studd & Millington [1913] 2 Ch 648��������������������������������������������������������������������2.212 Morris v Tarrant [1971] 2 QB 143���������������������������������������������������������������������3.51, 6.125, 6.172 Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) [1990] 1 Lloyd’s Rep 391, HL������������������6.43, 6.104, 6.153, 8.5, 8.12, 8.38, 8.64, 8.79, 8.100, 8.103, 8.118, 8.121, 8.124, 8.125 Mowatt v Castle Steel and Iron Works Co (1886) 34 Ch D 58�����������������������������������������������4.6 MSC Mediterranean Shipping Co SA v Glencore International AG [2017] EWCA Civ 365, [2017] 2 Lloyd’s Rep 186, [2017] All ER (D) 02 (Jun)����������6.115 Muir’s Executors v Craig’s Trustees 1913 SC 349�������������������������������������������������������������������3.56 Mullen v Conoco Ltd [1998] QB 382, CA������������������������������������� 9.51, 9.55, 9.58, 9.117, 9.219 Multiservice Bookbinding v Marden [1979] Ch 84������������1.1, 1.44, 3.110, 5.82, 6.176, 7.250 Munir v Jang Publications Ltd [1989] ICR 1, CA����������������������������������������������������������������9.165 Munni Bibi v Tiroloki Nath (1931) LR 58 Ind App 158, PC (India)�����������������������������������9.96 Murphy v Burrows [2004] EWHC 1900 (Ch), [2005] 1 P & CR DG3������������������������������7.252 Murphy v Rayner [2011] EWHC 1 (Ch), [2011] All ER (D) 125 (Jan)�����������������������������7.257 Muschinski v Dodds (1985) 160 CLR 583, HCA������������������������� 1.45, 2.189, 7.78, 7.95, 9.214 MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2016] EWCA Civ 553, [2017] QB 604��������� 6.24, 6.51, 6.63, 6.64, 6.65, 6.72, 6.85, 6.192 MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2018] UKSC 24, [2019] AC 119 ������������������������1.55, 2.137, 2.144, 2.214, 3.35, 3.38, 3.80, 3.81, 3.82, 3.135, 6.24, 6.43, 6.48, 6.51, 6.53, 6.65, 6.67, 6.69, 6.72, 6.83, 6.85, 6.107, 6.192, 6.204 National Provincial Bank Ltd v Hastings Car Mart Ltd [1965] AC 1175�������������������������2.238 xlvii

Table of Cases National Westminster Bank Plc v Somer International (UK) Ltd [2001] EWCA Civ 970, [2002] QB 1286������������2.53, 2.185, 3.2, 3.96, 3.127, 3.135, 3.139, 3.156, 3.163, 3.168, 3.170, 3.172, 3.174, 3.177, 3.180, 3.182, 6.216 National Westminster Finance NZ v National Bank of New Zealand Ltd [1996] NZLR 548, NZCA����������������������������������������������������������������������������������������������������1.44 Nea Agres SA v Baltic Shipping Co Ltd [1976] QB 933������������������������������������������������������6.122 Neenan v Woodside Astoria Transportation Co (1932) 256 NY Supp 38��������������������������9.95 Neville v Wilkinson (1782) 1 Bro CC 543������������������������������������������������������������ 3.74, 3.102, 6.7 New Brunswick Railway Co v British and French Trust Corporation Ltd [1939] AC 1, PC (Can)������������������������������������������������������������������������������������� 9.50, 9.89, 9.93 New Zealand Shipping Co Ltd v Societe des Ateliers et Chantiers de France [1919] AC 1, HL���������������������������������������������������������������������������� 3.58, 3.95, 6.131 Newbold v Coal Authority [2012] UKUT 20 (LC), [2012] RVR 157�������������������� 2.122, 2.123 Newbold v Coal Authority [2013] EWCA Civ 584, [2014] 1 WLR 1288������������� 2.122, 2.123 Newport City Council v Charles [2008] EWCA Civ 1541, [2009] 1 WLR 1884, CA������������������������������������������������������������ 2.33, 2.63, 7.50, 7.121, 7.183 Newsome v Graham (1829) 10 B & C 234������������������������������������������������������������������������������4.65 Nexus Communications Group Ltd v Lambert [2005] EWHC 345 (Ch), (2005) 102(13) LSG 28 ��������������������������������������������������������������������������������������������� 8.28, 8.29 Nippon Menkwa Kabushiki Kaisha (Japan Cotton Trading Co Ltd) v Dawsons’s Bank Ltd [1935] 51 Ll L Rep 147, PC (Burma)���������������������������������������������2.29 Noell v Wells and Page (1668) 1 Lev 235���������������������������������������������������������������������������������9.22 North Eastern Properties Ltd v Coleman [2010] EWCA Civ 277, [2010] 1 WLR 2715�������3.80 North West Water Ltd v Binnie & Partners [1990] 3 All ER 547�����������������������������������������9.96 North Western Gas Board v Manchester Corporation [1964] 1 WLR 64��������������������������2.80 Nouvion v Freeman (1889) 15 App Cas 1��������������������������������������������������������������������� 9.28, 9.55 NRAM plc v McAdam [2014] EWHC 4174 (Comm), [2015] 2 All ER 340����������������������3.21 NRAM plc v McAdam [2015] EWCA Civ 751, [2016] 3 All ER 665���������������������� 2.108, 3.21 Nurcombe v Nurcombe [1985] 1 WLR 370������������������������������������������������������������������ 8.27, 8.33 Oak Property Co Ltd v Chapman [1947] KB 886, CA������������������������������������������������ 8.64, 8.65 Official Custodian for Charities v Parway Estates Developments Ltd [1985] Ch 151������������������������������������������������������������������������������������������������������������� 8.70, 8.88 Ogilvie v West Australian Mortgage and Agency Corporation Ltd [1896] AC 257, PC��������������������������������������������������������������������������� 3.55, 3.134, 3.153, 3.154, 3.155, 3.161, 3.170, 3.180, 3.210 Oliver Ashworth (Holdings) Ltd v Ballard (Kent) Ltd [2000] Ch 12����������������������������������������������������������������������� 2.200, 2.204, 8.1, 8.14, 8.29, 8.36, 8.40, 8.41 Onward Building Society v Smithson [1893] 1 Ch 1, CA�������������������3.39, 4.1, 4.5, 4.23, 4.25, 4.26, 4.27 O’Reilly v Mackman [1983] 2 AC 237�����������������������������������������������������������������������������������9.151 Orient Steam Navigation Co Ltd v The Crown (1952) 21 Lloyd’s Rep 301������������������������2.85 Osibanjo v Seahive Investments Ltd [2008] EWCA Civ 1282, [2009] 2 P & CR 2����������������������������������������������������������������������������������8.56, 8.57, 8.64, 8.102 xlviii

Table of Cases  Otkritie Capital International Ltd v Threadneedle Asset Management [2015] EWHC 2329 (Comm), [2015] 2 CLC 459, [2015] All ER (D) 68 (Aug)��������9.232 Otkritie Capital International Ltd v Threadneedle Asset Management Ltd [2017] EWCA Civ 274, [2017] CP Rep 27������9.222, 9.226, 9.232 OTV Birwelco Ltd v Technical & General Guarantee Co Ltd [2002] EWHC 2240 (TCC), [2002] 4 All ER 668��������������������������������������������������� 4.11, 4.23 Outram v Morewood (1803) 3 East 346��������������������������������������������������9.65, 9.89, 9.104, 9.135 Ovendale Pty v Anthony (1966) 117 CLR 539, HCA����������������������������������������������������������8.108 Owens Bank Ltd v Bracco [1992] 2 AC 443����������������������������������������������������������������������������9.39 Oxley v Hiscock [2004] EWCA Civ 546, [2005] Fam 211����������������������������������������������������7.74 P v P [1957] NZLR 854 �����������������������������������������������������������������������������������������������������������3.124 Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal [1983] 1 AC 854����������������3.63 Pacol Ltd & Others v Trade Lines Ltd and R/I Sif IV (The Henrik Sif) [1982] 1 Lloyd’s Rep 456������������������������������������� 3.62, 6.132, 6.164, 6.166 Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997������������������������������2.63 Pallant v Morgan [1953] Ch 43�������������������������������������������������������������������7.54, 7.70, 7.71, 7.137 Pankhania v Hackney LBC [2002] EWHC 2441 (Ch), [2002] NPC 123������������������ 3.20, 3.26 Panoutsos v Raymond Hadley Corporation of New York [1917] 2 KB 473����� 2.216, 6.14, 6.117 Pargeter v Harris (1845) 7 QB 708�������������������������������������������������������������������������������������������4.29 Pascoe v Turner [1979] 1 WLR 431�����������������������������������2.244, 7.31, 7.35, 7.91, 7.106, 7.111, 7.247, 7.271, 7.273, 7.296, 7.310 Pathfinder Minerals Plc v Veloso [2012] EWHC 2856 (Comm), [2012] All ER (D) 263 (Nov)������������������������������������������������������������������������������������ 2.29, 5.28 Pao On v Lau Yiu Long [1980] AC 614, PC (HK)������������������������������������������������������� 6.16, 6.58 Parbulk II A/S v Heritage Maritime Ltd SA [2011] EWHC 2917 (Comm), [2012] 2 All ER (Comm) 418����������������������������������������������������������������������������������������������8.91 Patman v Pay (1974) 232 EG 457�������������������������������������������������������������������������������������������6.138 Pearce v Chaplin (1846) 9 QB 802�������������������������������������������������������������������������������������������8.52 Peareth v Marriott (1882) 22 Ch D 182, CA���������������������������������������������������������������������������9.65 Pearl Carriers Inc v Japan Line Ltd (The Chemical Venture) [1993] 1 Lloyd’s Rep 508�������6.82 Peekay Intermark Ltd, Harish Pawani v Australia and New Zealand Banking Group Ltd [2006] EWCA Civ 386, [2006] 2 Lloyd’s Rep 511��������3.190, 3.192, 3.194 Pennant’s Case (1596) 3 Co Rep 64a������������������������������������������������������������������� 6.155, 8.13, 8.91 Penn-Texas Corporation v Murat Anstalt (No 2) [1964] 2 QB 647��������������������������� 9.5, 9.102 Penny’s Bay Investment Co Ltd v Director of Lands, FACV No 1 of 2017, HK FCA�������9.32 Perrot (JF) & Co Ltd v Cohen [1951] 2 KB 705���������������������������������� 6.14, 6.105, 6.173, 6.207 Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1996] AC 514, PC (HK)���������������������������������������������������������������8.11, 8.40, 8.43, 8.45, 8.47, 8.48, 8.49, 8.50, 9.8 Petrie v Nuttall (1856) 11 Exch 569����������������������������������������������������������������������������� 1.48, 9.120 Petty v Daniel (1886) 34 Ch D 172����������������������������������������������������������������������������������������2.116 Peyman v Lanjani [1985] Ch 457, CA���������������������������������������� 3.121, 6.153, 6.155, 8.57, 8.58, 8.61, 8.76, 8.79, 8.81, 8.83, 8.85, 8.86, 8.100 Philips v Bury (1694) Term Rep 346���������������������������������������������������������������������������� 1.72, 9.165 Philips v Bury (1696) 1 Ld Raym 5������������������������������������������������������������������������������������������9.22 xlix

Table of Cases Philips Electronique Grand Public SA v BskyB Ltd [1995] EMLR 472������������������������������4.28 Phillip Collins v Davis [2000] 3 All ER 808��������������������������������������������������������������������������3.165 Phillips v Phillips (1862) 4 De GF & J 208����������������������������������������������������������������������������2.238 Phipps v Lovegrove (1873) LR 16 Eq 80��������������������������������������������������������������������������������2.264 Phonographic Performance Ltd v AEI Rediffusion Music Ltd [1999] 1 WLR 1507, CA����������������������������������������������������������������������������������������������������7.307 Phosphate Sewage Co v Molleson (1879) 4 App Cas 801���������������������������������������������������9.238 Pickard v Sears (1837) 6 Ad & El 469������������������������������������������� 3.1, 3.42, 3.44, 3.52, 3.53, 7.4 Pinisetty v Manikonda [2017] EWHC 838 (QB), [2017] 5 Cost LO 565, [2017] All ER (D) 98 (Apr)���������������������������������������������������������������������7.37, 7.72, 7.81, 7.97 Pink v Lawrence (1978) 36 P & CR 98������������������������������������������������������������������������������������4.18 Pinnel’s Case (1602) 5 Co Rep 117a�������������������������������������2.207, 2.214, 6.13, 6.16, 6.40, 6.47, 6.48, 6.49, 6.50, 6.51, 6.53, 6.61, 6.66, 6.69, 6.73, 6.83, Glossary Pitts v Hunt [1991] 1 QB 24����������������������������������������������������������������������������������������������������2.133 Plasticmoda Societe per Azoni v Davidsons (Manchester) Ltd [1952] 1 Lloyd’s Rep 527����������������������������������������������������������������������������������������������������2.217 Plimmer v Mayor, etc, of Wellington (1883) 1 NZLR 229, NZCA��������������������������������������7.23 Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699, PC (NZ)����������� 1.72, 1.75, 2.71, 2.77, 2.80, 2.148, 2.244, 2.248, 2.249, 7.4, 7.18, 7.20, 7.21, 7.22, 7.23, 7.24, 7.28, 7.30, 7.36, 7.37, 7.43, 7.48, 7.52, 7.59, 7.78, 7.100, 7.103, 7.109, 7.116, 7.121, 7.127, 7.161, 7.169, 7.194, 7.254, 7.266, 7.284, 7.298, 7.304, 7.305 Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendant of Crown Lands [1947] AC 565, PC����������������������������������������������������������������������������������6.12 Pople v Evans [1969] 2 Ch 255������������������������������������������������������������������������������������� 9.54, 9.128 Porter v Secretary of State for Transport [1996] 3 All ER 693 ����������������������3.134, 6.201, 9.82 Poulson v Adjustable Cover and Boiler Block Co [1908] 7 Ch 430�����������������������������������9.217 Poulton v Moore [1915] 1 KB 400���������������������������������������������������������������������������������� 4.20, 4.23 President of the Methodist Conference v Parfitt [1984] QB 368�����������������������������������������3.85 Prest v Petrodel Properties Ltd [2013] UKSC 34, [2013] 2 AC 415�����������������������������������9.136 Price v Worwood (1859) 4 H & N 512������������������������������������������������������������������������������������8.19 Pridean Ltd v Forest Taverns Ltd (1998) 75 P & CR 447, CA���������������������������������� 7.36, 7.133 Priestley v MacLean (1860) 2 F & F 288��������������������������������������������������������������������������������6.201 Prime Sight Ltd v Lavarello [2013] UKPC 32, [2014] AC 436, PC (Gib)���������������� 1.75, 2.21, 2.111, 2.186, 2.277, 2.285, 3.187, 3.190, 3.191, 4.5, 4.16, 4.17, 4.23, 4.24, 4.33, 4.53, 4.54, 4.55, 4.56, 4.57, 4.62, 5.7, 5.14, 5.39, 5.43 Proctor v Bennis (1887) 36 Ch D 740�������������������������������������������������������������������������� 6.190, 8.76 Proctor and Gamble Philippine Manufacturing Corporation v Peter Cremer GmbH [1988] 3 All ER 843����������������������������������������������������������������������6.148 Prudential Assurance Co v London Residuary Body [1992] 2 AC 386������������������������������5.29 Prudential Assurance Co Ltd v Mount Eden Land Co Ltd [1997] 1 EGLR 37����������������7.132 l

Table of Cases  PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994 (Ch), [2004] Ch 142�������������������������������������������������������������������������� 1.55, 1.56, 2.159, 2.160, 2.178, 2.193, 2.197, 3.25, 3.111, 3.122, 3.131, 3.135, 3.188, 4.1, 4.5, 4.18, 4.20, 4.21, 4.26, 4.27, 4.46, 4.58, 5.6, 5.28, 5.29, 5.44, 5.45, 5.58, 5.69, 5.70, 5.71, 5.75, 5.78, 5.79, 6.177, 6.178, 6.191, 6.195, 7.49, 7.236, 7.308 Queen’s Moat Houses Plc v Capita IRG Trustees Ltd [2004] EWHC 868 (Ch), [2005] 2 BCLC 199�������������������������������������������������������������������5.40 R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions [2001] UKHL 23, [2003] 2 AC 295�������������������������������������2.91 R (on the application of Bloggs 61) v Secretary of State for the Home Department [2003] EWCA Civ 686, [2003] 1 WLR 2724����������������������������2.90 R (Coke-Wallis) v Institute of Chartered Accountants in England and Wales [2011] UKSC 1, [2011] 2 AC 146���������������9.42, 9.65, 9.90, 9.148, 9.166, 9.167 R (Gray) v Police Appeals Tribunal [2018] EWCA Civ 34, [2018] 1 WLR 1609, CA������������������������������������������������������ 2.41, 2.43, 9.42, 9.50, 9.56, 9.90, 9.166, 9.221, 9.222 R (On the application of Munjaz) v Mersey Care NHS Trust [2003] EWCA Civ 1036, [2004] QB 395�������������������������������������� 9.147, 9.148, 9.153, 9.156 R (on the application of Nahar) v Social Security Commissioners [2002] EWCA Civ 859, [2002] ACD 105������������������������������������������������������������������������9.148 R (Reprotech (Pebsham) Ltd) v East Sussex County Council [2002] UKHL 8, [2003] 1 WLR 348������������������������������������� 1.1, 2.63, 2.70, 2.78, 2.88, 2.89, 2.90, 2.91, 2.99, 6.14 R v Bow Street Metropolitan Stipendiary Magistrate, ex parte Pinochet Ugarte (No 2) [2000] 1 AC 119������������������������������������������������������������������������������������������9.41 R v British Coal Corporation, ex parte Vardy [1993] ICR 720���������������������������������������������2.93 R v General Council of the Bar, ex parte Percival [1991] 1 QB 212������������������������������������2.77 R v Governor of Brixton Prison, ex parte Osman [1991] 1 WLR 281��������������������� 9.93, 9.149 R v Grundon [1775] 1 Cowp 315�������������������������������������������������������������������������������������������9.166 R v Hampden (1637) 3 St Tr 826����������������������������������������������������������������������������������������������2.63 R v Hebden (1738) Andr 388������������������������������������������������������������������������������������������ 9.22, 9.37 R v Inhabitants of the Township of Hartington Middle Quarter (1855) 4 E & B 780�������9.89 R v Leicester City Council, ex parte Powergen UK Ltd [2000] JPL 629������������������������������2.88 R v Minister of Immigration and Multicultural Affairs (2013) 214 CLR 1������������������������2.96 R v Ministry of Agriculture, Fisheries and Food, ex parte Hamble Fisheries (Offshore) Ltd [1995] 2 All ER 714������������������������������������������������������������������������������������2.70 R v Nedrick [1986] 1 WLR 1025����������������������������������������������������������������������������������������������3.93 R v North and East Devon Health Authority, ex parte Coughlan [2001] QB 213, [2000] 2 WLR 622 �������������������������������������������������������������������������� 2.91, 2.96 R v Paulson [1921] 1 AC 271, PC (Can)��������������������8.1, 8.93, 8.98, 8.106, 8.107, 8.108, 8.109 R v Secretary of State for the Environment, ex parte Hackney London Borough Council [1984] 1 WLR 592, CA����������������������������������������������������������� 9.146, 9.148 R v University of Cambridge (1723) 1 Str 557������������������������������������������������������������������������2.94 li

Table of Cases R v Westminster City Council [1986] AC 668, HL����������������������������������������������������������������2.93 R v Woollin [1999] 1 AC 82, HL����������������������������������������������������������������������������������������������3.93 Radcliffe v Pacific Steam Navigation Co [1910] 1 KB 685������������������������������������������ 9.79, 9.82 Raiffeisen Zentralbank Osterreich AG v Royal Bank of Scotland Plc [2010] EWHC 1392 (Comm), [2011] 1 Lloyd’s Rep 123 ��������������������������������� 3.114, 3.194 Railtrack Plc (in Railway Administration) v Guinness Ltd [2003] EWCA Civ 188, [2003] 1 EGLR 124����������������������������������������������������������� 3.26, 9.35 Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900���������������� 6.137, 7.151 Rajapakse v Fernando [1920] AC 892, PC (Ceylon)�������������������������������������������������������������4.66 Rama Corporation Ltd v Proved Tin and General Investments Ltd [1952] 2 QB 147��������������������������������������������������������������������������������������������������������������������3.46 Ramsden v Dyson (1866) LR 1 HL 129, HL����������������������������� 7.2, 7.10, 7.18, 7.20, 7.21, 7.22, 7.23, 7.24, 7.25, 7.28, 7.30, 7.34, 7.36, 7.37, 7.45, 7.48, 7.50, 7.100, 7.106, 7.111, 7.112, 7.125, 7.127, 7.135, 7.156, 7.159, 7.162, 7.184, 7.193, 7.281, 7.302 Randolph v Tuck [1962] 1 QB 175��������������������������������������������������������������������������������� 9.95, 9.96 Rann v Hughes (1778) 7 Term Rep 350n�������������������������������������������������������������������������6.3, 6.40 Raysing’s Case (1560) 2 Dyer 208��������������������������������������������������������������������������������������4.1, 4.25 RBC Dominion Securities Inc v Dawson (1994) 111 DLR (4th) 230, Newfoundland������������������������������������������������������������������������������������������������ 3.170, 3.174 Redgrave v Hurd (1881) 20 Ch D 1 ���������������������������������������������������������������������������� 3.96, 3.117 Reese River Silver Mining Co Ltd v Smith (1869) LR 4 HL 64, HL������������������������������������3.32 Relvok Properties v Dixon (1973) 25 P & CR 1���������������������������������������������������������������������8.92 Republic of India v India Steamship Co Ltd (No 1) [1993] AC 410, HL����������������� 2.17, 2.34, 2.110, 2.147, 5.18, 5.28, 9.8, 9.24, 9.25, 9.26, 9.30, 9.67, 9.69, 9.70, 9.75, 9.77, 9.85, 9.86, 9.99, 9.188 Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878, HL; [1998] AC 878, CA������������������������������������������������1.24, 2.34, 2.51, 2.110, 2.187, 2.279, 3.20, 3.25, 3.138, 4.21, 4.59, 5.4, 5.5, 5.6, 5.8, 5.17, 5.22, 5.23, 5.28, 5.37, 5.41, 5.43, 5.49, 5.57, 5.60, 5.61, 5.64, 5.69, 5.82, 7.2, 7.45, 9.23, 9.24, 9.27, 9.30, 9.70, 9.75, 9.77, 9.117 Resolution Chemicals Ltd v Lundbeck A/S [2013] EWCA Civ 924, [2014] RPC 5��������9.134 Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174 ������1.57, 2.21, 2.178, 3.68, 3.114, 5.6, 5.8, 5.24, 5.44, 5.52, 5.55, 5.65, 5.70, 5.71, 5.80, 5.90, 5.92 Revenue and Customs Commissioners v Pal [2006] EWHC 2016 (Ch), [2008] STC 2442�����������������������������������������������������������������������������������������������������������������2.147 Rhyl UDC v Rhyl Amusements Ltd [1959] 1 WLR 465��������������������������������������������������������2.79 Ribble Joint Committee v Croston UDC [1897] 1 QB 251���������������������������������������������������9.61 Ricardo v Garcias (1845) 12 Cl & F 368���������������������������������������������������������������������� 9.70, 9.176 lii

Table of Cases  Rice v Reed [1900] 1 QB 54������������������������������������������������������������������������������������������������������8.50 Richardson Roofing Co Ltd v Colman Partnership Ltd [2009] EWCA Civ 839, [2009] 4 Costs LR 521����������������������������������������������������������������9.16 Riches v Hogben [1985] 2 QR 292�������������������������������������������������������������������������������������������7.61 Right d Jefferys v Bucknell (1831) 2 B & Ad 278����������������������������������������4.14, 4.25, 4.29, 4.83 Risch v McFee [1991] 1 FLR 105, (1991) 61 P & CR 42, CA������������������������������������ 7.72, 7.237 Riverlate Properties Ltd v Paul [1975] Ch 133����������������������������������������������������������� 4.18, 6.138 Rivertrade Ltd v EMG Finance Ltd [2015] EWCA Civ 1295, [2016] 2 BCLC 226�����������������������������������������������������������������������������������2.19, 5.22, 5.45, 5.70 Roberts v Church Commissioners for England [1972] 1 QB 278����������������������������������������5.12 Robertson v Minister of Pensions [1949] 1 KB 227, CA�������� 2.30, 2.77, 2.80, 6.14, 6.105, 6.160 Rochdale Canal Co v King (1853) 16 Beav 630������������������������������������������������� 7.13, 7.36, 7.125 Roe v Mutual Loan Fund Ltd (1887) 19 QBD 347���������������������������������������������������������������2.149 Roebuck v Mungovin [1994] 2 AC 224, [1994] 1 All ER 568, HL������������������ 6.31, 6.78, 7.260 Rogers v Wood (1831) 2 B & Ad 245����������������������������������������������������������������������������� 9.59, 9.63 Rookes v Barnard [1964] AC 1129, HL�����������������������������������������������������������������������������������6.16 Rose & Frank Co v JR Crompton & Bros Ltd [1923] 2 KB 261, CA������������������������������������5.32 Rose & Frank Co v JR Crompton & Bros Ltd [1925] AC 445, HL�������������������������������������7.135 RTS Flexible Systems Ltd v Molkerie Alois Muller GmbH & Co KG [2010] UKSC 14, [2010] 1 WLR 753�������������������������������������������������������������������������������7.133 Rudd v Bowles [1912] 2 Ch 60�������������������������������������������������������������������������������������������������4.24 Russell v Watts (1883) 25 Ch D 559���������������������������������������������������������������������������������������7.113 Russell v Watts (1884) 10 App Cas 590����������������������������������������������������������������������� 7.18, 7.113 Russo-Chinese Bank v Li Yau Sam [1910] AC 174, PC (HK)����������������������������������������������3.46 Safehaven Investments Inc v Springbok Ltd (1995) 71 P & CR 59��������������������������������������8.21 Sajid v Sussex Muslim Society [2001] EWCA Civ 1684, [2002] IRLR 113�����������������������9.165 Salisbury (Marquess) v Gilmore [1942] 2 KB 38��������������������������������������������������������������������6.11 Salvation Army Trustee Co v West Yorkshire Metropolitan County Council (1980) 41 P & CR 179��������������������������� 2.80, 2.85, 2.235, 7.2, 7.98, 7.133, 7.167, 7.183, 7.247, 7.282 Sarat Chander Dey v Gopal Chander Laha (1892) 19 LR Ind App 203, PC (Fort William (Bengal))����������������������������������������������������������������������������������������������7.112 Sargent v ASL Developments Ltd (1974) 131 CLR 634���������������������������������������������������������8.16 Saunders v Anglia Building Society; sub nom Gallie v Lee [1971] AC 1004, HL��������������4.16 Saunders v Merryweather (1865) 3 H & C 902����������������������������������������������������������������������4.29 Scammell (G) and Nephew Ltd v Ouston [1941] AC 251, HL�������������������������������������������6.122 Scarf v Jardine (1882) 7 App Cas 345, HL������������������������������� 3.17, 8.13, 8.14, 8.15, 8.24, 8.34, 8.36, 8.40, 8.55, 8.87, 9.83 Schofield v Earl of Londesborough [1896] AC 514, HL��������������������������������������������������������3.58 Scottish & Newcastle Plc v Lancashire Mortgage Corporation Ltd [2007] EWCA Civ 684, [2007] NPC 84���������������������������������������������������������������������������2.153 Scottish Equitable Plc v Derby [2001] EWCA Civ 369, [2001] 3 All ER 818��������� 2.51, 2.183 Scraptrade, The; Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana [1983] QB 529, CA��������������������������������������������������������������������������� 6.117, 6.125 Scraptrade, The; Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana [1983] 2 AC 694, HL�������������������������������������������������������������������6.117 liii

Table of Cases Secretary of State for Employment v Globe Elastic Thread Co Ltd [1980] AC 506, HL��������������������������������������������������������2.108, 2.121, 2.122, 6.70, 6.71, 6.158 Seechurn v Ace Insurance SA-NV [2002] EWCA Civ 67, [2002] 2 Lloyd’s Rep 390���������������������������������������������3.48, 6.107, 6.117, 6.133, 6.139, 7.151 Segal Securities v Thoseby [1963] 1 QB 887���������������������������������������������������������������������������8.19 Selectmove Ltd, Re [1995] 1 WLR 474, CA������������������������������������������������6.43, 6.48, 6.64, 6.65 Sere Holdings Ltd v Volkswagen Group United Kingdom Ltd [2004] EWHC 1551 (Ch), [2004] All ER (D) 76 (Jul)�����������������������������������������������������5.51 Seton v Lafone (1886) 18 QBD 139, QBD ����������������������������������������������������������������������������3.153 Seton v Lafone (1887) 19 QBD 68, CA��������������������������������������������������������������� 3.37, 3.95, 3.208 Shadwell v Hutchinson (1831) 2 B & Ad 97���������������������������������������������������������������������������9.72 Shaw v Applegate [1977] 1 WLR 970����������������������������������������������������������������������������� 7.29, 7.95 Shiloh Spinners Ltd v Harding [1973] AC 691, HL������������������������������������������������� 2.233, 2.238 Ship Money case. See R v Hampden Sidhu v Van Dyke (2014) 308 ALR 232, HCA����������������������������������������������������������������������7.278 Sidney Bolsom Investment Trust Ltd v E Karmios & Co (London) Ltd [1956] 1 QB 529�����������������������������1.84, 3.19, 3.41, 3.88, 6.107, 7.149, 7.150 Siegfried v Adelburt Unruh (FACV Nos 9 and 10 of 2006), HK CFA��������������������������1.75, 5.4 Siew Soon Wah v Yong Tong Hong [1973] AC 836, PC (Malaysia)����������������������������������7.106 Simm v Anglo American Telegraph Co (1879) 5 QBD 188 ���������������������������������� 3.121, 3.153 Simpson v Fogo (1863) 1 H & M 195������������������������������������������������������������������������������������9.190 Simpson v Norfolk and Norwich University Hospital NHS Trust [2011] EWCA Civ 1149, [2012] QB 640�������������������������������������������������������������������������2.164 Skyring v Greenwood (1825) 4 B&C 281��������������������������������������������� 3.52, 3.135, 3.156, 3.170 Sledmore v Dalby (1996) 72 P & CR 196, CA��������������������������� 7.31, 7.53, 7.193, 7.231, 7.232, 7.236, 7.272, 7.278, 7.280, 7.284, 7.290 Smirk v Lyndale Developments [1975] Ch 317��������������������������������������������������������������������6.207 Smith v Baker (1737) 1 Atk 385����������������������������������������������������������������������������������������������7.254 Smith v Hughes (1871) LR 6 QB 597�������������������������������������������������������������������������������������6.137 Smith v Land and House Property Corporation (1884) 28 Ch D 7��������������������������� 3.32, 3.42 SmithKline Beecham Plc v Apotex Europe Ltd [2006] EWCA Civ 658, [2007] Ch 71, CA ������������������������������������������������������������������������������������������������������ 2.34, 5.40 Société Italo-Belge pour Le Commerce et L’Industrie SA (Antwerp) v Palm and Vegetable Oils (Malaysia) Sdn Bhd (The Post Chaser) [1982] 1 All ER 19, QBD��������������������������������������������6.12, 6.113, 6.127, 6.191, 6.197, 6.198 Society of Medical Officers of Health v Hope (Valuation Officer) [1960] AC 551, HL����9.89 Soleimany v Soleimany [1999] QB 785���������������������������������������������������������������������������������2.162 Solle v Butcher [1950] 1 KB 671�����������������������������������������������������������������������������������������������3.28 Somerset Coal Canal Company v Harcourt (1858) 2 De Gex & Jones�������������������������������7.12 South American and Mexican Co, Re, ex parte Bank of England [1895] 1 Ch 37������ 9.16, 9.45 South Eastern Railway Co v Warton (1861) 6 H & N 520����������������������������������������������������4.38 Southend-on-Sea Corporation v Hodgson (Wickford) Ltd [1962] 1 QB 416���������� 2.79, 2.81 Southern British National Trust Ltd (In Liquidation) v Pither (1937) 37 CLR 89����������2.265 Southern Gas Networks Plc v Thames Water Utilities Ltd [2018] EWCA Civ 33, [2018] 1 WLR 5997�����������������������������������������������������������������������2.77 Spens v IRC [1970] 1 WLR 1173, ChD���������������������������������������������������������������������������������9.100 liv

Table of Cases  Spiro v Lintern [1973] 1 WLR 1002, CA��������������������������������������� 3.60, 3.61, 3.63, 3.210, 6.132 Spriggs v Wessington Court School Ltd [2004] EWHC 1432 (QB), [2005] Lloyd’s Rep IR 474���������������������������������������������������������������������������������������������������8.18 Springwell Navigation Corporation v JP Morgan Chase Bank [2010] EWCA Civ 1221, [2010] 2 CLC 705���������������������������������������������3.186, 3.196, 3.197 Stack v Dowden [2007] UKHL 17, [2008] 2 AC 432���������������������������������������� 2.186, 7.72, 7.78 Stancliffe Stone Co Ltd v Peak District National Park Authority [2004] EWHC 1475 (QB), [2005] Env LR 4����������������������������������������������������������� 2.63, 2.90 State of Norway’s Application (No 2), Re [1988] 3 WLR 603���������������������������������������������9.102 Steadman v Steadman [1976] AC 536, HL��������������������������������������������������������� 2.143, 7.16, 7.64 Steam Line Ltd v Merchant Navy Ratings Pension Trustees Ltd [2010] EWHC 1805 (Ch), [2010] Pens LR 411������������������������������������������������������������������5.6 Steed v Whitaker (1740) Barn Ch 220������������������������������������������������������������������ 3.60, 7.7, 7.156 Stephens v Junior Army and Navy Store [1914] 2 Ch 516����������������������������������������������������8.19 Steria Ltd v Hutchison [2006] EWCA Civ 1551, [2007] ICR 445, [2007] 2 P & CR DG8�������������������������������������������������1.52, 1.55, 1.56, 1.70, 2.193, 3.5, 3.11, 3.92, 3.93, 3.111, 3.114, 3.116, 3.117, 3.121, 3.122, 3.126, 3.139, 3.142, 3.197, 4.45, 4.53, 5.67, 5.70, 5.71, 5.74, 5.76, 6.24, 6.143, 6.175, 6.176, 6.179, 6.182, 6.183, 6.185, 6.189, 6.191, 6.192, 6.193, 6.195, 6.196, 6.197, 6.200, 7.49, 7.98, 7.101, 7.140, 7.165, 7.208, 7.224, 7.229, 7.252 Stevens & Cutting Ltd v Anderson [1990] 1 EGLR 95������������������������������������������������ 8.81, 8.82 Stewart v Engel [2000] 1 WLR 2268���������������������������������������������������������������������������� 7.297, 9.35 Stiles v Cowper (1748) 3 Atk 692���������������� 6.7, 7.3, 7.8, 7.9, 7.121, 7.122, 7.169, 7.193, 7.281 Stilk v Myrick (1809) 2 Camp 317, (1809) 6 Esp 129����� 6.3, 6.16, 6.40, 6.43, 6.55, 6.56, 6.57, 6.60, 6.61, 6.62, 6.67, 6.68, 6.69, Glossary Stocznia Gdanska SA v Latvian Shipping Co [2002] EWCA Civ 889, [2002] 2 Lloyd’s Rep 436������������������������������������������������������������������������������������������������������8.21 Stocznia Gdynia SA v Gearbulk Holdings Ltd [2009] EWCA Civ 75, [2010] QB 27������8.111 Stolt Loyalty, The [1993] 2 Lloyd’s Rep 281����������������������������������������������������������������� 3.62, 6.132 Stratford v Syrett [1958] 1 QB 107�������������������������������������������������������������������������������������������4.69 Stratford (JT) & Son Ltd v Lindley [1965] AC 269����������������������������������������������������������������6.16 Stratulatos v Stratulatos [1988] 2 NZLR 424������������������������������������������������������������������������7.273 Street v Mountford [1985] AC 809, HL���������������������������������������������������2.135, 3.25, 4.69, 7.283 Stroughill v Buck (1850) 14 QB 781��������������������������������������������������������������������� 4.32, 4.42, 4.43 Strover v Strover [2005] EWHC 860 (Ch), [2005] WTLR 1245����������������������������������������7.258 Stuart v Goldberg Linde (a firm) [2008] EWCA Civ 2, [2008] 1 WLR 823���������������������9.232 Suggitt v Suggitt [2011] EWHC 903 (Ch), [2011] 2 FLR 875����������������������7.149, 7.190, 7.294 Suggitt v Suggitt [2012] EWCA Civ 1140, [2012] WTLR 1607������������������7.233, 7.236, 7.248, 7.272, 7.307 Sunderland Marine Insurance Co v Kearney (1851) 16 QB 925�������������������������������� 4.14, 4.15 Surrey Shipping Co Ltd v Compagnie Continentale (France) SA; Shackleford, The [1978] 2 Lloyd’s Rep 154, CA������������������������������������������������������������������������������������6.137 lv

Table of Cases Svenson v Payne (1945) 72 CLR 531��������������������������������������������������������������������������������������7.160 Swan v North British Australasian Co Ltd (1863) 2 H & C 175���������������������� 3.55, 3.77, 3.208 Swain v West (Butchers) Ltd [1936] 1 All ER 224, KBD�������������������������������������������������������6.56 Sweetman v Nathan [2003] EWCA Civ 1115, [2004] P & CR 7������������������������������������������9.96 Sybray v White (1836) 1 M & W 435�������������������������������������������������������������������������������������9.169 Sybron Corpn v Rochem Ltd [1984] Ch 112��������������������������������������������������������������������������6.56 T & N Ltd v Royal & Sun Alliance Plc [2003] EWHC 1016 (Ch), [2003] 2 All ER (Comm) 939����������������������������������������������������������������������������������������������5.40 Tabor v Godfrey (1895) 64 LJ (QB) 245��������������������������������������������������������������������������������6.207 Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank [1986] AC 80, PC (HK)��������� 3.84, 3.110, 3.121, 3.139, 6.176, 6.191, 7.229 Talbot v Berkshire County Council [1994] QB 290�������������������������������������������������������������9.224 Tamil Nadu Electricity Board v ST-CMS Electricity Co Private Ltd [2007] EWHC 1713 (Comm), [2007] 2 All ER (Comm) 701����������������������������������������5.72 Tang Man Sit v Capacious Investments Ltd [1996] AC 514, PC (HK)��������������������������������8.11 Taylor v Attorney General [1975] 2 NZLR 675, NZCA������������������������������������������������������9.218 Taylor v Dickens [1998] 1 FLR 806, ChD���������������������������������������������������1.45, 7.2, 7.82, 7.126 Taylor v Needham (1810) 2 Taunt 278�����������������������������������������������������������2.264, 2.270, 2.286 Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n��������� 2.189, 3.30, 3.50, 3.139, 4.1, 4.20, 4.24, 4.25, 4.27, 6.2, 6.34, 6.115, 6.142, 7.2, 7.3, 7.4, 7.28, 7.29, 7.30, 7.31, 7.36, 7.45, 7.50, 7.95, 7.98, 7.112, 7.113, 7.150, 7.156, 7.159, 7.160, 7.161, 7.169, 7.171, 7.184, 7.206, 7.212, 7.281 Taylor Walton v David Eric Laing [2007] EWCA Civ 1146, [2008] PNLR 11�����������������9.238 TCB Ltd v Gray [1986] Ch 621��������������������������������������������������������������������������������������� 2.30, 3.18 Tehidy Minerals Ltd v Norman [1971] 2 QB 528, CA����������������������������������2.211, 7.114, 8.119 Tele2 International Card Co SA v Post Office Ltd [2009] EWCA Civ 9, [2009] All ER (D) 144 (Jan)����������������������������������������8.11, 8.31, 8.64, 8.79, 8.88, 8.91, 8.94 Territorial and Auxiliary Forces Association of the County of London v Nicholls [1949] 1 KB 35����������������������������������������������������������������������������������������������������������������������3.18 Terunnanse v Terunnanse [1968] AC 1086, PC (Ceylon)����������������������������������������������������4.87 Tervaete, The [1922] P 259, CA������������������������������������������������������������������������������������������������9.23 Tesco Stores Ltd v Costain Construction Ltd [2003] EWHC 1487 (TCC), [2003] All ER (D) 394 (Jul)�������������������������������������������������������������������������������������������������5.30 Thake v Maurice [1986] QB 644���������������������������������������������������������������������������������������������6.137 Thames Trains Ltd v Adams [2006] EWHC 3291 (QB), [2006] All ER (D) 320 (Dec)�����3.63 Thoday v Thoday [1964] P 181�����������������������������������1.2, 2.26, 9.7, 9.10, 9.36, 9.45, 9.68, 9.71, 9.90, 9.93, 9.102, 9.105, 9.106, 9.108, 9.109, 9.115, 9.141, 9.184, 9.199, 9.219 Thomas v Ken Thomas Ltd [2006] EWCA Civ 1504, [2007] 1 EGLR 31������������������ 8.57, 8.60 Thomas v Sorrell (1673) Vaugh 330���������������������������������������������������������������������������������������7.303 Thomas Bates & Son Ltd v Wyndham’s (Lingerie) Ltd [1981] 1 WLR 505�������������� 4.18, 5.40, 5.61, 6.138 Thompson v Palmer (1933) 49 CLR 507����������������������������������������������������������������������� 5.8, 6.182 lvi

Table of Cases  Thorner v Major [2007] EWHC 2422 (Ch), [2008] WTLR 155�����������������7.119, 7.120, 7.144, 7.149, 7.214, 7.310 Thorner v Major [2008] EWCA Civ 732, [2008] WTLR 1289, [2008] 2 FCR 435���������6.104, 6.133, 6.142, 7.119, 7.149 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776����������� 1.6, 1.23, 1.45, 1.51, 1.52, 1.54, 1.73, 2.23, 2.85, 2.140, 2.169, 2.178, 2.179, 3.39, 3.48, 3.49, 3.85, 3.89, 3.116, 3.122, 4.30, 4.53, 5.21, 5.24, 5.64, 5.66, 5.76, 6.7, 6.27, 6.30, 6.33, 6.34, 6.101, 6.104, 6.107, 6.113, 6.114, 6.116, 6.123, 6.126, 6.133, 6.140, 6.142, 6.143, 6.157, 6.182, 6.185, 6.191, 6.214, 7.1, 7.3, 7.4, 7.9, 7.10, 7.20, 7.21, 7.30, 7.31, 7.32, 7.35, 7.36, 7.38, 7.39, 7.40, 7.41, 7.42, 7.43, 7.44, 7.45, 7.51, 7.53, 7.57, 7.59, 7.61, 7.76, 7.81, 7.82, 7.91, 7.98, 7.101, 7.104, 7.105, 7.106, 7.107, 7.110, 7.111, 7.113, 7.118, 7.119, 7.121, 7.126, 7.130, 7.138, 7.139, 7.142, 7.144, 7.145, 7.146, 7.149, 7.150, 7.152, 7.153, 7.161, 7.168, 7.173, 7.177, 7.179, 7.183, 7.186, 7.187, 7.190, 7.191, 7.193, 7.206, 7.213, 7.214, 7.215, 7.216, 7.229, 7.238, 7.247, 7.250, 7.256, 7.281, 7.310, 8.58, 8.88, 8.95 Thornton and Dyson v Ramsden (1864) 4 Gif 519����������������������������������������������������������������7.23 Thornton Springer v NEM Insurance Co Ltd [2000] 2 All ER 489������������������������� 6.53, 6.108 Thoroughgood’s Case (1582) 2 Co Rep 9b������������������������������������������������������������������������������4.16 Thrasyvoulou v Secretary of State for the Environment [1990] 2 AC 273, HL����� 2.67, 2.102, 9.2, 9.3, 9.80, 9.142, 9.143, 9.144, 9.153, 9.154 Tilling v Armitage (1805) 12 Ves Jun 78����������������������������������������������������������������������� 7.10, 7.21 Timbercorp Finance Pty Ltd v Collins [2016] HCA 44, (2017) 259 CLR 212, HCA������9.225 Tomlinson v Ramsey Food Processing Pty Ltd (2016) 256 CLR 257, HCA���������������������9.135 Toogood v Farrell [1988] 2 EGLR 233�����������������������������������������������������������������������������������7.281 Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd (No 1) (1952) 69 RPC 108, CA�������������������������������������������������������������������������������������������������������6.98 Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd (No 3) [1955] 1 WLR 761, HL���������������������������������������������2.223, 6.14, 6.17, 6.21, 6.72, 6.87, 6.98, 6.99, 6.111, 6.181 Toronto Railway Co v Corporation of the City of Toronto [1904] AC 809, PC (Can)��������������������������������������������������������������������������������� 9.43, 9.60, 9.61 Tradax Export SA v Dorada Compania Naviera SA (The Lutetian) [1982] 2 Lloyd’s Rep 140, QBD������������������������������������������������������������������������������������������3.62 Trane (UK) Ltd v Provident Mutual Life Assurance [1995] 1 EGLR 33, ChD ����������������3.117 Transport for London v Spirerose Ltd [2009] UKHL 44, [2009] 1 WLR 1797 ��������������������������������������������������������������������������������������3.134, 6.201, 9.82 Transvaal & Delagoa Bay Investment Co Ltd v Atkinson [1944] 1 All ER 579������������������������������������������������������������������������������������������������������������3.174 Trendtex Trading Corporation v Credit Suisse [1982] AC 679, HL���������������������� 2.164, 2.263 Trident Turboprop (Dublin) Ltd v First Flight Couriers Ltd [2008] EWHC 1686 (Comm), [2008] 2 Lloyd’s Rep 581����������������������������������������������3.194 Trinidad Asphalte Company v Coryat [1896] AC 587, PC���������������������������������� 4.6, 4.19, 4.40 Troop v Gibson [1986] 1 EGLR 1, CA��������������������������������������������������������������������������� 5.40, 5.89 lvii

Table of Cases Trustee Solutions Ltd v Dubery [2006] EWHC 1426 (Ch), [2007] 1 All ER 308��������������������������������������������� 2.63, 3.140, 5.40, 5.83, 6.195, 7.252, 7.308 Tulk v Moxhay (1848) 2 Ph 774����������������������������������������������������������������������������������������������2.227 Turton v Turton [1988] Ch 542������������������������������������������������������������������������������������������������7.77 Uglow v Uglow [2004] EWCA Civ 987, [2004] WTLR 1183����������������������6.107, 7.179, 7.231 Ungurian v Lesnoff [1990] Ch 206�������������������������������������������������������������������������������������������7.73 Unilin Beheer BV v Berry Floor NV [2007] EWCA Civ 364, [2007] Bus LR 1140���������9.217 Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514, PC (HK)���������������� 8.110, 8.117 Union Music Ltd v Watson [2002] EWCA Civ 680, [2004] BCC 37������������������������� 8.41, 8.45 United Australia Ltd v Barclays Bank Ltd [1941] AC 1, HL��������������������������������������������������������������������6.119, 8.33, 8.34, 8.44, 8.50, 9.83, 9.118 United Bank of Kuwait v Sahib [1997] Ch 107�����������������������������������������������������������������������7.83 United Overseas Bank v Jiwani [1976] 1 WLR 964 ���������������������������������������3.96, 3.112, 3.146 United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904, HL������������6.118 United Shoe Machinery Co of Canada v Brunet [1909] AC 330, PC (Can)����������������������8.33 Unity Joint Stock Mutual Banking Association v King (1858) 25 Beav 72�����������������7.3, 7.19, 7.281, 7.286 Universal Permanent Building Society v Cooke [1952] Ch 95�������4.70, 4.72, 4.76, 4.82, 4.84 Vadula v Lowes (1890) 25 QBD 310����������������������������������������������������������������������������������������9.38 Van Haarlam v Kasner [1992] 64 P & CR 214������������������������������������������������������������������������8.70 Van Laun, In Re [1907] 2 KB 23, CA�������������������������������������������������������������������������������������2.275 Vanderbergen v St Edmund’s Properties Ltd [1933] 2 KB 223���������������������������������������������6.43 Vandervell’s Trusts (No 2), Re [1974] Ch 269�����������������������������������������������������������������������7.258 Vauxhall Bridge Company v Earl of Spencer (1821) Jac 64����������������������������������������������������6.7 Vervaeke v Smith [1983] 1 AC 145, HL����������������������������2.41, 9.88, 9.191, 9.195, 9.220, 9.236 Vick v Edwards (1735) 3 Peere Wms 373��������������������������������������������������������������������������������4.68 Virgin Atlantic Airways Ltd v Premium Aircraft Interiors UK Ltd [2009] EWCA Civ 1062, [2010] RPC 8�����������������������������������������������������������������������������9.30 Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160��������������������������������������������� 1.31, 2.43, 2.192, 2.289, 9.4, 9.7, 9.8, 9.11, 9.16, 9.21, 9.22, 9.30, 9.50, 9.65, 9.70, 9.198, 9.199, 9.200, 9.205, 9.206, 9.207, 9.208, 9.209, 9.210, 9.211, 9.212, 9.213, 9.214, 9.215, 9.216, 9.217, 9.219, 9.220, 9.222, 9.224 Vistafjord, The; Norwegian American Cruises A/S v Paul Mundy Ltd [1988] 2 Lloyd’s Rep 343, CA���������������������������5.28, 5.44, 5.55, 5.82, 5.89 Vitol SA v Esso Australia Ltd; Wise, The [1989] 2 Lloyd’s Rep 451, CA��������������� 6.109, 6.183 Vitol SA v Norelf Ltd; Santa Clara, The [1996] AC 800, HL���������������������������� 8.91, 8.93, 8.110 Voyager Case. See Commonwealth v Verwayen Voyce v Voyce (1991) 62 P & CR 290, CA�������������������������������� 2.235, 7.19, 7.281, 7.295, 7.310 Vyuyan v Vyuyan (1861) 30 Beav 65���������������������������������������������������������������������������������������8.77 Waiwai Ltd v Grey and Menzies Ltd [1957] NZLR 70 �������������������������������������������������������3.123 Wakefield Corporation v Cooke [1904] AC 31, HL������������������������������������������������������������9.142 Wall v Radford [1991] 2 All ER 741�����������������������������������������������������������������������������������������9.96 Wallis’s Caxton Bay Holiday Camp Ltd v Shell-Mex and BP Ltd [1975] QB 94, [1974] 3 All ER 575, CA��������������������������������������������������������������� 6.126, 6.173 lviii

Table of Cases  Walsh v Lonsdale (1882) 21 Ch D 9����������������������������������������������������������������������������� 2.137, 4.13 Walton v Walton (unreported, 14 April 1994; [1994] CAT No 479)������������6.175, 7.61, 7.117 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, HCA�������������������������������������������������1.46, 2.21, 2.36, 2.139, 2.185, 5.35, 6.18, 6.19, 6.34, 6.109, 6.139, 6.159, 6.160, 6.164, 7.273, 8.121 Ward (RV) Ltd v Bignall [1967] 1 QB 534������������������������������������������������������������������������������8.39 Waring (No 2), Re; Westminster Bank v Burton-Butler [1948] Ch 221����������������� 9.21, 9.198 Warr (Frank) and Co Ltd v London County Council [1904] 1 KB 713������������������������������7.23 Watson v Goldsborough [1986] 1 EGLR 265�����������������������������������������������������������������������7.266 Watts v Storey (1984) 134 NLJ 631����������������������������������������������������������������������������������������7.229 Wayling v Jones (1993) 69 P & CR 170, CA��������� 7.2, 7.147, 7.206, 7.209, 7.219, 7.220, 7.257 Webb v Austin (1844) 7 Man & G 701������������������������������������������������������������������������ 2.285, 4.66 Webb v Spicer (1849) 13 QB 88����������������������������������������������������������������������������������������������2.283 Wee v Law Society of Singapore [1985] 1 WLR 362������������������������������������������������������������9.167 Welch v Bank of England [1955] Ch 508��������������������������������������������������������������������������������3.53 Welch v Nagy [1950] 1 KB 455����������������������������������������������������� 2.109, 2.135, 2.151, 5.14, 5.16 Weld-Blundell v Synott [1940] 2 KB 107���������������������������������������������������������������������� 3.38, 3.52 Welford v Transport for London [2011] EWCA Civ 129, [2011] RVR 172, [2011] All ER (D) 203 (Feb)�����������������������������������������������������������������������������������������������4.25 Wells v Minister of Housing and Local Government [1967] 1 WLR 1000����������������������������������������������������������������������������������2.81, 2.86, 2.87, 2.89 West v Dillicar [1921] NZLR 617���������������������������������������������������������������������������������������������3.60 West Country Cleaners (Falmouth) Ltd v Saly [1966] 1 WLR 1485�����������������������������������3.53 Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669, HL�������� 7.69, 7.72 Western Fish Products Ltd v Penwith District Council [1981] 2 All ER 204, (1979) 38 P & CR 7, CA��������2.22, 2.87, 2.88, 2.89, 7.58, 7.183, 7.258 Westlands Savings Bank v Hancock [1987] 2 NZLR 21��������������������������������������������������������1.45 Wheeler v Keeble (1914) Ltd [1920] 1 Ch 57��������������������������������������������������������������� 8.42, 8.93 White v Riverside Housing Association [2005] EWCA Civ 1385, [2006] HLR 15��������������������������������������������������������������������������������������������������� 2.32, 2.33, 2.63 White v Riverside Housing Association [2007] UKHL 20, [2008] 1 P & CR 13���������������2.32 White and Carter (Councils) Ltd v McGregor [1962] AC 413, HL�������������������������������������8.37 Wiles v Woodward (1850) 5 Exch 557��������������������������������������������������������������������������� 4.23, 4.41 William Ewing & Co v Dominion Bank [1904] AC 806�������������������������������������������������������3.56 William Porter & Co Ltd, Re [1937] 2 All ER 361������������������������������������������6.11, 6.139, 6.207 Williams v Pinckney (1897) 67 LJ Ch 34����������������������������������������������������������������������������������3.2 Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1, CA�������������������������������������������������6.3, 6.43, 6.59, 6.60, 6.63, 6.64, 6.65, 6.67 Williams v Staite [1979] Ch 291, CA���������������������������������������2.235, 2.244, 7.284, 7.295, 7.297 Willis v Hoare (1998) 77 P & CR D 42����������������������������������������������������������������������������������7.193 Willmott v Barber (1880) 15 Ch D 96����������������������������2.210, 7.2, 7.26, 7.27, 7.28, 7.29, 7.45, 7.95, 7.98, 7.159, 7.160, 7.169, 7.207, 7.241, 7.243, Glossary Wilson v Anderton (1830) 1 B & Ad 450��������������������������������������������������������������������������������4.65 Wilson v McIntosh [1894] AC 129��������������������������������������������������������������������� 2.215, 8.13, 8.54 lix

Table of Cases Wilson v Thornbury (1875) 10 Ch App 239���������������������������������������������������������������������������8.10 Wilson v Truelove [2003] EWHC 750 (Ch), [2003] WTLR 609������������������������������������������5.44 Wilson v Wilson [1969] 1 WLR 1470�������������������������������������������������������������������������������4.5, 4.18 Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] NZCA 407, [2014] 3 NZLR 567, NZCA��������������������������������������1.23, 1.46, 2.36, 2.66, 2.209, 3.38, 5.87, 6.24, 6.25, 6.96, 6.99, 6.100, 6.104, 6.107, 6.185, 6.210, 6.211, 7.58, 7.193, 7.273, 7.276, 7.277 Wimpey (UK) Ltd v VI Construction Ltd [2005] EWCA Civ 77, [2005] BLR 135�����������5.40 Windeler v Whitehall [1990] 2 FLR 505���������������������������������������������������������������������������������7.31 Windmill Investments (London) Ltd v Milano Restaurants Ltd [1962] 2 QB 373������ 8.60, 8.98 Wing v Harvey (1854) 5 De GM & G 265�������������������������������������������������������������������������������3.45 Winn v Bull (1877) 7 Ch D 29������������������������������������������������������������������������������������������������7.132 WJ Alan & Co Ltd v El Nasr Export and Import Co [1972] 2 QB 189 �����3.122, 6.192, 6.197 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1971] 2 QB 23������������������������������������������������������������������������������������ 6.43, 6.52, 6.122 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741�������������������������������������������������� 2.179, 3.29, 3.39, 3.40, 3.49, 4.25, 5.28, 5.40, 6.21, 6.22, 6.27, 6.36, 6.43, 6.52, 6.107, 6.110, 6.111, 6.122, 6.123, 6.124, 6.133, 6.217, 7.140, 7.141, 8.88 Workington Harbour & Dock Board v Trade Indemnity Co Ltd (No 2) [1938] 2 All ER 101�����������������������������������������������������������������������������������������������9.167 Wormall v Wormall [2004] EWCA Civ 1643, (2005) 102(5) LSG 28�������������������������������7.266 Wright, Re; Blizard v Lockhart [1954] Ch 347���������������������������������������������������������������������9.109 Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] AC 581, PC (HK)����������������9.224 Yaxley v Gotts [2000] Ch 162, CA������������������������������������2.139, 2.150, 2.153, 2.155, 5.34, 7.75, 7.78, 7.79, 7.80, 7.83, 7.85, 7.89 Youell v Bland Welch & Co Ltd [1990] 2 Lloyd’s Rep 431���������������������������6.114, 6.148, 6.192 Young v Bristol Aeroplane Co Ltd [1946] AC 163, HL�������������������������������8.2, 8.33, 8.77, 8.78 Young v Raincock (1849) 7 CB 310������������������������������������������������������������������������������ 3.205, 4.20 Yukong Line Ltd of Korea v Rendsburg Investments Corporation of Liberia [1996] 2 Lloyd’s Rep 604, CA������������������������������������������������������������������ 8.81, 8.89 Yukos Capital Sarl v OJSC Rosneft Oil Co (No 2) [2012] EWCA Civ 855, [2014] QB 458������������ 9.41, 9.88, 9.98, 9.117, 9.191, 9.206, 9.214

lx

TABLE OF STATUTES References are to paragraph number Acquisition of Land Act 1981 s 23���������������������������������������������������������������������������������������������������������������������������������������9.150 Agricultural Holdings Act 1948�����������������������������������2.131, 2.151, 5.12, 5.13, 5.14, 7.85, 7.89 s 24(1)����������������������������������������������������������������������������������������������������������������������������������2.131 Agriculture Act 1947����������������������������������������������������������������������������������������������������������������2.131 s 31(1)����������������������������������������������������������������������������������������������������������������������������������2.131 Arbitration Act 1989����������������������������������������������������������������������������������������������������������������2.102 Arbitration Act 1996������������������������������������������������������������������������������������������������������������������9.98 s 58(1), (2)���������������������������������������������������������������������������������������������������������������������������9.169 s 69���������������������������������������������������������������������������������������������������������������������������������������9.169 s 73(1)������������������������������������������������������������������������������������������������������������������������������������8.54 Bills of Exchange Act 1882������������������������������������������������������������������������������������������������������2.137 Bills of Sale Act 1878 (Amendment) Act 1882���������������������������������������������������������������������2.137 Chancery Amendment Act 1858������������������������������������������������������������������������������������ 8.42, 9.73 Civil Jurisdiction and Judgments Act 1982 s 34����������������������������������������������������������� 5.17, 5.18, 5.37, 9.23, 9.70, 9.75, 9.85, 9.86, 9.172, 9.183, 9.184, 9.186, 9.187, 9.188, 9.272 s 50���������������������������������������������������������������������������������������������������������������������������������������9.172 Civil Liability (Contribution) Act 1978 s 1��������������������������������������������������������������������������������������������������������������������������������������������9.68 s 3���������������������������������������������������������������������������������������������������������������������������������� 8.15, 9.68 s 7(1)��������������������������������������������������������������������������������������������������������������������������������������8.15 Coal Mining Subsidence Act 1991������������������������������������������������������������������������������� 2.122, 8.54 s 8��������������������������������������������������������������������������������������������������������������������������������������������8.54 s 8(11)������������������������������������������������������������������������������������������������������������������������������������8.54 Companies Act 2006������������������������������������������������������������������������������������������������������������������4.11 s 44(1)������������������������������������������������������������������������������������������������������������������������������������4.11 s 44(4)–(8)�����������������������������������������������������������������������������������������������������������������������������4.11 Constitution Reform Act 2005 s 40(1)����������������������������������������������������������������������������������������������������������������������������������9.163 Consumer Credit Act 1974������������������������������������������������������������������������������������������� 2.108, 3.21 s 234�������������������������������������������������������������������������������������������������������������������������������������2.137 County Courts Act 1984 s 1(2)������������������������������������������������������������������������������������������������������������������������������������9.164 s 38�����������������������������������������������������������������������������������������������������������������������������������������8.42 Criminal Justice Act 2003 Pt 10�����������������������������������������������������������������������������������������������������������������������������������������9.2 lxi

Table of Statutes Criminal Law Act 1977 s 6��������������������������������������������������������������������������������������������������������������������������������������������8.93 Criminal Procedure and Investigations Act 1996��������������������������������������������������������������������9.2 Distress for Rent Act 1737���������������������������������������������������������������������������������������������������������8.29 s 18�����������������������������������������������������������������������������������������������������������������������������������������8.29 Ecclesiastical Court Jurisdiction Act 1860 s 1������������������������������������������������������������������������������������������������������������������������������������������9.168 European Communities Act 1972 s 9��������������������������������������������������������������������������������������������������������������������������������������������8.70 Fatal Accidents Acts 1846–1959���������������������������������������������������������������������������������������������6.201 Financial Services and Markets Act 2000 s 26���������������������������������������������������������������������������������������������������������������������������������������2.131 Gambling Act 2005������������������������������������������������������������������������������������������������������������������2.163 Gaming Act 1845����������������������������������������������������������������������������������������������������������������������2.163 Housing Act 1980���������������������������������������������������������������������������������������������������������������������2.135 Housing Act 1985�����������������������������������������������������������������������������������������������������������������������2.33 Housing Act 1988����������������������������������������������������������������������������������������������������������� 2.32, 2.135 Insurance Act 2015��������������������������������������������������������������������������������������������������������� 2.200, 8.54 s 10(2)������������������������������������������������������������������������������������������������������������������������ 2.205, 8.54 s 10(3)(c)������������������������������������������������������������������������������������������������������������������� 2.205, 8.54 Judgments (Reciprocal Enforcement) Act 1933������������������������������������������������������� 9.180, 9.181 Pt I����������������������������������������������������������������������������������������������������������������������������������������9.180 s 8�������������������������������������������������������������������������������������������������������������������9.180, 9.181, 9.271 s 8(1)���������������������������������������������������������������������������9.180, 9.181, 9.182, 9.183, 9.184, 9.185 s 8(3)�������������������������������������������������������������������������������������������������������������9.180, 9.181, 9.183 Judicature Act 1873 s 25(ii)������������������������������������������������������������������������������������������������������������������������������������6.50 s 25(11)������������������������������������������������������������������������������������������������������������������������������������6.6 s 75(11)����������������������������������������������������������������������������������������������������������������������������������1.73 Judicature Act 1875������������������������������������������������������������������������������������������������������������������2.116 Judicature Acts 1873–75�����������������������������������������������������������������������������������������������������7.5, 9.26 Jurisdiction and Judgments Act 1832 s 34���������������������������������������������������������������������������������������������������������������������������������������2.110 Land Charges Act 1925������������������������������������������������������������������������� 2.146, 2.230, 7.147, 7.212 s 13���������������������������������������������������������������������������������������������������������������������������������������2.146 Land Charges Act 1972�������������������������������������� 2.146, 2.230, 2.241, 2.243, 2.246, 2.251, 2.256, 2.288, 7.46, 7.121, 7.306, 8.69, Glossary Land Clauses Act 1925�������������������������������������������������������������������������������������������������������������2.146 Lands Clauses Consolidation Act 1845�����������������������������������������������������������������������������������7.12 s 68�������������������������������������������������������������������������������������������������������������������������������������������7.1 Land Compensation Act 1961 s 5, r (2)��������������������������������������������������������������������������������������������������������������������������������7.167 s 5, r (5)�������������������������������������������������������������������������������������������������������������������� 7.167, 7.247 Land Compensation Act 1973 s 37�����������������������������������������������������������������������������������������������������������������������������������������7.23 Land Registration Act 1925������������������������������������������������������������� 2.230, 2.240, 4.73, 4.77, 4.85 lxii

Table of Statutes  Land Registration Act 2002��������������������������������� 2.12, 2.146, 2.230, 2.239, 2.240, 2.243, 2.246, 2.251, 2.256, 2.288, 4.77, 7.46, 7.121, 7.179, 7.271, 7.306, 7.310, 8.69, Glossary s 23�����������������������������������������������������������������������������������������������������������������������������������������4.77 s 28���������������������������������������������������������������������������������������������������������������������������������������2.240 s 29���������������������������������������������������������������������������������������������������������������������������������������2.240 s 116������������������������������������������������������������������������������������������������������������������������� 2.239, 2.255 Sch 3�������������������������������������������������������������������������������������������������������������������������������������2.240 Landlord and Tenant Act 1927 s 18(1)������������������������������������������������������������������������������������������������������������������������������������8.39 s 19�����������������������������������������������������������������������������������������������������������������������������������������7.26 Landlord and Tenant Act 1954������������������������������������������������������� 1.84, 2.119, 2.130, 8.81, 8.82 Pt II�������������������������������������������������1.84, 2.118, 2.130, 2.134, 2.200, 3.88, 7.165, 8.78, 8.116 s 29(3)����������������������������������������������������������������������������������������������������������������������������������2.118 s 38���������������������������������������������������������������������������������������������������������������������������������������2.130 s 38(1)����������������������������������������������������������������������������������������������������������������������������������2.151 s 38A������������������������������������������������������������������������������������������������������������������������������������2.130 Law of Property Act 1925���������������������������������������������������������������� 2.237, 4.13, 4.61, 7.83, 7.300 s 1������������������������������������������������������������������������������������������������������������������������������ 7.300, 7.302 s 1(1)������������������������������������������������������������������������������������������������������������������������������������7.281 s 1(1)(b)�������������������������������������������������������������������������������������������������������������������������������8.115 s 1(2)������������������������������������������������������������������������������������������������������������������������ 7.281, 7.302 s 1(3)������������������������������������������������������������������������������������������������������������������������������������7.281 s 4(1)������������������������������������������������������������������������������������������������������������������������������������2.237 s 40���������������������������������������������������������������������������������������������������������2.137, 2.143, 7.15, 7.65 s 52���������������������������������������������������������������������������������������������������������������������������������������2.137 s 52(1)������������������������������������������������������������������������������������������������������������������������������������4.13 s 52(2)(d)��������������������������������������������������������������������������������������������������������������������� 4.13, 4.76 s 53(1)(b)�������������������������������������������������������������������������������������������������������������������������������7.67 s 53(2)�������������������������������������������������������������������������������������������������������������������������� 7.67, 7.83 s 54(2)��������������������������������������������������������������������������������������������������������������� 2.137, 4.13, 4.76 s 56(2)������������������������������������������������������������������������������������������������������������������������������������4.12 s 73�������������������������������������������������������������������������������������������������������������������������������������������4.9 s 84����������������������������������������������������������������������������������������������������������������������������� 9.62, 9.164 s 84(2)������������������������������������������������������������������������������������������������������������������������������������9.62 s 84(3A)���������������������������������������������������������������������������������������������������������������������������������9.62 s 101(1)����������������������������������������������������������������������������������������������������������������������������������4.13 s 139�������������������������������������������������������������������������������������������������������������������������������������2.160 s 146���������������������������������������������������������������������������������������������������� 8.92, 8.101, 8.102, 8.115 s 149(6)��������������������������������������������������������������������������������������������������������������������������������7.302 Law of Property (Miscellaneous Provisions) Act 1989�������� 2.139, 2.155, 4.8, 4.10, 4.11, 7.65, 7.72, 7.83, 7.94 s 1�������������������������������������������������������������������������������������������������������������������������� 4.61, Glossary s 1(1)(b)���������������������������������������������������������������������������������������������������������������������������������4.11 s 1(2)(a)���������������������������������������������������������������������������������������������������������������������������������4.10 s 1(2)(a)(ii)����������������������������������������������������������������������������������������������������������������������������4.11 lxiii

Table of Statutes s 1(2)(b)���������������������������������������������������������������������������������������������������������������������������������4.10 s 1(3)��������������������������������������������������������������������������������������������������������������������������������������3.20 s 1(3)(a)(i)�����������������������������������������������������������������������������������������������������������������������������4.11 s 1(3)(b)���������������������������������������������������������������������������������������������������������������������������������4.11 s 1(11)��������������������������������������������������������������������������������������������������������������������������������������4.8 s 2������������������������������������������������������������������������ 2.138, 2.139, 2.140, 2.143, 2.148, 6.19, 7.15, 7.18, 7.54, 7.62, 7.63, 7.65, 7.66, 7.72, 7.79, 7.80, 7.81, 7.83, 7.85, 7.94 s 2(1)����������������������������������������������1.66, 2.1, 2.127, 2.137, 2.138, 2.140, 2.150, 2.151, 2.155, 2.156, 4.13, 4.22, 5.34, 6.18, 6.165, 6.169, 7.18, 7.37, 7.54, 7.65, 7.66, 7.79, 7.80, 7.81, 7.82, 7.83, 7.84, 7.87, 7.89, 7.90, 7.91, 7.92, 7.93, 7.94, 7.131 s 2(5)�������������������������������������������������������������������� 2.139, 2.140, 2.155, 2.156, 7.54, 7.65, 7.67, 7.83, 7.89, 7.93, 7.94 Law Reform Act 1969 s 1������������������������������������������������������������������������������������������������������������������������������������������2.157 Law Reform (Contributory Negligence) Act 1945�����������������������������������������������������������������9.94 Leasehold Property (Repairs) Act 1938 s 1��������������������������������������������������������������������������������������������������������������������������������������������8.39 Limitation Act 1980������������������������������������������������������������������������������������������������ 2.17, 5.49, 5.90 s 5������������������������������������������������������������������������������������������������������������������������������������������6.174 s 29(5)�������������������������������������������������������������������������������������������������������������������������� 2.21, 5.90 Local Government Act 1972 s 101���������������������������������������������������������������������������������������������������������������������������������������2.65 s 102���������������������������������������������������������������������������������������������������������������������������������������2.65 s 123(1)(c)�����������������������������������������������������������������������������������������������������������������������������2.83 Lord Cairns’ Act. See Chancery Amendment Act 1858 Matrimonial Causes Act 1857������������������������������������������������������������������������������������������������9.168 Matrimonial Causes Act 1973��������������������������������������������������������������������������������������������������7.72 Matrimonial Homes Act 1967������������������������������������������������������������������������������������������������6.172 Mental Capacity Act 2005 s 2(1)������������������������������������������������������������������������������������������������������������������������������������2.158 s 7������������������������������������������������������������������������������������������������������������������������������������������2.158 Minors’ Contracts Act 1987����������������������������������������������������������������������������������������������������2.157 s 3(1)������������������������������������������������������������������������������������������������������������������������������������2.157 Misrepresentation Act 1967����������������������������������������������������������������������������������������������������3.195 s 2(1)������������������������������������������������������������������������������������������������������������������������ 3.192, 3.208 s 2(2)������������������������������������������������������������������������������������������������������������������������������������3.208 Official Secrets Acts��������������������������������������������������������������������������������������������������������������������8.70 Partnership Act 1890�����������������������������������������������������������������������������������������������������������������1.85 s 14�����������������������������������������������������������������������������������������������������������������������������������������1.85 Patents Act 1977�������������������������������������������������������������������������������������������������������������������������9.21 Pt II��������������������������������������������������������������������������������������������������������������������������������������9.208 Powers of Attorneys Act 1971���������������������������������������������������������������������������������������������������2.30 Prescription Act 1832���������������������������������������������������������������������������������������2.211, 7.114, 9.111 s 4������������������������������������������������������������������������������������������������������������������������������ 7.114, 7.163 lxiv

Table of Statutes  Protection from Eviction Act 1977����������������������������������������������������������������������������������������2.135 s 2��������������������������������������������������������������������������������������������������������������������������������������������8.93 Public Order Act 1936 s 5��������������������������������������������������������������������������������������������������������������������������������������������3.28 Railways Clauses Consolidation Act 1845������������������������������������������������������������������������������7.12 Real Property Act 1845 s 5��������������������������������������������������������������������������������������������������������������������������������������������4.12 Rent Act 1977����������������������������������������������������������������������������������������������������������������������������2.135 Rent Act 1965 s 30���������������������������������������������������������������������������������������������������������������������������������������2.135 Rent Act 1968����������������������������������������������������������������������������������������������������������������������������6.100 Rent Acts��������������������������������������������������������� 2.109, 2.118, 2.135, 2.151, 3.28, 3.156, 4.69, 5.14, 5.16, 7.283, 9.53, 9.80, 9.81 Rent and Mortgage Interest (Amendment) Act 1933������������������������������������������������������������9.80 Rent and Mortgage Interest (Restrictions) Act 1920�����������������������������������������������������������2.135 Sale of Goods Act 1893������������������������������������������������������������������������������������������������������������2.273 Sale of Goods Act 1979 s 21(1)������������������������������������������������������������������������������������������������������������������������������������1.85 Senior Courts Act 1981�����������������������������������������������������������������������������������������������������������2.102 s 15(1)����������������������������������������������������������������������������������������������������������������������������������9.163 s 19(1)����������������������������������������������������������������������������������������������������������������������������������9.163 s 37(1)������������������������������������������������������������������������������������������������������������������������������������8.42 s 45(1)����������������������������������������������������������������������������������������������������������������������������������9.163 s 49(1)�����������������������������������������������������������������������������������������������������������������������������6.6, 6.50 s 50������������������������������������������������������������������������������������������������������������������������������� 8.42, 9.73 Settled Law Act 1882��������������������������������������������������������������������������������������������������������������������7.6 Settled Land Act 1925������������������������������������������������������������������������������������������������������ 7.6, 7.300 Solicitors Act 1974��������������������������������������������������������������������������������������������������������������������2.114 s 20���������������������������������������������������������������������������������������������������������������������������������������2.114 Stamp Act����������������������������������������������������������������������������������������������������������������������������������2.153 Statute De Donis Conditionalibus 1285��������������������������������������������������������������������������������7.300 Statute of Anne, 4 Anne, c 16 s 11���������������������������������������������������������������������������������������������������������������������������������������2.117 Statute of Frauds 1677����������������������������������2.137, 2.139, 2.141, 2.142, 2.143, 2.153, 4.61, 7.65 s 4��������������������������������������������������������������������������������2.137, 2.139, 2.141, 2.143, 2.144, 2.151, 2.153, 5.26, 5.34, 6.18, 7.15, 7.16, 7.18, 7.64, 7.65, 7.83, 7.85, 7.89 Statute of Westminster II 1285�������������������������������������������������������������������������������������������������2.17 Statute Quia Emptores 1290����������������������������������������������������������������������������������������������������7.300 Tenures Abolition Act 1660����������������������������������������������������������������������������������������������������7.300 Theft Act 1968 s 5(1)������������������������������������������������������������������������������������������������������������������������������������7.121 Town and Country Planning Act 1962 s 43�����������������������������������������������������������������������������������������������������������������������������������������2.81 Town and Country Planning Act 1990��������������������������������������������������������������� 2.71, 2.102, 9.80 s 174���������������������������������������������������������������������������������������������������������������������������������������9.22 lxv

Table of Statutes s 181���������������������������������������������������������������������������������������������������������������������������������������9.22 s 288�������������������������������������������������������������������������������������������������������������������������������������3.118 Tribunals, Courts and Enforcement Act 2007���������������������������������������������������������� 2.102, 9.164 s 13�������������������������������������������������������������������������������������������������������������������������������������������9.5 s 35(1)����������������������������������������������������������������������������������������������������������������������������������9.163 Trusts of Land and Appointment of Trustees Act 1996���������������������������������������������� 7.6, 7.300 Water Industry Act 1991�����������������������������������������������������������������������������������������������������������2.77 Workmen’s Compensation Act 1906����������������������������������������������������������������������������������������9.79 Workmen’s Compensation Act 1925������������������������������������������������������������������������������ 8.33, 8.52

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TABLE OF STATUTORY INSTRUMENTS References are to paragraph number Civil Procedure Rules 1998, SI 1998/3132����������������������������������������2.116, 3.71, 3.72, Glossary Pt 1.1(1)�������������������������������������������������������������������������������������������������������������������������������9.218 Pt 3.4���������������������������������������������������������������������������������������������������������������������������� 9.14, 9.54 Pt 8����������������������������������������������������������������������������������������������������������������������������� 3.71, 7.195 Pt 11(4), (5)���������������������������������������������������������������������������������������������������������������������������8.54 Pt 12���������������������������������������������������������������������������������������������������������������������������������������9.49 Pt 12.1������������������������������������������������������������������������������������������������������������������������������������9.49 Pt 12.4������������������������������������������������������������������������������������������������������������������������������������9.50 Pt 12.4(2)(b)��������������������������������������������������������������������������������������������������������������������������9.29 Pt 14���������������������������������������������������������������������������������������������������������������������������������������3.71 Pt 14.1(1),(2)�������������������������������������������������������������������������������������������������������������������������3.71 Pt 14.1(5)�������������������������������������������������������������������������������������������������������������������������������3.71 Pt 14.1A(1)����������������������������������������������������������������������������������������������������������������������������3.71 Pt 14.1A(3)����������������������������������������������������������������������������������������������������������������������������3.71 Pt 15.4������������������������������������������������������������������������������������������������������������������������������������9.49 Pt 16���������������������������������������������������������������������������������������������������������������������������������������8.45 Pt 17��������������������������������������������������������������������������������������������������������������������������� 6.125, 8.45 Pt 17.1(2)�������������������������������������������������������������������������������������������������������������������������������3.71 Pt 18���������������������������������������������������������������������������������������������������������������������������������������8.86 Pt 24����������������������������������������������������������������������������������������������������������������������������� 9.14, 9.55 Pt 36���������������������������������������������������������������������������������������������������������������������������������������9.46 Pt 36.1(2)�������������������������������������������������������������������������������������������������������������������������������9.46 Pt 36.11(1)�����������������������������������������������������������������������������������������������������������������������������9.46 Pt 38.7�������������������������������������������������������������������������������������������������������������������������� 9.34, 9.54 Pt 40���������������������������������������������������������������������������������������������������������������������������������������9.16 Pt 40.12��������������������������������������������������������������������������������������������������������������������������������7.297 Pt 52�����������������������������������������������������������������������������������������������������������������������������������������9.5 Pt 52.11(1)���������������������������������������������������������������������������������������������������������������������������7.307 Pt 52.11(1)(b)����������������������������������������������������������������������������������������������������������������������7.307 Pt 52.11(3)���������������������������������������������������������������������������������������������������������������������������7.307 Pt 54��������������������������������������������������������������������������������������� 2.92, 9.5, 9.145, 9.151, Glossary Rules of the Supreme Court 1965, SI 1965/1776��������������������������������5.44, 9.14, 9.46, Glossary Ord 14������������������������������������������������������������������������������������������������������������������������������������9.55 Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010, SI 2010/2600 r 56�����������������������������������������������������������������������������������������������������������������������������������������9.35

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TABLE OF INTERNATIONAL INSTRUMENTS References are to paragraph number European Convention for the Protection of Human Rights and Fundamental Freedoms 1953 Art 6�������������������������������������������������������������������������������������������������������������������������������������9.228 European Patents Convention�������������������������������������������������������������������������������������� 9.21, 9.208 Art 68�����������������������������������������������������������������������������������������������������������������������������������9.208 Hague-Visby Rules���������������������������������������������������������������������������������������������������������������������9.75 Treaty of Waitangi (1840)����������������������������������������������������������������������������������������������������������7.22 UNIDROIT Principles of International Commercial Contracts, 4th edn (2016) Art 2�������������������������������������������������������������������������������������������������������������������������������������2.144 Vienna Convention on Contracts for the International Sale of Goods (1980) Art 29(2)������������������������������������������������������������������������������������������������������������������������������������2.144

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TABLE OF OVERSEAS MATERIAL References are to paragraph number ANTIGUA Employment Law Code�������������������������������������������������������������������������������������������������������������2.44 Evidence Act�������������������������������������������������������������������������������������������������������������������������������2.44 AUSTRALIA New South Wales Conveyancing Act 1919 s 54(1)������������������������������������������������������������������������������������������������������������������������ 2.139, 6.18 FIJI Native Land Trust Act s 12����������������������������������������������������������������������������������������������������������������������������� 2.148, 7.89 HONG KONG Crown Lands Resumption Ordinance s 10���������������������������������������������������������������������������������������������������������������������������������������7.213 NEW ZEALAND Sale of Goods Act 1908 s 18���������������������������������������������������������������������������������������������������������������������������������������2.273 Wellington Harbour Board and Corporation Land Act 1880 s 4��������������������������������������������������������������������������������������������������������������������������������������������7.23

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1 Introduction (A)  The Legal and Moral Basis of Estoppel 1.1  Jurists distinguish between rules of law and rules or principles of morality. A rule of law is a prescriptive1 rule of conduct which is backed by the organised sanction of the state. The state, through an organised system of courts, decides whether there is a breach of a particular rule of law and what should be the consequences of any breach. A rule or principle of morality also governs the conduct of persons but there is rarely any organised means of determining whether there has been a breach and the only form of sanction may be social disapproval. While the distinction is certainly important, fundamental rules of law have their origin and justification in generally accepted nostrums of morality. Where two persons enter into an agreement with both persons having obligations and with both persons intending it to be binding, ordinary morality suggests that both persons shall be held to their agreement, and the law of contract is founded on and justified by this moral expectation. A person should not have to suffer violence to his body or harm to his property without his consent, and out of this principle has arisen the law of trespass and other elements of the law of torts.2 In the same way, where A makes a statement to B knowing or intending that B will or may act on that statement and B does so act to his disadvantage, common morality suggests that A should not go back on the statement which he has made. People speak with approval of a person ‘whose words is his bond’. From this concept of morality there has arisen the law of estoppel.3 A requirement that it would be unconscionable to allow a person to go back on a statement which that person has made with an intention that the statement be acted upon is now firmly established as an essential element

1 A prescriptive rule, sometimes called a normative rule or just a norm, is a rule which prescribes or ordains what actions a person ought or ought not to take. It is to be compared with a descriptive rule which describes what conduct or events in fact happen. Principles of law and moral and religious principles are prescriptive rules. The laws of physics such as the law of gravity are descriptive rules. 2 Basic rules, such as that agreements are enforced and that persons are entitled to live their lives free of violence, as well as giving effect to ordinary perceptions of morality, are also necessary for the operation of commercial life. 3 In R (Reprotech (Pebsham) Ltd) v East Sussex County Council [2002] UKHL 8, [2003] 1 WLR 348, para 35, Lord Hoffmann referred to ‘The moral values which underlie the private law concept of estoppel’, an observation cited by Lord Walker in his examination of the basis of proprietary estoppel in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 47. In ING Bank NV v Ros Roca SA [2012] 1 WLR 472, 92, Rix LJ spoke of estoppel as one of the individual concepts of the English common law which might be said to reflect the notion of a duty of good faith in commercial affairs. In Habberfield v Habberfield [2019] EWCA Civ 890, para 33, Lewison LJ pointed out that underpinning the whole doctrine of proprietary estoppel was the idea that promises should be kept. The rationale behind estoppel per rem iudicatam is quite different and is the need for finality in litigation and the unfairness if a litigant has to fight the same issue twice in legal proceedings.

1

1.2  Introduction of the main forms of estoppel. One definition of unconscionability is that it is conduct which is morally reprehensible.4 1.2  The essence of an estoppel is that in various defined circumstances where a person has made a statement, intending it to be acted on, that person may be prevented in subsequent legal proceedings from denying the truth or the effect of what he has stated. The maker of the statement is said to be estopped from asserting for his own benefit that what he has stated is not true or is not to have effect.5 The defined circumstances just referred to are important and usually mean that the person to whom the statement has been made has acted in some way in reliance on the statement such that he will or may suffer detriment if the maker of the statement is permitted to go back on it. The process has been described as involving a pretence in that some fact is pretended to be true because of the estoppel even though it is known that that fact is or may be untrue.6 Of course, this simple explanation of the nature of an estoppel and of its justification conceals a plenitude of problems and qualifications a major cause of which is the various forms of estoppel which have been developed by the courts and the differences between these forms.7 1.3  The way in which the law has transferred the basic principle of morality just described into the system of law administered by the courts as the law of estoppel has two aspects. In the first place, different forms of estoppel have been established. Secondly, each form of estoppel has its own detailed rules. For example, one of the oldest forms of estoppel, common law estoppel by representation, applies to statements or representations of fact which have been made and as a result of recent decisions may extend to representations of law which have been made. This form of estoppel does not apply to statements of opinion or of future intention. On the other hand a different form of estoppel, often called equitable or 4 Multiservice Bookbinding v Marden [1979] Ch 84, 110. The concept of unconscionability is discussed generally in para 1.44 et seq of this chapter and its application in the various forms of estoppel is examined in subsequent chapters. 5 In Moorgate Mercantile Co Ltd v Twitchings [1976] 1 QB 225, 241, Lord Denning MR described estoppel as a principle of justice and of equity and said that it came to this: ‘When a man, by his words or conduct, has led another to believe in a particular state of affairs, he will not be allowed to go back on it when it would be unjust or inequitable for him to do so’. In Thoday v Thoday [1964] P 181, 197, Diplock LJ said: ‘Estoppel merely means that, under the adversarial system of procedure upon which the common law of England is based, a party is not allowed, in certain circumstances, to prove in litigation certain facts or matters which, if proved, would assist him to succeed as Plaintiff or Defendant in an action’. A further and well-known description of estoppel as an overall doctrine was given by Lord Denning in Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 122, which enjoyed some limited support in the House of Lords. This formulation is considered in more detail in ch 2, para 2.189, in connection with the question of whether a single and unified statement of the doctrine of estoppel, superseding the differences between its various forms, is practical or desirable. A general description of the nature and effect of an estoppel was given by Lord Scott in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 14, in connection with a claim for proprietary estoppel. This description may be over-restrictive: see ch 7, para 7.109. 6 Re Goldcorp Exchange Ltd [1995] 1 AC 74, 93–94 (Lord Mustill). The relevant passage is set out in ch 2, para 2.273. The observation made was in relation to title to chattels but it is applicable to estoppel by representation generally and possibly also to estoppel by deed and estoppel by convention. It is less apposite in relation to proprietary and promissory estoppel, the two forms of equitable estoppel. 7 The category of estoppel known as estoppel by record, which includes cause of action estoppel and issue estoppel, falls outside this general description since it derives from a decision of a court rather than from a statement of any person. The aspect of estoppel which prevents a party from denying the effect of what has been stated is important as regards promissory and proprietary estoppel where in certain defined circumstances a party who has given a promise or made an assurance is held to the promise or assurance even though the promise or the assurance is not part of a contract and is not supported by the general contractual requirement of consideration.

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The Legal and Moral Basis of Estoppel  1.5 promissory estoppel, is capable in certain circumstances of binding a person who has made a promise as to future conduct. As such this form of estoppel has obvious affinities with the law of contract which also in certain circumstances binds persons to promises which they have made. A third form of estoppel is estoppel by convention which may bind persons to a common or shared understanding of matters and applies to shared understandings of law as well as of fact. The concept of unconscionability, that is whether it is fair and equitable in particular circumstances to hold a person to what that person has written or spoken, plays a part in most forms of estoppel but not in all forms. One obvious question which arises is whether this division of estoppel into various forms with different detailed rules is necessary, as opposed to the articulation of some general and overriding rule which would apply uniformly to all situations in which there could be an estoppel. Even if this last aim cannot be achieved, it appears to be desirable that certain elements or components of different forms of estoppel should apply uniformly and consistently across different estoppels where that can be practically attained.8 1.4  One purpose of this introductory chapter is to specify and summarise in very general terms the various forms of estoppel which exist today. A further purpose is to state, again in very general terms, certain of the major questions and issues which apply across the overall law of estoppel. Those questions and issues are of course examined in more detail later in this book.9 1.5  There was a time when estoppels were described as ‘odious’ and as such were viewed with suspicion and reluctance.10 In more modern times, the law of estoppel has developed and has become recognised as a beneficial branch of the law. Sir Frederick Pollock described the doctrine of estoppel as ‘a simple and wholly untechnical conception, perhaps the most powerful and flexible instrument to be found in any system of court jurisprudence’.11 It is probably impossible to formulate a single concept or proposition which encompasses every aspect of estoppel and this may be one reason why it has been queried whether some forms of estoppel are properly described as estoppels at all.12

8 The possibility of a single uniform statement of the law of estoppel, or of most forms of estoppel, has ­engendered some judicial and academic comment and is discussed in ch 2, part (G). 9 See ch 2. 10 The statement that estoppels are odious comes from Coke on Littleton: Co Litt 365b. Coke also described the doctrine of estoppel as an excellent and curious kind of learning: see below (n 91). The unease of courts in applying an estoppel may in some instances be due to the fact that the court is obliged by the estoppel to treat some matter as true when it is apparent that it is not or may not be true: see Howard v Hudson (1853) 2 E & B 1, 10, where Lord Campbell CJ observed that a conclusion based on an estoppel ‘shuts out the truth and is odious’. Estoppel by convention applies to shared assumptions of law as well as of fact and today an estoppel by representation can probably be founded on a statement of law as well as one of fact, with the result that when such an estoppel operates a court may be required to apply to the case before it a proposition of law which it knows or believes to be incorrect. 11 Referred to in Canada and Dominion Sugar Co Ltd v Canadian National (West Indies) Steamships Ltd [1947] AC 46, 55 (Lord Wright). As will be apparent from parts of this book the reference to simplicity may be overstated. A view less extreme than either of these was expressed by Lord Upjohn in Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, 947, where he said that all estoppels were not odious but must be applied so as to work justice and not injustice. Lord Denning MR has described the doctrine of estoppel as one of the most flexible and useful in the armoury of the law: Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 122. 12 Such a question has been raised in connection with the two forms of equitable estoppel which are promissory and proprietary estoppel. It is also open to debate whether estoppel by record with its component principles should properly be described as an estoppel.

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1.6  Introduction

(B)  The Forms of Estoppel and the Doctrine of Election 1.  A List of Estoppels 1.6  Even the classification and description of the forms of estoppel are not wholly certain.13 There is no complete agreement on the separation of forms of estoppel let alone on their exact content and requirements. For instance, in two decisions of the House of Lords in two successive years proprietary estoppel was described first as a sub-species of promissory estoppel14 and then as being, with promissory estoppel, one of the two varieties of equitable estoppel.15 It had at one time been considered that it was not helpful to make any distinction between promissory and proprietary estoppel.16 The following descriptions are often used, and this classification dictates much of the scheme of this book. Estoppel has been applied for centuries in a multitude of judicial decisions and with so many and varied descriptions that it would be unrealistic to suppose that any list of the descriptions was complete and exhaustive. Nonetheless the following 23 descriptions do seem to embrace those which have been most generally used. 1. Estoppel by representation 2. Estoppel in pais 3. Common law estoppel 4. Estoppel by conduct 5. Evidential estoppel 6. Estoppel by deed 7. Estoppel by convention 8. Equitable estoppel 9. Promissory estoppel 10. Estoppel by forbearance 11. Proprietary estoppel 12. Estoppel by acquiescence 13. Estoppel by expectation 14. Quasi-estoppel 15. Contractual estoppel 16. Estoppel by negligence

13 In Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 67, Lord Walker acknowledged that in this part of the law terminology and taxonomy are far from uniform. As mentioned below at least 23 separate descriptions of estoppel are found in this country. The fragmentation, not variety of description, may not be quite as advanced in New Zealand where at least 16 different doctrines of estoppel are said to have received judicial consideration: see Equity and Trusts in New Zealand, 2nd edn, 19.1.2 (Dr James Every-Palmer) (Thompson Reuters, Wellington, 2009). 14 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 14 (Lord Scott). 15 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 61 (Lord Walker). Lord Walker at para 67 said that he had difficulty with the classification as stated in Cobbe’s case by Lord Scott. 16 Crabb v Arun District Council [1976] Ch 179, 193 (Scarman LJ). It is well established today that those two forms of estoppel have substantial differences both in their field of operation and in certain of their essential elements. As the law has developed in Australia and New Zealand the tendency has been not to draw any firm distinction between these two forms of equitable estoppel. See below (n 30).

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The Forms of Estoppel and the Doctrine of Election  1.8 17. 18. 19. 20. 21. 22. 23.

Estoppel by silence Estoppel per rem iudicatam Cause of action estoppel Issue estoppel Res iudicata Estoppel by record Reliance-based estoppels

1.7  The word ‘estoppel’ is sometimes inserted into the title of other areas of law, examples being election by estoppel and agency by estoppel (ostensible agency).17 As just stated, it may be useful at this stage to summarise in very short compass the essential nature of the various forms of estoppel. These very general statements of course do not explain what is sometimes a variety of individual rules or qualifications which apply to the principle in question. These individual aspects of the main separate forms of estoppel are explained in detail in subsequent chapters, and in each case a summary is provided at the end of the chapter which aims to state within a short compass the essential elements of the estoppel and the nature of its operation. The book also explains the doctrine of election. One form of this last doctrine, common law election, has considerable affinities with promissory estoppel. The order of the brief description as now given generally follows that in the above list. In order to assist understanding in this book estoppel as a whole is referred to as the doctrine of estoppel, the various types of estoppel are called forms of estoppel or are described as a principle, such as the principle of promissory estoppel, and the more detailed requirements of each form are called its essential elements or requirements. A further descriptive term sometimes used is that parts of an element are called the components of that element.

2.  General Description 1.8  Anyone who is required to grapple with the subject of estoppel, as are from time to time most lawyers engaged in civil practice, is struck and perhaps bewildered by the large number of descriptions which exist of various forms of estoppel. This plethora of descriptions or forms is due partly to the different historical genesis of various forms of estoppel, partly to the absence of a uniformly agreed description of certain forms of estoppel, and partly to a tendency to invent new names for existing rules which do not necessarily have anything directly to do with estoppel. A further cause of confusion is that some forms of estoppel have two or more names. A vivid instance of this last tendency is that estoppel by representation, estoppel in pais, common law estoppel, evidential estoppel, estoppel by silence, and estoppel by conduct are all names given to one form of estoppel, e­ stoppel by representation, or to an aspect of the operation of that form. The descriptions may not always be wholly accurate. For example, estoppel by representation is sometimes called common law estoppel even though it was developed and regularly applied in both common law and Chancery courts. The description ‘common law’ serves to distinguish this form of



17 For

‘agency by estoppel’ see para 1.17.

5

1.9  Introduction estoppel from promissory and proprietary estoppels which are developments of the law of equity. On occasions an expression can have more than one meaning, an instance being common law estoppel which can refer to estoppel by representation or to all forms of estoppel save for promissory and proprietary estoppel. Estoppel by forbearance is the same as promissory estoppel (it is also sometimes called equitable forbearance, presumably out of a reluctance to call it an estoppel at all). The estoppels called estoppel by acquiescence, and estoppel by expectation or the doctrine of encouragement, are other names given to proprietary estoppel. Estoppel by record is a name which comprises two main principles, that is cause of action estoppel and issue estoppel. These last two principles are said to be species of estoppel per rem iudicatam, an expression which is sometimes shortened to res iudicata. It is also sometimes taken to include the principle that a court may prevent a party from relying on some claim or defence or issue which that party should have raised in previous proceedings, the reason being that to raise or rely on the matters in later proceedings is an abuse of the process of the court.18 It is suggested later in this book that two of the designations, contractual estoppel and estoppel by negligence, are not separate forms of estoppel at all but are an aspect of a different principle of law or a particular aspect of a different form of estoppel. The doctrine of common law election, which is not an estoppel, but has ­affinities to promissory estoppel and is explained in chapter eight of this book, has been called ‘election by estoppel’.19 This multitude of differing designations and descriptions easily leads to confusion. During the period of the development of various forms of estoppel any uniform classification was even less clear than it is today.20 1.9  One method of classifying the different forms of estoppel is as common law estoppels or equitable estoppels. Sir Edward Coke in 1628, in his Commentaries on Littleton’s Tenures stated that there were three estoppels, estoppel in pais, estoppel by writing and estoppel by record.21 All of the main separate22 forms of estoppel, save for promissory and proprietary estoppel, are derived from these three categories and are sometimes described generically as common law estoppels.23 Promissory estoppel and proprietary estoppel, as befits their origin as principles of equity, and primarily in the latter case in the decisions of the former Court of Chancery, are described as forms of equitable estoppel. One consequence of the distinction appears to be that the way in which a court can give effect to an equitable estoppel is more flexible than is the case for common law estoppels. The expression ‘estoppel in pais’ is sometimes used as another name for estoppel by representation or sometimes means

18 This principle is often called the rule in Henderson v Henderson (1843) 3 Hare 100. The principle is explained in ch 9 as a part of estoppel by record. 19 Halsbury’s Laws, vol 47, 5th edn (LexisNexis, 2014) para 363. 20 In Attorney General to the Prince of Wales v Collom [1916] 2 KB 193, 204, Atkin J described the principle of what would today be classified as proprietary estoppel as estoppel in pais, which he contrasted with estoppel by deed. 21 Co Litt 352a. See para 1.72. 22 See para 1.11. 23 Estoppel by record speaks for itself. The record is the record of the decision of a court. Estoppel by representation derives from estoppel in pais. Estoppel by writing is the origin of estoppel by deed and probably of estoppel by convention. There is a rather different suggestion in recent authority that estoppel by convention has ‘largely been explained in equitable terms and expanded as another variant of equitable estoppel’: see Dixon v Blindley Heath Investments Ltd [2015] EWCA Civ 1023, [2017] Ch 389, para 72. This suggestion seems only to create confusion in terms of classification and perhaps illustrates the difficulty in arriving at any uniformly accepted scheme of classification.

6

The Forms of Estoppel and the Doctrine of Election  1.12 all forms of estoppel whatever their derivation or historical development except estoppel by deed and estoppel by record. It is an expression of historical interest but perhaps of little practical utility today. 1.10  Another compendious and useful description sometimes used to indicate a number of forms of estoppel where reliance on some statement is an essential requirement of the estoppel is ‘reliance-based estoppels’. This expression can be used to encompass all estoppels except estoppel by record and estoppel by deed where reliance is not an essential element of the estoppel. An important reason for isolating together the four reliance-based estoppels, estoppel by representation, estoppel by convention, promissory estoppel and proprietary estoppel, is that they share the essential requirements that the recipient of a statement or promise or assurance must have acted in some way to its detriment in reliance on what has been stated. These common features make it possible to move towards a broadbrush formulation of these common aspects of the estoppel which can be applied across all four forms.24 1.11  It is suggested that it conduces to clarity if attention is concentrated on the six truly separate forms of estoppel which exist and are applied today, namely (a) estoppel by representation, (b) estoppel by deed, (c) estoppel by convention, (d) promissory estoppel, (e) proprietary estoppel, and (f) estoppel by record with its two main principles or categories of cause of action estoppel and issue estoppel. Each of these forms of estoppel is dealt with in a separate chapter in this book. Other designations or alleged forms of estoppel are explained in these chapters as appropriate. In each case a fuller definition of the main forms of estoppel is suggested in the relevant chapter. Courts in more modern cases have sometimes offered definitions, sometimes in fairly elaborate terms, of various forms of estoppel and these are cited as appropriate.25 The following summary concentrates on these six forms of estoppel. The order of the designations in the above list has been arranged so as to facilitate this method of summary.

3.  Estoppel by Representation 1.12  An estoppel by representation operates where A makes to B a representation of fact or of mixed law and fact intending that B shall act upon that representation and there would be an injustice in the absence of an estoppel usually because B in reliance on the representation acts in such a way that it would suffer detriment if A could deny the truth of the representation. It is one of the earliest forms of estoppel, having been developed from estoppel in pais referred to by Coke in his Commentaries on Littleton’s Tenures in the early seventeenth century. Estoppel by representation was developed and applied by both common law and Chancery courts from at least the seventeenth century onwards. This form of estoppel has been described by Lord Diplock as ‘an estoppel in the strict sense of the term’.26 An estoppel

24 The subject of a uniform statement of the forms of estoppel or of important aspects of those forms is discussed in ch 2, part (G). 25 See ch 3, para 3.1 (estoppel by representation); ch 5, para 5.4 (estoppel by convention); ch 6 (n 1) (promissory estoppel); and ch 7 (n 8) (proprietary estoppel) for judicial definitions. 26 Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, 883.

7

1.13  Introduction by representation cannot be founded on a promise or a statement of opinion as opposed to one of fact. The more traditional view is that a statement of law as opposed to a statement of fact or of mixed law and fact cannot found an estoppel by representation, but recent authority indicates that a representation of law may be sufficient. This point is discussed in detail in chapter three,27 but the best course by way of description may at present be to describe a common law estoppel by representation as depending on a statement of an existing matter so as to exclude promises and expressions of opinion but to leave open the possibility, perhaps the likelihood, that further appellate authority will support the rule that a statement of law is sufficient to support the estoppel. 1.13  Estoppel in pais is a form of estoppel referred to by Coke in his above work. ­Estoppel in pais means literally estoppel in the country and denoted an estoppel founded on certain publicly or formally recorded acts such as a partition of property or the acceptance of an estate. Estoppel by representation, as described in the last paragraph, is a much wider concept and developed out of the limited nature of estoppel in pais. 1.14  Common law estoppel is a name sometimes given to estoppel by representation. The reason for the designation was to distinguish between estoppel by representation and the two forms of estoppel depending mainly on decisions in Chancery courts, namely promissory estoppel and proprietary estoppel. In fact, estoppel by representation was recognised and applied equally in both common law courts and courts administering equity. Sometimes the designation ‘common law estoppel’ is used to describe all forms of estoppel except promissory and proprietary estoppel which are the two forms of equitable estoppel. 1.15  Estoppel by conduct is not a separate form of estoppel but is usually a variety of estoppel by representation. It occurs where the representation which founds an estoppel by representation is not made by way of an express written or oral statement but is inferred from the conduct of the representor, including in limited circumstances the silence of the representor. It is possible that conduct other than express language can be the foundation of other forms of estoppel. An example is proprietary estoppel which can arise from passive acquiescence towards the actions of some other person. 1.16  Evidential estoppel is yet a further name for estoppel by representation. Its main usage seems to be in drawing a distinction between estoppel by representation, which like other estoppels is sometimes described as a rule of evidence, and so-called contractual estoppel which is in truth no more than the ordinary enforcement of a term in a contract.28 1.17  One particular operation of estoppel by representation is the creation of ­ostensible agency. A person may hold out another person as his agent although he confers no express or implied authority on that other person. A person who has so conducted himself is estopped from denying as against third parties the authority of the other person to act on his behalf. This aspect of the law of agency depends on estoppel by representation and the agency in question may be called agency by estoppel.

27 See ch 3, para 3.18 et seq. 28 For the nature of contractual estoppel see para 1.27. For a discussion on whether estoppel is properly to be described and regarded as a rule of evidence see ch 2, part (C).

8

The Forms of Estoppel and the Doctrine of Election  1.19

4.  Estoppel by Deed 1.18  Estoppel by deed is a principle the main aspect of which is that a party to a deed is estopped from denying the correctness of a clear and unequivocal statement of fact or of mixed law and fact contained in the deed where that statement was attributable to that party or to it and other parties. The estoppel applies only in an action relating to the rights and obligations created by the deed. In the case of an estoppel by deed, it is not necessary for the person who asserts the estoppel to show that he has acted to his detriment in reliance on the statement contained in the deed or that it would be unjust that the other party should be able to resile from the statement. The status and formality of the deed are thought to be enough to justify the estoppel. It is therefore the least flexible and the most mechanical of the forms of estoppel in its operation and effect. Estoppel by deed was one of the three forms of estoppel mentioned by Coke. There is an associated aspect of the principle which is that when a person purports to grant an interest in land but without holding a title enabling him to do so (a) the grant may operate to create in the grantee and as between the grantor and the grantee an interest by estoppel equivalent to the interest purported to be granted and (b) if the grantor subsequently acquires an interest sufficient for the making of the grant, the estoppel may be ‘fed’ such that the interest of the grantee is automatically and without further grant converted from an interest by estoppel into a full interest. These two rules are largely separate and in this book are described as the two aspects of estoppel by deed. The matter is further complicated by the second aspect of estoppel by deed being the operation of two separate doctrines with different historical origins and significantly different rules.

5.  Estoppel by Convention 1.19  An estoppel by convention arises where parties to a transaction subsequently act on an assumed state of fact or law relating to their transaction, the assumption being either shared by both of them or made by one and acquiesced in by the other. The common assumption must have ‘crossed the line’ in the sense that each party must have been made aware that the assumption is shared by the other party. The effect of an estoppel by convention is that it precludes a party to the assumption from denying the assumed facts or law if it would be unjust to allow that party to go back on the assumption. As with estoppel by representation, the injustice normally arises when a party to the transaction acts in reliance on the shared assumption such that it would suffer detriment if the other party could go back on that assumption. The shared assumption may therefore in certain circumstances alter the meaning and effect of the previous transaction. Estoppel by convention developed and became recognised as a separate form of estoppel in the twentieth century and is said to have derived from estoppel by deed. Estoppel by convention has often been described as a common law estoppel but has recently been described in the Court of Appeal as another variant of equitable estoppel.29 This may be yet a further example of the difficulties which arise in classifying forms of estoppel with any degree of general acceptance or precision.

29 Dixon

v Blindley Heath Investments Ltd [2015] EWCA Civ 1023, [2017] Ch 389, para 72.

9

1.20  Introduction

6.  The Two Forms of Equitable Estoppel 1.20  Equitable estoppel is a name given to cover two forms of estoppel, promissory estoppel and proprietary estoppel. The description derives from the origin of these two forms of estoppel, and certainly of proprietary estoppel, mainly in the decisions of the former Court of Chancery or in principles as established mainly by that Court. 1.21  A promissory estoppel arises when one party to a transaction promises that it will not enforce or fully enforce its legal rights under that transaction and the other party acts in reliance on that promise such that it would be unjust to allow the first party to enforce its rights in contradiction of its promise. As with estoppel by representation and estoppel by convention, the injustice is normally shown by the fact that the promisee has acted in reliance on the promise and would suffer detriment if the promisor was not kept to the terms of the promise. The principle owes its origin to two well-known decisions in Victorian times, in the first of which it was described as a first principle of equity, but has come into prominence and been elaborated through a series of decisions mainly in the second half of the twentieth century. The remedy given by a court under the principle of equity involved is flexible and may result in the first party being prevented from enforcing the right the subject of the promise either permanently or for a period of time. The operation of this principle of estoppel is in effect the enforcement in certain limited circumstances of a promise even though that promise is not supported by consideration so that the principle can be regarded within its circumscribed area of operation as an exception to the contractual doctrine of consideration. It is integral to the limited nature of the estoppel and to its relationship with the law of contract that the promise cannot be enforced as in itself constituting a cause of action but can be used only as a defence to the assertion of the legal rights which are the subject of the promise. 1.22  Proprietary estoppel is the most difficult form of estoppel to summarise in part because even though its main elements are now established there is no authoritative and comprehensive description of its content. The statement of the estoppel suggested in this book is as follows. Where A owns an interest in land and by an express or implied assurance leads B reasonably to hold an expectation that B has become or will become entitled to an interest or rights in the land, and B acts to his significant detriment in reliance on this expectation, with A both knowing of the expectation of B and doing nothing to remove that expectation, then when it would be just to do so A will be compelled to transfer to B an interest in A’s land or to make some other form of recognition of the rights of B or to make some other recompense to B. The statement of the principle in a single sentence is necessarily a complicated statement. The assurance normally has to apply to an identifiable area of land. However, it is probable that proprietary estoppel can apply to entitlements to interests in chattels and to rights which do not have corporeal entities as their subject matter as well as to interests in land, although the historical development of the principle was confined to interests in land. As with other estoppels, the principle is later broken down into its main elements and components and the above broad-brush definition conceals a number of important rules and sub-rules. 1.23  Given a situation in which the elements of a proprietary estoppel are established, this form of estoppel has two further particular aspects. One is that a court has a wide discretion on what order it may make to satisfy the expectation and to do justice. A primary form of 10

The Forms of Estoppel and the Doctrine of Election  1.25 order is that effect is given to the assurance by a direction for the creation or transfer of an interest in land in accordance with the assurance which founds the estoppel, but a variety of other orders may be made including an order that the person to whom the assurance was made may occupy land as a licensee or an order for the payment of monetary compensation to that person in place of any rights over land. The second aspect is that, unlike other forms of estoppel, a proprietary estoppel can be used as a cause of action in its own right in legal proceedings. Proprietary estoppel is a principle of equity which can trace its origin to decisions of the Court of Chancery going back to at least the eighteenth century and, like promissory estoppel, was not initially recognised or described as an estoppel but came into prominence as a separate form of estoppel in the latter part of the twentieth century. Fairly recent decisions of the House of Lords30 have done much to clarify the elements of this form of estoppel and these are of course explained in detail. 1.24  Estoppel by acquiescence is sometimes used as another name for proprietary ­estoppel. This description came into use probably because the estoppel could be founded in some, though far from all, cases on the person against whom the estoppel was asserted having stood by and acquiesced in the actions of the person asserting the estoppel rather than being founded on some positive assurance by the former person such as that contained in a representation or a promise. The acquiescence is treated as a form of implied assurance. The acquiescence which may bring about a proprietary estoppel is a form of conduct, albeit passive conduct as compared with positive action, so that this situation could also be described as a variety of estoppel by conduct. However, the estoppel which eventuates would be a proprietary estoppel and no separate form of estoppel would be involved.31 The expression ‘estoppel by acquiescence’ is also sometimes, though less frequently, used to denote an estoppel which can arise from silence when a person is under a legal or moral duty to impart information to another person but fails to do so. When used in this last sense, the estoppel which arises is best characterised as an estoppel by representation. The absence of any agreed and comprehensive description and classification of the forms of estoppel is further illustrated by the fact that the circumstances which give rise to an ‘estoppel by acquiescence’ in the sense last mentioned are sometimes said to create an ‘estoppel by negligence’ or an ‘estoppel by silence’ which are also varieties of estoppel by representation. These last two expressions are examined under the next sub-heading of this chapter. 1.25  Estoppel by expectation is also a name given to proprietary estoppel. The name probably derives from the fact that the estoppel rests on an expectation by a person that that person has or will obtain an entitlement to an interest in property. This description does not appear to have had an extensive usage. A more accurate statement in the light of

30 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752; and Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776. The distinction between promissory and proprietary estoppel as two independent and separate forms of equitable estoppel is now established: see in particular Thorner v Major, para 67 (Lord Walker). However in Australia and New Zealand the tendency is to avoid any sharp distinction between the two forms. See, eg, Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394, 409–11 (Mason CJ) in the High Court of Australia. See also Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2004] 3 NZLR 567, a modern decision of the Court of Appeal of New Zealand in which at para 41 the elements necessary to establish an equitable estoppel are set out in terms which do not distinguish between the two forms of that estoppel. 31 See, eg, the consideration of estoppel by acquiescence in the Court of Appeal in Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878, 892–93.

11

1.26  Introduction modern authority is to say that an expectation of this nature is required if there is to be a proprietary estoppel but that other elements also need be established, such as a sufficiently clear assurance giving rise to that expectation. A further variation of this description is that proprietary estoppel has been called ‘the doctrine of encouragement’, presumably in recognition of the fact that the assurance is often made to encourage the person to whom it is given to act in a certain way. 1.26  Quasi-estoppel is a description which has been given to promissory estoppel (and possibly to proprietary estoppel). The reason for this usage is not apparent but may be due to doubts which have been expressed on whether these two principles are truly estoppels at all. Such doubts are now mainly matters of the past. This description was used by Lord Diplock in Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd32 but has not gained prominence.

7.  Three Doubtful Forms of Estoppel 1.27  Contractual estoppel or estoppel by contract are names which have grown up to describe the situation in which parties to a contract include in the contract a term stating that some past, present or future fact (or possibly some proposition of law) is to be taken as correct for the purposes of the contract. Effect is given to such a term in accordance with the ordinary law of contract. The view expressed in this book is that this situation is simply an aspect of the general law of contract and is not an estoppel with the normal characteristics of that doctrine or in the normal sense of that word. 1.28  Estoppel by negligence is an expression usually applied to the situation in which a person who has a duty to provide information to another person fails to do so. In such circumstances, the first person can be said to have made an implied representation relating to the subject matter of the duty. This situation is best regarded as a variety of estoppel by representation rather than as a separate form of estoppel. This meaning of estoppel by negligence is similar to the third possible meaning of estoppel by silence as stated in the next paragraph. These two doubtful forms of estoppel, contractual estoppel and estoppel by negligence, are examined in detail in chapter three on estoppel by representation. 1.29  Estoppel by silence is capable of bearing three meanings. (a) It may mean that the estoppel rests on some inference drawn from the express language or other conduct of a party. This is the least usual of its meanings and is in effect the same as estoppel by conduct. (b) The second possible meaning is when a proprietary estoppel originates not from any express statement or conduct but from the acquiescence, that is the absence of any protest, by a person whose proprietary rights are infringed. In other words, this meaning of estoppel by silence is the same as the meaning of estoppel by acquiescence and both are not estoppels in their own right but are examples of proprietary estoppel. (c) The third meaning is that most encountered. Normally silence is of its nature equivocal and cannot constitute the clear representation or promise required for an estoppel by representation or a promissory



32 [1971]

AC 850.

12

The Forms of Estoppel and the Doctrine of Election  1.32 estoppel. However, it is said that silence can found an estoppel by representation, and possibly even a promissory estoppel, if a person has a duty to speak but fails to do so. So viewed, estoppel by silence is a possible variety of one or other of those forms of estoppel, normally of estoppel by representation. 1.30  It can therefore be seen that on a correct analysis the three descriptions of estoppel here discussed are not true and separate forms of estoppel in their own right, but each is either a variety of the operation of another form of estoppel, or is the result of the operation of some principle of law other than the doctrine of estoppel.

8.  Estoppel by Record 1.31  The last form of estoppel to mention is estoppel by record. It is one of the three forms of estoppel described by Coke. Descriptions of this form of estoppel are hindered by differences of classification and terminology. The classification adopted in this book, which is far from universally applied,33 is that estoppel by record is a comprehensive description applied to three principles. The first two principles are together classified as the two types or species of estoppel per rem iudicatam or res iudicata. The first principle is cause of action estoppel and is the rule that once a cause of action has been held to exist or not to exist that outcome may not be challenged by either party in subsequent proceedings between the same parties. The second principle is issue estoppel. Legal proceedings, as well as determining a cause of action, may often involve the determination of one or more separate issues leading to the final and overall determination of the proceedings. The rule is that once an issue has been so determined between the parties, both parties are bound by that determination in any future proceedings between them. The essence of estoppel per rem iudicatam in either of its two species is therefore (a) identity of the cause of action or the issue in the previous and the subsequent proceedings and (b) identity of the parties in the previous and the subsequent proceedings. The estoppel can also bind the privies of the original parties, that is persons who have some form of close connection with the original parties. 1.32  There is a third principle which is that a court may refuse to allow a party to bring proceedings when that party could and should have raised the subject matter of the proceedings in previous proceedings, the reason for the refusal being that it would in these circumstances be an abuse of the process of the court for the matter to be raised in the later proceedings. It is arguable whether this third principle constitutes an estoppel at all but it is convenient to describe the principle as a part of estoppel by record. The principle is often described as the rule in Henderson v Henderson since it originates in the principles stated by Wigram V-C in a decision of that name.34 It seems inaccurate to describe this third principle as an estoppel per rem iudicatam (literally an estoppel by reason of a matter which has been decided in earlier proceedings) when, ex hypothesi, the matter sought to be raised in the later proceedings has not been adjudicated upon.

33 The most recent analysis is in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160, para 17 (Lord Sumption), where five principles comprising res iudicata are identified. 34 Henderson v Henderson (1843) 3 Hare 100.

13

1.33  Introduction 1.33  Descriptions of aspects of estoppel by record vary in decided authorities and in explanatory accounts. On occasions the expression ‘res iudicata’ is extended to include what is here described as the third principle, and on other occasions it is confined to cause of action estoppel. There is an associated principle of merger which is that when judgment is obtained establishing a cause of action, the cause of action ceases to exist and is merged into the judgment. The best that can be done in the account of estoppel by record in chapter nine is to adhere to the classification and description here given while recognising that in the authorities other classifications and descriptions are often used. 1.34  It will be observed at once that the rules of law described under this sub-heading, albeit described in English or in Latin as estoppels, are founded on what a court has decided and not on any representation or promise or assurance made by a party or on any understanding shared between parties. Indeed, the rules are founded on a decision of a court which may be directly contrary to that which is asserted by a party to the litigation which has given rise to the decision. An underlying characteristic of estoppels as rules of law is that a person is in certain circumstances held to a representation or promise or assurance which he has made or to a common understanding of fact or law which he has shared with another person or persons. Accordingly, with estoppel by record, no questions of reliance or detriment or injustice arise. Estoppel per rem iudicatam can be argued to belong most naturally to the law of evidence or to the law of procedure before courts.35 Nonetheless, in deference to the traditional description of the rule as an estoppel it forms the subject matter of a chapter of this book.

9.  Reliance-Based Estoppels 1.35  A useful category is that of what are called reliance-based estoppels. The category comprises four of the six main forms of estoppel, namely estoppel by representation, ­estoppel by convention, promissory and proprietary estoppel, where it is an essential element of the estoppel that the party claiming it has acted in some way in reliance on a statement made to that party. It is also a requirement of these estoppels that as a result of action taken (or not taken) in reliance on the statement, the party who asserts the estoppel has or will or may suffer some detriment as a consequence of those actions such that it would be unconscionable that the maker of the statement should be allowed to resile from it. This uniformity of requirements opens the way to a uniform formulation of certain of the essential elements of the four estoppels involved.

10.  Classifications of Estoppels 1.36  In order to provide a coherent description of estoppel as an overall doctrine of law, it is necessary to try to bring some order to the multitude of names and descriptions which have been given to varieties of estoppel. The brief description of the terminology just given reveals that there are in truth six varieties of estoppel which can be regarded as separate

35 There

is a view that all or most estoppels are principles of the law of evidence. See para 1.63.

14

The Nature and Characteristics of Estoppel  1.38 forms of estoppel in their own right and with their own separate elements and rules, namely estoppel by representation, estoppel by deed, estoppel by convention, promissory ­estoppel, proprietary estoppel and estoppel by record. Other descriptions of estoppel can be regarded as referring to varieties of these separate forms or as not being an estoppel at all. It remains to classify and tabulate the six forms of estoppel by reference to their origin and main characteristics. Common Law Estoppels Estoppel by representation Estoppel by deed Estoppel by convention Estoppel by record

Equitable Estoppels Promissory estoppel Proprietary estoppel

Reliance-Based Estoppels Estoppel by representation Estoppel by convention Promissory estoppel Proprietary estoppel

Each of these six separate forms of estoppel is examined in a separate chapter of this book, and the other descriptions and varieties of estoppel which make up the 23 descriptions identified earlier are explained or referred to as necessary within an appropriate chapter.

11.  The Doctrine of Election 1.37  Election has two forms, common law election and equitable election. A common law election arises when a person has two or more inconsistent rights and acts in such a way as to indicate to the person against whom the rights are exercisable that he has decided to exercise one of those rights. Once that decision has been communicated, the owner of the rights is prevented from asserting against the other person any of the other inconsistent rights. Equitable election is a principle of equity relating only to instruments such as deeds and wills, and involves the doctrine of ‘approbate and reprobate’. The essence of the principle is that a person who receives a testamentary or other gift must elect whether to accept the gift including any burden within it (ie, to approbate the gift) or to reject it as a whole (ie, to reprobate the gift). Equitable election is explained in summary form only in this book. There are similarities between the doctrine of common law election and some forms of estoppel, notably promissory estoppel. An effort is made to itemise and clarify the important differences between election and promissory estoppel when these two principles are described.36

(C)  The Nature and Characteristics of Estoppel 1.38  There is no comprehensive definition of the word ‘estoppel’.37 As an overall doctrine or concept, the word connotes a series of principles of law with each principle being a form of estoppel with its own requirements and rules. In the crudest sense, the unifying feature 36 See ch 6, paras 6.155–6.156; and ch 8, para 8.121. 37 See however the descriptions of the concept which underlies estoppel mentioned above (n 3). Attempts have been made to state a single unified principle which encompasses most forms of estoppel but this has met with little judicial enthusiasm. This topic is discussed in ch 2, part (G).

15

1.39  Introduction of the principles is that a person is kept to what that person has stated. Even then, the two component principles of estoppel per rem iudicatam, cause of action estoppel and issue estoppel, fall outside this core description since they depend on what a court has determined rather than on what a person has stated. The three main questions next examined have no bearing on estoppel by record. The examination of these questions is followed by an examination of two other concepts, the concepts of unconscionability and of mutuality which are, or have been said to be, central to estoppel as a whole.

1.  The Three Main Questions 1.39  Given the core purpose and description of most forms of estoppel the law then prescribes for these forms the answer to three main questions, (a) the question of the type and circumstances of the statements which can lead to an estoppel, (b) the question of the events following such a statement which must occur if the estoppel is to come into operation and a person is to be held to his statement, and (c) the question of the form of order or relief which is to be determined by a court so as to give effect to the estoppel. It is differences in the types of initial statements and, to a lesser extent, differences in the types of necessary events subsequent to the statement, which create five of the main different forms of estoppel, estoppel by representation, estoppel by deed, estoppel by convention, promissory estoppel and proprietary estoppel.

2.  The First Question: The Initial Statement 1.40  Looking at the first of the three questions, one type of estoppel arises from a representation of fact or of mixed law and fact and probably today also from a representation of law. If such a statement is made and is intended to be acted upon by the person or persons to whom it is made then, subject to the necessary subsequent events, an estoppel by representation may come into effect. A statement of fact or of mixed law and fact made in a deed may also create an estoppel, but in this case there are no subsequent events which have to be shown such as are necessary for other forms of estoppel. A second type of statement is a promise intended to be acted upon and to be binding. If the promise is not to enforce a legal right available to the promisor then, subject to the necessary subsequent events, there may be an estoppel, called a promissory estoppel, such that the promisor is held to his promise. A third type of statement occurs where parties to a transaction make a common assumption of law or of fact relating to the transaction and state or communicate their assumption to each other (what is called the assumption ‘crossing the line’) such that the common assumption becomes a shared assumption. In certain circumstances, depending on the necessary subsequent events, the parties may be held to their communicated shared assumption by an estoppel by convention. A fourth type of statement is an assurance given by the owner of an interest in property which creates an expectation in another person that that other person has or will have an entitlement to an interest in or rights over the property. Subject again to necessary subsequent events, the maker of the assurance may be held to the assurance by an estoppel, here called a proprietary estoppel. In most cases the statement of whatever 16

The Nature and Characteristics of Estoppel  1.42 type may be an express written or oral statement or may be implied from the conduct of a party including in some instances silence or inaction by that party. It has been said that the classic type of proprietary estoppel is the acquiescence, that is absence of any response or protest, by a landowner when actions adverse to the land of the owner are carried out by some other person, and this passive acquiescence may constitute an implied assurance given to that other person relating to rights in or over the land of the owner. There are therefore a limited number of types of statement which are capable of founding some form of estoppel. Other forms of statement, such as the stating of an opinion or the giving of advice or the making of a threat, do not have this capacity. It is essential to distinguish carefully which form the statement takes since on this depends the form of estoppel which may, subject to other matters, ensue.38 1.41  On the first question, the law therefore prescribes four different types of statement which, if made and where normally accompanied by a particular intention, may result in an estoppel, namely a representation, a promise, a communication of a common assumption, and an assurance creating an expectation of an entitlement to an interest or rights in property. As just mentioned, when the statement is one of fact or of mixed law and fact and is contained in a deed then, unlike for the other statements and forms of estoppel, no further events are generally necessary to make the statement binding on the party to the deed who made it. The principle here involved, that of estoppel by deed, depends only on the status and formality of the deed. A further distinguishing aspect of estoppel by deed is that the statement of fact or of mixed law and fact which creates the estoppel must be express and contained in writing within the deed itself.

3.  The Second Question: Events Following the Initial Statement 1.42  Turning to the second question, for the remaining principles other than estoppel by deed, namely estoppel by representation, promissory estoppel, estoppel by convention and proprietary estoppel, the necessary subsequent events if an estoppel is to arise are substantially the same. In each case, it must be unjust or unconscionable that the maker of the statement should be able to go back on or deny the truth or the effect of what has been stated. In each case, injustice can normally only be established if it is shown, first, that the recipient of the statement acted in some way in reliance on it, and, secondly, that by reason of that reliance that person would or might suffer detriment if the maker of the statement was not held to it. It is for this reason that these four forms of estoppel are called reliance-based estoppels. This uniformity of a part of the requirements for most of the main estoppels offers some opportunity to move towards a synthesis of some of the main elements of those forms of estoppel.

38 The demarcation between types of statement which initiate different forms of estoppel is not always precise. For instance, the assurance which may bring about a proprietary estoppel may be of the nature of a promise or may, though less usually, be a representation as to some existing matter. A result of this imprecise demarcation is that it is sometimes possible to argue that a particular statement, such as a statement of some existing matter relating to land, may give rise to either an estoppel by representation or a proprietary estoppel.

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1.43  Introduction

4.  The Third Question: Giving Effect to the Estoppel 1.43  Once the two main questions have been considered, leading to a decision that an estoppel is established, there is a third question which is in what way or by making what order a court is to give proper effect to the estoppel. With the three common law estoppels this last question should not generally create any doubt. The court simply binds the maker of the initiating statement or holder of the common assumption to that which has been stated or assumed, with the result that the legal proceedings in which the estoppel arises are then determined with the subject matter of the statement or assumption being assumed to be correct. It is likely, though possibly still the subject of some doubt, that a party can be held to a part only of the truth of a statement which leads to an estoppel by representation.39 With the two forms of equitable estoppel, and particularly with proprietary estoppel, the third question may have a greater importance since here the court has a wide discretion over how and to what extent the promise or assurance which initiates the estoppel is to be enforced and this affects the order made. The obvious, and perhaps the primary, form of order when a proprietary estoppel is established is that the interest or rights in land which are the subject of an assurance should be ordered to be vested in the party to whom the assurance was given and which has acted to its detriment on the faith of that assurance, but other forms of order are often made including an order for the payment of a sum of money to the recipient of the assurance in lieu of the assurance not being enforced, or fully enforced, in accordance with its terms. With a promissory estoppel, a court may determine that the equitable rights created by the estoppel can be satisfied by allowing only a temporary effect of the promise made, or that the effect of the promise may be brought to an end by a notice given by the promisor who is bound by the estoppel.

5. Unconscionability 1.44  Unconscionability is a concept which is sometimes thought of as the foundation of estoppel (although estoppel by record again stands by itself where unconscionability has no part and in addition unconscionability plays no part in estoppel by deed). It has been said that the concept of unconscionability permeates the law of estoppel.40 Jurisdictions which have adopted and developed the common law doctrine of estoppel have taken a similar approach.41 By unconscionability is meant that which is in some way morally reprehensible42 or that which shocks the conscience of the court.43 The Shorter Oxford English Dictionary

39 See ch 3, part (F). 40 Gillett v Holt [2001] Ch 210, 225 (Robert Walker LJ). In Johnson v Gore Wood & Co [2002] 2 AC 1, 41, Lord Goff, having rejected the view that the many circumstances capable of giving rise to an estoppel can be accommodated within a single formula, added that it was unconscionability which provided the link between them. 41 In National Westminster Finance NZ v National Bank of New Zealand Ltd [1996] NZLR 548, 549, Tipping J in the Court of Appeal of New Zealand said that decisions of the Court had ‘emphasised the element of unconscionability which runs through all manifestations of estoppel. The broad rationale of estoppel, and this is not a test in itself, is to prevent a party from going back on his word (whether express or implied) when it would be unconscionable to do so’. 42 Multiservice Bookbinding v Marden [1979] Ch 84, 110. 43 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 92.

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The Nature and Characteristics of Estoppel  1.45 defines ‘unconscionable’ as showing no regard for conscience and as a word having been in use since the sixteenth century. This hearkens back to the ultimate moral basis of, and justification for, the doctrine of estoppel.44 Unconscionability is a synonym for injustice or inequity and these words have the same meaning in the present context. It is difficult to find any more exact description of unconscionability. It is something more than conduct which is unreasonable or unattractive, and it has moral overtones which these descriptions sometimes do not have, but it may derive from conduct which is less than fraudulent. Judges, even in the same case, may disagree over whether particular conduct is unconscionable.45 In one case concerning proprietary estoppel it was said that even if conduct was repugnant to a court that was not per se enough to render the conduct unconscionable in the eyes of equity.46 1.45  Probably no comprehensive definition of so diffuse a concept is possible. The starkest suggestion of the importance of unconscionability to estoppel is that once a party has made some form of statement all that needs to be asked is whether in all the circumstances it would be unconscionable to allow that party in subsequent legal proceedings to resile from what it has stated. The difficulty with such very general statements of law of this nature is that they fail to provide any significant degree of guidance or certainty for those who wish to know what are their rights and obligations by reference to some reasonably detailed rules of substantive law.47 In any event, whatever may be desirable in theory, in fact each form of estoppel has its own specific rules on the questions of what form of statement can found the estoppel and what events following a statement have to be shown to exist before an estoppel can operate. It would be a bold person who would suggest that an estoppel by representation, or a promissory estoppel, could be established without a clear and unambiguous representation or promise intended to be acted upon, and in fact acted upon, but a view which at one time appeared to gain some favour was that it was sufficient to create a proprietary estoppel to show that the behaviour of the person alleged to be estopped was unconscionable without any exact requirement for a sufficiently clear assurance giving rise to a reasonably held expectation of an entitlement to an interest in or rights over land, or for action taken in reliance on the assurance, or for detriment to the party who had so acted.48 That approach has now been decisively rejected by the House of Lords and it is clear today 44 See para 1.1. 45 For instance, in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 92, Lord Walker found the conduct of one of the persons involved, going back on an unenforceable agreement, to be unattractive but not unconscionable. On the other hand Lord Scott in the same case at para 36 described the same conduct as unconscionable. This perhaps illustrates the difficulties of definition. 46 Matharu v Matharu (1994) 68 P & CR 93 (Dillon LJ in a dissenting judgment). 47 In Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 98, Lord Neuberger observed, it is suggested correctly, that concentrating on the perceived morality of the parties’ behaviour can lead to an unacceptable degree of uncertainty of outcome. See also Lord Walker at para 46: ‘Certainty is important in property transactions’. Lord Walker in the same paragraph, commenting on equitable estoppel (promissory and proprietary estoppel), put it vividly in saying that the estoppel was ‘not a joker or wild card to be used whenever the court disapproves of the conduct of a litigant who seems to have the law on his side’. It has been said in New Zealand that while the concept of estoppel should remain flexible ‘there must be some test of principle so that those who have to consider the matter in advance of a decision by the Court can have a reasonable prospect of forecasting what the result will be’: Westlands Savings Bank v Hancock [1987] 2 NZLR 21, 36 (Tipping J). 48 See the comments by Lord Scott in the House of Lords in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 16, on the judgments at first instance and in the Court of Appeal in that case. See also Lord Walker at para 92.

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1.46  Introduction that this form of estoppel, as other forms, can only be asserted if all of its elements, of which unconscionability is only one, are established.49 In principle and on this matter proprietary estoppel stands on the same analytical basis as other estoppels. 1.46  As well as constituting the moral justification for estoppel as a general doctrine, unconscionability or injustice has three further general roles to play in the case of most estoppels. In the first place, unconscionability is a specific and essential element of estoppel by representation, estoppel by convention, promissory estoppel and proprietary estoppel.50 The proponent of the estoppel cannot succeed in establishing it unless, as well as satisfying the other elements, he can show that in the circumstances it would be unjust or unconscionable that the maker of the statement should be allowed to resile from it.51 Unconscionability is not here applied simply as a vague or general concept. In order for unconscionability to be established, it is normally necessary that the person asserting the estoppel should show both that he acted in reliance on the statement made and that he would or might suffer detriment if the maker of the statement was allowed to go back on that statement. In this way, the general concept of unconscionability as some morally reprehensible conduct is brought within specific and defined rules. Secondly, certainly with proprietary and promissory estoppel, the two forms of equitable estoppel, unconscionability has an important role to play in determining the appropriate remedy or order of the court. As it has been put in the High Court of Australia, unconscionability is the element which both affects the jurisdiction of a court of equity and moulds the remedy.52 1.47  Thirdly, unconscionability as a separate element of the estoppel has a possible function of avoiding the need for rigid rules or formulations on certain questions. For instance, there may be or may have been some uncertainty as regards estoppel by representation on whether the representee has to have been reasonable in acting in reliance on the representation in the way in which he did, and on how high must be the prospect of the representee

49 See ch 7, para 7.95. A trenchant criticism of decisions reached not by the application of principles of law but by ‘the formless void’ of individual moral opinion is found in the judgment of Deane J in the High Court of Australia in Muschinski v Dodds (1985) 160 CLR 583, 615–18, cited by Lord Scott in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 17. A passage from the judgment of Deane J, with which Mason J concurred, is set out in ch 7, para 7.95. The proposition that a court can in any case do that which it thinks most just ignoring settled points of law and specific restrictions and requirements is occasionally described as ‘“palm tree” justice or justice which varies with the length of the Lord Chancellor’s foot’. Such an approach was rejected in vivid words in a proprietary estoppel case by HH Judge Weeks QC in Taylor v Dickens [1998] 1 FLR 806: ‘In my judgment there is no equitable jurisdiction to hold a person to a promise simply because the court thinks it unfair, unconscionable, or morally objectionable for him to go back on it. If there were such a jurisdiction, one might as well forget the law of contract and issue every civil judge with a portable palm tree. The days of justice varying with the size of the Lord Chancellor’s foot would have returned’. 50 There may still be some possible doubt on whether unconscionability is an essential element of estoppel by representation since it does not figure in the older statements of the substance of that form of estoppel. See ch 3, para 3.139. The better view is that unconscionability is a requirement of all four reliance-based forms of estoppel. 51 The word ‘statement’ is here and elsewhere used as a composite description for statements of fact or of law, communications of an assumption, promises and assurances which are essential elements of the various forms of estoppel. In later chapters describing individual forms of estoppel the importance of distinguishing between different types of statement such as statements of fact and promises is explained. This matter of terminology is discussed again in para 1.71. 52 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 419 (Brennan J); Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567, 594 (Randerson J giving the judgment of the Court of Appeal of New Zealand).

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The Nature and Characteristics of Estoppel  1.48 suffering some detriment if the representor is allowed to resile from his statement, and on how substantial the anticipated detriment has to be before an estoppel is established.53 There are similar uncertainties in relation to other forms of estoppel. It may be possible to avoid laying down exact rules or formulations on these and other questions if it can be said that where the reliance is manifestly unreasonable or the prospect of detriment is very small or the amount of the anticipated detriment is very small, a court can properly conclude that although the other elements of the estoppel have been made out, one or more of the above matters means that it would not be unconscionable to allow a representor or promisor to go back on his statement so that in the end the estoppel fails. These and other questions are discussed when each of the relevant forms of estoppel is explained and an attempt is made to suggest a uniform answer to these and other questions. Reasonableness and the substantiality of detriment and of the prospect of detriment or of other matters are two of the factors common to most forms of estoppel and are discussed in a later part of this chapter. The approach summarised in this chapter, and suggested as that to be applied to various forms of estoppel, is a twofold test, the first or threshold test being that matters such as the amount of detriment or the risk of detriment must be at least significant if there is to be an estoppel at all, and the second test being that the amount of the detriment or the risk of detriment is one of the factors to be weighed in deciding the final question of whether it would be unconscionable to allow a person to resile from a statement made.54

6. Mutuality 1.48  Coke describes ‘mutuality’ as a feature of estoppel.55 The meaning of mutuality for the purposes of estoppel by record has been said to be that the only parties who can take advantage of the estoppel or be bound by it are the parties to previous proceedings themselves or their privies, and that no third party can take advantage of it or be bound by it because he was not a party to the previous proceedings. Those proceedings, so far as third parties are concerned, are res inter alios acta.56 An estoppel by record is also mutual in that both parties to a judgment are bound by the judgment in further proceedings between them and it does not matter for these purposes which of the parties was successful in the first proceedings. It is not apparent how mutuality applies to estoppel generally which normally

53 It is now fairly clear that the actions carried out in reliance on a statement must have been reasonably so carried out if an estoppel is to be established, and later in this chapter reasonableness is identified as a factor which affects estoppels generally at certain points. It is not so easy to find exact descriptions of the degree of probability that detriment will be suffered which has to be shown if it is to be concluded that an estoppel is permitted to operate. 54 See para 1.59. 55 Co Litt 352a. It was said in 1856 that the authorities from the time of Coke up to that date showed that an estoppel had to be mutual between the parties: Petrie v Nuttall (1856) 11 Exch 569, 576 (Martin B). 56 Hunter v Chief Constable of the West Midlands in the Court of Appeal [1980] QB 283, 317 (CA) (Lord Denning MR). For this decision on appeal to the House of Lords see [1982] AC 529. A further statement of the rule is that: ‘It is essential to an estoppel that it be mutual, so that the same parties or privies may be bound and take advantage of it’: Petrie v Nuttall (1856) 11 Exch 569, 575 (Alderson B). One of the reasons why a deed poll, that is a deed executed by only one party or by only two or more parties having a common interest, may not be capable of giving rise to an estoppel by deed is that it lacks mutuality or reciprocity: see ch 4, para 4.14.

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1.49  Introduction depends on a statement of some sort made by A to B in reliance on which B acts to his detriment.57 The only mutuality is that at least two persons are involved. The nearest one comes to any further mutuality may be in estoppel by convention, where the basis of the estoppel is that an assumption of fact or of law is shared between parties such that in certain circumstances none of the parties can depart from that assumption.58 As can be seen from the above statement of its meaning, mutuality is bound up with the question of whether a person, other than the parties to the events which gave rise to the estoppel, can take advantage of the estoppel or be bound by it.59 1.49  Whatever exactly it means, mutuality has not found favour in the development of the doctrine of estoppel. It was described by Bentham as destitute of any semblance of reason.60 It was said in Smith’s Leading Cases in 1837 that the rule that an estoppel had to be mutual must be taken with some limitation. The doctrine of mutuality has been rejected altogether in the United States.61

(D)  General Factors Common to Estoppels 1.50  There are five other factors common to, or at least having a similar effect on, the four ‘reliance-based’ estoppels, estoppel by representation, estoppel by convention, promissory estoppel and proprietary estoppel,62 which it is useful to consider separately. The detailed application of these factors to each of these four forms of estoppel is examined in subsequent chapters which describe each of the estoppels and state their essential elements and components. The five factors are (a) the intention of the maker of the statement which initiates and founds the estoppel, (b) the role of reasonableness and reasonable conduct, (c) the general application of an objective test in determining the existence of certain of the elements or components of estoppels, (d) the substantiality of matters which follow the initial statement, and (e) the burden of proof on factual matters. The five factors are here outlined mainly by reference to proprietary estoppel since that is the form of estoppel which has been most recently developed and of which the essential elements have been most recently established by authority. It is the presence of these common factors which makes possible a tentative definition in broad terms of certain of the main elements or components of the four ­estoppels which can be applied across each of them.63

1.  The First Factor: Intention 1.51  As regards the first factor, the four main estoppels mentioned above arise not out of casual statements but out of statements or communications made seriously and with

57 The

exception is estoppel by deed where reliance and detriment are not essential elements of the estoppel. ch 5. 59 This is a question of some complexity and is discussed in detail in ch 2, part (H). 60 J Bentham, Rationale of Judicial Evidence (1827). 61 Hunter v Chief Constable of the West Midlands [1980] QB 283, 317 (CA) (Lord Denning MR). 62 See para 1.35 for the meaning of reliance-based estoppels. 63 The tentative definition is given in ch 2, para 2.194. 58 See

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General Factors Common to Estoppels  1.53 an intention that they be taken seriously and acted upon by the recipient. It is this intention and this characteristic (together, of course, with other elements of the estoppel) which provide the moral justification for holding the maker of the statement to what that person has stated. A proprietary estoppel is founded on an assurance that the recipient of the assurance will have an interest in land. That assurance must have been made seriously and with the intention that it was to be relied on and acted upon. Any assurance which is expressly or impliedly revocable is not enough.64 Similarly, for a promissory estoppel to arise from a promise or a common law estoppel by representation to arise from a representation made, the promise or the representation must have been made with the intention that it was to be acted upon.65

2.  The Second Factor: Reasonableness 1.52  The second factor is the role of the test of reasonableness in establishing an estoppel. It appears from formulations of the principle of forms of estoppel that reasonableness permeates estoppel as does the concept of unconscionability. The test of reasonableness applies to the conduct of the person who asserts the estoppel. To take again, and first, proprietary estoppel, there is recent and high authority that the party asserting the estoppel must show not only that it has acted in reliance on the assurance made to it but also that it was reasonable for the party so to act.66 It seems that the party raising the estoppel must show not only that it was in principle reasonable for it to act in some way on the faith of the assurance but also that the actual conduct of that party was reasonable. The same test applies to estoppel by representation and promissory estoppel where the actions taken by the representee or promisee in reliance on the representation or promise must have been reasonably taken and must have been reasonable in nature.67 A further facet of reasonableness is that it is a part of the objective test applied to the satisfaction of components of the forms of estoppel, a factor which is described in the next paragraph.

3.  The Third Factor: Objective Test 1.53  The third common factor is the application at stages within the establishment of the components of estoppels of an objective test. An objective test means that a matter such as the correct interpretation of language spoken or written, or the mental state of a person at a particular time, such as the intention of that person, has to be determined as the conclusion on the matter which would be reached by a reasonable person with knowledge of the relevant surrounding facts. It is to be contrasted with a subjective test which is what a person actually meant by words spoken or written, or what was the actual mental state of the person in question. 64 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 2 (Lord Hoffmann). 65 See ch 6, para 6.139 et seq (promissory estoppel); and ch 3, para 3.84 et seq (estoppel by representation). 66 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, paras 77, 78 and 81. 67 Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93. See ch 3, para 3.115 (estoppel by representation); and ch 6, para 6.185 (promissory estoppel).

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1.54  Introduction 1.54  An objective test is applied at three important stages in the establishment of the necessary components of estoppels. (a) An objective test is generally applied in determining the meaning of the assurance or other statement made which initiates an estoppel. What matters is not what the maker of the assurance or other statement or promise actually meant by the words used, but what a reasonable person with the knowledge available to the recipient of the assurance or statement or promise would conclude the words meant.68 (b) As just explained, an important factor in estoppels is the intention of the maker of the assurance or other statement or promise that it should be taken seriously and relied on and acted upon. The existence of the necessary intention has to be established as that which would have been concluded to be the intention of the maker of the statement by a reasonable person in the position of, and with the knowledge of, the recipient of the statement. If the conclusion reached on this objective basis is that the statement was intended to be taken seriously and relied on, it is of no avail for the maker of the statement to plead that he did not in fact have such an intention. The crucial importance of the objective approach is illustrated by a leading recent decision on proprietary estoppel in which an assurance was made in oblique terms by a farm owner to a relative, who worked for many years for no reward on the farm, that on the death of the owner the farm would pass to the relative. The House of Lords upheld a proprietary estoppel and ordered the vesting of the farm in the relative on the death of the owner on the basis that the seriousness of the assurance was to be judged on an objective test. In doing so, the House rejected the decision of the Court of Appeal which had reached a different conclusion as to the intention of the owner and the seriousness of his assurance or promise by erroneously applying a form of subjective approach.69 A series of justifications for the use of an objective test, at any rate as regards intention, is set out in chapter six on promissory estoppel.70 Similar reasons apply to other forms of estoppel. (c) An objective test is also applied in determining the question of unconscionability which is critical in reliance-based estoppels. It has been said, in a leading modern decision on proprietary estoppel, that unconscionability has to be determined as an objective value judgement on the behaviour of a person and that the judgement is made regardless of the actual state of mind of the person in question.71

4.  The Fourth Factor: Substantiality 1.55  The fourth factor is the substantial nature of aspects of the events which follow the initial statement if an estoppel of the forms here under review is to be established. This factor concentrates on the detriment which is a component of these forms of estoppel. In general

68 There is a possible exception where the assurance which founds a proprietary estoppel is made orally and the maker of the statement is alive and can give evidence of what he subjectively understood to be the true meaning of the words spoken. For a discussion of this point, see ch 7, para 7.152. 69 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 2 (Lord Hoffmann); para 60 (Lord Walker); para 81 (Lord Neuberger). The need for an objective test in judging the intention of a person giving a promise which leads to a promissory estoppel was stated by Morgan J in his definition of that form of estoppel in Crossco No 4 Unlimited v Jolan Ltd [2011] EWHC (Ch) 803 para 332. The full passage is cited in ch 6 (n 75). For this decision on appeal see [2011] EWCA Civ 1619. 70 See ch 6, para 6.136 et seq. 71 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 92 (Lord Walker).

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General Factors Common to Estoppels  1.56 terms, what the person asserting the estoppel has to show is that he would suffer detriment if the maker of a statement was not held to that statement. A question which arises is how substantial does the detriment have to be. A detriment which a person suffers or may suffer may range from the trivial to the very serious. There is no elaborate examination of this question in the authorities, but such indications as exist suggest that the detriment must be more than trivial. The most useful general description of the need for reliance and detriment for the purposes of estoppel by representation and promissory estoppel does not state any test of the necessary amount of detriment, merely stating that the claimant must show that he will suffer detriment if the defendant is not held to the representation or promise.72 In respect of estoppel by representation, it has been said that where the detriment was the loss of a chance of recovering money, the chance of recovery must have been substantially prejudiced for there to be an estoppel,73 and in respect of proprietary estoppel, it has been said that the detriment must have been something substantial.74 In respect of estoppel by convention, it has been stated that the claimant must show real detriment if the estoppel is to be established.75 1.56  The other aspect of substantiality in relation to detriment is the risk, as opposed to the certainty, of detriment. In discussions of detriment as a component of estoppel, the word ‘detriment’ is used in two senses. It may mean detriment already suffered when the court considers the alleged estoppel, such as the expenditure of money by a person which that person can ill afford in reliance on a representation made that a sum of money is due or payable to that person, or the performance of unpaid services to a landowner on the faith of an assurance of a future interest in land. On the other hand, the concept of detriment may mean that there is a risk, but not a certainty, that future detriment will occur if an estoppel is not held to operate. Well-known statements of the need for detriment as a component of estoppel by representation, promissory estoppel and estoppel by convention, focus on future detriment in the latter sense.76 If detriment is considered in the former sense, there is no risk of detriment involved. It can be determined on the evidence whether or not detriment has in fact occurred. Such a determination may on occasion involve two questions. One is whether, as a fact, the person claiming the estoppel did act in a certain way or to the extent claimed, a question of primary fact to be determined on the evidence and on the balance of probability, and the other is whether the actions of that person do constitute a detriment, a question of secondary fact on which the court must make a judgement.77 When detriment

72 Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93 (Neuberger LJ). The full passage is set out in ch 6, para 6.176. The most recent contribution to the present matter is that the Supreme Court has upheld the decision of the court below that ‘minimal steps’ taken in reliance on a promise were not enough to support a promissory estoppel: MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119, para 16 (Lord Sumption). 73 Fung Kai Sun v Chan Fui Hing [1951] AC 489. 74 Gillett v Holt [2001] Ch 210, 232 (Robert Walker LJ). 75 PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994 (Ch), [2004] Ch 142, para 222 (Neuberger J). 76 Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93; PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994 (Ch), [2004] Ch 142, para 222. 77 The different approaches of courts to the proof of evidence of events which have occurred in the past, as opposed to contingencies, whether those contingencies exist in the past or in the future is discussed, with the application of these approaches to the risk of detriment in connection with promissory estoppel in ch 6, para 6.201 et seq. In the first type of case and as stated in this paragraph the question of whether detriment has occurred in the past and the amount of it may sometimes be one of whether in the circumstances which have occurred there is

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1.57  Introduction is considered in the latter sense, there is no detailed consideration in the authorities of how high the risk of detriment in the future has to be for an estoppel to be established. An illustration of the problem may be that as a result of a representation made a party did not take an opportunity to recover money due to him by legal or other proceedings and it may be that a future attempt to do so would not stand much chance of success. On the other hand, it may also be the case that if the opportunity to recover the money had been taken earlier and in the absence of the representation there would also have been a limited, but greater, chance of success in any proceedings or other steps to recover the money. In such a case, the most that occurs is that there is a risk of detriment in that if the proceedings for the recovery of the money had been taken earlier they might have been more successful than if taken at a later stage. The best that can probably be said on the general question of the amount of the risk is that there must be shown to be a significant risk of detriment as a result of the statement which founds the estoppel if the estoppel is to be established on the basis of that risk. 1.57  Substantiality may also have a part to play in the rule that the actions taken by the party asserting an estoppel following a representation or promise or assurance made to that party must have been carried out in reliance on what was stated. The statement need not have been the only matter which motivated the actions, and it is enough that the carrying out of the actions was to some degree influenced by the statement. It may be that within this rule there is a requirement that before the estoppel can be established, the influence of the statement must have been significant and more than trivial or de minimis.78 1.58  Discussion of substantiality as a factor has been largely an examination of how great the detriment must be and how high the risk of that detriment must be before the d ­ etriment component of the four forms of reliance-based estoppel can be established. There are in ­principle two methods of answering this question. There could be a uniform rule governing the detriment and its risk such as that there must be at least a significant amount of d ­ etriment and a significant risk of that detriment before an estoppel can operate. A ­ lternatively, even if there is no initial limitation or threshold on the amount or the degree of risk of detriment such that some very small amount of detriment or very small risk of that detriment occurring is still sufficient to permit an estoppel to be established in principle, the limited nature of the detriment and its risk may be matters to be considered when it comes to the overall element of unconscionability within the estoppels and may then in some cases be something which results in it not being unconscionable to allow the maker of a statement to resile from it. On the basis of such authority as exists, the first of the two approaches seems to be the more likely statement of the existing law. a detriment at all to the person asserting the estoppel. For example, the recipient of an assurance of some interest in property may have performed some services for the owner of the property who makes the assurance but may also have been allowed rent-free accommodation of the property so that when looked at in overall terms and on balance that person has not suffered any detriment at all. See ch 7, para 7.238 et seq, where this type of situation occurs in connection with proprietary estoppel. 78 Again there is only limited reference to this question in the authorities. An example of the consideration of the point is the careful statement of the elements of estoppel by convention by Briggs J in Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174, para 52, in which it was said that the person alleging the estoppel must have relied on the common assumption, the foundation of this form of estoppel, ‘to a sufficient extent’. The full citation from the judgment is in ch 5, para 5.6. See also Crossco No 4 Unlimited v Jolan Ltd [2011] EWHC 803 (Ch) para 332 (Morgan J), where an issue before the court was whether the promise or assurance had a sufficiently critical influence on the conduct of the promisee to make it inequitable for the promisee to depart from it. For this decision on appeal see [2011] EWCA Civ 1619.

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General Factors Common to Estoppels  1.60 1.59  When different forms of estoppel are examined in subsequent chapters it is suggested that the most useful approach to the question of substantiality is a twofold approach. The first stage may be a threshold test, in the sense that unless a factor such as the degree of influence of a statement on the recipient of it or the amount of detriment or the risk of detriment is at least significant, there can in principle be no estoppel. If this test is satisfied, then there is a second stage which is applicable when it comes to the overall matter of unconscionability when one of the matters to be weighed in the balance is the degree of substantiality of the influence of the statement or the amount or the risk of detriment.79

5.  The Fifth Factor: The Burden of Proof 1.60  Coming to the fifth factor, the burden of proof, the burden of proving any factual matter needed to establish a cause of action or to resist a cause of action in civil proceedings generally rests on the person who asserts that particular matter.80 The same rule applies generally to the various matters which have to be demonstrated to exist in order that a particular form of estoppel, including estoppel by record, can be operated. There is a possible exception which is that for the purposes of proprietary estoppel, the burden of proving that the recipient of the assurance acted in some way following the assurance is on the person asserting the estoppel, but once the necessary actions have been proved, the burden then shifts to the maker of the assurance in the sense that the fact that the actions were taken in reliance on the assurance, itself an essential component of this as of other forms of estoppel, will be assumed unless the person against whom the estoppel is asserted proves otherwise. The main authority for this exceptional situation is a decision of the Court of Appeal in Greasley v Cooke,81 and in particular the judgment in that case of Lord Denning MR. The judgments of Lord Denning during his long period as a judge have included notable and important contributions to the development of the law of estoppel, particularly the resuscitation of the principle of promissory estoppel in the landmark case of Central London Property Trust Ltd v High Trees House Ltd,82 but this particular rule relating to the proof of reliance in one form of estoppel appears to be an unnecessary exception to the general rule on the incidence of the burden of proof in estoppel and in civil proceedings, and may not necessarily apply today in all cases where this issue arises in the context of proprietary estoppel.83 79 The first or threshold test is included in the suggested synthesis of certain of the main elements of reliancebased estoppels set out in ch 2, para 2.194. 80 Constantine Line v Imperial Smelting Corporation [1942] AC 154, 174 (Lord Maugham). The principle is encompassed in the latin maxim ‘onus probandi ei qui affirmat non ei qui negat’. 81 Greasley v Cooke [1980] 1 WLR 1306. There has also been a suggestion that the same rule on the burden of proof may apply to promissory estoppel: see ch 6, para 6.88. 82 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. 83 Lord Denning was a consistent proponent of other propositions in the law of estoppel such as that while actions in reliance on a statement have to be shown as a component of estoppels it is not necessary to show that detriment has occurred or will occur to the person asserting the estoppel and that it is desirable that at any rate many of the forms of estoppel should be combined together into a single and overall statement of principle. The need for detriment is now firmly established as regards all reliance-based estoppels and the courts have shown little enthusiasm for formulating and applying some overall principle or even for proposals to amalgamate certain of the existing forms of estoppel. All these matters are discussed in detail in subsequent chapters where they are most relevant to a particular form of estoppel. The possibility of an overall principle unifying the main forms of estoppel is discussed in general terms in ch 2, part (G).

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1.61  Introduction

(E)  General Questions of Principle Regarding Estoppel 1.61  There are a number of general questions, some or all of which arise in connection with all forms of estoppel (although only to a limited extent with estoppel by record). It is useful to discuss and attempt to reach general conclusions on these questions as separate matters before coming to the various forms of estoppel, since the considerations involved are often common to most forms of estoppel. As necessary, any general conclusions can then be taken forward and applied to each particular form of estoppel where in some instances more specific considerations may be relevant. For example, the question of whether an estoppel can contradict the effect of a statutory provision should be answerable in accordance with a general principle which can then be applied to the operation of any specific form of estoppel and any specific statutory provision where that question arises. In the case of one question, the effect of an estoppel on third parties such as the successors in title to the original parties to the estoppel, the rules do appear to vary substantially between forms of estoppel, that is so far as any clear rules at all on this difficult subject can be extracted from the authorities. Accordingly, when this subject is discussed in chapter two a separate heading is provided for each form of estoppel. These general questions are discussed in detail in chapter two where a rather fuller summary of the law applicable to each of the questions than can be given here is also provided.84 There are eight such general questions to be examined and the substance of these questions is now stated. 1.62  The first question is whether an estoppel can be used in itself as a separate and independent cause of action. This is what has been described, somewhat inaccurately, as the question of whether an estoppel can be used as a sword as well as a shield. The general answer is that an estoppel cannot by itself constitute a cause of action but may be used in support of some separate cause of action, such that in some circumstances the use of the estoppel will enable the cause of action to succeed where it would not otherwise succeed. Equally, an estoppel may be used as a defence to a cause of action, such that in some circumstances the cause of action can be resisted where it would otherwise succeed. An exception to this general principle is proprietary estoppel which, because of its nature (giving effect to an assurance relating to an interest or rights in property), may be used as a separate and independent cause of action. 1.63  The second question is whether estoppel is a rule of evidence or a rule of substantive law. The question arises mainly in connection with estoppel by representation and depends on statements in older cases (as well as on occasion in modern cases) that estoppel is a rule of evidence. The question is not often of great practical significance85 and it is suggested that today all estoppels are best regarded as substantive rules of law. Proprietary estoppel, which can itself constitute a cause of action, obviously has this status. The notion of estoppel as a

84 See ch 2, para 2.3 et seq for this summary. 85 The status of an estoppel by representation as a rule of evidence may have had some modern practical importance since it appears to have been one of the reasons which led the Court of Appeal in Avon County Council v Howlett [1983] 1 WLR 605 to the somewhat unfortunate conclusion that generally this form of estoppel cannot have a ‘pro tanto’ or partial effect. See ch 3, part (E). The proposition that estoppel is only a rule of evidence was one of the reasons given in a first instance decision in Re Exchange Securities & Commodities Ltd [1988] Ch 46 for the holding that an estoppel against a company does not bind a liquidator of the company.

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General Questions of Principle Regarding Estoppel  1.67 rule of evidence may have led to the description of a type of estoppel by representation as evidential estoppel when it has been compared with contractual estoppel or estoppel by contract.86 1.64  The third question is whether the principles of estoppel, including estoppel by record,87 apply in the area of public law. The principles do not apply to criminal law and probably do not apply in the realm of administrative law, that is the law governing the relationship between citizens and the government and public bodies when performing statutory functions in the public interest. Within administrative law there has been developed an allied doctrine of legitimate expectation which may to some extent replace estoppel in this field. However, there seems no reason why estoppel should not apply in the ordinary way to public bodies when they carry out activities available to all persons, such as employing staff or taking leases of offices. 1.65  The fourth question arises because an estoppel, if effective, would sometimes extend or alter a statutory jurisdiction conferred on a court or tribunal. The fundamental rule is that an estoppel cannot have such an effect. Indeed, this rule is a corollary of the rule stated under the next question. However, some provisions which relate to jurisdiction are procedural in nature, a good instance being time limits for the taking of certain steps, and such procedural requirements are capable of being overridden or altered by the operation of an estoppel. 1.66  The fifth question arises because an estoppel, if effective, would sometimes override or qualify or otherwise alter the effect of a statutory provision, and the issue then becomes one of whether in principle an estoppel can have this effect. The fundamental rule is that an estoppel cannot operate so as to contradict or alter the effect of a statutory provision. However, there is a somewhat uncertain qualification to this rule which is that an estoppel may operate so as to affect the operation of a statutory provision if the effect is not contrary to a social policy which underlies the provision and which must be enforced in the interests of the public. This question may be of particular importance when it comes to the relationship between proprietary estoppel and the requirement in section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 that a contract for the sale or other disposition of an interest in land must be in writing and this question, not as yet fully or clearly resolved, is considered in the chapter on proprietary estoppel since it is in relation to the operation of this form of estoppel that the question primarily, and perhaps exclusively, arises.88 An estoppel may also be prevented from operating because it would subvert some basic principle of the common law such as that an illegal contract cannot be enforced. 1.67  The sixth question is one raised in some decisions, including Australian decisions, and in academic writing. It is whether there is, or ought to be, some comprehensive and overarching doctrine of estoppel which can be encompassed within one stated principle

86 See para 1.16; and for a full discussion of ‘contractual estoppel’ see ch 3, part (G). 87 Estoppel by record may perhaps be regarded as a rule of evidence or a rule of procedure and is usually covered in textbooks on the law of evidence or on procedure. Criminal law contains analogous principles to estoppel by record such as autrefois acquit and autrefois convict, but these are outside the scope of this book. There is some doubt on whether the main component of estoppel by record, estoppel per rem iudicatam, applies or applies fully to judgments given in applications for judicial review: see ch 9, part (F). 88 See ch 7, part (B) section 5.

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1.68  Introduction applying to all of the present forms of estoppel (except estoppel by record) in place of the different elements and rules and requirements which presently characterise the different forms of estoppel. An associated suggestion is that at least certain forms of estoppel could be amalgamated into a single principle. When this question is examined in chapter two, there is a suggested twofold answer, which is (a) that it is not desirable or practical to try to evolve some single statement of principle which describes in a meaningful way all forms of estoppel (except estoppel by record), and (b) that it would be clearer and simpler if for the forms of reliance-based estoppel there could be a degree of synthesis so as to create uniformity in the statement of certain of the main elements of the estoppels. 1.68  The seventh question is the exact meaning in law of the concept of waiver. A ­particular point is whether there is some principle of waiver which is separate from the effect of other principles of law, such as forms of estoppel or the doctrine of common law election or the principle of an implied abandonment of rights. The answer suggested in this book is that there is probably no such independent general doctrine of waiver. 1.69  The eighth question is whether an estoppel can operate for the benefit of, or against, the successors in title of the persons whose actions brought about the possibility of an estoppel. For instance, if a landlord promises to reduce the rent for a period and the tenant acts to his detriment in reliance on the promise, a promissory estoppel will normally arise binding the landlord to the promise. The question is whether a successor to the landlord’s interest will be bound by the estoppel, and whether a successor to the tenant’s interest can take the benefit of the estoppel. There is only limited authority on the question of whether or when an estoppel can bind or be relied on by third parties, that is parties other than the parties whose actions brought about the estoppel between them. Such guidance as does exist relates to particular forms of estoppel and the discussion of this subject in chapter two is largely organised around a consideration of each separate form. The present question has been most fully elaborated in connection with estoppel per rem iudicatam where it is established that a judgment of a court can give rise to an estoppel in subsequent proceedings not only between the parties to the judgment but also between the ‘privies’ of those parties. Privies include not only successors in title to the land affected by a judgment but also to other persons who have a sufficiently close connection to a party to the judgment. This subject is examined in detail in chapter nine where estoppel by record, including the two species of estoppel per rem iudicatam, is explained.

(F) Terminology 1.70  In addition to problems of taxonomy, a further difficulty in an explanation of estoppel as a legal topic is that of terminology. Certain expressions are clear in this area, for example the description of a person who makes a representation or a promise as the representor or promisor and the description of a person to whom the representation or promise is made as the representee or promisee. Such descriptions are used in many areas of law such as the law of contract or the law of fraudulent or negligent misrepresentation. When it comes to estoppel, there is no single and generally agreed word either to describe the person who asserts the existence of the estoppel, for example who asserts that the other party cannot deny the truth of what that party has previously written or said, or to describe the person 30

The Historical Basis of Estoppel  1.72 against whom the assertion of the estoppel is made. In the absence of a single word, more cumbrous descriptions of the parties have to be used such as ‘the person who asserts or alleges the estoppel’ or ‘the person who is alleged to be estopped’. One description that can be used to describe a person in the former category is ‘the estoppel raiser’. An expression sometimes used to describe a person in the latter category is ‘the object of the estoppel’.89 In descriptions of the principles or requirements of estoppel, the person asserting the estoppel is sometimes called the claimant and the person against whom the estoppel is asserted is sometimes called the defendant90 and this form of shorthand description is often used in subsequent chapters of this book. This usage should not obscure the fact that in legal proceedings an estoppel may be relied on by a claimant or a defendant or any other party. 1.71  Estoppels, except estoppel by record, often depend on some form of oral or written utterance made by one person to another from which the maker of the utterance is not allowed to depart with legal impunity. The form of estoppel which ensues depends on the form of the utterance. A statement of fact (or of mixed law and fact), or probably today of law, founds an estoppel by representation; and a statement of fact (or of mixed law and fact) founds an estoppel by deed if contained in a deed; a promise founds a promissory estoppel; a communication of a shared assumption founds an estoppel by convention; and an assurance (which may itself be a statement of fact or law or a promise or an implication from passive acquiescence) founds a proprietary estoppel. There is no obvious term which covers all of these types of utterance. Consequently, in the explanation of the law of estoppel where the context makes it appropriate, the word ‘statement’ is sometimes used in a general sense to encompass all of these varieties of utterance even though it is important for some purposes to determine which sort of utterance is involved. On other occasions, the same word may mean a statement of fact or of mixed law and fact, or probably today of pure law, such as will found an estoppel by representation and is then used by way of contrast to some other form of utterance such as a promise which may found a promissory estoppel.

(G)  The Historical Basis of Estoppel 1.72  Estoppel is a concept of some antiquity in the law. In his Commentaries on Littleton’s Tenures, published in 1628, Coke stated that there were three categories of estoppel, estoppel by record, estoppel by deed and estoppel in pais.91 In Terms de la Ley, a legal dictionary in Law French with an English translation published by William Rastel a little earlier in

89 See, eg, Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 14 (Lord Scott). The possible expressions ‘estoppor’ and ‘estoppee’ do not appear to have gained currency. While the words ‘representor’ and ‘representee’ and ‘promisor’ and ‘promisee’ are usefully used in descriptions of the parties in estoppel by representation and promissory estoppel, no corresponding descriptions of ‘assurer’ or ‘assuree’ have found their way into descriptions of proprietary estoppel. 90 See, eg, Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93 (Neuberger LJ). 91 Co Litt 352a. (The first part of the Institutes of the Laws of England or a Commentary on Littleton.) The Shorter Oxford English Dictionary gives the first recorded use of the word ‘estoppel’ as being in Dialogue on the Laws of England in 1531: see Wharton’s Law Lexicon (1848). Estoppel is described by Coke as ‘An excellent and curious kind of learning’: Co Litt 352a, referred to by Chitty QC, arguendo, in General Finance, Mortgage, and Discount Company v Liberator Permanent Benefit Building Society (1878) 10 Ch D 15, 17.

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1.73  Introduction about 1620, it was said under the title of Estoppel: ‘Estoppel is when one is concluded and forbidden in law to speak against his own act or deed, yea, though it be to say the truth’,92 a definition which could not unreasonably and in a very general sense be used today for some forms of estoppel. Clearly the concept was known to Littleton writing in the Law French of late medieval times, whose Tenures, giving a scientific account of methods of land holding and ownership, was published about 1481, who stated that ‘pur ceo que le baron est estoppe a dire’ (the husband is estopped from saying something).93 According to Lord Denning the word, and presumably the concept, was brought over by the Normans.94 The idea of estoppel per rem iudicatam was known to Roman law and is shown by the reference to Justinian’s Digest in a leading judicial definition of cause of action estoppel.95 The word ‘estoppel’ is said to be adapted from the Old French word ‘estopail’ meaning a bung or a cork. An equivalent word in Spanish is ‘estopa’. In English, an estoppel usually has the effect that a party is stopped from asserting some fact or asserting some right on which it would otherwise be entitled to rely. Other forms of estoppel, established today, have their origin in principles of equity developed in previous centuries. The principle of what is today known as promissory estoppel was said in 1877 by Lord Cairns LC in a well-known passage to derive from a first principle of equity on which all courts of equity proceeded.96 Proprietary estoppel as it is now established can be traced back to decisions in the nineteenth century such as Dillwyn v Llewelyn97 and Plimmer v Mayor, etc, of Wellington,98 and to a series of earlier decisions in the eighteenth and nineteenth centuries in the Court of Chancery. In a leading modern case on estoppel by convention, that form of estoppel was said to have been one of the varieties of estoppel developed over the previous 150 years.99 A task of the law today is to articulate these various forms of the overall concept of estoppel by way of a series of coherent rules which can be applied to the particular form of estoppel under consideration.100 A fuller account of the development of estoppel by representation, estoppel by convention, promissory estoppel and proprietary estoppel is given in the chapters which explain these forms of estoppel.101 1.73  Law and equity have played their part in the generation of the forms of estoppel which exist today. Estoppel by representation is often called common law estoppel and, as mentioned, Sir Edward Coke, an eminent common lawyer in the late sixteenth and early

92 Cited in H v H [1928] P 206, 214 (Lord Merrivale P). 93 As cited by Lord Denning in Hunter v Chief Constable of the West Midlands in the Court of Appeal at [1980] QB 283, 317. For this decision on further appeal to the House of Lords see [1982] AC 529. 94 ibid. 95 Badar Bee v Habib Merican Noordin [1909] AC 615, 612–63, cited in ch 9, para 9.65. 96 Hughes v Metropolitan Rly Co (1877) 2 App Cas 439, 448. 97 Dillwyn v Llewelyn (1862) 4 De GF & J 517. 98 Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699 (Privy Council on appeal from New Zealand). 99 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 122 (Lord Denning MR). 100 The question of a unified statement of all forms of estoppel is considered in ch 2, part (G). 101 See ch 3, para 3.2 (estoppel by representation); ch 5, part (B) (estoppel by convention); ch 6, part (A) (promissory estoppel); and ch 7, part (A) (proprietary estoppel). Estoppel by record, including issue estoppel as one of the species of estoppel per rem iudicatam, was understood and has been applied since at least the end of the 17th century: see Philips v Bury (1694) Term Rep 346 (Holt CJ); and The Duchess of Kingston’s Case (1776) 20 St Tr 355, (1776) 1 Leach 146 (De Grey CJ giving the unanimous advice of the Judges to the House of Lords). See generally ch 9 for estoppel by record.

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The Structure of the Book  1.74 seventeenth century, referred also to estoppel by deed and estoppel by record as varieties of estoppel.102 Promissory estoppel and proprietary estoppel have wholly or largely equitable origins. Lord Scott in a recent decision described proprietary estoppel as a sub-species of promissory estoppel.103 The classification used in this book is that by reason of their origin all types of estoppel are called common law estoppels save for promissory and proprietary estoppel which are the two forms of equitable estoppel.104 While classification is important, the origins of the different forms of estoppel may be mainly of historical interest today when law and equity are fused and are applied in all courts.105 Even so, the equitable origins and nature of proprietary and promissory estoppel may be significant since the right to assert a proprietary estoppel where it affects land is an equitable proprietary interest in land and so is capable in principle of binding successors in title of the land affected subject to registration as necessary. The binding effect of other forms of estoppel on successors in title is less clear.106 A characteristic of the two types of equitable estoppel is the flexibility of their operation. Where a proprietary estoppel is established, a court has a wide choice of interests in land or other relief which may be created or awarded to give effect to the estoppel, and when a promissory estoppel is established, a court may temper the effect of the estoppel by, for example, requiring that the person bound by a promise not to enforce rights shall give notice before he can resume his full rights.

(H)  The Structure of the Book 1.74  The structure of this book is dictated by the nature of estoppel. As long as the overall doctrine of estoppel remains divided into its various separate forms, each with its own principle and elements, it is inevitable that the subject is treated with different chapters devoted to each form of estoppel. There is a separate chapter on the allied doctrine of election. As mentioned earlier,107 there are a number of questions which apply to estoppels generally and these are addressed in chapter two before an examination of the details of the different forms of estoppel in subsequent chapters. It has also been pointed out that there are

102 See para 1.72. 103 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, paras 14 and 23. 104 There is high modern authority for this classification: see Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 61, where Lord Walker said that there were two varieties of equitable estoppel, that is promissory estoppel and proprietary estoppel. He said that he had some difficulty with the description in Cobbe v Yeoman’s Row Management Co by Lord Scott of proprietary estoppel as a sub-species of promissory estoppel. 105 The classification of some principles of law as legal or equitable may be still of substantial importance, eg, the difference between common law and equitable damages since the remedy of awarding equitable damages may be discretionary: see Lunn Poly Ltd v Liverpool & Lancashire Properties Ltd [2006] EWCA Civ 430, [2006] 2 EGLR 29, para 21 (Neuberger LJ) where the description ‘quasi-equitable’ was applied to damages assessed on a ‘voluntary release’ or ‘negotiation’ basis. In Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, 134, Denning J attributed the development of promissory estoppel to the fusion of law and equity by s 75(11) of the Judicature Act 1873. The six main forms of estoppel are classified in a table contained in para 1.36. 106 The overall question of whether the benefit or the burden of estoppels can assist or bind successors in title to the property or rights affected by the estoppel is one of the more difficult aspects of the law of estoppel as a whole with the possibility that different rules apply to different forms of estoppel and with a dearth of clear authority. This subject is discussed in detail in ch 2, part (I). 107 See para 1.61 et seq.

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1.75  Introduction today numerous descriptions of various forms of estoppel which are in use.108 There are six clearly established and separate forms of estoppel in operation today, namely estoppel by representation, estoppel by deed, estoppel by convention, promissory estoppel, proprietary estoppel and estoppel by record (which includes estoppel per rem iudicatam and its two species, cause of action estoppel and issue estoppel). Each of these six forms is examined in a separate chapter. 1.75  As with so many areas of law, the law of estoppel has been assisted in its development by decisions from different jurisdictions. Some of these have been appeals to the Privy Council from present or former British territories such as Hong Kong or Kenya. For instance, a leading and still often cited decision on the law of proprietary estoppel is an appeal in 1884 to the Privy Council from the then recently established Colony of New Zealand.109 Two of the decisions of greatest help on the uncertain question of whether an estoppel can bind a third party are a decision of the Court of Appeal of New Zealand110 and a decision of the Privy Council on appeal from the Court of Appeal of New Zealand.111 In addition, some countries have to some extent developed their own independent jurisprudence on estoppel and decisions from these countries are sometimes mentioned. Particular assistance can be gained from carefully considered decisions of the High Court of Australia.112 There has also been a degree of cross-fertilisation of principle. For instance, the principle of estoppel by convention has been applied in the Court of Final Appeal in Hong Kong.113 1.76  There is no obviously logical order in which to examine the various forms of estoppel. Estoppel by record in its main principles stands out from the other forms of estoppel and the coverage of it is accordingly little connected with the remainder of estoppels as an overall doctrine. It has been decided to explain first three of the common law estoppels, estoppel by representation, estoppel by deed and estoppel by convention. The description ‘common law’ may itself be to a degree misleading since the most frequently applied form of estoppel, estoppel by representation, was applied in Chancery courts as well as in common law courts.114 However, these three forms of estoppel are either included in or derived from the forms of estoppel mentioned by Coke in the early seventeenth century and so may be examined first. There is no unanimity of description of the remaining two forms of estoppel, promissory and proprietary estoppel, but the description used in this book is that they are the two forms of equitable estoppel. This description is justified since both estoppels are derived from principles of equity and, certainly as regards proprietary estoppel, from decisions and principles applied in the former Court of Chancery. They are therefore examined after the three common law forms of estoppel. 108 See para 1.6. 109 Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699. 110 Bay of Plenty Electricity Ltd v Natural Gas Corporation Energy Ltd [2002] 1 NZLR 173. 111 Re Goldcorp Exchange Ltd [1995] 1 AC 74. 112 See, in particular, ch 6, para 6.18 et seq, on promissory estoppel. The exposition of the principle underlying estoppel by Dixon J in the High Court of Australia in Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641, 674, has been particularly influential in guiding subsequent English decisions. The statement of Dixon J was described by Denning LJ in Central Newbury Car Auctions Ltd v Unity Finance Ltd [1957] 1 QB 371, 380, as the most satisfactory formulation that he knew. Recent decisions in English courts, such as ING Bank NV v Ros Roca SA [2012] 1 WLR 472, para 61 (Carnwath LJ) and Prime Sight Ltd v Lavarello [2014] AC 436, para 41 (Lord Toulson) (Privy Council on Appeal from Gibraltar), continue to rest on and derive guidance from the Grundt decision. 113 Siegfried v Adelburt Unruh (FACV Nos 9 and 10 of 2006). 114 See ch 3, para 3.2.

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The Structure of the Book  1.79 1.77  The nature and content of the rules of law which constitute the forms of estoppel lead to the way in which generally the estoppels are treated in each chapter by way of explanation. A person asserting an estoppel, or a person against whom an estoppel is asserted, will wish to know what are the essential elements which must be established before the estoppel can be established. Consequently, following an initial broad-brush definition or explanation an attempt has been made for the forms of estoppel to isolate the essential elements which have to be proved if reliance is to be placed on that form of estoppel. These elements generally involve the nature of the statement made, the mental state of the maker of the statement, that is the intention and knowledge of that person, and the subsequent actions and the mental state of the person to whom the statement is made. These characteristics are common to most forms of estoppel and it is the differences of detail, especially as regards the making of the initial statement, which bring about the different forms which estoppel takes. In the case of most estoppels there are identified as the main elements, (a) a statement (whether a representation or a promise or an assurance or the communication of an assumption of law or of fact), (b) action taken in reliance on the statement, (c) detriment to the person to whom the statement was made if the maker of the statement can resile from it, and (d) unconscionability if there is no estoppel which compels the maker of the statement to adhere to it.115 A general sequence of explanation within most chapters is therefore that the basic nature of the estoppel, and its status and place within the law, are explained and its essential elements are stated. This is followed by an examination in more detail of each of the essential elements of the estoppel and sometimes of components of each element. 1.78  The separation or classification of the essential elements of a form of estoppel, particularly of the two forms of equitable estoppel, is sometimes criticised as a process which places the law in a straightjacket and which is inimical to the flexible nature of estoppel as an overall doctrine. In addition, it is pointed out that the satisfaction of one element or requirement may have a bearing on whether a further element or requirement is satisfied. Estoppel is a creation which rests on the inherent flexibility and adaptability of rules of common law and of equity and cannot be confined within some immutable quasi-statutory formulation. Even so, some arrangement of the essential elements of a form of estoppel is usually needed if a coherent explanation of it is to be given and if lawyers and others are to be able to form judgements on whether a form of estoppel can be relied on by parties or can be invoked against parties. 1.79  This process is followed by a consideration of how the estoppel is put into effect and what form of relief is given by the court if the essential elements of the estoppel are established. Effect is normally given to an estoppel by either (a) the court determining that by reason of the estoppel some assertion or matter relevant to the proceedings before it cannot be relied on by one or other party, or (b) the court making some specific order to give effect

115 A difficulty in this form of description is to decide the appropriate level of detail into which to divide the requirements of each form of estoppel. For instance, proprietary estoppel is perhaps the most complicated form of estoppel to describe either within a single sentence or by way of an explanation of its details. In general, the approach adopted has been to seek to isolate three or four essential elements of a form of estoppel and then to describe other more detailed requirements as components of the main element to which they must naturally refer. In accordance with this methodology ch 7 states the four main elements of proprietary estoppel and then identifies 11 components, most of which fall within one of the main elements. See ch 7, paras 7.100 and 7.101.

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1.80  Introduction to the estoppel. The second type of effect is more usual as a means of giving effect to proprietary or promissory estoppel where a court may have available a wide range of forms of relief to give effect to the equity created by the estoppel. 1.80  Certain aspects of the relevant law are complicated and some matters are still not wholly clear or decided today. For this and other reasons, there is provided at the end of each of the chapters which cover the various estoppels a summary of the main rules of law which constitute and govern the estoppel in question. The same is done at the end of chapter eight which covers the doctrine of election. 1.81  After the chapters devoted to the main common law or equitable estoppels there is a chapter on the doctrine of election. Election is not a form of estoppel but has considerable similarities to estoppel, and particularly to promissory estoppel, and it is logical to explain it here. 1.82  Finally, the three principles which make up estoppel by record are described. Estoppel by record is left to the end because, although traditionally described as a form of estoppel, it has few characteristics in common with the other forms of estoppel. The nature of estoppel by record dictates a somewhat different approach to explanation in chapter nine. Estoppel per rem iudicatam depends on there being a final judgment of a court or tribunal and the first step is to consider the categories of judgments. After this, the two species of estoppel per rem iudicatam, cause of action estoppel and issue estoppel, are explained. The remainder of chapter nine is devoted to general matters pertaining to estoppel by record such as the nature of ‘privies’, the exceptions to estoppel per rem iudicatam and foreign judgments. The last topic is the rule in Henderson v Henderson which may prevent a party from raising in later proceedings a claim or other matter which it could and should have raised in previous proceedings. This rule is described as an aspect of estoppel by record although it may be more correctly categorised as a part of the inherent power of a court to prevent an abuse of its own process. 1.83  Certain of the elements of the four common law or equitable estoppels which are reliance based are the same or are very similar, notably the actions which must have been taken by the person asserting the estoppel such as actions in reliance on the statement or promise or assurance made to that person, before an estoppel can be established. There is therefore necessarily a degree of repetition in the description of the details of these four estoppels. Some of the questions which arise are common to several of these forms of estoppel. An illustration is what degree of likelihood of detriment occurring to the recipient of a statement if no estoppel is applied has to be demonstrated in order to establish the estoppel, a question which is common to estoppel by representation, estoppel by convention, promissory estoppel and proprietary estoppel. An attempt has been made when describing each form of estoppel to provide, so far as possible, cross-references to where the same or a similar question is discussed in connection with a different form of estoppel. This process reduces the degree of detailed repetition needed. In cases where an exact rule is in doubt, the same or a similar suggestion of the correct law for the different forms of estoppel is made whenever possible. 1.84  Estoppel is a doctrine of law which applies to most areas of civil law.116 As a result, the operation of the doctrine in its various forms can generally only be understood by ­reference to

116 An

exception may be administrative law: see para 1.64.

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The Structure of the Book  1.85 certain of the rules of law in a particular area where estoppel becomes relevant. For example, one of the elements of estoppel by representation is that the representor when he makes a statement intends that statement to be acted upon by the representee. This element is illustrated by a decision of the Court of Appeal which concerned a statement about a request for a new tenancy of business premises made under the procedure in Part II of the Landlord and Tenant Act 1954.117 The principle of the law of estoppel here illustrated and applied might be unclear without a brief explanation of the operation of that Act. For a specialist in the law of landlord and tenant such an explanation is unnecessary, but few practitioners are familiar with all areas of law and so may need to understand the content and operation of aspects of estoppel by reference to its application to some area of law in which they are not a specialist. Another example of this process is the principle, applicable to estoppel generally save for proprietary estoppel, that an estoppel can be used to assist in establishing a cause of action but cannot in its own right create a cause of action. Certain modern authorities appear to deny the possibility that an estoppel, even though not itself constituting a cause of action, can even assist in establishing a cause of action, which is sometimes described as operating as a sword rather than as a shield, and the impact of these authorities, which range from tenancies of social housing to infringements of patents, cannot be properly understood without some examination of the facts of the decisions and the causes of action involved.118 Therefore, some brief explanation of the area of law within which aspects of estoppel operate, or within which important authorities are decided, is given where that is appropriate. Estoppel is wholly a judge-made and case-driven subject with very little direct statutory intervention and this method of explanation, although it may somewhat lengthen parts of the text, appears to be the most practical and useful way of proceeding. 1.85  In certain instances, statute provides for what is in effect an estoppel. For instance, section 21(1) of the Sale of Goods Act 1979 provides that when goods are sold by a person who is not their owner, and without the consent of the owner, the buyer acquires no better title to the goods than the seller had ‘unless the owner of the goods is by his conduct precluded from denying the seller’s authority to sell’.119 Under section 14 of the Partnership Act 1890 it is stated that: Everyone who by words spoken or written or by conduct represents himself, or who knowingly suffers himself to be represented, as a partner in a particular firm, is liable as a partner to anyone who has on the faith of such representation given credit to the firm, whether the representation has or has not been made or communicated to the person so giving credit or with the knowledge of the apparent partner making the representation or suffering it to be made.

This is a statutory enactment to a limited extent of estoppel by representation.120 The application of these ‘statutory estoppels’ depends on the language and purpose of the particular statutory provision, although of course assistance may be gained from the principles and rules of common law and equitable estoppel. This is necessarily a long book and a detailed 117 Sidney Bolsom Investment Trust Ltd v E Karmios & Co (London) Ltd [1956] 1 QB 529. See ch 3, para 3.88. 118 The general question of the use of estoppel as a sword and as a shield is examined in ch 2, part (B). 119 The statutory provision reflects the general principle of the common law explained in the latin maxim ‘nemo dat quod non habet’: ‘no one gives what he does not have’. 120 In the current edition of Spencer Bower: Reliance-Based Estoppel, 5th edn (Bloomsbury, 2017) ch 11 statutory estoppels are examined under the four main headings of: Sale of Goods; Bills of Exchange; Bills of Lading; and the Partnership Act 1890.

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1.86  Introduction consideration of the statutory provisions is best left to specialist textbooks on the area of law to which those provisions apply. 1.86  Estoppel is to a considerable extent a parasitic subject. In general, its principles and rules do not operate independently but instead affect or qualify the operation of other general doctrines of law which themselves bring about rights and obligations. The law of contract, with its requirement of consideration for the creation of any contract not contained in a deed, is such a fundamental doctrine which creates rights and obligations and itself may bring about a cause of action. In general an estoppel cannot itself create a cause of action but may assist in promoting or resisting some other cause of action such as an action for damages or other relief for a breach of contract.121 Again, the desirability of keeping this account of the law of estoppel within a reasonable compass means that no attempt is made to provide a separate comment on the application of estoppel to specific different areas of law. Inevitably in the account of the forms of estoppel other areas of law have to be examined and explained but the doing so is incidental to, and a means of explaining, the doctrine of estoppel by reference to some particular application of that doctrine. Any attempt to comment on the application of estoppel to separate and specific areas of law could not be comprehensive and there is no reason to think that the application of the basic principles of the forms of estoppel differs to any significant extent between the different areas of private law to which it applies.122

121 A major exception to this explanation is proprietary estoppel which can itself create a right of action independently of any other principle of law. This subject is explained in ch 2, part (B). 122 Estoppel applies only to a limited extent to the actions of public bodies, a subject which is explained in ch 2, part (D). Estoppel by record may not apply to judicial review proceedings against public authorities: see ch 9, para 9.145 et seq.

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2 General Questions Relating to Estoppel (A) Introduction 2.1  It is explained in chapter one that there are certain general questions concerning the nature and operation of estoppel as an overall doctrine which are relevant to all or some of the forms of estoppel.1 Rather than repeating an explanation of these questions whenever they are relevant in connection with various forms of estoppel covered in subsequent chapters, it is convenient to discuss the questions in this chapter in general terms and to attempt to provide an answer on the issues which arise which will then be generally applicable to the various different forms of estoppel. It will be possible when the particular forms of estoppel are explained in later chapters to refer back to this general discussion and the conclusions reached in this chapter. Where some aspect of the matters explained in this chapter is of particular relevance to an individual form of estoppel or applies in some individual way to a particular form of estoppel, a further consideration of this aspect is given in the chapter concerning that particular form. For example, the general question of whether an estoppel can stand by itself as a cause of action applies differently to proprietary estoppel as compared with the other forms of estoppel and this matter is referred to again in chapter seven on proprietary estoppel.2 A further example is that the effect of statutory restrictions on the operation of estoppel is relevant to most forms of estoppel, but the effect of the requirement in section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 that a contract for the sale or other disposition of an interest in land must be in writing, is a particularly acute issue for proprietary estoppel which often involves the transfer or creation of interests in land. Accordingly, this last matter is considered in detail in chapter seven on proprietary estoppel.3 The doctrine of privity, that is the circumstances in which a party may take the benefit or the burden of an estoppel although not a party to the events creating the estoppel, has a particular impact on estoppel by record and is examined separately in chapter nine on that form of estoppel.4 2.2  In all the subsequent chapters of this book which cover the forms of estoppel and the doctrine of election, a summary of the main rules on the subject matter of the chapter is given at the end of the chapter. In the case of most of the questions applicable to estoppel generally, it seems most useful to summarise here in the introduction to this chapter the answers given or conclusions reached, as explained in detail later in the chapter, on the eight general questions which arise. In the case of most of the questions an attempt is also made

1 See

ch 1, para 1.61 et seq. part (B) of this chapter and ch 7, para 7.52. 3 See ch 7, part (B), section 2. 4 See ch 9, part (E). 2 See

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2.3  General Questions Relating to Estoppel at the end of the examination of the principles and the authorities to state a more detailed conclusion or conclusions on the law applicable. 2.3  (i) Any form of estoppel may be used by any party to civil legal proceedings either in order to assist in establishing a cause of action (such that without the operation of the estoppel the cause of action might not be able to be established) or in order to assist in resisting a cause of action (such that without the operation of the estoppel it might not be possible to resist the cause of action). No form of estoppel can be used as by and in itself constituting a separate cause of action save for proprietary estoppel which alone can be used in this way. This matter is sometimes described as the ‘sword or shield’ question. 2.4  (ii) Whatever their origin or however they were originally understood, all forms of estoppel can today be regarded as principles of substantive law and not merely as rules of evidence. 2.5  (iii) The law of estoppel has to be substantially modified in its application to public bodies carrying out statutory functions, since as a matter of general principle public bodies cannot be prevented from or hindered in carrying out such functions by contracts or by estoppel. A satisfactory state of the law, which is achievable in the light of modern authority, may be summarised as being that (a) a public body cannot be estopped as regards how it carries out or exercises a public duty or power vested in it by statute, and which is required to be carried out so as to serve the purposes of the statute and in the public interest, (b) a public authority, when it is carrying out activities open to any private person such as taking a lease of offices, is subject to the doctrine of estoppel in the same way as a private person, and (c) public bodies carrying out public statutory functions are subject, in place of estoppel, to the developing public law doctrine of legitimate expectation. 2.6  (iv) Where jurisdiction to determine specified matters or make specified orders has been conferred on a court or tribunal or other body, the fundamental rule is that that jurisdiction cannot be extended or otherwise altered by the agreement of the parties or by the operation of an estoppel. There is an exception to this rule in that a party may become disentitled to rely on a procedural requirement relating to the jurisdiction by reason of an estoppel (often in this context called a waiver). In order for a requirement to be classified as procedural for this purpose it must usually be (a) procedural in nature such as a time limit or a specified form of application to the court, (b) for the sole benefit of the person said to be estopped, and (c) one where its waiver is not contrary to any requirement of public policy. 2.7  (v) The fundamental principle is that an estoppel cannot operate so as to contradict a statutory provision. An estoppel is likely to have this result, and so be incapable of operation, if the result of its operation would be (a) to contradict an express statutory provision, or (b) to contradict or frustrate the purpose or intention of a statutory provision, or (c) to lead to the statutory provision ceasing to have substantive effect and becoming a dead letter. One qualification to the general principle which has been suggested is that an estoppel will be prevented from operation in the circumstances under consideration only if the legal provision affected by the estoppel can be seen, in the particular area of its operation, to represent a social policy to which the court must give effect in the interests of the public or some section of the public. 2.8  (vi) There has been academic discussion, and some discussion in judicial decisions, including Australian decisions, on the desirability and practicability of bringing together 40

Introduction  2.11 the various forms of estoppel into one single overall principle. However, there has been little judicial support in this country for such a process. In addition, and given the different detailed rules applicable and the different legal nature of the forms of estoppel, any attempt to reach an overall formulation would either be so general and diffuse as to serve little purpose or be so detailed and so qualified by exceptions and reservations and distinctions that it would fail in its purpose. Nor has there been any judicial support for the more limited process of bringing together at least two or more forms of estoppel into a single provision. What does seem practical, and that which has some support from modern decisions, is to concentrate on certain essential components of the most important forms of estoppel, estoppel by representation, estoppel by convention, promissory estoppel and proprietary estoppel (the four ‘reliance-based’ estoppels), and to formulate uniform definitions of the rules concerning these components to be applied across the spectrum of the four forms of estoppel just mentioned. Estoppel by record, in its two main forms of cause of action estoppel and issue estoppel, and estoppel by deed, do not share the same important components and are not susceptible to inclusion in even this limited form of unification. 2.9  (vii) ‘Waiver’ is a word sometimes used loosely to describe a number of different legal grounds on which a party may be debarred from asserting a substantive right which it at one time possessed or from raising a particular defence to a claim against it which would otherwise be available to it.5 Because of its imprecision and its number of meanings, waiver is a word and concept not generally used in this book. If it is used it is probably best confined to the effect of the doctrine of common law election. An attempt is made later in this chapter to describe and classify the various main ways in which the expression is used.6 The view there put forward is that waiver is usually a word which describes the result of the application of various specific legal doctrines, mainly election and certain forms of estoppel. 2.10  There is probably no general and separate principle of waiver going beyond this usage, although there are suggestions that the owner of a right may unilaterally and voluntarily renounce that right if it is wholly for his own benefit so that without any other events or requirements that right is then wholly and permanently lost. It is difficult to reconcile such a principle with the contractual doctrine of consideration or the principle of proprietary estoppel. It may be that waiver in this last sense is confined to a party undertaking in litigation that it will give up a right wholly for its own benefit in order to sustain some claim or to obtain some order from the court. 2.11  (viii) An estoppel operates primarily between the two parties who carry out the actions, such as the making of a representation or the taking of steps in reliance on the representation, which bring about the estoppel. There is, in the authorities, no overall examination of the circumstances in which parties other than those original parties are in principle entitled to the benefit of the estoppel or must bear the burden of the estoppel. The question can arise in a variety of circumstances such as the transfer of a chattel or the assignment of rights under a contract, but is most obviously important when an interest in land to which the estoppel relates is transferred so that the position of successors in title to the land



5 Kammins 6 See

Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, 882 (Lord Diplock). para 2.203 et seq.

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2.12  General Questions Relating to Estoppel is involved. Where the question has been considered, it has usually been in connection with a particular form of estoppel rather than on a more general basis. Estoppel by record has its own doctrine of privity which is examined separately. 2.12  The best that can be done in these circumstances is to indicate by way of summary a few rules which have emerged for particular forms of estoppel, with these rules being considered in detail later in the chapter.7 Some of the rules can be expressed only in tentative language. (a) Where a party is entitled to the benefit of a proprietary estoppel, but before effect had been given to the estoppel by an order of the court, the rights under the estoppel constitute an equitable proprietary interest in land and will bind a successor in title to the land affected, subject where applicable to the need for protection on the register under the provisions of the Land Registration Act 2002. (b) It is probable that the benefit and the burden of a promissory estoppel apply to successors in title of land affected by the estoppel but in this case no registration is required. (c) It is probable that when rights under a contract, the owner of which has the benefit of an estoppel by representation, are assigned the benefit of the estoppel passes to an assignee and that when contractual rights, the owner of which is bound by an estoppel, are assigned the assignee takes the burden of the estoppel whether or not he had notice of the facts giving rise to the estoppel. (d) A similar rule as to contractual rights probably applies to estoppel by convention. (e) Where an estoppel by representation applies to the title or ownership of a chattel, it applies only as between the original parties and does not apply to a third party who acquires the ownership of the chattel, such as a person who has the benefit of a charge over the chattel. (f) It seems likely that an estoppel by representation which binds a person or a company does not bind a trustee in bankruptcy or a liquidator appointed on the insolvency of that person or company. (g) An estoppel by deed binds the parties to the deed and their privies in the sense of those claiming under a party such as successors in title to any land affected but does not affect persons who are not within these categories.

(B)  Sword or Shield 1.  The Issue 2.13  A question which sometimes arises is whether an estoppel can be used as a cause of action or claim or in support of a cause of action or claim or is confined to use in resisting a cause of action or claim. The question is sometimes clothed in a military metaphor and is phrased as whether an estoppel can be used as a sword or only as a shield. 2.14  The question is in some ways an unfortunate one since it fails to appreciate the general nature of an estoppel. That nature is that in appropriate circumstances an estoppel operates to prevent a person who has made a statement or a promise or an assurance, in reliance on which the person to whom the statement or promise or assurance is made has acted to his detriment, from going back on what has been stated or promised or assured in



7 See

part (H) of this chapter.

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Sword or Shield  2.15 subsequent legal proceedings.8 Obviously, the person who has made the statement may be the person who in those proceedings is asserting some cause of action or claim and in that case the fact that that person may be bound to the truth or the effect of what he has stated, even though he wishes to assert the contrary, may impede his success in proving his cause of action. The estoppel can then be described as being used as a defensive mechanism or as a shield by a person resisting the cause of action. Equally obviously, the person who has made the statement and is prevented from going back on it because of an estoppel may be the person against whom a cause of action is being asserted. The estoppel can then be described as being used as an offensive mechanism or, to revert to the military phraseology, as being used as a sword. It does not seem necessary as a matter of principle to differentiate between the two possible methods or circumstances of the use of the estoppel. The underlying moral and legal basis of an estoppel, the prevention of a person from resiling from what he has stated when the person to whom the statement has been made has acted to his detriment in reliance on it, is the same in both cases. 2.15  Nor in the ordinary operation of an estoppel is any significance to be attached to whether the estoppel is relied on by the claimant or the defendant in the legal proceedings in which the estoppel is relevant. The estoppel may be asserted with equal facility by either of the two main parties to legal proceedings or by any other party to the proceedings.9 It would be irrational if the availability of an estoppel depended on which party initiated the proceedings, and so became the claimant in those proceedings, and which party to a dispute initiates proceedings may be largely a matter of chance or convenience. For example, if a landlord under a lease sought to recover rent from the tenant, the tenant might contend that the landlord had promised that for a period only a half of the rent would be payable and that as he as the tenant had acted in reliance on this promise, a promissory estoppel had arisen which prevented the landlord from recovering the full rent for the period in question.10 The issue of whether there was a promissory estoppel could in these factual circumstances arise in proceedings brought by the landlord as the claimant in a claim to recover the full rent. Equally, the same question could arise in proceedings brought by the tenant for a declaration that only a half of the contractually reserved rent was payable, proceedings in which the tenant would be the claimant. It would be nonsensical that the tenant could rely on the alleged estoppel in the first set of proceedings but not in the second set.11 8 This sentence describes the types of statement which underlie an estoppel by representation, a promissory estoppel and a proprietary estoppel. Another important form of estoppel is estoppel by convention which depends on a shared assumption of law or of fact communicated between the parties. For a classification and summary of the main forms of estoppel see ch 1, para 1.6. 9 The parties to ordinary legal proceedings in the civil courts are usually today described as the claimant, that is, the party who seeks a remedy or relief of some sort from the court, or the defendant, that is, the party against whom the remedy or relief is sought. A defendant may itself counterclaim for relief against a claimant. Other parties may sometimes join in or be joined in the proceedings and are then known as the third party, the fourth party, etc, or as an intervening party. A third party is usually a party against whom a defendant seeks some relief connected with the subject matter of the claim against it. Until fairly recently the claimant was usually described as the plaintiff. In other types of legal proceedings, such as claims before tribunals, it is usual to describe the person who initiates the proceedings as the applicant and the other party as the respondent. For present purposes none of these differences of description matter. 10 This example is based on the facts of Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, a leading case on promissory estoppel. See ch 6, para 6.12 et seq. 11 A possible argument for confining estoppel to a largely defensive role would be that it was a rule of evidence rather than a rule of substantive law. This categorisation is itself highly questionable (see part (C) of this chapter)

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2.16  General Questions Relating to Estoppel 2.16  The exact analysis can be illustrated by a further example based loosely on the facts of a leading decision.12 Suppose that bank A guarantees the repayment of loans to be made by bank B to subsidiary companies of bank A. A loan is made to a subsidiary of bank A, but is so made not by bank B but, for various reasons of convenience, by a foreign subsidiary of bank B, and is not repaid as due. An issue may be whether, as a matter of the construction of the contract of guarantee, the guarantee extends to the loan made by the subsidiary company of bank B. In terms of litigation and procedure the issue may arise in various ways. The obvious case is that bank B sues bank A on the contract of guarantee. Bank B may have two contentions to advance in support of its cause of action. First, it may say that as a matter of the correct interpretation of the contract the guarantee did cover the repayment of a loan made by its subsidiary company. If this contention succeeded that would establish the cause of action. Secondly, and alternatively, bank B may contend that even if as a matter of its interpretation the contract did not cover the repayment of the loan, there had arisen since the date of the contract an estoppel by convention, an assumption shared by the parties, that the contract did cover loans made or to be made by the subsidiary company, such that bank A is estopped from asserting the contrary. If the estoppel could be asserted in this way it would be used by a claimant in support of its cause of action, the recovery of money payable under a contract of guarantee. The estoppel would be used as a sword in support of that cause of action. One can imagine a variation in the basic facts which is that bank A has paid what was due under the contract of guarantee but then formed the view that it had not been bound to do so under the contract and sued bank B for the recovery of the money paid under the law of restitution or unjust enrichment as money paid under a mistake of law.13 In these circumstances, bank B would wish to rely on the same two contentions as just outlined in resistance to the claim, the correct meaning of the contract of guarantee and, if that failed, the estoppel by convention. If the estoppel could be used by bank B in these circumstances, it would be used defensively in resisting the cause of action in restitution and therefore as a shield. There can be no sensible reason for distinguishing between the two procedural circumstances and for allowing the estoppel to be used defensively and in resistance to a cause of action in the second set of circumstances but denying the availability of the estoppel in principle in the first set of circumstances. There are of course still further procedural variations on how, given the same underlying facts, the issue might arise. For instance, bank A might start proceedings for a declaration that it was not liable to bank B for the repayment of the loan.14

but in any event a rule of evidence is neutral as between a claimant and a defendant so that it could assist in promoting a cause of action as much as it could assist in resisting a cause of action. See Canada and Dominion Sugar Co Ltd v Canadian National (West Indies) Steamships Ltd [1947] AC 46, 56 (Lord Wright) and see below (n 45). 12 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84. This decision is a leading case in the law of estoppel by convention and is examined in ch 5, para 5.9 et seq. It is also referred to below in para 2.27. 13 Money paid under a mistake of law has been recoverable under the law of restitution or unjust enrichment since the decision of the House of Lords in Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349. 14 The proceedings brought by the liquidator of bank A in the Texas Bank case, above (n 12) were of this nature.

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Sword or Shield  2.18

2.  Cause of Action (i)  The General Rule 2.17  The above examination of the sword or shield issue has concentrated on the use of an estoppel in support of a cause of action or in resistance to a cause of action. The reasoning has always assumed that apart from the estoppel there is an alleged cause of action and that the estoppel is or may be of assistance in establishing or denying some essential element of that cause of action. What has not been referred to is the possibility that an estoppel may of and by itself constitute a cause of action. A cause of action means those essential matters of fact which must be established by a person if that person is to obtain some remedy or relief from a court in accordance with a general principle of law.15 When these elements have come into existence, the cause of action is said to have accrued.16 For example, a person who alleges that he has a cause of action entitling him to substantial damages for breach of contract must establish the existence of the contract, the correct meaning of the contract or a term of it, the action (or inaction) which is a breach of an obligation owed to him under the contract, and the amount of loss which he suffers by reason of the breach.17 The general principle of law which gives a cause of action in these circumstances is that courts will enforce an obligation within a properly formed contract and will award damages equal to the loss suffered by a breach of such an obligation.18 A form of estoppel may assist a party in establishing by evidence one or more of these essential elements but the cause of action is for damages for breach of contract, or of course in other cases some other appropriate cause of action, and is not for an estoppel. 2.18  Subject to one important exception an estoppel cannot in and by itself constitute a cause of action. A claimant may seek a remedy for a cause of action such as damages for a breach of contract or for a tort committed against him but cannot, subject to the exception to be mentioned, seek damages or any other remedy solely for an estoppel. If B makes a representation of fact to A, and A acts on it to his detriment, A cannot go to a court and seek damages or other remedy on account of his detriment solely because he can show that B, by reason of the estoppel, cannot deny the truth of the statement. He must have some other

15 In Letang v Cooper [1965] 1 QB 232, 242–43, Diplock LJ described a cause of action as ‘simply a factual situation the existence of which entitles one person to obtain from the court a remedy against another person’. Some matters which have to be established in order for the cause of action to succeed may be categorised as particular matters of law, such as the correct meaning of a contractual term. See also: Republic of India v India Steamship Co Ltd [1993] AC 410, 419 (Lord Goff). 16 The date of the accrual of a cause of action may be important for purposes of limitation, since under the Limitation Act 1980 limitation periods generally run from the date of the accrual of a cause of action. The date of the accrual of the cause of action, that is when the essential elements first come into existence, is of course different from the date on which a party is able to establish its entitlement to some remedy by establishing the existence of the elements in proceedings brought in a court. 17 Technically a cause of action for breach of contract may be established even in the absence of any loss to the claimant and in such a case the claimant may be entitled only to nominal damages. 18 In terms of legal history, a cause of action depended on the factual situation which gave rise to a ‘form of action’ by which a remedy was obtained. The origin of the forms of action were writs issued by the Lord Chancellor in medieval times, such as a writ of trespass. In due course, the clerks in Chancery began to issue writs similar to those appropriate to a form of action, and actions founded on such writs became known as ‘actions on the case’, an expression derived from the Latin words ‘in consimili casu’. It is possible that this last process derives from authority conferred by the Statute of Westminster II of 1285. See Fifoot, History and Sources of the Common Law (1949).

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2.19  General Questions Relating to Estoppel subsisting cause of action and if he does, the inability of B to deny the truth of the statement by reason of an estoppel may enable A to establish one of the essential elements of the cause of action and may enable him to succeed in that cause of action where he would otherwise not be able to do so. Nonetheless, the remedy obtained by A from the court, his entitlement to damages for a breach of contract in the example given in the last paragraph, is founded on his cause of action for breach of contract and is not founded on a cause of action constituted by the estoppel. 2.19  The best illustration of the rule just stated is in the context of promissory estoppel. Promissory estoppel is a form of equitable estoppel and has come into prominence since new life was breathed into an older principle of equity by Denning J in Central London ­Property Trust Ltd v High Trees House Ltd in 1947.19 In brief terms, the estoppel means that when A promises not to enforce an obligation owed to him by B under some existing transaction A may be estopped as against B from resiling from the promise.20 If A then asserts a cause of action based on the obligation, B may be able to resist the claim by relying on the estoppel, ie, by enforcing the promise not to assert the right in question. What B will not be able to do is to rely on the promise and the estoppel as itself constituting a cause of action available to him and which entitles him to some form of remedy or relief. A good example of an estoppel, in this case again an alleged promissory estoppel, not being available as constituting a cause of action is the decision of the Court of Appeal in Combe v Combe.21 That decision arose out of divorce proceedings during the course of which a husband promised to pay to his wife a sum of £100 per year free of tax. The wife failed in proceedings to recover the sums promised. A cause of action for the enforcement of a contractual obligation was not available to her since there was no consideration for the promise made by the husband.22 The wife sought to rely on a promissory estoppel, invoking the principle as stated in the then recent High Trees decision, but was held not to be able to do so since she was seeking to use the estoppel as itself being her cause of action.23 2.20  A decision often cited in connection with the sword or shield question, and the use of an estoppel as itself providing a cause of action, is that of the Court of Appeal in Baird Textile Holdings Ltd v Marks & Spencer Plc.24 The Claimants had been for years a regular supplier of goods to the Defendants, the well-known retailers. Each transaction was carried out under its own particular contract but there was no overall express contract governing the trading relationship between the parties. The Claimants put forward two contentions in support of an overall or continuing contract, the first being that there was to be implied from the facts an ongoing contract between the parties which could only be terminated by the giving of appropriate notice. This contention was rejected on the grounds that there was no certainty

19 [1947] KB 130. See ch 6, para 6.12 et seq for a full discussion of this decision. 20 See ch 6, para 6.1 for a full statement of the principle. 21 Combe v Combe [1951] 2 KB 215. See also Lyle-Meller v A Lewis & Co Ltd [1956] 1 WLR 29, 36, where Denning LJ reiterated that a promissory estoppel did not give rise to a cause of action in itself. In Berezovsky v Abramouich [2011] 1 WLR 2290, para 71, Longmore LJ said that it was elementary that estoppels do not found causes of action. 22 The reason that there was no consideration was that the wife had not requested any such promise. 23 A recent decision in which it was emphasised that an estoppel by convention was not being used to create an enforceable right when none previously existed is Rivertrade Ltd v EMG Finance Ltd [2015] EWCA Civ 1295, [2016] 2 BCLC 226, para 50. 24 Baird Textile Holdings Ltd v Marks & Spencer Plc [2001] EWCA Civ 274, [2002] 1 All ER (Comm) 737.

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Sword or Shield  2.21 on the terms which would have formed a part of any general or ongoing contract for the sale of goods and that there was no intention by the parties to enter into such a contract. 2.21  The second and alternative contention, based on estoppel, was that the Defendants were estopped from denying that the relationship between the parties could be determined only by the giving of reasonable notice which was put in the circumstances at three years.25 One way in which this contention was argued was that some decisions, or some observations in some decisions, indicated that there might have emerged, or should emerge, some general doctrine of estoppel of an overall and flexible nature which did away with any technical rules or requirements of individual forms of estoppel. This is of course a question in its own right and is something which is discussed separately later in this chapter.26 Not surprisingly, the Court of Appeal refused to abandon the distinction between forms of estoppel and the boundaries and limitations on the different forms as established by many authorities after centuries of separate development. It is enough for present purposes to point out that reliance on estoppel by representation or promissory estoppel or estoppel by convention ran up against the insuperable difficulty that the estoppel was attempted to be used as something which constituted by itself a cause of action. The only separate cause of action possible was for breach of contract but the Court held that there was no contract which required notice to determine it. All that was left was estoppel of some form as a cause of action. There was some discussion on the possibility of a proprietary estoppel,27 which, as explained next, can stand as a separate cause of action by itself, but today any prospect of reliance on that form of estoppel would be defeated by the rule that the assurance must have created an expectation of an entitlement to an interest or rights over land (or possibly other rights), whereas the most that could be shown by the Claimants was a hope of negotiating and concluding some overall contract for the continuing supply of goods on terms to be discussed.28 Other obstacles stood in the way of reliance on other forms of estoppel beyond the difficulty that the estoppel was sought to be deployed by itself as the foundation of a cause of action.29

25 ibid, para 79. 26 The argument relied to a considerable extent on two decisions of the High Court of Australia where these matters were discussed extensively: Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; and Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394. These decisions are discussed in ch 6 on promissory estoppel: see para 6.18 et seq. A proposal to merge together three forms of estoppel, estoppel by deed, estoppel by convention and the alleged estoppel by contract, was recently rejected by the Privy Council in Prime Sight Ltd v Lavarello [2014] AC 436 as a step too far. The possibility of an overall and uniform doctrine of estoppel, encompassing most of the existing separate forms, is a general question examined in part (G) of this chapter. 27 For the question of whether a proprietary estoppel can relate to rights other than interests and rights in land see ch 7, part (H). 28 See Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752. This decision established that such a hope cannot be the foundation of a proprietary estoppel and has done much to limit the previous diffuse boundaries of this form of estoppel. 29 There was no precise and unambiguous statement such as is required for an estoppel by representation; any promise was not a promise not to enforce subsisting legal rights which is a requirement of promissory estoppel; any shared assumption did not relate to an existing transaction such as is required for an estoppel by convention. Further reference may be made to Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174, in which as in the Baird decision no contract could be distilled from the facts but an estoppel by convention was held to arise by reason of a shared but incorrect assumption that there had been a valid acknowledgement given that certain employers’ national insurance contributions were due sufficient to start anew the running of the limitation period under s 29(5) of the Limitation Act 1980. In this case the pre-existing transaction or relationship was the statutory liability to make national insurance payments.

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2.22  General Questions Relating to Estoppel The Baird decision provides a lesson of the need, in the absence of the establishment by the Supreme Court of some wide and overarching doctrine of estoppel, to isolate the essential elements of each relevant form of estoppel and to investigate in each case whether the facts established are such as can satisfy each of those elements.

(ii) Proprietary Estoppel 2.22  The exception to the rule as just stated is the principle of proprietary estoppel, one of the two forms of equitable estoppel.30 Proprietary estoppel is a principle of ancient origin developed by the former Court of Chancery but in its modern form has been established by decisions over the last half century. In very brief compass, the estoppel arises when an owner of land makes an express or implied assurance to another person which creates in that other person a reasonable expectation of an entitlement to an interest or rights in the land of the legal owner.31 In this instance, and in this instance alone as regards estoppels, the estoppel can be used as an independent cause of action with a claim to relief by way of the acquisition of an interest or rights in land as assured or some other appropriate remedy.32 2.23  The operation of proprietary estoppel in conferring a cause of action, in this case for the acquisition of an interest in property, can be illustrated by a recent leading case on the subject. In Thorner v Major,33 the Claimant had worked for many years for no pay on a farm owned first by his father and then by a relative of his father. The Claimant had over the years received oblique assurances that on the death of the owner the farm would be left to him but the will of the relative had been changed, due to a dispute with other parties, so that no gift of the farm was made in it to the Claimant. The Claimant sought and obtained against the executors an order that they should hold the land on bare trust for him. This decision gives valuable guidance on the elements of proprietary estoppel and for present purposes it illustrates how the establishment of the necessary elements of a proprietary estoppel confers on the person asserting the estoppel an independent cause of action, ie, an entitlement to a remedy from a court without reliance on any other cause of action such as might exist under the law of contract or tort or elsewhere. There was no question in Thorner v Major of there being an enforceable contract between the Claimant and the owner of the farm where he had worked.

30 The two forms of equitable estoppel are promissory estoppel and proprietary estoppel. 31 The principle and its details are described in ch 7. 32 A proposition agreed between the parties and accepted by the court in Baird Textile Holdings Ltd v Marks & Spencer Plc [2001] EWCA Civ 274, [2002] 1 All ER (Comm) 737, para 34, was that proprietary estoppel may create a cause of action but is limited to cases involving property rights, whether or not confined to land, with Western Fish Products Ltd v Penwith District Council [1981] 2 All ER 204, 217, cited in support. It is probable today that proprietary estoppel can extend the rights with a subject matter other than land. A proprietary estoppel can also in appropriate circumstances be used in resisting a separate cause of action as was attempted in Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764 (a decision concerning musical royalties), in which that use failed because the proponents of the estoppel could not show that they had acted to their detriment in reliance on any express or implied assurance made. In the same way a person against whom an order for possession of land is sought may assert a proprietary estoppel giving him a licence to continue to occupy the land and in this way, if he is successful, resists the cause of action against him: see, eg, Inwards v Baker [1965] 2 QB 29. 33 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776. This decision is examined in detail in ch 7, para 7.39 et seq.

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Sword or Shield  2.26 2.24  It is in this respect, the creation of a cause of action in its own right, that proprietary estoppel differs fundamentally from other forms of estoppel. A person may be able to establish a common law estoppel by representation or an estoppel by deed or an estoppel by convention or a promissory estoppel and any of these may assist him in asserting or resisting a cause of action or a remedy in legal proceedings, but none of them creates a cause of action by itself.34 An entitlement to a proprietary estoppel creates an equitable interest in land of a proprietary nature.35 It is inevitable that proprietary estoppel has this characteristic of itself creating a cause of action. The nature of the estoppel, the creation of an expectation of an entitlement to an interest in land, would be largely meaningless if the court had no power to give effect to that expectation without there being some other cause of action which created the entitlement. It is this unique characteristic and potential operation of the principle of proprietary estoppel which could give rise to a suggestion that the principle is not in truth a form of estoppel at all.36 2.25  It should be noted that while an order for the creation or transfer of a proprietary interest in land is a primary remedy when a proprietary estoppel is established, other forms of relief to satisfy the estoppel may be more appropriate in certain circumstances, such as an order for the payment of a sum of money to the claimant or an entitlement given to the claimant to occupy property for a period under a licence. It should also be noted that proprietary estoppel may be used in a defensive role such as in resistance to a claim for possession of land. In such circumstances, an order for possession may be refused on the basis that by reason of the estoppel, the defendant is entitled to some interest which entitles him to possession of the land at any rate for a period such that the claim for possession fails.37

3.  The Principle: Three Propositions 2.26  Following the above account of the ways in which the various forms of estoppel may be used in legal proceedings, it is possible to state the principle of law on this subject by way of three propositions. (a) The first proposition is that any form of estoppel may be used in civil proceedings38 by any party to assist that party in asserting a cause of action or in resisting a cause of action. Accordingly, the estoppel may operate to enable a party to succeed in a cause of action when without the estoppel he would not be able to do so. Equally, the estoppel may operate to enable a party to resist a cause of action asserted against him when without the estoppel he would not be able to do so.39 (b) The second proposition is that, subject to 34 This statement is correct as regards the first aspect of estoppel by deed. The second aspect of that form of estoppel may result in the creation of an interest by estoppel in land. There could arise a cause of action entitling a person to enforce rights appurtenant to that interest: see ch 4. 35 This characteristic of the estoppel is also important when it comes to the assertion of the estoppel against successors in title to the land of the person who gave the assurance, a matter discussed in para 2.233 et seq. 36 This suggestion is considered in ch 7, para 7.51 et seq, but is argued to be unsound. A not dissimilar suggestion has been made as regards promissory estoppel: see ch 6, para 6.27 et seq. 37 See above (n 32). 38 The operation of estoppel is limited in the area of administrative law. See part (D) of this chapter. As so often estoppel by record, which in some respects may hardly be an estoppel at all, stands outside these propositions. 39 The principle could scarcely be stated more succinctly than it was by Diplock LJ in Thoday v Thoday [1964] P 181, 197: ‘Estoppel merely means that under the rules of the adversary system of procedure upon which the common law of estoppel is based, a party is not allowed, in certain circumstances, to prove in litigation certain facts

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2.27  General Questions Relating to Estoppel the operation of proprietary estoppel and the third proposition, an estoppel cannot be used so as itself to create a separate and independent cause of action.40 (c) The third proposition is that a proprietary estoppel may operate so as itself to constitute and create a separate and independent cause of action with the result of that cause of action being the vesting in the claimant of an interest or other rights in land or some appropriate other form of relief such as the payment of a sum of money as compensation for not obtaining the expected interest or a right to occupy land as a licensee for a period. It is now necessary to examine how these three propositions are supported by authority. As has been and will be seen, there is no significant authority which is contrary to the second and third propositions and attention has been drawn to authority in support of these two propositions. The weight of authority also supports the first proposition but it is necessary to draw attention to certain decisions which appear to contradict that proposition. Attention is therefore concentrated on decisions relevant to the first proposition.

4.  The Authorities (i)  The General Weight of Authority 2.27  Although the authorities do not point entirely in the same direction, the preponderance of authority supports the above propositions including the first proposition. A leading decision on estoppel by convention is Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd.41 In summary, a property company guaranteed a loan to be made by a bank to a subsidiary company of the property company. The loan was made not by the bank but by a subsidiary company of the bank in the Bahamas. The issue was whether the guarantee extended to the loan made by the Bahamian subsidiary company. Two questions arose which were, (a) whether the guarantee did so extend as a matter of its proper construction, and (b), if it did not, whether the property company was prevented from contending that the guarantee did not so extend by reason of an estoppel by convention resulting from a shared assumption between the parties. The Court of Appeal held that on its proper construction the contract of guarantee did cover the loan made by the Bahamian subsidiary of the bank so that strictly it was not necessary to examine the estoppel question. However, the Court held that an estoppel by convention was established so that, even if the contract of guarantee had been interpreted to a different effect, the property company would have been estopped from contending that the guarantee did not extend

or matters which, if proved, would assist him to succeed as plaintiff or defendant in an action’. There is no trace of a ‘sword or shield’ dichotomy in this explanation of the concept of estoppel. 40 As mentioned above (n 34) the second aspect of estoppel by deed may operate to create a cause of action so as to assert an entitlement to an interest by estoppel or so as to assert rights appurtenant to that interest. 41 [1982] QB 84. This decision is considered more fully in connection with the principle of estoppel by convention in ch 5, para 5.9. When considering the question of how far an estoppel may assist in bringing about a cause of action without standing alone as a cause of action in itself Mance LJ in Baird Textile Holdings Ltd v Marks & Spencer Plc [2001] EWCA Civ 274, [2002] 1 All ER (Comm) 737, para 88, described the possible effect of an estoppel by convention in the Texas Bank case, above (n 12) as enlarging the effect of an agreement by binding parties to an interpretation which would not otherwise be correct, citing De Tchihatchef v Salerni Coupling Ltd [1932] 1 Ch 330. This description of the effect of an estoppel by convention does not alter the fact that the cause of action remains the enforcement of a contract whether the terms of that contract are enlarged or not.

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Sword or Shield  2.28 to the loan in question. The form of the proceedings was an action by the liquidator of the property company claiming a declaration that the company was under no liability in respect of the loan. A declaration to that effect was refused by Robert Goff J and the Court of Appeal. The issues between the parties, including that of an alleged estoppel, would have been the same whatever procedural form the proceedings had taken. A different form of proceedings might have been the seeking of a declaration by the bank that the guarantee did extend to the loan by its Bahamian subsidiary or an action by the bank to recover the amount of the loan under the guarantee. It seems fanciful to believe that the operation of the estoppel would have been different in any of these alternative circumstances. There was no question of the estoppel itself creating a cause of action since the cause of action involved was that of the bank under the law of contract, being a claim for the repayment by a guarantor of a sum loaned under the terms of the guarantee. The matter was summarised by Brandon LJ in the following way: This illustrates what I would regard as the true proposition of law, that, while a party cannot in terms found a cause of action on an estoppel, he may, as a result of being able to rely on an ­estoppel, succeed in a cause of action on which, without being able to rely on that estoppel, he would necessarily have failed. That, in my view, is, in substance, the situation of the bank in the present case.42

2.28  There is earlier authority to the same effect. In Re Bahia and San Francisco Railway Company43 is a decision in which there was a forged transfer of shares in a company to transferees who obtained from the company a certificate that they were registered as the owners of the shares. The Plaintiff purchased shares from the transferees in good faith and without knowledge of the forgery. It was held that the company by reason of the certificate of ownership as issued were estopped from denying that the initial transferees were the owners of the shares and that the Plaintiff had become an owner as a result of her purchase of the shares in good faith, with the further result that the Plaintiff was entitled to the value of the shares from the company. Plainly, in this case, the Plaintiff was using the estoppel as something which was essential to support her cause of action to recover the value of the shares from the company on the basis that she owned them. In Low v Bouverie44 Bowen LJ cited this decision as authority for the proposition that you cannot found an action upon estoppel but that ‘estoppel is only important as being one step in the progress towards relief on the hypothesis that the Defendant is estopped from denying the truth of something which he has said’.45 42 ibid, 131. This summary has never been bettered. Lord Denning MR said at p 122 that the parties were bound by the convention and that ‘either party can sue or be sued upon it just as if it had been expressly agreed between them’. Presently this means that a party to a shared assumption which creates an estoppel by convention may insist on the assumption being taken as correct, whether or not it is in fact correct, in any legal proceedings, whether that party is asserting or resisting a cause of action. The observation of the Master of the Rolls must not be read as indicating that an estoppel by convention can itself be used as constituting a cause of action. See also Mears Ltd v Shoreline Housing Partnership Ltd [2015] EWHC 1396 (TCC) para 49 (Akenhead J). 43 In Re Bahia and San Francisco Railway Company (1868) LR 3 QB 584. 44 Low v Bouverie [1891] 3 Ch 82. 45 A similar observation was made by Lord Wright in Canada and Dominion Sugar Co Ltd v Canadian National (West Indies) Steamships Ltd [1947] AC 46, 56, when he said that estoppel was correctly viewed as a substantive rule of law rather than as a rule of evidence, that estoppel was different from contract both in its nature and consequences, and that ‘the relationship between the parties must be such that the imputed truth of the statement is a necessary step in the constitution of the cause of action’.

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2.29  General Questions Relating to Estoppel 2.29  Other more recent authorities are to the same effect. In Nippon Menkwa Kabushiki Kaisha v Dawson’s Bank Ltd,46 Lord Russell pointed out that estoppel was not a cause of action but: ‘It may (if established) assist a plaintiff in enforcing a cause of action by preventing a defendant from denying the existence of some fact essential to establish the cause of action’. In Lyle-Meller v A Lewis & Co Ltd,47 the Plaintiff sought to recover money under an agreement by which royalties were payable to him for the use of a new type of lighter which he had invented. One issue was whether the Defendants’ products had embodied the invention. It was held that the Defendants were estopped, as a result of their conduct including statements made, from denying that the inventions had been used by them. The estoppel was therefore used as a means of establishing an essential component of the Plaintiff ’s cause of action.48 The representation was inferred from conduct as a common law estoppel and reliance was placed on the principle of law stated by Bowen LJ in Low v Bouverie as referred to in the last paragraph.49 In Johnson v Gore Wood & Co,50 Lord Goff said that he accepted that in certain circumstances an estoppel may have the effect of enabling a party to enforce a cause of action which, without the estoppel, would not exist and added that examples were given in his judgment as a Judge of first instance in the Texas Bank case.51 2.30  Other decisions can readily be found in which an estoppel was allowed, without questioning the principle, to be used to support a claim when without the estoppel that claim would have failed. One such decision is Robertson v Minister of Pensions52 in which an Applicant for a war pension was refused a pension by the Minister of Pensions, and by a tribunal on appeal, on the ground that his disability was not attributable to war service. The Court of Appeal held that an estoppel arose binding the Minister since the War Office had stated that it had been assessed that the Applicant’s disability was attributable to military service and that that estoppel bound the Minister of Pensions so that a pension was due. Plainly in this case the estoppel was used to support a cause of action for a pension under the terms of a Royal Warrant where that cause of action would not otherwise have been sustainable. A further example is Farrow v Orttewell53 in which a tenant of agricultural land claimed statutory compensation after he had been served with a notice to quit. The notice served was invalid since it was given by a person who had only an equitable or contractual interest in the land as opposed to a legal interest at the time of the giving of the notice, but it was held that that person was estopped from asserting the invalidity of the notice which he

46 Nippon Menkwa Kabushiki Kaisha v Dawsons’s Bank Ltd [1935] 51 Ll L Rep 147, 150. 47 Lyle-Meller v A Lewis & Co Ltd [1956] 1 WLR 29. 48 ibid, 39–40 (Hodson LJ). 49 Denning LJ preferred to regard the case as an application of ‘the new kind of estoppel’ affecting legal relations which had arisen as a result of recent decisions including his own decision at first instance in Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. The new kind of estoppel referred to is now generally regarded as promissory estoppel which, with proprietary estoppel, is one of the two forms of equitable estoppel. See ch 1, para 1.20 et seq. A more recent decision involving an estoppel by convention being used to support and establish a cause of action in accordance with the principle stated in previous paragraphs is Pathfinder Minerals Plc v Veloso [2012] EWHC 2856 (Comm) where the assumption which founded the estoppel was one of law and involved a company being estopped from denying that a share option agreement had operated as a sale and purchase agreement. 50 Johnson v Gore Wood & Co [2002] 2 AC 1. 51 [1982] QB 84, 105–07. 52 Robertson v Minister of Pensions [1949] 1 KB 227. 53 Farrow v Orttewell [1943] Ch 480.

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Sword or Shield  2.32 had served with a representation that it was valid. Again, the estoppel was not the cause of action but it enabled the claimant for the compensation to succeed in his cause of action. In TCB Ltd v Gray54 a contract of guarantee was amended, so as to remove a limitation on the guarantee, by a person acting under a power of attorney given by the guarantor. The power of attorney was defective in form in that it was not under seal as required by the Powers of Attorneys Act 1971, but the guarantor was prevented by estoppel from asserting the invalidity. The estoppel enabled the maker of a loan to sue on the guarantee in its amended and less limited form. Once again, the success of the cause of action was dependent on an estoppel which enabled one essential element of it, the existence of the amendment to the terms of the guarantee, to be established.

(ii)  Contrary Decisions on the First Proposition 2.31  The propositions governing the use of an estoppel as set out earlier,55 including the first proposition, are backed by a consistent line of authority as just summarised. Nonetheless, the first proposition, the extent to which an estoppel may be used to assist in establishing a cause of action as opposed to standing alone as a cause of action by itself, may still remain in some dispute.56 It is submitted that there are in principle no limits to the ways in which a person asserting a cause of action may rely on an estoppel of any form to assist him in establishing that cause of action or any component of it provided always that (save in the case of proprietary estoppel) the estoppel is not itself put forward as the cause of action. Thus, a cause of action may not exist unless an agreement can be shown to bear a particular meaning when it does not on its true interpretation bear that meaning and the different meaning can be established by way of an estoppel by convention. The cause of action is of course a breach of the agreement with the meaning as established by the estoppel. It may be necessary for a claimant to establish a particular fact in order to succeed in some cause of action, and that fact can be established as existing by way of an estoppel by representation which prevents the truth of the fact being denied even though the fact does not in truth exist. All that having been said, it is necessary next to mention three decisions, the first two of which may on one view be regarded as having proceeded on an incorrect basis of law as regards the first proposition. 2.32  The first decision is that of the Court of Appeal in White v Riverside Housing Association.57 The Housing Association sought arrears of rent against a tenant and an order for possession on the statutory ground under the Housing Act 1988 of non-payment of rent. The tenant contended that notices increasing the rent given were not valid. The necessary ingredients of an estoppel by convention were established, the convention being to the effect that the notices were valid. The Court rejected the use of the estoppel for the reason that

54 TCB Ltd v Gray [1986] Ch 621. 55 See para 2.26. 56 See Baird Textile Holdings Ltd v Marks & Spencer Plc [2001] EWCA Civ 274, [2002] 1 All ER (Comm) 737, para 88 (Mance LJ). This decision is examined in more detail in paras 2.20 and 2.21. 57 White v Riverside Housing Association [2005] EWCA Civ 1385. For this decision in the House of Lords, where the decision of the Court of Appeal was reversed but without consideration of the estoppel point, see [2007] UKHL 20, [2008] 1 P & CR 13.

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2.33  General Questions Relating to Estoppel the Association was trying to use the estoppel to create or give rise to a cause of action.58 This does not appear to be a correct analysis of the situation. The cause or causes of action were for the payment of arrears of rent and for possession of the property. Under the terms of the tenancy and under the Housing Act 1988, it was necessary for the Association to establish that valid notices of increase had been served before either cause of action could be sustained. The estoppel by convention did not create either cause of action, both of which arose out of the terms of the tenancy and the provisions of the Act. What the estoppel would have done, if it had been allowed, was to permit the establishment of one essential ingredient of the causes of action, namely that the amount of rent payable had been validly increased. There were other ingredients of the cause of action which needed to be established, such as that the full rent had not in fact been paid. It is submitted that this decision was not in accordance with established principles since it confuses the use of an estoppel so as itself to create a cause of action with the use of an estoppel to establish some legal or factual component of a cause of action in a particular case. The words of Brandon LJ in the Texas Bank case59 were cited by Sir Ralph Gibson but, it is submitted, the essence of them was not applied. This decision, therefore, cannot be regarded as a contradiction of the propositions stated earlier,60 but should be regarded as a possible misapplication of those propositions. 2.33  The second decision is Newport City Council v Charles61 which also arose out of a tenancy of social housing. The tenant lived in a property let by the Council together with his mother. On his mother’s death he acted so as to conceal from the Council the fact of her death and continued to pay rent in his mother’s name, his reason being that if the Council knew of his mother’s death they would seek to move him to smaller premises. On finding out about the mother’s death, the Council wished to remove the tenant from the property and to rehouse him in smaller property suitable to his needs. The Council could do this under the Housing Act 1985, but only if an appropriate notice was served on the tenant within one year after the death of his mother. Since they did not know of the mother’s death for some time due to the concealment of it, the Council did not serve a notice in good time. They nonetheless brought proceedings for possession and contended that by reason of his misleading actions the tenant was estopped from asserting the true date of the death of his mother. The Court of Appeal held that an estoppel was not available to the Council since an estoppel, other than a proprietary estoppel, ‘was a shield only and could not found a cause of action’.62 The decision in White v Riverside Housing Association was prayed in aid to support

58 ibid, para 66 (Sir Ralph Gibson). The other Members of the Court agreed with this judgment. The Court of Appeal also referred to a previous decision of the Court, Aristocrat Property Investments v Harounoff (1982) 2 HLR 102, but this decision rested on the reasoning that where persons cannot contract out of a statutory provision the effect of a contracting out cannot be achieved by virtue of an estoppel. This is a separate question and is discussed in part (D) of this chapter. 59 This citation is set out in para 2.27. 60 See para 2.26. 61 Newport City Council v Charles [2009] 1 WLR 1884. 62 ibid, 1893–94 (Laws LJ). The Council also had the difficulty that rather than serving a notice under this Act late when they found out about the mother’s death they had not served a notice at all. The mother died in January 2003 but due to the deception practised by the tenant the Council did not find out about the death until March 2006. If the conduct of the tenant amounted to a representation that his mother was alive until March 2006 he would have been bound by an estoppel which, if it could have been relied upon by the Council, would have prevented him from asserting that she died until March 2006. On this reasoning, and by reliance on the estoppel, the Council could have served the required notice in the year following March 2006.

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Sword or Shield  2.34 this conclusion.63 This decision in the Newport case exhibits the same difficulty as does the Riverside decision since the cause of action by Newport City Council was for possession of the property. In order to succeed in this cause of action they needed under the statute to show that a notice was served within a particular time. There seems to have been no reason to prevent the Council relying on an estoppel as to the date of the death of the tenant’s mother, and thus as to the running of the time period, so as to validate a notice since in doing so they would not have been using the estoppel to found a separate cause of action, but rather to establish some particular factual matter which would if so established assist them in succeeding in their cause of action for possession. The Newport City Council decision may be reduced in its authority by the concession by Counsel for the City Council who accepted that the only form of estoppel which could be used otherwise than in a defensive fashion was proprietary estoppel. The Court concluded, plainly correctly, that the facts of the case did not create a proprietary estoppel so that on the proposition as just stated the estoppel had to fall. In fact the estoppel, the elements of which appear to have been accepted to exist, was an ordinary estoppel by representation arising from a false express or implied statement of fact, namely that a person had not died when in fact that person had died. 2.34  The third decision which is on occasions cited in the present context is SmithKline Beecham Plc v Apotex Europe Ltd.64 The Claimants alleged a breach of their patent relating to a chemical product by the Defendants and sought an interim injunction to prevent the continued use of that product. The Claimants gave the usual cross-undertaking in damages that if they failed in the action they would abide by any order of the Court as to compensating the Defendants for their loss as a result of the interim injunction. It was, in due course, held that the actions of the Defendants were not in breach of the patent such that the cross-undertaking came into force. An issue was whether the Claimants, by reason of the cross-undertaking, should be required to compensate not only the Defendants but two Canadian companies associated with the Defendants. One argument deployed for the inclusion of the associated companies was that there was on the facts an estoppel, either an estoppel by convention or an estoppel by representation, that the undertaking should extend to any loss of the associated companies due to the injunction. The Court of Appeal refused to accept that there was such an estoppel having the effect alleged. A primary point was that the undertaking was given to the Court and the Court could not be estopped by the actions of the parties as to the meaning of its order.65 When discussing the fundamental nature of an estoppel, Jacob LJ said that an estoppel inherently arose by nature of a riposte and gave an illustration of how that might happen in procedural and pleading terms.66 In a sense this is correct, but does not prevent the estoppel being used in support of a cause of action. If A in a claim alleges that actions amounting to a breach of contract have been carried out by B, and B by way of defence denies that these actions were carried out, A may be able in reply 63 There was also discussion as to whether an estoppel could operate so as to override a statutory restriction, but this is a separate matter. Some reservation on this subject was expressed by Longmore LJ. The relationship between estoppel and statutory provisions is considered as a general question in part (F) of this chapter. 64 SmithKline Beecham Plc v Apotex Europe Ltd [2007] Ch 71. 65 ibid, para 104. A similar point had been made by the Court of Appeal a century earlier when it was said that an estoppel might operate between the parties in matrimonial proceedings but could not bind the Court as to matters on which the Court had to be satisfied before it made an order under the matrimonial law then in force: Harriman v Harriman [1909] P 123, 144 (Farwell LJ). 66 SmithKline Beecham Plc v Apotex Europe Ltd [2007] Ch 71, paras 109–12.

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2.35  General Questions Relating to Estoppel to rely on an estoppel, assuming that all the necessary elements of the particular form of estoppel relied on are made out, to prevent B resiling from what he has said about his actions and relying on the denial in the defence. This use of the estoppel would be the riposte of A and, if it succeeded, would assist A in establishing his cause of action for damages for breach of contract in circumstances in which he might not otherwise have been able to do so. It appears that this was all that Jacob LJ was saying and nothing in it cuts across the fundamental propositions as described in this account of the ‘sword or shield’ question. The ability to use an estoppel cannot depend on whether it is used in an initial claim and in support of that claim or is used as a riposte to a denial of that claim. The progress of litigation and the exchange of pleaded assertions take various forms and the availability of estoppel within the litigation cannot be dictated by procedural accidents or niceties. In the course of claim and defence in the example just given A, anticipating the defence of B, might have included and pleaded the estoppel in his original claim.67

(iii)  The Result of the Authorities 2.35  What the current situation amounts to is that there is a substantial body of decisions which state or illustrate the true principle which is that an estoppel can be used to assist in establishing or in resisting a cause of action but, apart from proprietary estoppel, cannot be used so as itself to constitute a cause of action. Certain decisions of the Court of Appeal over the last decade or so may appear to suggest that in general an estoppel cannot be used so as to assist in the establishment of a cause of action by reason of a supposed principle that an estoppel can be used only as a shield and not as a sword, that is only defensively and in resisting a cause of action. As such, these decisions can be seen as running contrary to the first of the three propositions described earlier. On closer examination, the decisions either do not support such a limitation on the use of estoppels or, so far as they may do so, appear to be based on a failure to distinguish between an estoppel assisting in the establishment of a cause of action and an estoppel itself constituting a cause of action and so are inconsistent with other earlier and general authority.

5. Conclusion 2.36  Both considerations of policy and the preponderance of decided authority support the view that in legal proceedings any form of estoppel can in principle be used to assist in 67 An illustration of the claim – defence – riposte to defence scenario is Republic of India v India Steamship Co Ltd [1993] AC 410. The Plaintiffs consigned a cargo of munitions to the Defendant to be transported by sea from Sweden to India. Due to a fire off Cherbourg a large part of the munitions was damaged. The Plaintiffs claimed damages. A defence was that there had been an earlier judgment in India for damages for a small part of the cargo which had been jettisoned at Cherbourg and that there was a cause of action estoppel which preceded the later proceedings in England. The riposte of the Plaintiffs was that at the time of the Indian proceedings there was an estoppel by convention based on a shared assumption that the subsequent English proceedings would not be barred by the Indian judgment. In one sense the estoppel was here being deployed as a weapon without which the cause of action in an English court could not succeed. It was eventually decided by the House of Lords in the second India Steamship decision at [1998] AC 878 that no shared assumption sufficient to support an estoppel by convention had been made out, on the facts. This litigation, which twice came before the House of Lords, is of general importance to estoppel by convention (see ch 5) and estoppel by record (see ch 9).

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Evidence or Substantive Law  2.37 establishing a cause of action or to assist in resisting a cause of action and may be so used by any party to the proceedings. However, in general an estoppel cannot be used so as by itself to constitute a cause of action.68 The exception to the latter principle is proprietary estoppel which can be used as itself as the foundation of a cause of action claiming an interest in land or other appropriate relief.69 Expressions such as use as a shield but not a sword should not be a substitute for exact thinking or formulation of principle on the present subject. If the law can be both stated and applied in the above brief terms, as it is suggested it can, then the need for further discussion on the particular subject may be avoided as may any general and possibly confusing metaphors drawn from warfare in previous ages.70 On this general aspect of the doctrine of estoppel the law, if properly applied and understood, operates in a consistent and satisfactory fashion.

(C)  Evidence or Substantive Law 1. Introduction 2.37  Although the description was not universally applied, it was at one time usual to describe the doctrine of estoppel as a rule of evidence or a part of the law of evidence rather than as a rule of substantive law. This description of the doctrine arose before major forms

68 The law was stated in this way, it is submitted correctly, as regards estoppel by convention by Akenhead J in Mears Ltd v Shoreline Housing Partnership Ltd [2015] EWHC 1396 (TCC) para 49. There is, it is suggested, sometimes an unfortunate tendency to confuse or conflate the proposition that an estoppel can be used in support of or in resisting a particular cause of action and the proposition that no estoppel (except proprietary estoppel) can itself constitute a separate and independent cause of action. For example, in New Zealand in McDonald v A-G 20/6/91, High Court Invercargill CP 13/86, p 33, Holman J said as regards promissory estoppel that the estoppel ‘may now be used as a sword as well as a shield and thus supports a cause of action in its own right’. This statement is not correct as regards the law in England as is shown in preceding paragraphs. 69 In the recent decision of the Court of Appeal in Dixon v Blindley Heath Investments Ltd [2017] EWCA Civ 1023, [2017] Ch 389, para 73, it was said that promissory estoppel as well as proprietary estoppel could provide a cause of action. This seems to be contrary to principle and decided authority. It has been said that the decision of the High Court of Australia in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 swept away the previous understanding that equitable estoppel was generally available only as a shield rather than as a positive cause of action: see Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567, para 80. In this context equitable estoppel probably encompassed both promissory and proprietary estoppel. It is submitted that whatever may be gained from this area of jurisprudence as examined in Australia and New Zealand the law in this country is now clear and is that (a) equitable estoppel is a compendious term which encompasses promissory and proprietary estoppel as two separate forms of estoppel, each with its own separate essential elements; (b) that a promissory and a proprietary estoppel may be used to assist in asserting or resisting some separate cause of action; and (c) that a proprietary estoppel may be used as the foundation of a separate cause of action resting on the estoppel and nothing else whereas a promissory estoppel cannot perform this function. 70 Military phraseology has a strong attraction in this area of the law. In early editions of Spencer Bower on Estoppel by Representation the principle was put in the language of naval warfare in that it was said that estoppel by representation must always be either a mine-layer or a mine-sweeper but can never be a capital unit. Presumably the estoppel was compared to a mine-laying vessel when used in support of a cause of action and to a mine-­sweeping vessel when used in resisting a cause of action. A cause of action was compared to a capital unit, at that time mainly battleships. The capital ships of the Royal Navy have changed from battleships to the four Vanguard class submarines carrying Trident thermonuclear missiles (and to their proposed replacement, the four ­Dreadnought class submarines) but the analogy remains apt save that proprietary estoppel has today been recognised as a capital ship.

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2.38  General Questions Relating to Estoppel of estoppel, promissory estoppel, proprietary estoppel and estoppel by convention, took their modern form and importance and before they were generally recognised as separate forms of estoppel or principles of law.71 When estoppels were considered to be wholly or mainly confined to estoppel by representation and estoppel by deed and estoppel per rem iudicatam, the classification of the estoppels as a rule of evidence may have been more understandable and it may be that any influence of the former limited description of the status of estoppels in the civil law as a whole as an evidential rule is confined to estoppel by representation and estoppel by deed. 2.38  It is not difficult to find support in older authorities for classifying estoppel as a rule of evidence and reference is made below to a number of authorities to this effect. Substantial influence on the development of estoppel was justifiably exercised by successive editions of Spencer Bower on Estoppel by Representation and in the first three editions published between 1923 and 1977 the view expressed was that estoppel was a rule of evidence.72 The tide has somewhat turned and today the predominant and general view is that estoppel should be regarded as a rule of substantive law.73 2.39  There is no clear discussion in the earlier decisions on why estoppel should be regarded as a part of the law of evidence but two reasons supporting that description emerge. The first reason is that estoppel by representation was, and is, often used in order to establish the truth or untruth of a proposition of fact in particular legal proceedings and so may be considered akin to the law of evidence which states the means by which the truth of a particular fact may be established in legal proceedings. The second reason is the general limitation on the use of estoppel to the effect that an estoppel (save for proprietary estoppel) cannot be used as constituting by itself a cause of action. The most that estoppel could, and can, generally do is to assist in establishing or in resisting a cause of action.74 It was sometimes said, even in recent decisions, that an estoppel could not work even to support a cause of action but was confined to the purely defensive function of resisting the establishment of a cause of action against the person who wished to rely on the estoppel.75 It is perhaps an easy step, although not an entirely logical one, to say that because most forms of estoppel cannot constitute a cause of action their function must be only evidential in character.76 The reasoning was that substantive rules of law prescribed what facts had to be established to constitute a cause of action so as to obtain relief from a court, whereas rules of evidence stated how those facts could be proved and estoppel by representation, which

71 As explained in ch 1, para 1.72, the three forms of estoppel recorded by Coke, estoppel in pais, estoppel by writing and estoppel by record, remain today as the forms of estoppel by representation and estoppel by deed and estoppel per rem iudicatam, and were the generally recognised forms of estoppel until the second half of the last century. 72 Later editions took a different view and the current fifth edition of Spencer Bower: Reliance-Based Estoppel (Bloomsbury, 2017) argues forcefully in favour of estoppel being regarded as a rule of substantive law: see para 1.42 et seq of the current edition. 73 See ibid; and see Halsbury’s Laws, vol 47, 5th edn (LexisNexis, 2014) para 301. 74 This is the ‘sword or shield’ question which is mentioned in connection with the description of estoppel as a doctrine as here explained and which is explained in more detail in part (B) of this chapter. 75 This view is not now generally considered to be correct as is explained in para 2.35. Two modern decisions of the Court of Appeal to the effect stated are described in paras 2.33 and 2.34. 76 See the distinction drawn by Lindley LJ between a cause of action and a rule of evidence as mentioned in para 2.41.

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Evidence or Substantive Law  2.41 prevented some particular fact from being proved, could for this reason be regarded as a rule of evidence. 2.40  A question which may understandably be asked is why, once the role and area of application of estoppel are clearly established, it matters whether estoppel is classified as a rule of evidence or as a rule of substantive law. On one view, the only significance of the correct classification is that it conduces to a tidy arrangement and exposition of aspects of the civil law. In fact, as will be explained, the correct linguistic description of estoppel can have an effect even today beyond the area of taxonomy. Accordingly, when considering this aspect of estoppel as a general doctrine it is convenient first to look at what has been said in the authorities and to attempt to explain the correct description of the doctrine today before looking at what effect the description or classification may have today on the practical operation of estoppel.

2.  The Authorities (i)  A Rule of Evidence 2.41  Examples can readily be found of distinguished judges who have spoken of estoppel as a rule of evidence and no more. A leading decision on estoppel by representation is Low v Bouverie77 in which Lindley LJ said that ‘Estoppel is not a cause of action – it is a rule of evidence which prevents a person from denying the truth of some statement made by himself ’.78 In Bell v Marsh,79 Collins MR said that estoppel was a part of the law of evidence. In Harriman v Harriman,80 Farwell LJ in a divorce case said that estoppel was ‘only a rule of evidence’. In Re Exchange Securities & Commodities Ltd (In Liquidation),81 Harman J said that one of the reasons for his holding that an estoppel by representation made by a company was not binding on a liquidator of the company was that estoppel was a rule of evidence. Other examples could be given. In a recent decision in the Court of Appeal, Dixon v Blindley Heath Investments Ltd,82 it was said that the origins of the modern principle of estoppel by convention were to be found in decisions of the High Court of Australia in the 1930s and that that form of estoppel was conceived as a rule of evidence. In Greer v Kettle,83 Lord Maugham described estoppel by deed as a rule of evidence. In Vervaeke v Smith,84 Lord Diplock said that his view, supported by the balance of authority, that the estoppel per rem iudicatam in question before the Court, relating to the nullity or otherwise of a marriage,

77 [1891] 3 Ch 82. This decision established the rule that a representation can only found an estoppel if it is precise and unambiguous, a rule which was relied upon for the later established similar rule in promissory estoppel that the promise must be clear and unequivocal. 78 ibid, 101. Bowen LJ made a similar observation at 105. See also Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993, 1015 in which Lord Radcliffe referred to estoppel as a rule of evidence when considering the effect of statutory provisions on the operation of an estoppel. 79 Bell v Marsh [1903] 1 Ch 528, 540. 80 [1909] P 123, 144. 81 Re Exchange Securities & Commodities Ltd (In Liquidation) [1988] Ch 46. 82 [2017] EWCA Civ 1023, [2017] Ch 389, paras 72, 80. 83 Greer v Kettle [1938] AC 156, 171. 84 Vervaeke v Smith [1983] 1 AC 145, 162.

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2.42  General Questions Relating to Estoppel was adjectival and evidentiary, and not substantive in character. The exact opposite was said by Lord Millett in Johnson v Gore Wood & Co,85 namely that estoppel per rem iudicatam in its two species of cause of action estoppel and issue estoppel, might properly be regarded as a rule of substantive law. The distinction between the two species of estoppel per rem iudicatam as rules of substantive law and the rule in Henderson v Henderson as a procedural rule, was reiterated by the Court of Appeal in R (Gray) v Police Appeals Tribunal.86 What is not often explained in these decisions is why it was necessary to categorise estoppel as a rule of evidence in order to prevent its use as suggested by one party. In Low v Bouverie the claim was against the trustee of a settlement who had by mistake given incorrect factual information as to incumbrances binding the interest of a beneficiary in reply to a person who was considering making a loan to that beneficiary. The Court of Appeal held that an estoppel, which was relied on in support of a claim, was not itself a cause of action. It does not follow from this holding that estoppel is not a rule of substantive law subject of course to its own limitations of which its unavailability in most cases as a cause of action in itself is one.

(ii)  A Doctrine of Substantive Law 2.42  There is strong judicial support for the opposite view which is that estoppel is more than a rule of evidence. The point was put by Lord Denning MR, who in his long years as a Judge perhaps did more than anyone else to advance the law of estoppel, possibly on occasions beyond its proper borders, when he said in Moorgate Mercantile Co Ltd v Twitchings: ‘Estoppel is not a rule of evidence. It is not a cause of action. It is a principle of justice and of equity’.87 Apart from the fact that estoppel owes much of its development to common law as well as Chancery courts, the point could not have been put more succinctly. In particular, the observation of Lord Denning emphasises that because estoppel is not a cause of action it does not have to be relegated to no more than a rule of evidence. A slightly more elaborate statement of the same point was made in the Privy Council by Lord Wright in Canada and Dominion Sugar Co Ltd v Canadian National (West Indies) Steamships Ltd88 where he said that estoppel was a complex legal notion, involving a combination of several essential elements which were a statement, action on it and resulting detriment to the actor. He added: ‘Estoppel is often described as a rule of evidence as, indeed, it may be so described. But the whole concept is more correctly viewed as a substantive rule of law’. 2.43  The status in law of estoppel by record was commented on by Lord Millett in Johnson v Gore Wood & Co.89 In chapter nine estoppel by record is divided into three principles, cause of action estoppel, issue estoppel and the rule in Henderson v Henderson, with the first two principles being described as species of estoppel per rem iudicatam. The view expressed by Lord Millett was that estoppel per rem iudicatam in all its branches may be

85 [2002] 2 AC 1, 59. Lord Millett distinguished res iudicata in its strict sense from the rule in Henderson v Henderson which he described as no more than a procedural rule. See ch 9 for res iudicata and estoppel by record generally. 86 R (Gray) v Police Appeals Tribunal [2018] 1 WLR 1609. 87 Moorgate Mercantile Co Ltd v Twitchings [1976] QB 225, 241. This decision was reversed on appeal but on a different matter at [1977] AC 890. 88 [1947] AC 46, 56. 89 [2002] 2 AC 1.

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Evidence or Substantive Law  2.45 regarded as a rule of substantive law whereas the rule in Henderson v Henderson can be no more than a procedural rule based on the need to prevent the process of the court from abuse and the defendant from oppression.90 This is a readily understandable distinction. Estoppel per rem iudicatam is a rule with only limited exceptions which binds parties to an action to what was determined in previous proceedings between them either as to the existence or non-existence of a cause of action or as to a particular issue decided in those previous proceedings. It is difficult to see that rule as merely procedural. On the other hand, the rule in Henderson v Henderson allows to the court a power in certain circumstances to strike out proceedings or not to strike out proceedings and is akin in this respect to other procedural orders which permit the striking out of an action for various reasons. 2.44  The matter under discussion has been perhaps most helpfully examined in a modern decision of the Privy Council. In Berridge v Benjies Business Centre,91 two employees were dismissed for alleged misconduct. Under the Employment Law Code for Antigua and Barbuda, the employer was required on request to give a statement of the reasons for the dismissal. The employer, although asked, failed to do so. The matter came before the Industrial Court which ruled that the employer was estopped from placing reliance on reasons which should have been included in the statement of reasons following the request. A provision in the relevant legislation governing the procedure before the Tribunal stated that the Tribunal should not be bound to follow the rules of evidence specified in the Evidence Act. One question was whether by reason of this provision the Industrial Court was entitled to disregard an estoppel which would have otherwise bound the employer by reason of the estoppel being a rule of evidence which did not need to be followed. It was held that estoppel was not a rule of evidence. Lord Hoffmann put the point as follows: It is true that estoppel is sometimes called a rule of evidence, but this is not the case. It is a rule of substantive law, by which the facts which a party is estopped from proving, which would otherwise be material to the issue of liability, are assumed to be otherwise. Evidence to the contrary is inadmissible not on account of some technical exclusionary rule like hearsay, but because the substantive law makes it irrelevant.92

The importance of this decision is that, unlike other general statements on the status of estoppel as a part of the general law, the exact examination of that status was of central relevance to the issue before the Court. The decision of the Privy Council does not bind any court applying the law of England but this unanimous decision of the Court is a telling statement of the difficulty of regarding estoppel as no more than an evidentiary rule.

3.  Discussion of the Principle 2.45  It is tempting to say that the exact classification of estoppel as a doctrine among the descriptions of broad areas of law (the exact boundaries of which are themselves not

90 ibid, 59. See also Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160, para 25 (Lord Sumption) in a passage cited in ch 9, para 9.222; and see R (Gray) v Police Appeals Tribunal [2018] 1 WLR 1609, para 57 (Sir Terence Etherton MR) in a passage cited in ch 9 (n 138). 91 Berridge v Benjies Business Centre [1997] 1 WLR 53. See also Carter v Ahsan [2008] 1 AC 696 on issue estoppel. 92 Berridge v Benjies Business Centre, ibid, 57.

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2.46  General Questions Relating to Estoppel always agreed) as used in English law does not need very careful scrutiny. However, as has already been indicated, and as will be indicated further, the classification may be of significance so that the problem cannot be ignored. The view put forward in this book is that, whatever their historical origins, all forms of the doctrine of estoppel shown today be categorised as and applied as rules not of evidence but of substantive law. This conclusion is supported first by drawing a distinction between what matters have to be proved to support a cause of action and how those matters are proved by evidence and, secondly, by referring to certain adverse practical results which do or may flow from treating estoppel as only a rule of evidence.

(i)  Causes of Action: Their Components and their Proof 2.46  The best method of approach is to consider how, under the common law system of civil law, parties proceed to obtain some relief or order in their favour from a court. They do so by asserting a cause of action. The meaning of a cause of action has already been suggested in this chapter93 on established authority to be those essential matters which must be established by a person if that person is to obtain some remedy or relief from a court in accordance with a general principle of law. A simple example has been given which is that a person who asserts a cause of action for damages for breach of a contract must establish as its components (a) the contract, (b) the meaning of any relevant term of the contract if it is in dispute, (c) the actions of the defendant which constitute a breach of the terms of the contract, and (d) the amount of any loss suffered as a result of that breach. Of course, in many cases some of the components of a cause of action will be agreed. When it comes to the establishment of any component not agreed there is a distinction between matters of fact and matters of law. Matters of law are not subject to evidence or to rules of the law of evidence such as the incidence of the burden of proof. The court simply considers the position, including the submissions of the parties, and determines what is the correct law to be applied. Thus, in the above example the meaning of a term of the contract, if in dispute, being a matter of law would be determined in this way. Estoppel may have a part to play in relation to the determination of disputed questions of law as a component of a cause of action and the best example of this is the decision of the Court of Appeal in the Texas Bank case which has been examined in detail earlier. The estoppel in that case was an estoppel by convention as to the meaning and extent of a contract of guarantee and so was a matter of law.94 2.47  As to components of a cause of action which are matters of fact and which are not admitted or agreed, it is necessary for the person asserting the cause of action to establish those facts. To take an example, the owner of Blackacre may enter into a restrictive covenant with the owner of adjoining land, Whiteacre, that he will not erect any building on

93 See para 2.17. 94 Amalgamated Investment and Property Co Ltd v Texas Commerce Industrial Bank Ltd [1982] QB 84. See para 2.16 and for a further examination of this case, see ch 5, para 5.9, on estoppel by convention where the decision is a leading authority. The effect of the case was that if it had been necessary to interpret a contract in a particular way an estoppel by convention would have arisen so as to bind both parties to a different meaning of the contract. The construction of a written document is generally taken to be a matter of law. The probable recent extension of estoppel by representation so as to encompass statements of law as well as statements of fact may result in estoppel playing a greater part in deciding questions of law. This matter is examined in para 2.54 and in ch 3, para 3.18 et seq.

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Evidence or Substantive Law  2.48 ­ lackacre above a certain height without the consent of the owner of Whiteacre. The owner B of Blackacre builds above the stipulated height and a dispute arises between the parties. The owner of Blackacre brings proceedings seeking a declaration that he has not acted in breach of the restrictive covenant. The owner of Blackacre agrees that the building does exceed the permitted height limit but asserts that the owner of Whiteacre had told him that consent for the particular building had been given by the previous owner of Whiteacre. The owner of Whiteacre agrees that he made this statement but that it was a genuine mistake on his part and that in fact no consent had been given. Apart from this statement made it would be necessary for the owner of Blackacre as the Claimant to show that consent had been given and he might not be able to do so. On the other hand, the Claimant might be able to show that in reliance on the statement made to him he had carried out the work and so could successfully plead the main elements of an estoppel by representation, the making of a statement of fact, actions by the representee in reliance on it, and detriment caused to the representee by reason of those actions. The result of the estoppel would be that the owner of Whiteacre was not entitled to assert the contrary of what he had represented and so could not assert that consent had not been given for the building erected. In these circumstances it would not be necessary to go into matters of proof concerning the alleged consent, that is into matters such as whether what was said or done by the previous owner did amount to a consent. This question simply does not arise because, as a result of a logically anterior question, the owner of Whiteacre is not entitled to assert that no consent was given. It is apparent in this example that the question of whether consent for the building was given is a fact in issue between the parties and has to be established as a factual component of a cause of action. Two questions then arise. 2.48  Logically, the first question is whether the owner of Blackacre has to show by appropriate evidence that consent was given. The second question arises if the owner of Blackacre has to show that consent was given and is how, by various means of proof, he can show that consent was given. The first question does not depend on evidence of what exactly was done or said such as whether words or documents issued by the previous owner of Whiteacre were a consent and the circumstances in which they were issued. It depends on whether the statement made by the present owner of Whiteacre as a matter of law creates an estoppel. If it does then the first question is answered. By reason of the estoppel the owner of Whiteacre is estopped from asserting that no consent was given for the building so that it has to be taken for the purposes of the proceedings that consent was given. No proof of the fact of the giving of consent or evidence relating to it is required. On the other hand, if the estoppel cannot be established then the owner of Blackacre must prove by admissible evidence that consent for the building was given. It is at this stage and in these circumstances that the second question arises. The rules of evidence apply to the second question. Evidence in these circumstances usually constitutes oral evidence of what was said or done or the production of documents containing relevant material. There may be technical rules about what evidence may be brought before the court. One such rule is the hearsay rule which at one time played an important part in civil proceedings, the rule being that subject to certain exceptions A could not give evidence of what he had been told by B in order to establish that what had been said by B was true. Other important exclusionary rules still apply, such as the rule that communications between a person and his legal advisers are privileged from disclosure. These and other exclusionary rules of evidence simply do not arise in the present example if an estoppel is established. In other words, and to put it at its simplest, estoppel 63

2.49  General Questions Relating to Estoppel as a rule of substantive law dictates what matters a person may have to prove by way of the rules of evidence whereas the law of evidence dictates the mode by which a matter which has to be proved can in fact be proved. The two areas of law therefore carry out different functions.95 It seems reasonable and logical in these circumstances to separate estoppel from the law of evidence and to classify it as what it is, a substantive rule of law. 2.49  Of course, rules of evidence and of procedure themselves apply to the proof of those factual matters which are necessary to establish an estoppel. A party raising an estoppel should normally plead those facts which are said to give rise to the estoppel and the ordinary rules of evidence will apply to the proof of those facts such as proof that the person asserting the estoppel has acted to his detriment in reliance on what has been stated to him.96

(ii)  Adverse Results 2.50  The last few paragraphs are an attempt to explain why on a correct view estoppel is a rule of substantive law in that it dictates what matters a person has to prove in order to establish or to resist a cause of action rather than the means by which those matters may be proved by admissible evidence. Apart from this explanation, which may seem to be a matter more of juridical analysis than of practical impact, there are other practical reasons why to regard estoppel as a rule of substantive law is more satisfactory than to regard it as a rule of evidence. 2.51  One reason is the existence of different forms of estoppel. Discussions on whether estoppel is a rule of substantive law tend to concentrate on common law estoppel by representation. It may well be that whatever the status today of estoppel by representation this form of estoppel did have its origins in what was regarded as a rule of evidence.97 It would be very strained indeed to describe other forms of estoppel as no more than rules of evidence. Promissory estoppel is a principle of law which in limited circumstances prevents a person from asserting a legal right which would otherwise be available to that person because he has promised not to assert that right. The principle has nothing to do with the evidence needed to establish the right or the failure to observe the right. The principle operates in limine to prevent or limit the assertion of the right and so may render any such evidence irrelevant. Proprietary estoppel can operate, uniquely among the forms of estoppel, so as itself to constitute a cause of action which may result in an order that the claimant should acquire an interest in land. It would be close to absurd to describe this principle as nothing more than a rule of evidence. Perhaps the most unsatisfactory conclusion on the matter here under discussion would be to categorise some forms of estoppel as rules of substantive

95 See in particular the citation from the judgment of Lord Hoffmann in Berridge v Benjies Business Centre [1997] 1 WLR 53 set out in para 2.44. 96 Rules of evidence can be significant in connection with establishing the essential factual components of forms of estoppel. The burden of proving all such facts is generally on the party who asserts the estoppel but there is some dispute on whether for the purposes of proprietary estoppel this rule applies to proof that the person asserting the estoppel acted in reliance on an assurance given to that person: see ch 7, para 7.217 et seq. 97 In Scottish Equitable Plc v Derby [2001] 3 All ER 818, para 48, Robert Walker LJ referred to the evidential origin of estoppel by representation as part of the possibility of the House of Lords moving to a more unified doctrine embracing the various forms of estoppel. This possibility is a separate matter and is discussed in part (G) of this chapter.

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Evidence or Substantive Law  2.53 law and other forms of estoppel as just rules of evidence. On the same point, and whatever is the rule for other forms of estoppel, estoppel by convention may be used to establish the correctness of a proposition of law.98 Matters of law, as just explained, have nothing to do with evidence or the rules of evidence. It is difficult in these circumstances to understand how estoppel by convention can over its whole field of operation be categorised as a rule of evidence.99 2.52  A further practical reason for rejecting the evidential status of estoppel is that it can lead to an inhibition on the sound development and operation of estoppel as a doctrine of law. This matter is mentioned again under the next heading of this part of the chapter where certain of the practical effects of the supposed evidential status of estoppel are discussed. 2.53  A particular aspect of the point can now usefully be mentioned. The remedy or relief which a court orders when a promissory or a proprietary estoppel is established is varied and flexible, particularly in the case of proprietary estoppel. By contrast it has generally been supposed that where an estoppel by representation is established, the effect of the estoppel is straightforward. The person bound by the estoppel is prevented from asserting the contrary of that which he has represented. The estoppel therefore appears to have an all or nothing effect. Recent decisions have shown that in some sets of circumstances this operation of the estoppel may be unsatisfactory and may lead to injustice. The type of situation is one in which A pays a sum of money, say £10,000, to B mistakenly stating that B is entitled to the sum and B on the faith of that statement expends a part of the money, say £4,000, on some matter such as a holiday which he would otherwise be unable to afford. A may then seek to recover from B the £10,000 under the law of restitution or unjust enrichment as money paid under a mistake. In this type of situation the essential elements of an estoppel by representation are present in that there is a representation by A of an entitlement of B to the money and action by B in reliance on that representation with the obvious detriment that as to £4,000 B is required to pay back money which he may be unable to do. A straightforward application of the estoppel is that A is unable to deny that the £10,000 or any part of it was properly payable to B under an entitlement of B. This result is just as far as £4,000 is concerned but is unjust for the balance of £6,000 since B has suffered no detriment as regards that latter sum. The just solution is that the estoppel should be operated but only as to a part, here £4,000, of the total representation. Such an operation is described as giving a pro tanto effect to the estoppel. The question as here explained has been discussed in a number of recent cases with some complexity of reasoning involving the relationship between estoppel by representation and the law of restitution, and it appears that a pro tanto operation of the estoppel is permissible at any rate in some circumstances. The matter is fully discussed and explained

98 See ch 5, para 5.4, for the classic definition of estoppel by convention by Lord Steyn in Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878, 913. It seems likely that as a result of recent decisions a common law estoppel by representation can be founded on a representation of law as well as one of fact or of mixed law and fact such that the representor may be bound to a proposition of law by the estoppel. This makes it all the less apposite to describe even this form of estoppel as no more than a rule of evidence. See para 2.54 where this matter is elaborated and see ch 3, para 3.18 et seq, for a discussion of the question of whether a representation of law can give rise to an estoppel by representation. 99 See, however, Dixon v Blindley Heath Investments Ltd [2017] EWCA Civ 1023, [2017] Ch 389, para 72, in which it was said in the Court of Appeal that estoppel by convention was traditionally conceived as a rule of evidence that precluded the party estopped from leading evidence to rebut a recital or assumption. See also para 2.55.

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2.54  General Questions Relating to Estoppel in chapter three on estoppel by representation.100 The point for present purposes is that in the first of the modern cases on this question, one reason for rejecting a pro tanto operation of the estoppel was that estoppel by representation was a rule of evidence and no more.101 In a subsequent case it was said that the only substantial hurdle standing in the way of a pro tanto operation of the estoppel was the historical origin and technical status of estoppel by representation as a rule of evidence.102 It is not an attractive proposition that a just result and the just operation of a form of estoppel should be prevented by what was properly described as the technical status of that form of estoppel. The difficulty in this type of case could be avoided if it is accepted that whatever its historical origin estoppel by representation, as other forms of estoppel, is today a rule of substantive law.

(iii)  Representations and Assumptions of Law 2.54  A traditional view long held was that representations which could bring about a common law estoppel by representation had to be statements of fact or of mixed law and fact. This is still the law as regards provisions in a deed which bring about an estoppel by deed. A number of recent first instance decisions indicate that the law may now have altered such that an estoppel by representation can be based on a statement of pure law. This question, which still awaits detailed consideration by appellate courts, is discussed in chapter three.103 It is trite law to say that while evidence is needed to establish matters of fact in the absence of an admission or agreement on them there is no such thing as evidence on matters of law. A court simply decides the law, assisted of course by submissions made to it usually by lawyers on what is the law. If indeed an estoppel by representation can arise from a statement of law it must follow that at least in this area of its operation estoppel cannot be a rule of evidence since there is no such thing as evidence relating to the law of this country. 2.55  There may be some uncertainty over whether a statement of law can found an estoppel by representation but there is no doubt that an estoppel by convention may be founded on a shared assumption of law or of fact. Therefore, again, the estoppel may bring about a conclusion of law to be applied by a court, such as the meaning of a provision in an existing contract, which is something which has nothing to do with the law of evidence.

4.  Practical Impact of the Description 2.56  If an estoppel has effect in a satisfactory way it may not matter to the parties or to the court whether the principle of law being applied is described as a rule of substantive law or as a rule of evidence. This observation is no doubt correct in many cases. If the contract

100 See ch 3, para 3.147 et seq. 101 Avon County Council v Howlett [1983] 1 WLR 605, 622. 102 National Westminster Bank Plc v Somer International (UK) Ltd [2002] QB 1286, para 35 (Potter LJ). 103 See ch 3, para 3.18 et seq. The justification for a change in the law appears to be founded mainly on other recent changes in the law which have introduced a mistake of law as a ground for the recovery of money paid under a mistake in the law of restitution and which have introduced a representation of law as a form of misrepresentation leading to the making of a contract which can be used as a ground for seeking rescission of the contract.

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Evidence or Substantive Law  2.59 of guarantee in the Texas Bank case104 had been construed in a different fashion, and an estoppel by convention which dictated a different construction being placed on the contract had been applied, it would not have mattered whether the estoppel was described as a rule of substantive law or as a rule of evidence. The result would have been the same. Yet, as has been indicated in the earlier discussion of the matter, there are at least three circumstances in which the correct characterisation of an estoppel may have a practical impact on its operation. 2.57  The first of the circumstances is that just described where the supposed evidential status of estoppel by representation has been seen as an inhibition to the partial or pro tanto operation of that form of estoppel which is required in some cases if a satisfactory operation of the estoppel is to be achieved and a basic purpose of the estoppel, avoidance of detriment, is also to be achieved.105 It does not appear that the status of estoppel has inhibited a partial operation of other forms of estoppel. Promissory estoppel is the enforcement in limited circumstances of a promise not to enforce a legal right. A court is not bound to enforce the promise to its full extent or without limitation but may order, for example, that the promisor can resile from the effect of his promise if he gives reasonable notice to the other party.106 A clear acceptance that estoppel in all its forms is a substantive rule of law would remove the potential difficulty of possible partial or pro tanto operation as regards estoppel by representation. 2.58  Secondly, there is the question, which is much discussed, of the extent to which an estoppel, other than a proprietary estoppel, may be used as a cause of action or may be used in assisting in the establishment of a cause of action or is confined to use in resisting a cause of action. This question has been discussed earlier in this chapter and the best view is that any estoppel may be used to assist in either establishing or resisting a separate cause of action whereas proprietary estoppel, alone among estoppels, may be used as itself constituting a cause of action.107 It is possible that the characterisation of estoppels as rules of evidence, certainly as regards estoppel by representation, may have inhibited the full acceptance of the proposition that any estoppel, including estoppel by representation, may be used to assist in establishing a cause of action, in that it may mean that a defendant is prevented from relying on some matter, with the result that a claimant can establish his cause of action in circumstances in which he would otherwise not be able to do so. The acceptance of all estoppels as rules of substantive law may help to prevent this unjustified inhibitory effect. 2.59  Thirdly, an estoppel may be raised in some statutory context which refers to rules of evidence or rules of procedure. It will then be necessary to know whether estoppel is truly such a rule or is a substantive rule of law extending beyond questions merely of evidence

104 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84. See para 2.16. 105 It is also possible that the characterisation of an estoppel by representation as a rule of evidence or even as something which leads to a pretence has influenced the unwillingness of a court to enforce an estoppel against persons other than the original maker of the representation. See Re Exchange Securities & Commodities Ltd (In Liquidation) [1988] Ch 46, 59 (an estoppel not binding on the liquidator of an insolvent representor: see para 2.273) and Re Goldcorp Exchange Ltd [1995] 1 AC 74 (an estoppel as to title to chattels not binding on a chargee on the crystallisation of a floating charge over assets: see para 2.273). 106 Ajayi v Briscoe (Nigeria) Ltd [1964] 1 WLR 1326. 107 See para 2.17 et seq.

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2.60  General Questions Relating to Estoppel or procedure. This situation arose in a decision mentioned earlier108 where Lord Hoffmann explained that estoppel was a rule of substantive law.

5. Conclusion 2.60  Discussions on whether the doctrine of estoppel, or parts of it, are rules of evidence or rules of substantive law are an arid dispute in that they obscure the truly important questions which are the essential elements and the operation of each of the main forms of estoppel. Even so, it is a point which cannot be ignored if only because the classification of estoppel, or at any rate estoppel by representation, as only a rule of evidence has had an unfortunate effect on achieving the flexible and just operation of that form of estoppel and may perhaps have an adverse effect on other forms of estoppel. The short, simple and satisfactory method of ending this discussion is the acceptance that whatever the historical origins of different forms of estoppel, the doctrine of estoppel in all its forms is today an important part of the substantive law of this country and that any attempt to limit its development by recollections of the origin of parts of the doctrine as no more than a rule of evidence is unnecessary and a possible impediment to a satisfactory future development.

(D)  Public Law 1. Introduction (i)  The Underlying Problem 2.61  English law has a number of classifications of which the most fundamental are the distinction between civil law and criminal law and, within civil law, the distinction between public law and private law.109 Private law regulates the rights and obligations of citizens between and towards each other. Public law regulates the rights and liabilities of citizens between themselves and the state. In this context the state includes the Crown, organisations of central government, local authorities and the medley of public and quasi-public bodies whose functions increasingly impinge on the life of citizens. Public law in this sense is often called administrative law. 2.62  The question here to be examined is the extent, if any, to which the principles of estoppel govern public law in the sense just stated. An initial query is to ask why estoppel as an overall doctrine and in its constituent forms should not apply to public law or administrative law as it applies to the generality of private law. The underlying basis of estoppel, that as a matter of justice and morality a person should be kept to the truth of his statement when someone else has acted on it to that person’s detriment, appears to apply in principle 108 See para 2.44. 109 There may be other areas of law which do not fit easily into this neat classification, such as international law. Law itself must be distinguished from other prescriptive or normative rules of conduct such as moral and religious rules. Law is a series of rules governing human conduct enforced by a centrally organised sanction of the state within which the rules apply. It is this enforcement of the rules by the state which differentiates law from other codes, such as moral or religious codes.

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Public Law  2.63 to relations between the state and public bodies and private citizens as much as it applies to relations between private citizens. 2.63  The key to the distinction between public law and private civil law in the present context is that estoppel assists in asserting rights or in resisting the assertion of rights. Rights in private law are asserted for the benefit of the person, an individual person or a persona ficta such as a company, which owns the rights. The assertion of rights is resisted for the same reason. It does not matter, subject to general considerations such as fraud, what is the reason for one citizen asserting his legal rights against another citizen. The reason may be a good or a bad one but it is usually of no concern to persons other than the persons involved. The position is different with the rights and duties of public bodies. These rights can be asserted and these duties can be carried out only in the interests of the public which the public body serves. The functions of public bodies derive almost wholly from statute, and their rights and duties have to be asserted or carried out for the purposes of the statute by which the rights were granted or the duties imposed.110 The result of this reasoning is that if an estoppel is applied against a public body in a situation involving the discharge by that body of its public functions, the outcome may be a burden on the public and it may be that the public body is unable to discharge its public functions in the way in which it would otherwise do under its statutory powers and duties with consequent disadvantage to the public who have not participated in the events giving rise to the estoppel.111 The same reasoning may apply to a lesser extent to the assertion of an estoppel by a public body against a citizen but this situation is less likely to arise in practice.112 The description of the law in this part of this chapter centres primarily on the main forms of estoppel such as estoppel by representation

110 This principle of law was stated most succinctly by Lord Reid in Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997: ‘Parliament must have conferred the discretion with the intention that it should be used to promote the policy and objects of the Act; the policy and objects of the Act must be determined by construing the Act as a whole and construction is always a matter of law for the Court’. A few powers remain in the Crown otherwise than conferred by statute and not available to private persons (usually called the Royal Prerogative) such as the power to create peerages and to create corporations by Royal Charter or to destroy property at time of war to prevent it falling into enemy hands (see Burmah Oil Co Ltd v Lord Advocate [1965] AC 75) but these are not of great significance in administrative law terms. In former times the Crown claimed much wider powers such as that of imprisonment and the imposition of taxes: see R v Hampden (1637) 3 St Tr 826 (the Ship Money case). 111 See the passage from the judgment of Lord Mackay in R (Reprotech (Pebsham) Ltd) v East Sussex County Council [2002] UKHL 8, [2003] 1 WLR 348, para 6, cited in para 2.89. The reasoning here described has some similarity to that which sometimes occurs with estoppels between private citizens. A person may be able to make out most of the essentials of an estoppel, such as an estoppel by representation or an estoppel by convention, but a court may refuse to apply an estoppel by reason of the unconscionability criterion where the effect of the estoppel would be to cause prejudice to third parties, for example other contributors to a pension scheme, who have not participated in the events creating the estoppel: see Trustee Solutions Ltd v Dubery [2006] EWHC 1426 (Ch), [2007] 1 All ER 308, para 51(ii). 112 A decision which appears to fall into the category of an estoppel in favour of a public body is Augier v Secretary of State for the Environment (1979) 38 P & CR 219; see para 2.82. However, in Stancliffe Stone Co Ltd v Peak District National Park Authority [2005] Env LR 4, para 35, it was held that in the public law context of mineral planning permissions an estoppel by convention was not in principle available in favour of a planning authority (upheld on appeal at [2006] Env LR 7). Two other decisions in which a public authority acting in the administration of public or social housing were unsuccessful in an attempt to rely on an estoppel against a housing tenant are White v Riverside Housing Association [2005] EWCA Civ 1385 and Newport City Council v Charles [2009] 1 WLR 1884. In both cases the attempt failed primarily because the estoppel was sought to be used ‘as a sword and not a shield’. These two decisions are examined in paras 2.32 and 2.33 where the sword or shield question is discussed generally. It is there suggested that the decisions do not accurately reflect the law on this question today. If this supposed impediment to the operation of the estoppel had not existed it might have been necessary for the Court to have gone on to consider

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2.64  General Questions Relating to Estoppel and promissory estoppel. Considerations which are in some way similar, notably the public interest in some legal proceedings, apply to estoppel by record and the principles of cause of action and issue estoppel which are explained in chapter nine where it is explained that on one view such estoppels may have only a limited application, if any application at all, to decisions made in applications for judicial review.113 2.64  The possibility of an estoppel against a public authority is connected with the principle that an authority in which duties and powers are vested cannot contract in such a way as to take away its ability to perform its duties and exercise its discretionary powers. In a leading case on this subject,114 Harbour Trustees had been given statutory power to acquire land compulsorily for the purposes of carrying out certain works. Having acquired a part of the land, the Trustees proposed to contract with the former owners of the land acquired to allow those owners unimpeded access over the other land to which the powers of the Trustees related with a view to reducing the compensation payable to the persons whose land had been acquired. This was held not to be a lawful contract since its effect would impede the discretion which the Trustees were required to exercise in connection with their powers over the remainder of the land not at that time acquired.115 The relevance of this aspect of public law for present purposes is that if a contract is void when it purports to fetter the power of a public body to act in the future as it thinks proper in pursuance of its statutory powers, it should necessarily follow that an estoppel cannot have the same effect. The duties and powers and rights of public bodies, as created by statute, are normally described collectively as the functions of the body. For present purposes there seems to be no distinction between these types of function as to the application of the private law doctrine of estoppel. 2.65  A further principle of public law which might affect estoppel by public bodies is that where a function is vested in a public body then, subject to important exceptions, that body must exercise the function itself and cannot delegate it to others including its own officers or employees. For example, where a body had power to permit the laying of drains it was held that the exercise of the power could not be validly delegated to a surveyor employed by that body even for straightforward cases.116 The application of this principle is tempered by two important exceptions. One is that there is a wide statutory power for local authorities to delegate their function to committees, sub-committees and officers.117 The other exception is that officials of ministers and departments of central government may act in the name of the relevant minister without any formal delegation of power.118 The relevance of this matter for present purposes is that if a statement is made on behalf of a public body by someone

the availability of an estoppel in favour of a public authority, a point on which some reservation was expressed by Longmore LJ in the Newport case. See also Milford Haven UDC v Foster (1961) 13 P & CR 289 in which a local authority was held to be able to assert an estoppel by representation so as to hold the representor to a statement that he had no interest in land when it came to a compulsory purchase of the land by the authority. 113 See ch 9, para 9.145 et seq. 114 Ayr Harbour Trustees v Oswald (1883) 8 App Cas 623. 115 If this principle of law was applied with undue rigidity to contracts it could seriously impede the detailed execution by public authorities of their functions and, while the principle remains, later decisions have limited the rigidity of its application: see, eg, Birkdale District Electric Supply Company v Southport Corporation [1926] AC 355. 116 High v Billings (1903) 89 LT 550. 117 Local Government Act 1972, ss 101, 102. Some authorities have formal delegation arrangements in place. 118 This rule is often called ‘the Carltona principle’ from the decision of the Court of Appeal in Carltona v Commissioners of Works [1943] 2 All ER 560.

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Public Law  2.68 without validly delegated power to make that statement what is so stated cannot bind the authority and so cannot operate to create an estoppel against the authority.119 2.66  The difference between the operation of estoppel against a private and a public person or body can be illustrated by a simple example. A person might own an area of land with his neighbour having an option to acquire the land at a specified price at any time in the next two years. The neighbour might state that he will not exercise the option and the owner might then carry out development on the land in reliance on that promise. In these circumstances there is likely to arise a promissory estoppel which will prevent the neighbour from changing his mind and exercising the option which he has promised not to exercise.120 On the other hand, a local authority might have power to acquire the land of an owner for public purposes under a confirmed compulsory purchase order. An employee of the Council might state to the owner that because of financial constraints the power would not be exercised against the land of that particular owner and in reliance on this the owner might again carry out development on the land. It is unlikely that an estoppel could arise against the authority preventing it changing its mind and exercising its power under the compulsory purchase order, first, because the estoppel would operate as a fetter on the exercise of its statutory powers by the authority and, secondly, because the person making the promise might not have delegated power to act for the authority. 2.67  The limitation on the use of estoppel against public bodies exercising public functions here explained applies generally across the forms of estoppel such as estoppel by representation, estoppel by convention and promissory estoppel. An exception is estoppel per rem iudicatam, where it has been said that the authorities which restrict the use of estoppel by representation against public bodies have no relevance. An estoppel per rem iudicatam, under its two principles of cause of action estoppel and issue estoppel, can in principle operate in the area of public law.121

(ii)  A Possible Solution 2.68  A straightforward application of the law of estoppel in all its aspects to the activities of public bodies as it applies against private persons would be unacceptable for reasons which have been explained. As against this, it would be equally unacceptable wholly to exclude the possibility of an estoppel against, or in favour of, a public body. Public bodies such as local authorities necessarily carry out activities which are no different in their nature and purpose from the ordinary activities carried out by individual persons or private corporations. In order to carry out properly their statutory functions local authorities must enter into contracts and other legal relationships as do private persons such as taking a lease of 119 See Howell v Falmouth Boat Construction Co Ltd [1951] AC 837, referred to in para 2.79. 120 See ch 6, and see Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. In a recent decision of the Court of Appeal of New Zealand, Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567, a party was prevented by a promissory estoppel from exercising a right of first refusal on a sale of property when that party had undertaken not to exercise the right and the owner of the property had acted to his detriment by transferring the property and incurring expenses in order to raise finance. 121 Thrasyvoulou v Secretary of State for the Environment [1990] 2 AC 273 where a cause of action estoppel was applied in respect of a determination of an appeal against an enforcement notice under town planning law procedures. There are judicial suggestions that estoppel per rem iudicatam may be limited in its application to judicial review applications in the High Court. This matter is discussed in ch 9, part (F).

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2.69  General Questions Relating to Estoppel offices or entering into contracts of employment with staff or contracting for the supply of goods to the authority. It seems reasonable that in respect of such activities the public body should be governed by all ordinary principles of private law such as the law of contract and the law of estoppel. To take an example, which is loosely based on a leading case on promissory estoppel,122 a local authority might have surplus premises which it does not need for a time and so lets out the premises to a commercial company on a lease for five years at a rent. The authority during the period of the lease, seeing that the tenant was in financial difficulties and being unlikely to be able to find another tenant for the remainder of the term, might state that they would accept one half of the rent as full payment over the last two years of the lease and in reliance on this the company might enter into financial arrangements which it would not otherwise have concluded. These facts make it likely that in the case of a private landlord there would arise a promissory estoppel, so preventing the landlord from recovering the full rent for the two years in question. It seems wholly reasonable that the same estoppel should operate in the same way against the local authority in the example given. The operation of the estoppel would not take away or impede the exercise by the authority of its statutory power to carry out such functions as the administration of town planning or the provision of social care. 2.69  As explained, it does seem unacceptable in law that a public body should be bound by a contract or an estoppel such that it cannot properly exercise the statutory functions given to it which have to be exercised in the general public interest, and as will be explained authority confirms that a public body cannot be so bound in this way.123 Even so, it also seems unsatisfactory that a public body should not be constrained in any way in law as to its future actions by what it has stated or promised that it will or will not do in regard to its public functions. While estoppel as applied in private law is an inappropriate method of constraint as regards the exercise of public functions, there has been developed by the courts as part of the judicial review of the administrative actions of public bodies a further principle, the doctrine of legitimate expectation, which may operate to some extent as such a constraint. 2.70  Legitimate expectation is an aspect of administrative law and of the law of judicial review which is a subject in itself and its details, some of which are uncertain, are outside the scope of this book.124 The essence of the doctrine is that it may operate when some benefit has been promised by or on behalf of a public body or would result from a statement of policy by that body and the body has acted or proposes to act in a way which is contrary to the promise or statement. In such circumstances a court may quash an action or decision of the public body at any rate unless proper consultation has been carried out with those affected. There is an obvious analogy between legitimate expectation and estoppel as used in private law but the two are certainly not the same doctrine.125 A short account is given later of the essentials of legitimate expectation but its introduction here leads to a part of the

122 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. 123 See para 2.78 et seq for a consideration of the authorities. 124 For a detailed explanation see, eg, HWR Wade and CF Forsyth, Administrative Law, 11th edn (Oxford University Press, 2014) 450 et seq. 125 As Sedley J observed in R v Ministry of Agriculture, Fisheries and Food, ex parte Hamble Fisheries (Offshore) Ltd [1995] 2 All ER 714 ‘legitimate expectation is [not] another name for estoppel’.

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Public Law  2.72 suggested solution to the problem caused by any conflict between estoppel and the requirements of public law.126 2.71  A rational solution to the problem, and one which is to a degree supported by the authorities, is to divide the activities of public bodies into two categories. The first category is the exercise of those functions (functions here being used in the sense of rights, powers and duties) conferred by statute which often cannot be exercised by private persons and which have to be exercised in accordance with the purpose of the statute conferring them and in the general public interest. Such functions may be called the core public functions of the authority. The second category is those activities which are ancillary to and facilitate the carrying out of the core functions conferred by statute and which are activities which private persons can and do ordinarily carry out. An example may illustrate what is meant. Many local authorities have statutory functions in connection with the town planning system under the Town and Country Planning Act 1990 such as determining applications made to them for planning permission and taking enforcement action against breaches of planning control. It is necessary for the authorities, in order to carry out these public law functions, to engage in ordinary activities such as taking a lease of offices, insuring their assets, and purchasing vehicles and other equipment. The determining of planning applications and the taking of enforcement action are clearly instances of public law functions which private persons cannot carry out. The leasing of offices is equally clearly a private law activity which any person may carry out. The private law doctrine of estoppel has no place in the first category of activities by public bodies for reasons which have been explained. The public law doctrine of legitimate expectation may have a part to play as regards such activities. There is no reason of general policy why the law of estoppel should not apply to the activities of public authorities within the second category. Indeed, activities within that category could not sensibly be carried out save under the control and in the context of major areas of general private law such as the law of contract or the law of misrepresentation or the law of restitution. As with most categorisations there may be activities of public authorities which are on the borderline between the two categories but this should not prevent a rational distinction being drawn and applied where it leads to a satisfactory overall state of the law.127 2.72  The relationship of estoppel to the activities of public bodies is a subject important both for the purposes of the law of estoppel and for the purposes of aspects of public law. It is submitted that a satisfactory resolution of any conflict or tension which exists may in principle be satisfactorily resolved along the following lines.

126 The most useful general comment on the matter under discussion is that of Lord Hoffmann in R (Reprotech (Pebsham) Ltd) v East Sussex County Council [2002] UKHL 8, [2003] 1 WLR 348, paras 33–34, where it was said to be unhelpful to introduce private law concepts of estoppel into public law and that there was an analogy between a private law estoppel and the public law concept of legitimate expectation created by a public authority. This decision is examined more fully in para 2.89 where the most significant passages from the decision are cited. 127 A situation which might be on the borderline was that disclosed in Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699. The activities of Mr Plimmer, building a jetty into the sea and a warehouse, were ordinary commercial activities but the Crown and the Provincial Government which acquiesced in and to a degree encouraged these activities, were acting in part in pursuance of the public function of making arrangements for the reception of immigrants into the Colony of New Zealand. The public authorities were held to be bound by what would today be classified as a proprietary estoppel. This important decision is discussed in ch 7, para 7.22.

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2.73  General Questions Relating to Estoppel 2.73  (i) Where a public body is carrying out a statutory function not available to private persons, and which has to be carried out in accordance with the purposes of the statute and in the general interests of the public, the private law doctrine of estoppel has no part to play. 2.74  (ii) Where a public body is carrying out an action or activity which is ancillary to its statutory or core functions, and that action or activity is one which can be and is carried out by private persons such as taking a lease of office space, the private law of estoppel should apply to it as it does to the actions and activities of private persons. 2.75  (iii) Where the actions of a public body fall within the first category as just mentioned the public law concept of legitimate expectation, a part of the panoply of judicial control of administrative action, should apply to those actions and may result in the actions of the body being held to be ultra vires if there has not been proper consultation with those affected or may even result in the actions of the body being ultra vires as a substantive result of a breach of the legitimate expectation.128 2.76  Following an examination of the sometimes conflicting authorities and a brief explanation of the public law doctrine of legitimate expectation these propositions are taken forward to the conclusion on the present question.129

(iii)  Public Bodies 2.77  If the law is to be applied in some fashion as just suggested it is necessary to know exactly what entities are or are not public bodies. As a first point it is established that in principle estoppel can apply to and bind the Crown.130 Most public bodies, including local authorities, are corporations and the difficulty is to know when such corporate bodies are or are not subject to the control of the principles of administrative law and to the remedy, particular to that area of the law, of judicial review.131 Judicial review as a remedy which depends on the application of public law principles has a wide application and has been held, for example, to be available against the General Council of the Bar exercising disciplinary

128 The exact ambit of the law of legitimate expectation, and in particular whether it can result in the actions of a public body, including a failure of that body to act, being ultra vires as a matter of substantive law as opposed to doing no more than impose a duty of proper consultation on that body, is mentioned in para 2.96. 129 See para 2.98 et seq for a suggested conclusion on the lines here outlined. 130 eg, in a leading case on proprietary estoppel, Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699, an estoppel was applied by reason of actions of the Crown or a provincial government in the then Colony of New Zealand. The doctrine of election, which is akin to estoppel, operates against the Crown: Davenport v R (1877) 3 App Cas 115. The Crown and central government operate through different ministers and departments of government and it may be that a statement by one minister or department may give rise to an estoppel which binds another minister: see Robertson v Minister of Pensions [1949] 1 KB 227, 232, discussed in ch 6, para 6.14. 131 In English law rights and duties enure to natural persons or artificial persons (personae fictae). Natural persons are ordinary human beings. Artificial persons are nearly always corporations. Corporate bodies are created by Royal Charter or, much more usually, by statute. Corporations are either a corporation sole, one person being the sole corporator, or a corporation aggregate where there are a number of corporators. A well-known description of corporate personality is that given by Lord Hoffmann in Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500, a decision of the Privy Council on appeal from New Zealand, in which he stated that ‘a company exists because there is a [legal] rule … which says that a persona ficta shall be deemed to exist’, but ‘[there] is in fact no such thing as a company as such, no Ding an sich, only the applicable rules’ which enable the shareholders of a company to conduct their collective activities through the medium of the corporate form. The eminent New Zealand jurist, Lord Cooke, has suggested that this was an allusion by Lord Hoffmann to Kant’s noumenon (see ‘Corporate Identity’ (1998) 16 Company and Securities Law Journal 160, 161–63).

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Public Law  2.78 functions132 and, in New Zealand, the New Zealand Rugby Football Union when deciding to send a rugby team to South Africa in the days of apartheid.133 A particular instance of the difficulty is knowing what is or is not a public body following the privatisation in recent decades of organisations providing public utilities. An illustration is the provision of sewerage facilities. Commissioners of Sewers existed in late medieval times but in the nineteenth century statutory duties to provide an effectual system of sewerage were imposed on local authorities, and then later on regional water authorities, until under the Water Industry Act 1991 commercial companies were appointed as statutory sewerage operators with similar duties. The question is whether such companies are or are not public bodies exercising public functions for the purposes of the operation of estoppel.134 It is not possible as the law now stands to provide a comprehensive rule for differentiating between bodies exercising public law functions and bodies exercising private law functions and to the extent that any such division is needed for the operation of the doctrine of estoppel, as it may be for other purposes, in practice each situation must be approached on a case-by-case basis.135

2.  Guidance from Conflicting Authorities 2.78  Certain root principles are clear and are frequently stated, notably the principle that a public body exercising public functions cannot by its statements or other actions be estopped from subsequently exercising its functions so as to fulfil the purposes of the legislation which conferred the functions and so as to serve the general public interest. The rights of the recipient of the statement, which would be available if the maker of the statement was a private natural or corporate person acting only in its own interests, must be subordinated to the public good which is a justification for the conferment of the statutory public functions. The difficulty is to find any wholly consistent thread or threads of decided authority which fully establish the law on this basis. It would not be productive in a book on estoppel to attempt a full analysis of the numerous decisions on this subject and for that reference should be made to a specialist book on administrative law.136 It is still possible to point the way, as well as to illustrate the difficulties, by referring to a number of leading decisions. It may be that the future development of the subject will be guided by what was said in the House of Lords in R (Reprotech (Pebsham) Ltd) v East Sussex County Council,137 and this

132 R v General Council of the Bar, ex parte Percival [1991] 1 QB 212. 133 Finnigan v New Zealand Rugby Football Union Inc [1985] 2 NZLR 159. 134 For a recent decision on the availability of private law remedies such as an action in tort for negligence, against a public utility company see Southern Gas Networks Plc v Thames Water Utilities Ltd [2018] EWCA Civ 33. See also Maritime Electric Co Ltd v General Utilities Ltd [1937] AC 610, referred to in para 2.79. 135 If the overall state of the law on the present subject is as suggested in paras 2.73–2.75 there are two questions which may arise when it is sought to assert an estoppel against what is or may be a particular public body. The first question is whether the body in question is one which has vested in it public functions which have to be exercised for the public good and in accordance with the general purposes of the statute which vests the functions. The second question, if the first question is answered in the affirmative, is whether the particular exercise of the functions to which the alleged estoppel relates is the exercise of those core functions of the body or is the exercise of some power ancillary to those core functions such as the purchase of goods or the leasing of offices. 136 An excellent description is given in HWR Wade and CF Forsyth, Administrative Law, 11th edn (Oxford University Press, 2014) in particular at 281 et seq. 137 [2002] UKHL 8, [2003] 1 WLR 348.

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2.79  General Questions Relating to Estoppel decision is discussed at the end of this outline examination of the authorities.138 A logical approach is to look first at decisions in which an estoppel has been refused or allowed as against a public authority exercising a public function, and then to look at decisions where an estoppel has been allowed as against a public authority acting otherwise than in the carrying out of its core public functions.

(i)  Public Functions: Estoppel Refused 2.79  In general, if A states to B that a certain state of financial accounting exists between them (for example, that A owes to B a specified sum of money or that B owes to A a specified sum of money) and B acts on that representation, A will be estopped from resiling from what has been stated.139 In an appeal to the Privy Council from the Supreme Court of Canada a public utility company supplying electricity had misread its metering system such that for a period of over two years it had charged a customer only 10 per cent of the total amount due for electricity supplied. It was held that the utility company had a statutory duty to make charges at a scheduled rate and an estoppel could not be set up so as to prevent the implementation of that duty with the result that the full and correct charges were ­recoverable.140 A trenchant approach to the limitation of estoppel when attempted to be deployed against government officials was expounded by Lord Simmonds in Howell v Falmouth Boat Construction Co Ltd.141 Under a wartime Order, repairs could only be carried out to a ship with a written licence granted by the Admiralty. An oral licence was given by the licensing officer. In the Court of Appeal Denning LJ said that whenever government officers in their dealing with a subject took on themselves to assume authority under a statute with which the officer was concerned, the subject was entitled to rely on the officer having the authority assumed. This view, which appears to rest on a form of estoppel, was rejected in the House of Lords by Lord Simmonds who said: ‘The question is whether the character of an act done in face of a statutory prohibition is affected by the fact that it has been induced by a misleading assumption of authority. In my opinion the answer is clearly No’.142 As will be explained, a landlord who grants a lease without the title or capacity to do so may be estopped as against the tenant from denying the validity of the lease under the principles of estoppel by deed.143 Yet in one case when a lease was purported to be granted by a local authority without the statutorily required consent of a minister, the lease was held to be void.144 No estoppel could rescue it. The same principle applies to statements of encouragement made by or on behalf of government departments or bodies. When the government encouraged an airline to invest in aircraft on the understanding that its licence 138 See para 2.89. 139 Cases of this type are discussed extensively in connection with estoppel by representation: see ch 3, para 3.147 et seq. 140 Maritime Electric Co Ltd v General Utilities Ltd [1937] AC 610. This decision was relied on by Harman J in Re Exchange Securities & Commodities Ltd (In Liquidation) [1988] Ch 46 for the proposition that an estoppel by representation founded on a representation made by a company could not be asserted against a liquidator of the company since the operation of the estoppel would be contrary to the statutory duty imposed on a liquidator by insolvency law. 141 [1951] AC 837. 142 ibid, 845. In the event the work done was held to be lawful and within the terms of licences for other reasons. 143 See ch 4. 144 Rhyl UDC v Rhyl Amusements Ltd [1959] 1 WLR 465.

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Public Law  2.81 to operate would be continued, it was held that there was no estoppel which prevented a subsequent administration from changing the policy on licensing and withdrawing a licence.145 Other decisions support the general proposition that no estoppel can be used to prevent or restrict the use of statutory powers by a public body.146

(ii)  Public Functions: Estoppel Allowed 2.80  A nineteenth-century decision, important for the development of the doctrine of proprietary estoppel, in which an estoppel was ordered against the Crown and a Colonial Provincial Government was Plimmer v Mayor, etc, of Wellington.147 A right by way of an irrevocable licence was ordered to be granted to the Plaintiff of a jetty and warehouse which he or his predecessor in title had constructed in Wellington Harbour in New Zealand on the basis of a period of no objection having been made to what had been done, and some encouragement given to it, by the authorities. No objection was seen against allowing this form of estoppel to operate against the Crown or a public authority. In another case involving the compulsory purchase of land, a local authority exercising statutory powers was held to be estopped by its conduct such that it was required to purchase land from an owner on a particular statutory basis for assessing compensation when the owner had suffered detriment by acquiring alternative property on the faith of statements made to it.148 In another case, an estoppel by representation was enforced against a Government Minister in connection with the eligibility of a Claimant for a pension by reason of a disability suffered by him on military service where the entitlement was under the terms of a Royal Warrant.149 A local authority was held to be estopped from denying that sums paid to it were ‘rates actually levied’ under the terms of a statutory provision, the reasoning of the Court of Appeal being that the estoppel did not prevent or hinder the proper performance of a statutory duty.150 2.81  It has been suggested that while a public authority cannot be estopped from doing its public duty it may be estopped from relying on technicalities. Under section 43 of the Town and Country Planning Act 1962, a person could apply to a local planning authority for a determination of whether a proposed development required a planning permission. The application was required to be in writing. A person applied for planning permission to erect a structure of a particular height and was told that no permission was required. He subsequently erected a structure which was higher and enforcement action was taken against him by the local planning authority. Whether there had been a valid determination binding the authority as a result of what it had stated concerning the lower structure was relevant to whether planning permission should be granted for the higher structure.

145 Laker Airways Ltd v Department of Trade [1977] QB 643. 146 Notable decisions in favour of this proposition are Southend-on-Sea Corporation v Hodgson (Wickford) Ltd [1962] 1 QB 416; and Brooks and Burton Ltd v Secretary of State for the Environment [1977] 1 WLR 1294, where Lord Widgery CJ said that he would deprecate any attempt to expand the circumstances in which an estoppel could be applied against authorities such as planning authorities. 147 (1884) 9 App Cas 699. This decision is discussed in detail in ch 7, para 7.22. 148 Salvation Army Trustee Co v West Yorkshire Metropolitan County Council (1980) 41 P & CR 179. 149 Robertson v Minister of Pensions [1949] 1 KB 227. The basis of this decision is sometimes said to be a promissory estoppel. 150 North Western Gas Board v Manchester Corporation [1964] 1 WLR 64.

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2.82  General Questions Relating to Estoppel The Court of Appeal held by a majority that the authority was estopped from asserting that there had not been a valid determination under section 43 in respect of the lower structure. It was in this context that Lord Denning MR made his well-known observation: ‘Now I know that a public authority cannot be estopped from doing its public duty, but I do think it can be estopped from relying on technicalities’.151 A similar approach, again by Lord Denning MR and again in the context of planning legislation, was adopted in a case in which planning permission was granted for a residential development of 14 houses. A planning officer who was subsequently approached told the developers that certain variations they proposed to the plans were immaterial variations of that which had been permitted and did not require a separate planning permission. The developers proceeded with the building of the houses in accordance with the varied plans and the Council then sought to take enforcement action against them. It was held that a planning permission was in law such that it could encompass not only precisely that which was permitted but also any immaterial variation of it. It was also held that the authority was estopped from contending that the variation was a material one. Given this rule of law as to immaterial variations, a main issue in the case was whether the authority could be estopped when the officer in question did not have actual delegated authority to make a determination on the materiality or otherwise of the variations. The Court of Appeal held that the authority was bound by what had been said. The law was stated by Lord Denning in the following way: If the planning officer tells the developer that a proposed variation is not material, and the developer acts on it, then the planning authority cannot go back on it. I know that there are authorities which say that a public authority cannot be estopped by any representations made by its officers. It cannot be estopped from doing its public duty: see, for instance, the recent decision of the Divisional Court in Southend on Sea Corporation v Hodgson (Wickford) Ltd [1962] 1 QB 416. But these statements must now be taken with considerable reserve. There are many matters which public authorities can now delegate to their officers. If an officer, acting within the scope of his ostensible authority, makes a representation on which another acts, then a public authority may be bound by it, just as much as a private concern would be. A good instance is a recent decision of this Court in Wells v Minister of Housing and Local Government [1967] 1 WLR 1000.152

Ostensible authority as part of the law of agency rests on principles of estoppel.153 Therefore, the effect of what was said in the Court of Appeal was to import an aspect of estoppel by representation into the carrying out of powers and duties in the public interest by a public authority. 2.82  A decision of some interest for present purposes is Augier v Secretary of State for the Environment.154 An Applicant was refused planning permission for the extraction of sand and gravel from land and appealed to the Secretary of State. A main issue in the appeal was the provision of a satisfactory vehicular access by way of visibility splays at the entrance to the land. The Applicant did not own the land needed to provide the splays but undertook to acquire it. The Secretary of State in deciding the appeal granted planning permission on the faith of this undertaking. In proceedings to challenge the legality of the decision of the



151 Wells

v Minister of Housing and Local Government [1967] 1 WLR 1000, 1007. Russell LJ dissented. Finance Ltd v Westminster City Council [1971] 1 QB 222, 230. 153 See ch 3, para 3.46. 154 (1979) 38 P & CR 219. 152 Lever

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Public Law  2.84 Secretary of State on this matter it was held in the High Court that there was a form of estoppel which bound the Applicant to his undertaking. Sir Douglas Frank QC put the matter in this way: In my judgment, where an applicant for planning permission gives an undertaking, and, relying on that undertaking, the local planning authority, or the Secretary of State on appeal, grants planning permission subject to a condition in terms broad enough to embrace the undertaking, the applicant cannot later be heard to say that there is no power to require compliance with the undertaking.155

This case appears to be an instance of an estoppel being available to a public authority against a private person and is to that extent unusual. There was unfortunately no examination by the Judge of the limitations applicable to the estoppel, presumably a promissory estoppel, which he was applying and the decision faced two formidable difficulties on its facts if a promissory estoppel were to be established, these being (a) that to enforce the undertaking would be to use promissory estoppel as itself a cause of action which cannot be done, and (b) that it is difficult to see how the Applicant made any promise not to enforce legal rights against the Secretary of State or the local planning authority. These cardinal aspects of the principle of promissory estoppel are explained in chapter six.

(iii)  Private Law Actions of Public Bodies 2.83  It has been explained that bodies, almost always created by statute, who carry out public law statutory functions need to enter into arrangements, such as taking leases of property, which are necessary and ancillary to their public law functions but which are in essence the same type of legal arrangements as those carried out by other natural persons and corporations for the purposes of their needs and functions and which any person can carry out without statutory authorisation. Public authorities are often given specific powers to carry out ancillary actions for the purposes of their functions.156 It has been suggested earlier that when it comes to the exercise of these ancillary and ‘ordinary’ actions, the law of estoppel should apply to public bodies in the same way as it does to everyone else.157 There is some authority in support of this proposition. 2.84  A nineteenth-century decision of the Privy Council established that the application of the doctrine of election was available against the Crown as a landlord.158 The Crown leased out for agricultural purposes 320 acres of land in the then Colony of Queensland in Australia. An issue was whether the doctrine of common law election applied so as to prevent the Crown forfeiting the lease for a breach of covenant by reason of the Crown having received rent after the breach and with knowledge of it. It was held that election

155 ibid, 227. Rather than referring to any aspect of estoppel that which a body granting planning permission in the circumstances of this case may wish to achieve could better be achieved by imposing a suitable condition to the effect that the development could not be commenced before the visibility splay had been provided over land owned or controlled by the applicant and that thereafter that area should be kept free of obstructions. 156 eg, local authorities are given a power to acquire land for the purposes of any of their functions by s 123(1)(c) of the Local Government Act 1972. 157 See para 2.74. 158 Davenport v R (1877) 3 App Cas 115.

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2.85  General Questions Relating to Estoppel applied in the ordinary way to the Crown although the issue as there discussed did not relate to the particular status of the Crown.159 Election, or, as it is sometimes termed, waiver, is a doctrine akin to estoppel and there is no reason to think that an estoppel stricto sensu would have been treated any differently. 2.85  Crabb v Arun District Council160 is a decision in which a proprietary estoppel was applied against a local authority so as to create a right of way over a private road which the authority owned.161 In another decision, a local authority was estopped by a statement made to an employee concerning his rights and status as to a pension.162 A further decision involved a supply of ships stores and was made under an oral contract with the Admiralty which was then confirmed by a letter sent to the Admiralty to which it did not reply. When the Admiralty disputed the terms of the contract it was held that by reason of its conduct, a form of representation by silence, it was to be prevented from doing so.163 In Bexley LBC v Maison Maurice Ltd164 an estoppel by representation was applied to prevent a local authority from denying that the representee had a private right of access over land of the authority to a public highway. There was no question of the Claimants being required by the estoppel to act outside their powers since they had statutory power to grant the right of access. In Hampshire County Council v Supportway Community Services Ltd165 the proposition was stated that a private law contractual remedy, that of specific performance, does not become a public law claim because it is being exercised against a public authority. In many cases a private law claim is the only possible remedy against the public body. Nor does it prevent an ordinary private law claim and remedy being asserted that the private law duty is the same or similar to a duty in public law.

159 The issue was whether when rent was received after a breach of covenant and with knowledge of it but only on a without prejudice basis an election arose. See ch 8, para 8.98. 160 Crabb v Arun District Council [1976] Ch 179. 161 See ibid, 193, where Scarman LJ said that he did not think that any distinction between proprietary and promissory estoppel was helpful for courts deciding cases. This authority therefore suggests that an estoppel against a public authority might arise as a form of promissory estoppel. This view of the proper categorisation of estoppels would be unlikely to find favour today when it is generally understood that equitable estoppel contains two distinct forms, promissory estoppel and proprietary estoppel: see Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 67. The decision is nonetheless important since the Court of Appeal found no difficulty in applying an estoppel, in whatever precise form it was, against a public authority. 162 Algar v Middlesex CC [1945] 2 All ER 243. 163 Orient Steam Navigation Co Ltd v The Crown (1952) 21 Lloyd’s Rep 301. 164 Bexley LBC v Maison Maurice Ltd [2007] 1 EGLR 19. 165 Hampshire County Council v Supportway Community Services Ltd [2006] EWCA 1035, paras 36, 38 (Neuberger LJ), citing the statement in De Smith, Woolf & Jowell’s, Principles of Judicial Review, 8th edn (Sweet & Maxwell, 1999) para 3–109: ‘When a public body enters into a contract with a supplier, a dispute about the rights and duties arising out of the contract will often be determined by private law’. There seems no reason why private law should not include principles of estoppel. Although the point is not discussed, other authorities indicate that an estoppel can operate against a public authority where the result is not to prejudice or circumscribe the public powers and duties of that body. An example is an estoppel ordered against the Commonwealth of Australia where there was a promise by the government not to rely on a limitation defence to a claim for damages for negligence as in Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394. Reference can also be made to Salvation Army Trustee Co v West Yorkshire Metropolitan County Council (1980) 41 P & CR 179 in which a proprietary estoppel was ordered against a local authority so as to compel it to acquire land of the Plaintiffs under statutory powers on a particular basis of compensation. This last decision does seem to relate to the exercise of powers for public purposes.

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Public Law  2.88

(iv)  A Possible Reconciliation of the Authorities 2.86  It is apparent from the authorities as explained in the last three paragraphs that estoppel in various forms can be and is operated against public bodies when they carry out ordinary private law functions such as entering into leases or dealing with the pension rights of employees. However, when it comes to the exercise by public bodies of powers and duties conferred by statute which only they can operate, such as dealing with planning matters or operating a statutory scheme of charges for electricity supply, there is a marked tension in the law. It is recognised as a wide and general principle that public bodies cannot be estopped from carrying out their duties or exercising their powers as conferred on them by statute and which must be operated for the purposes of the statute and for the general public good. Yet there are undeniably authorities which do involve the operation of some form of estoppel against public bodies in this last type of case, and in these cases there is no express or detailed analysis of how and to what extent an exception to the general rule is justified.166 2.87  An attempt was made by the Court of Appeal in Western Fish Products Ltd v Penwith District Council167 to state the law on a more careful basis. This decision also involved the application of the planning system and concerned an attempt by a landowner to establish that a use of land as proposed by it did not require planning permission in order for it to be lawful because of a previous similar use which had been carried out on the land, and involved discussions between a planning officer and a representative of the owner. The Court, having examined the previous authorities, held that there were two exceptions to the general rule that a public body cannot be estopped as regards the performance of its statutory duties and functions. The first exception was that of a planning authority, acting as such, delegating to an officer power to decide certain matters, such as certain applications under the town and country planning legislation, where the decision of that person cannot be revoked. It was said that this type of estoppel, if it was properly to be regarded as an estoppel, was akin to res iudicata.168 The second exception was said to be where a planning authority waived a procedural requirement relating to an application made to it for the exercise of its statutory powers when the authority might be estopped from relying on a lack of formality.169 2.88  In the Western Fish case the Court of Appeal was faced with the tension between principle and authority just described and did what it could in the light of decided cases to

166 The two main decisions are Wells v Minister of Housing and Local Government [1967] 1 WLR 1000; and Lever Finance Ltd v Westminster City Council [1971] 1 QB 222. See para 2.81. In the Wells decision Lord Denning MR recognised the general rule but said that it did not apply to ‘technicalities’. 167 Western Fish Products Ltd v Penwith District Council [1981] 2 All ER 204, (1979) 38 P & CR 7. 168 (1979) 38 P & CR 7, 29. As mentioned in para 2.65 there are wide provisions under which local authorities can validly delegate functions so as to be carried out on their behalf by officers. If there has been a valid delegation then no question of estoppel is involved since the acts of the delegatee are those of the authority. The only way in which estoppel can operate in this type of situation would be where an officer acted without properly delegated actual authority but had been so held out that he had ostensible authority to act. The doctrine of ostensible authority within the law of agency is one which is reliant on principles of estoppel: see ch 3, para 3.46. The two species of res iudicata, cause of action estoppel and issue estoppel, depend upon a final judgment of a court or tribunal and it is not apparent what these principles have to do with what was in question before the court in the Western Fish case. Res iudicata, or estoppel per rem iudicatam, is explained in ch 9. 169 ibid, 31. This exception was based on the Wells decision, which is summarised in para 2.81.

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2.89  General Questions Relating to Estoppel state a general principle subject to limited exceptions. What could not be explained was any reasoned basis for the two identified exceptions. The decided cases were concerned mainly with the law of town and country planning, as was the Western Fish decision, and the exceptions are stated by reference to that area of law. In truth if there are to be exceptions to the general principle against the application of estoppel to public authorities performing public statutory duties or exercising public statutory powers, then there is no reason for confining those exceptions to some particular area of public law such as town and country planning. It was commented in the House of Lords in the decision in R (Reprotech (Pebsham) Ltd) v East Sussex County Council,170 which is discussed next, that the Court of Appeal in the Western Fish case tried its best to reconcile the invocations of estoppel in the exceptional cases with the general principle that a public authority cannot be estopped from exercising a statutory discretion or performing a public duty.171

(v) The Reprotech Decision 2.89  Although the general principle that a public authority cannot be estopped from exercising a statutory discretion or performing a statutorily imposed duty had been applied by decisions of the highest authority172 the existence or the extent of any exceptions to this general principle had not come before the House of Lords until the decision in R (Reprotech (Pebsham) Ltd) v East Sussex County Council.173 This decision again concerned the law of town planning and again related at any rate in part to the question of whether a previous use of land was so similar to a new proposed use that no planning permission was required for the inception of the proposed use. Land had been used as a waste treatment plant and a purchaser of the land wished to use it to generate electricity. The prospective purchaser approached the local planning authority and was told by a planning officer that there would be no material change of use between the former use and the proposed new use such that under planning law no development would be involved and therefore no planning permission was required for the carrying out of the electricity generating use. An existing planning permission for the use of the land contained a condition that no power-driven machinery should be operated at night. A sub-committee of the Council resolved to grant planning permission to vary the condition since otherwise the new generating use could not be lawfully carried out as it depended on the 24-hour generation of electricity. No planning permission was issued pursuant to this resolution. It was held in the House of Lords that the informal advice of the planning officer that the change of use would not require planning permission was not binding on the Council since there was a statutory procedure for making determinations of this nature and the requirements for the operation of that procedure had not been complied with. Equally, the resolution to grant planning permission for a variation of the working hours condition did not create an estoppel since no actual planning permission had been granted. Lord Hoffmann, delivering the main judgment of the Court,

170 [2002] UKHL 8, [2003] 1 WLR 348. See also R v Leicester City Council, ex parte Powergen UK Ltd [2000] JPL 629. 171 Reprotech, ibid, para 35 (Lord Hoffmann). 172 See Maritime Electric Co Ltd v General Utilities Ltd [1937] AC 610; and Howell v Falmouth Boat Construction Co Ltd [1951] AC 837. 173 [2002] UKHL 8, [2003] 1 WLR 348.

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Public Law  2.91 referred to the previous decisions in the Wells case and the Lever Finance case, both decisions of Lord Denning MR, and the efforts of the Court of Appeal in the Western Fish case to reconcile these invocations of estoppel with the general principle that a public authority cannot be estopped from exercising a statutory discretion or performing a public duty. Lord Hoffmann then added: It seems to me that in this area, public law has already absorbed whatever is useful from the moral values which underlie the private law concept of estoppel and the time has come for it to stand upon its own two feet.174

Lord Mackay of Clashfern put the matter equally succinctly saying: I would also wish expressly to agree that where public authorities are fulfilling statutory duties or exercising statutory discretions, the public interest in their activities and the effect on members of the public who are not parties to the particular process which the authority is conducting requires the law to differentiate clearly between such activities and those in which interests only of those directly involved must be considered. I therefore respectfully agree with Lord Hoffmann that the time has come for public law in this area to stand upon its own two feet. If it does so, I believe greater clarity will result than if it is treated as standing upon some less discrete basis.175

2.90  The reasoning on the matter here under consideration in Reprotech was not a part of the ratio decidendi of the decision and is therefore technically not binding on lower courts.176 Even so, the inappropriateness of introducing private law concepts of estoppel into the area of town and country planning and other areas of public law has been recognised in a number of decisions following Reprotech.177 2.91  The reason that the moral basis of estoppel as applied in private law cannot be imported so as to operate in a satisfactory way to govern the functions of public bodies has already been mentioned.178 It is that when a body is exercising public law functions that body is constrained not by its own interests, as is the case in private law, but must have regard to the interests of the public generally and the rights of the public such as to participate in parts of the planning process by being consulted and given the opportunity to make representations. None of this applies in private law situations. It is said in the same general context that within public law some situations such as a right to a home are worthy of greater protection than commercial rights.179 Nonetheless, even as regards the activities of public authorities persons who are affected by statements which in private law might be the foundation of a claim in estoppel may assert against a public authority a claim to a degree of protection, also to a degree dependent on moral values, under the now established but developing public and administrative law doctrine of legitimate expectation. This last doctrine is

174 ibid, para 35. 175 ibid, para 6. 176 Stancliffe Stone Co Ltd v Peak District National Park Authority [2015] Env LR 4. 177 See, eg, R (on the application of Bloggs 61) v Secretary of State for the Home Department [2003] 1 WLR 2724, paras 41–42 (Auld LJ); Flattery v Secretary of State for Communities and Local Government [2010] EWHC 2868 (Admin), [2010] All ER (D) 01 (Dec). 178 See para 2.63. 179 R v North and East Devon Health Authority, ex parte Coughlan [2001] QB 213, 254–55; R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions [2003] 2 AC 295.

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2.92  General Questions Relating to Estoppel considered briefly in this chapter since, as was pointed out in the Reprotech case,180 there is an analogy between it and the doctrine of estoppel. In New Zealand the rejection of estoppel as having any part to play in public law has been put even more decisively.181

3.  Legitimate Expectation 2.92  The doctrine of legitimate expectation is an important and burgeoning aspect of administrative law. A full explanation of the subject is outside the scope of this book, and reference should be made to specialist works on administrative law,182 but because legitimate expectation can be regarded as an absorption into public law of parts of the moral basis of estoppel and because the existence of legitimate expectation as a doctrine is a justification for limiting the application of estoppel within public law, it is appropriate to give a very brief outline of the nature of, and justification for, the doctrine. The primary means of challenging an action or decision of a public authority is an application for judicial review and legitimate expectation may be regarded as one of the grounds of judicial review.183 2.93  Legitimate expectation in its origins was a duty of consultation by a public authority before that authority exercised its powers or made a decision in a way which affected certain people. It is said to have been aroused by either a promise made of consultation or an established practice of consultation.184 A decision made without such consultation when required could be quashed by process of judicial review as an unlawful exercise of power by a public authority. An example of the operation of the doctrine is that the action of a local education authority was held to be unlawful when it carried out a schools reorganisation without consulting parents.185 2.94  The doctrine is in some ways similar to the much older established rule of natural justice, the audi alteram partem rule, which is the principle that a body with power to act so as adversely to affect a person is bound to give to that person a hearing before making that decision.186 A recent example is that the Privy Council affirmed the decision of the Court of Appeal of New Zealand to set aside a costs order made by Mahon J in his investigation as a

180 See the Reprotech decision: R (Reprotech (Pebsham) Ltd) v East Sussex County Council [2002] UKHL 8, [2003] 1 WLR 348, para 34 (Lord Hoffmann). 181 Challis v Destination Marlborough Trust Board Inc [2003] 2 NZLR 107 where Wild J said that estoppel had no part to play in New Zealand public law because it ‘is analogous to legitimate expectation, overlapping and essentially duplicating it, and adding nothing but confusion’. 182 See HWR Wade and CF Forsyth, Administrative Law, 11th edn (Oxford University Press, 2014) 451 et seq; De Smith’s Judicial Review, 7th edn (Sweet & Maxwell, 2013) ch 12. 183 Judicial review is sought in the High Court under Part 54 of the Civil Procedure Rules. There is old authority for saying that a right to a remedy by way of judicial review may itself be lost by an estoppel: Lucking v Denning [1701] 1 Salk 201, 302 (Holt CJ). There is some doubt on the application of estoppel per rem iudicatam to judicial review decisions and this subject is examined in ch 9, part (F). 184 R v Westminster City Council [1986] AC 668, 692 (Lord Bridge). 185 London Borough of Brent, ex parte Gunning (1985) 84 LGR 168. A further instance of the application of the doctrine was the decision of the British Coal Corporation to close collieries without going through the proper review procedure which was quashed as unlawful: R v British Coal Corporation, ex parte Vardy [1993] ICR 720. 186 For instance, in the early 18th century the principle was applied in connection with the disputes between Cambridge University and Dr Bentley: see R v University of Cambridge (1723) 1 Str 557 where Fortescue J found an even earlier origin of the principle in the dealings between God and Adam in the Garden of Eden.

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Public Law  2.97 Royal Commissioner into the causes of the air crash of an Air New Zealand plane into the lower slopes of Mount Erebus in Antarctica since no sufficient opportunity had been given to the airline to make representations and answer charges.187 2.95  A possible analogy between legitimate expectation and estoppel is that a person would be unable to rely on legitimate expectation, when it was founded on a promise by a public authority, unless that promise was made to him or that at least he was aware of the promise, this also being a requirement of forms of estoppel. However, the public law aspect of the doctrine can be seen in a well-known authority in which the decision of the government to bar membership of a trade union to employees at the intelligence gathering GCHQ at Cheltenham could have been in breach of the doctrine due to an absence of consultation had the decision not been justified on the grounds of national security.188 2.96  A major limiting factor in the utility of legitimate expectation as a remedy is its focus on procedure. What is relied on as a breach of a legitimate expectation is not the exercise of powers otherwise than in accordance with a promise made but an absence of consultation before the giving of a decision, whether that decision is in the end in accordance with a promise or not. However, there are signs that the doctrine may in some cases be used to protect not only procedural rights but also substantive rights which are the subject of a promise. In one case an authority had promised residents of a home for injured long-term patients that they had a home for life; the authority was prevented in these circumstances from then closing the home for financial and other reasons.189 There is perhaps some analogy between such a decision and the operation of proprietary estoppel where a person who has been assured that property will be his home for his life and has acted to his detriment on that assurance has been awarded as a result of a proprietary estoppel a licence to occupy the property free of charge for as long as he wished.190 It has recently been suggested that in an appropriate case legitimate expectation against a public authority might be used as a defence to a contractual claim by the authority.191 In New Zealand it has been suggested that legitimate expectation cannot bring about a substantive outcome or effect.192 Similar doubts as to the doctrine generally have been expressed in Australia.193 2.97  Although the doctrine of legitimate expectation may be the primary replacement in administrative law for the non-availability of estoppel in the case of the performance of statutory functions by public bodies, it is not necessarily the only principle of administrative law which may be prayed in aid when a public body has made a representation or promise or commitment which might found an estoppel if made in other circumstances.

187 Mahon v Air New Zealand [1984] AC 808. The Judge had stated that he had listened ‘to an orchestrated litany of lies’ from officers of the airline which justified his costs order. 188 Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374. 189 R v North and East Devon Hospital Authority, ex parte Coughlan [2000] 2 WLR 622. 190 See Inwards v Baker [1965] 2 QB 29 and see generally ch 7 for proprietary estoppel. 191 Dudley Muslim Association v Dudley MBC [2016] 1 P & CR 10. The reliance on legitimate expectation failed on the facts. 192 Challis v Destination Marlborough Trust Board Inc [2003] 2 NZLR 107; GXL Royalties Ltd v Minister of Energy [2009] NZAR 478. 193 R v Minister of Immigration and Multicultural Affairs (2013) 214 CLR 1. As against this the High Court of Australia has held that a legitimate expectation against the government could arise from the ratification of an international convention on the rights of the child: Minister for Immigration and Ethnic Affairs v Ah Teoh (1995) 183 CLR 273.

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2.98  General Questions Relating to Estoppel Legitimate expectation is a comparatively new doctrine of public law and a rather older means of controlling the actions of public bodies is the principle of Wednesbury unreasonableness. This principle, although it may have older origins, takes its name from the decision of the Court of Appeal in Associated Provincial Picture Houses Limited v Wednesbury Corporation in which Lord Greene MR said that the decision of a local authority was unlawful if ‘they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it’.194 It might in some circumstances be arguable that a public authority which had acted in disregard of its previous assurances was acting in a way which was for that reason so unreasonable that no authority could so act. Yet a further ground of challenge under administrative law principles on an authority which had acted in contravention of a previous assurance might be that the authority had failed to give consideration to that assurance in reaching its decision.195

4. Conclusion 2.98  It has been suggested earlier in this part of the chapter that the law on the application of the doctrine of estoppel to public bodies should be encapsulated in three propositions.196 When the authorities are examined it is apparent that as regards the second and third propositions they are largely if not wholly consistent with the authorities. As to the second proposition, namely that estoppel should apply to public authorities in the same way as to private persons when public authorities are carrying out ordinary activities such as taking a lease, which can be carried out by any other person without statutory powers or reference to a public interest, there is strong authority for the application of estoppel in the ordinary way. Equally the third proposition, the principle of legitimate expectation as a means of control by the courts of the exercise by public bodies of their statutory functions in the public interest, is a developing area of law and may have in some of its aspects an analogy with estoppel but is certainly not constrained by the exact rules of estoppel. 2.99  It is as regards the first proposition, that estoppel cannot operate to prevent or constrain the exercise of statutory powers by public authorities for the purposes of the statute and in the public interest, that the authorities, at any rate until very recently, do not support a consistent and satisfactory overall state of the law. The general rule as just stated is beyond doubt. What is in doubt is any possible exceptions to the rule, the doubt extending both to the types of cases which may constitute an exception and to the extent of any exception. It is unfortunate that the law should lack clarity on this subject. The way forward is obviously that presaged in the Reprotech decision197 which is that the concept of private law estoppel has no function to perform in respect of the carrying out of public functions by public authorities where that function is to some extent replaced by a more modern, well established, and still developing and extending principle of legitimate expectation.

194 Associated Provincial Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223, 234. This ‘irrationality’ ground of impugning the decisions of public bodies has been much developed by later authorities. 195 ibid. 196 See paras 2.73–2.75. 197 R (Reprotech (Pebsham) Ltd) v East Sussex County Council [2002] UKHL 8, [2003] 1 WLR 348.

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Estoppel and Jurisdiction  2.102 If this should become the established state of the modern law on that subject then, although not directly within the scope of this book, it does seem reasonable to hope that legitimate expectation as a doctrine of administrative law should be able to operate where appropriate in a substantive as well as in a procedural way.198 2.100  This part of this chapter examines the general question of the application of the doctrine of estoppel and its various forms to the carrying out by public bodies of their statutory functions. In brief summary it is submitted that the law on this subject is, or should now be, (a) that estoppel does not apply to the carrying out of public functions by public bodies, (b) that estoppel does apply in the normal way to the carrying out by public authorities of those ordinary activities ancillary to their core public functions which any person can carry out such as taking leases or ordering supplies, and (c) that the administrative law doctrine of legitimate expectation should at least to some extent fill the gap in the control of the carrying out of public law functions by public authorities left by the non-availability of estoppel without the inconsistency of sometimes applying, and sometimes not applying, principles of estoppel to those functions.199 2.101  There is no reason to think that the principles of law suggested as those which govern the relationship between estoppel and the functions of public bodies differ materially between the forms of estoppel. There has been no direct discussion of the doctrine of election on the present subject although one decision on election, an election as to the exercise of a right of forfeiture under a lease, has been explained in support of a general principle that estoppel should operate in the same way to public bodies as it does to private bodies where the activities of the public body involve only those activities carried out by private persons such as granting or taking leases.200 Estoppel, particularly promissory estoppel, and common law election have a number of aspects and rules in common as well as significant differences,201 and it is suggested that the same principles as those applicable to estoppel and its effect on public bodies as just explained should apply to common law election and its effect on public bodies.

(E)  Estoppel and Jurisdiction 1. Introduction 2.102  The administration of law in the United Kingdom is operated by the state through a system of courts and tribunals such that in each case it may be necessary to determine whether a particular court or tribunal has jurisdiction to hear and determine a matter which a party brings before it.202 Some courts, including the Court of Appeal and the county

198 See para 2.96. 199 The principles are attempted to be stated concisely in paras 2.73–2.75. 200 Davenport v R (1877) 3 App Cas 115. 201 See ch 8, para 8.121 et seq, for a consideration of the relationship and differences between promissory estoppel and common law election. 202 Parties may of course by contract agree that an agreed person, an arbitrator, may be appointed to settle a dispute between them and the process of arbitration is regulated by the Arbitration Act 1989.

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2.103  General Questions Relating to Estoppel courts, have an entirely statutory origin and thus a wholly statutorily defined jurisdiction. The jurisdiction of the High Court originated from a number of former courts such as the High Court of Chancery and the Court of Common Pleas going back to medieval times203 but its jurisdiction is now derived from the Senior Courts Act 1981. There is today a series of tribunals and statutory bodies having specific areas of statutory jurisdiction.204 2.103  The jurisdiction of a judicial body is the area or the circumstances within which that body may make decisions and may issue orders. The ambit of the jurisdiction of a judicial body is normally prescribed by statute and the body has no power to act outside the confines of the jurisdiction as specified in the enabling statute. It would, for example, be absurd for the Lands Chamber of the Upper Tribunal, with a statutory jurisdiction to determine matters such as the sum payable as compensation for the compulsory acquisition of land, to purport to issue a decree of divorce or to imprison a person for a criminal offence. The relationship of jurisdiction and the law of estoppel is in basic principle a simple one. It is a basic tenet of the system of administrative justice that the limits of the jurisdiction of a court or tribunal are fixed by statute and the parties cannot by consent extend the limits of that jurisdiction.205 To take the extreme example just given, two married persons could not by their mutual consent confer on the Lands Chamber the power to issue a divorce decree. Just as jurisdiction cannot be extended by consent so it cannot be extended by the operation of a form of the doctrine of estoppel. The question of the relationship between the doctrine of estoppel and the statutory limits of the jurisdiction of a court or tribunal or other body may be regarded as an aspect of the wider question of the general relationship between estoppel and statutory provisions. It is convenient to consider the first and specific question separately in this part of this chapter. The second and wider question is discussed in the next part of the chapter. 2.104  On the other hand, once a judicial body has entered upon the determination of a question which is within its jurisdiction it may have to decide matters of fact and law which are relevant to its determination. As explained earlier in this chapter,206 a role of estoppel can be to assist a party in establishing some matter of fact or law which he would not otherwise be able to establish or in resisting the establishment of some matters of fact or law which he would not otherwise be able to resist. There is no reason why estoppel with its various facets and purposes should not apply to the determination of such matters within the jurisdiction of any judicial body where the determination is necessary for that body to arrive at its ultimate decision. For instance, the Lands Chamber of the Upper Tribunal may need to decide the meaning of a previous agreement made between an acquiring authority and the landowner relevant to the land acquired in order to ascertain the open market value 203 For a brief account see Halsbury’s Laws, vol 24, 5th edn (LexisNexis, 2010) para 699. 204 Tribunals are today organised into upper tier tribunals and lower tier tribunals under the Tribunals, Courts and Enforcement Act 2007. A further method of reaching decisions is by the holding of inquiries before an appointed person such as inspectors appointed by the Secretary of State to determine planning appeals following a refusal of a planning permission under the Town and Country Planning Act 1990. An estoppel per rem iudicatam can arise from the decisions of inspectors and of others operating in a similar capacity: Thrasyvoulou v Secretary of State for the Environment [1990] 2 AC 273. See ch 9, para 9.142. 205 In some cases a statute may itself provide that the jurisdiction of a judicial body may be extended by the consent of the parties. In such a case the extended limit of the jurisdiction is dependent on a statutory provision which itself requires or depends on the agreement of the parties. 206 See part (B) of this chapter.

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Estoppel and Jurisdiction  2.107 of the land and thus the amount of the compensation for the acquisition. A particular meaning may have to be attributed to such an agreement by reason of an estoppel by convention between the parties and if that meaning is not the correct meaning as a matter of contractual interpretation there is nothing to prevent this facet of the law of estoppel, the application of the conventional meaning, being applied by the Chamber in reaching its conclusion on the value of the land.207 2.105  What has just been described may seem a series of fairly basic and obvious propositions of law and suggests that the matter of the relationship between jurisdiction and estoppel can therefore be set out in simple terms. The basic propositions are (a) that the jurisdiction of any court or tribunal is specified and conferred, normally at least, by statute, (b) that an estoppel cannot operate, any more than a contract can operate, so as to extend the jurisdiction of the court or tribunal in circumstances in which apart from the estoppel, the court or tribunal would not have jurisdiction, and (c) that when the court or tribunal proceeds to determine a matter within its jurisdiction, estoppel can operate as regards matters relevant to that determination in the ordinary way. There can be no reasonable doubt over the first and third of these propositions and they do not require further discussion here. The second proposition remains the fundamental rule regarding jurisdiction and estoppel but it is the subject of some doubts and qualifications which may rob it of some of its clarity. It is therefore necessary before attempting a conclusion on estoppel and jurisdiction to examine more closely the fundamental rule, then a possible doubt on the application of the fundamental rule concerning the supervision of solicitors by the High Court, and then the matter of procedural requirements including the matter of the ‘waiver’ of a requirement by a party when that requirement exists wholly for the benefit of that party. 2.106  Since the jurisdiction of courts and tribunals is nearly always statutory, the second of the above propositions can be analysed as a particular application of the wider principle, examined in the next part of this chapter, that an estoppel cannot operate so as to contradict a statutory provision.208

2.  The Fundamental Rule (i)  The Rule of Law 2.107  The fundamental rule that the parties cannot by their agreement or consent, and thus cannot by an estoppel, confer upon a person or a body of persons a jurisdiction which that person or body does not possess is too obvious and well established to require much elaboration. In an early case, Green v Rutherford,209 the decision involved a dispute between two persons who each desired to be presented by St John’s College, Cambridge, to a Rectory and Parish Church in Suffolk. A presentation of the Defendant was made by the Bishop of Ely

207 See ch 5 for estoppel by convention and for the application of the estoppel in a way as described by the Court of Appeal in Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, discussed in ch 5, para 5.9. 208 An exception may be the inherent jurisdiction of the High Court over solicitors and officers of the Court, as explained in para 2.113. 209 Green v Rutherford (1750) 1 Ves Sen 462.

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2.108  General Questions Relating to Estoppel as Visitor of the College and the Plaintiff asserted that the Visitor had no jurisdiction so to act. One question which arose was whether the College had agreed or submitted to the jurisdiction of the Visitor but this assertion was roundly rejected by the Lord Chancellor, Lord Hardwicke, who said that there was ‘no colour’ to this point when in the case of a private, particular, and limited, jurisdiction no assurance, answering, or pleading of a party will give jurisdiction to the court.210 2.108  Over two centuries later the same principle was reiterated and applied in the House of Lords. In Essex County Council v Essex Incorporated Congregational Church Union211 the circumstances were that landowners, the saleability of whose land was adversely affected by public proposals such as road widening proposals, could serve a statutory notice on the relevant public authority requiring the purchase by that authority of their land. The authority could serve a counter-notice objecting to the notice on certain specified grounds. In the event of dispute, the validity of those grounds was to be determined by the Lands Tribunal. The owners of a church and church hall served a notice and there was a counter-notice served by the highway authority on certain grounds which did not include the ground that since the property was exempt from rates it did not fall within the statutory provisions. The matter was referred to the Lands Tribunal and the parties appear to have agreed in asking the Tribunal to determine as a preliminary issue whether the property was within those for which under the statute a notice could be given, and the Tribunal, and subsequently the Court of Appeal, held that the property did not fall within the statutory provisions. The House of Lords held that the only statutory jurisdiction of the Tribunal was to determine an objection properly made and that, as the issue as actually decided was not the subject of such an objection within a counter-notice, the Tribunal had no jurisdiction to determine it. In particular, the powers of the Tribunal could not be extended by agreement or estoppel. In a well-known passage, Lord Reid stated the law as follows: I need not consider whether this amounted to a consent to widening the reference to the tribunal, because, in my judgment, it is a fundamental principle that no consent can confer on a court or tribunal with limited statutory jurisdiction any power to act beyond that jurisdiction, or can estop the consenting party from subsequently maintaining that such court or tribunal has acted without jurisdiction.212

210 ibid, 471. 211 Essex County Council v Essex Incorporated Congregational Church Union [1963] AC 808. 212 ibid, 820–21. The fundamental rule is supported by other older precedent. In Farquharson v Morgan [1894] 1 QB 552 Davey LJ pointed out that ‘The parties cannot by agreement confer upon any Court or Judge a coercive jurisdiction which the Court or Judge does not by law possess’. See also NRAM v McAdam [2016] 3 All ER 665 in which it was held that the parties could not by an estoppel confer on a court powers under the Consumer Credit Act 1974 when the loan exceeded the £25,000 ceiling which at that time was specified in the legislation. See, however, Hiscox v Outhwaite [1992] 1 AC 562 in which it was held that an interim arbitration award should by reason of an estoppel be taken to have been made in London when it had in truth been made in Paris, so allowing the High Court to exercise a jurisdiction which it would not have had apart from the estoppel. It should be noted that the Court of Appeal put their conclusion on the ground of an estoppel but the House of Lords, having held that the High Court was capable of exercising a ‘curial’ jurisdiction over the arbitration, found it unnecessary to hear argument on the estoppel issue. See ch 5, para 5.89. In Secretary of State for Employment v Globe Elastic Thread Co Ltd [1980] AC 506, 519, Lord Wilberforce left open the question of whether, if an estoppel arose, it could confer on a tribunal a jurisdiction in excess of that given by the legislation which set up the tribunal. On general principles the answer must be that an estoppel could not have such an effect. The Globe Elastic decision is discussed in ch 6, para 6.70.

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Estoppel and Jurisdiction  2.110 2.109  Sometimes the rather different rule that a party cannot, by agreement or by the operation of an estoppel, lose a statutory protection given in the public interest has been stated in terms of jurisdiction. Under the Rent Acts courts were given only a limited jurisdiction to make orders for possession against tenants whose tenancy was such that they could claim the protection of the statutes. It was held that a tenant could not be estopped from claiming the protection of the statutes because he had, deliberately or inadvertently, represented that his tenancy was one to which the statutes did not apply (a furnished tenancy) when it was in truth an unfurnished tenancy to which the statutes did apply. The reason which justified the refusal of an estoppel was said to be that to permit an estoppel would be to allow the parties to confer on the court a jurisdiction, an untrammelled power to make orders for possession in respect of an unfurnished tenancy, which the statutes had said the courts should not have.213 2.110  There is a further and important conceptual point to mention. What parties cannot do by contract or by estoppel is to extend the jurisdiction of a court or tribunal. This jurisdiction is usually defined by a statutory provision. In relation to any statutory provision of this character, it is necessary to determine whether the provision is one which limits or confines the jurisdiction of the judicial body or is merely one which provides a party to the proceedings within the jurisdiction with a particular defence. In the first case the fundamental rule, as further explained in the following paragraphs, operates so that no contract or estoppel can override the jurisdictional limitation. In the latter case no jurisdictional limitation is involved, and the various forms and principles of estoppel apply to the assertions which a party may make concerning the operation of the provision. The distinction between the two types of provision is illustrated by Republic of India v India Steamship Co Ltd214 in which the House of Lords considered section 34 of the Civil Jurisdiction and Judgments Act 1982 which provides that no proceedings may be brought by a person in England and Wales or Northern Ireland on a cause of action in respect of which a judgment has been given in his favour in proceedings between the same parties or their privies in a court in another part of the United Kingdom or in a court of an overseas country. The crucial question was whether this statutory provision was a mandatory provision limiting the jurisdiction of English courts or was a provision which simply made available a defence to a party in proceedings before English courts. The House of Lords held that the provision fell within the latter category with the result that in principle the right to rely on the defence could be removed by the operation of an estoppel.215 213 Welch v Nagy [1950] 1 KB 455, 464 (Asquith LJ), applying a similar analysis by Lord Thankerton in JF Stone Lighting and Radio Ltd v Levitt [1947] AC 209, 216. The relationship between the doctrine of estoppel and statutory provisions is discussed more fully in part (F) of this chapter. 214 Republic of India v India Steamship Co Ltd [1993] AC 410. 215 ibid, 421–24 (Lord Goff). Although an estoppel to override the effect of s 34 was held to be available in principle due to the categorisation of this provision the question of whether there was an estoppel was further litigated between the parties and again reached the House of Lords where it was held that there was an insufficient factual or evidential basis to support either an estoppel by convention or an estoppel by acquiescence: see Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878. The second decision is also important for the statement by Lord Steyn of the essential elements of an estoppel by convention which are described in ch 5, para 5.4. The possibility of the defence of a cause of action estoppel or an issue estoppel (principles of estoppel by record) being defeated by some other form of estoppel such as an estoppel by convention is what has been called ‘cross-estoppel’ and is examined in ch 9, para 9.84 et seq. In this case the statutory provision was not jurisdictional in its nature because its purpose was to provide a possible defence which could be deployed before a court which was considering a matter

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2.111  General Questions Relating to Estoppel 2.111  Before leaving the fundamental rule it is necessary to mention two further principles of law which may be indirectly relevant to the present subject but which do not impinge upon the general rule. The first principle is that it is open to the parties to a contract to agree as a term of the contract that some specified matter of fact, and possibly of law, is to be taken for the purposes of the operation of their contract to be correct whether or not in truth it is correct. A court will normally give effect to such a term on the principle of freedom of contract, namely the principle that subject to certain limitations the parties to a contract may agree whatever they wish.216 This area of the law has given rise to the description of estoppel by contract on the suggestion that the enforcement of a contractual term of the present nature can be regarded as a form of estoppel. This subject is examined in chapter three on estoppel by representation and the view there expressed is that the enforcement of a term of the type mentioned is simply the application of the ordinary law of contract and that estoppel in the ordinarily understood sense of that doctrine is not involved.217 In any event this aspect of the law has nothing directly to do with jurisdiction. It is merely the way in which a court or tribunal deals with a matter of fact or law relevant to a question which is within the jurisdiction of that court or tribunal.218 2.112  The second principle is that, subject to a contractual term as just discussed, a court will not normally allow the parties to legal proceedings to manufacture a factual situation which does not represent the true facts in order to arrive at a decision on hypothetical rather than actual facts. A leading decision on this point is the judgment of Cumming-Bruce LJ in Avon County Council v Howlett.219 Again this principle does not impinge directly upon the boundaries of the jurisdiction of a court or tribunal, but rather concerns the way in which factual matters may be ascertained when an issue within those boundaries is before the court.

within its jurisdiction. A further example of a provision which is not jurisdictional in its nature is a procedural requirement which has to be observed before a court can enter into an adjudication of a matter within its jurisdiction, for instance a time limit on the making of an application to a court. Procedural provisions are examined in para 2.115 et seq. 216 An example of such a term would be a provision in a contract that in entering into the contract neither party was induced to do so by a representation made by the other party. The operation of that term would provide an answer to any proceedings based on an alleged misrepresentation. It appears that the parties may agree that some fact is to be taken as correct even though they both know that it is incorrect: Prime Sight Ltd v Lavarello [2014] AC 436, a decision on estoppel by deed. 217 See ch 3, part (G). 218 It is assumed in this paragraph that the matter of fact on which there is a stated agreement does not itself go to the jurisdiction of a court or tribunal. What the parties cannot do is to agree that some fact essential to the jurisdiction of a body is present or satisfied when it is in truth not present or satisfied in order to alter the jurisdiction of the body. Thus if a tenancy was in fact unfurnished the parties could not reach an agreement which would be binding that the tenancy was to be taken to be a furnished tenancy in order to deprive the court of jurisdiction under the Rent Acts (or, put another way, so as to confer on the court jurisdiction to make an order for possession of the premises when the court would not have had that power on the true facts). An estoppel by representation (which under recent authority can probably be founded on a representation of law as well as on a representation of fact) may arise from a representation. If the effect of the representation would otherwise require a court to accept as correct some matter which is not in truth correct and the result would be to convert or extend a jurisdiction beyond that stated by statute, it seems that for that reason the operation of the estoppel would have to be rejected. 219 [1983] 1 WLR 605, 622. See ch 3, para 3.147 et seq; and see also Adams v Naylor [1946] AC 543, 555 (Lord Uthwatt).

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Estoppel and Jurisdiction  2.114

(ii)  Supervision of Solicitors by the High Court 2.113  A possible query as to the universal application of the general rule as just described arises from a series of decisions concerning the jurisdiction of the High Court to control the actions of solicitors and to make summary orders against solicitors who are regarded as officers of the Court. In one case at first instance a person had obtained possession of money and documents by falsely claiming that he was a solicitor. It was held that the supervisory jurisdiction of the Court exercisable against solicitors could be exercised against that person since he was estopped by his representation from denying that he was a solicitor.220 In a subsequent case, the Court of Appeal declined to review the correctness of this decision.221 The most recent authority suggests that in such circumstances the Court can exercise its supervisory and summary jurisdiction against a person who is not a solicitor but who has represented that he is a solicitor. The principle was stated by Christopher Clarke LJ as being that the Court is entitled to proceed on the basis that someone who has falsely claimed to be an officer of the Court cannot claim not to be subject to the Court’s jurisdiction over its officers because, contrary to his representation, he is not one.222

2.114  The first and third of the decisions mentioned in the last paragraph do appear to contradict the general rule that the jurisdiction of a court or tribunal which would not otherwise exist because of the facts cannot be conferred by reason of an estoppel. The High Court has a disciplinary or supervisory jurisdiction over officers of the court. If a person is not a solicitor then he is not an officer of the court, yet the jurisdiction has been held to exist as regards that person because he is estopped from denying that he is a solicitor. It may be that this particular area of jurisdiction is in this regard an exception to the fundamental rule that jurisdiction cannot be conferred by estoppel, although it is not clear what it is about this particular area of jurisdiction which justifies the exception. The Solicitors Regulation Authority has the power to take certain action against a solicitor under the Solicitors Act 1974 but it is doubtful whether that jurisdiction could be exercised by reason of an estoppel against a person who purports to be or represents that he is a solicitor when he is not a solicitor.223 It may be that because the disciplinary and supervisory jurisdiction of the High Court over solicitors is an inherent jurisdiction and not a statutorily defined jurisdiction, it can be regarded as applicable against a person who is an officer of the court or who purports to be an officer of the court so that the exercise of the jurisdiction against a person who has represented himself as a solicitor can be regarded as an exercise of powers within the jurisdiction rather than as being an exercise of powers not within a statutory jurisdiction brought within it by an estoppel.224 In any event this exception to the general rule, if it exists, is of very narrow ambit.

220 In Re Hulm & Lewis [1892] 2 QB 261 (Mathew, Collins JJ). 221 Re Hurst & Middleton Ltd [1912] 2 Ch 520. The Court of Appeal held that the Court had no jurisdiction because the person in question had never represented that he was a solicitor so that there was no question of an estoppel. 222 Assaubayev v Michael Wilson & Partners Ltd [2014] EWCA Civ 1491, para 61. 223 It is a criminal offence for an unqualified person to act as a solicitor: Solicitors Act 1974, s 20. 224 See Brendon v Spiro [1938] 1 KB 176, 185–92, for a discussion of the inherent jurisdiction of the court.

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2.115  General Questions Relating to Estoppel

3.  Procedural Requirements (i)  The Rule: Jurisdictional and Procedural Requirements 2.115  Logic suggests that if Parliament has conferred on a court or tribunal power to determine certain specified matters but subject to compliance by one or both parties with specified procedural requirements then, just as the parties cannot by agreement or as a result of an estoppel alter or extend the ambit of the matters to be determined, so equally they cannot by agreement or as a result of an estoppel dispense with compliance with such a procedural requirement. To dispense with a procedural requirement would mean that the court or tribunal was arrogating to itself a jurisdiction which arose in circumstances in which Parliament had stated that it should not arise. 2.116  The strict logic of this approach, which some might describe as simplistic, has not found favour with the courts. The fundamental rule on the present subject has been stated above by reference to the statement of Lord Reid in Essex County Council v Essex Incorporated Congregational Church Union.225 In the same decision, Lord Hodson expressed the rule in the same way, saying: ‘The consent of the parties cannot confer jurisdiction where none exists, nor can any question of estoppel arise, for estoppel cannot enlarge the jurisdiction of a court of limited jurisdiction’.226 However, Lord Hodson prefaced his statement of principle by saying ‘Had the question been procedural only no difficulty would have arisen, for the parties had consented to the course taken before the Lands Tribunal’.227 Other earlier cases had indicated that requirements which had to be satisfied before a court could reach a decision or make an order could be ignored if the requirement was procedural in nature and the parties had agreed to dispensing with the requirement, or compliance with the requirement had been waived by one party.228 2.117  A leading older authority on the waiver of the benefit of a procedural requirement inserted for the benefit of a party expresses the principle in modern terms. In Graham v Ingleby,229 the statutory provision before the Court was one enacted in the reign of Queen Anne which stated, modernising the language, that no dilatory defence should be raised

225 [1963] AC 808, 820–21. See para 2.108. 226 ibid, 828. 227 ibid. 228 See, eg, Fry v Moore (1889) 23 QBD 395 (failure to obtain leave to serve a writ out of the jurisdiction); Petty v Daniel (1886) 34 Ch D 172 (failure to serve a copy of an affidavit in support of a notice of motion to commit); Moore v Gamgee (1890) 25 QBD 244 (failure to comply with the requirement in certain circumstances to obtain leave to commence an action); Lloyd v Great Western Dairies Co [1907] 2 KB 727 (failure to obtain leave to join another cause of action with an action for the recovery of land). These decisions mainly concern procedural requirements imposed by rules of court which had the force of statute under the Judicature Act 1875. Procedure in the Court of Appeal, the High Court and the county court is now governed by the Civil Procedure Rules which often contain provisions permitting a court to relax procedural requirements. The expression usually used in dispensing with reliance on a procedural requirement, whether by the assent of both parties or by an unilateral act of one party, is that the requirement is ‘waived’. The word and concept of waiver are discussed in part (H) of this chapter and its use is largely avoided in this book because of its imprecision and its numerous meanings. The use of the word in the present context, where it refers to the actions of one party, often means an election by that party not to rely on a particular right with that party held to its decision under the doctrine of election. See also below (n 234). 229 Graham v Ingleby (1848) 1 Exch 651.

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Estoppel and Jurisdiction  2.118 in any court of record unless the Defendant raising the defence proved the truth of it by affidavit.230 The Defendant did provide an affidavit but one which was technically defective. The question which arose before the Court was whether, in the event of a defective affidavit or even of no affidavit at all as required, a plaintiff would be held to have waived the requirement if he went to trial without contending that the Court had no jurisdiction due to non-compliance with the statutory requirement. The decision of the Court was that where there was a defective affidavit or no affidavit a plaintiff could waive the benefit of his right and go to trial with the result that he could not later allege that the Court had no jurisdiction by reason of non-compliance with the requirement of an affidavit.231 2.118  There is high and binding modern authority for the proposition that non-compliance with a procedural requirement which is antecedent to the exercise of a statutory jurisdiction by a court or tribunal may not prevent the exercise of that jurisdiction if compliance with the requirement has been dispensed with by the agreement of the parties or has been waived by one of the parties. The decision of the House of Lords in Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd232 concerned Part II of the Landlord and Tenant Act 1954 under which a tenant of premises let for business purposes could in certain circumstances apply to the county court for an order for the grant of a new tenancy provided that the application was made within a specified time period or slot of two months.233 The tenants made an application before the beginning of the allowed period. The landlords filed an answer in the Court making no objection that the application had been made out of time but later, and after the end of the period so that no new application could be made, contended that the Court had no jurisdiction to determine the application because of non-compliance with the time limit. It was held that the time limit was procedural in its nature and could in principle be waived although there was no waiver on the facts of the case.234 Lord Pearson said that requirements going to the exercise of a power by a court might be jurisdictional, such that non-compliance with the requirement resulted in the court having no jurisdiction to exercise the power irrespective of the action of the parties, or might be procedural, such that the court could exercise the power if the parties had agreed to dispense with compliance with the requirement or one party had waived the need for compliance.235 The reason given by Lord Pearson for his categorisation of the time limit before him as procedural was that the requirement was for the benefit of landlords rather than for the benefit of the Queen’s subjects generally such that there would be no infringement of public policy if compliance with the time limit could be dispensed with by the agreement of the parties or by waiver.236

230 Statute of Anne, 4 Anne, c 16, s 11. 231 (1848) 1 Exch 651, 656 (Parke B). Baron Parke applied the maxim ‘Quilebet potest renunciare iuri pro se introducto’ (a person can renounce (waive reliance on) a right introduced for his own benefit). 232 [1971] AC 850. Note that the penultimate line of paragraph (2) of the headnote in the official Law Reports is erroneous in that it should read ‘could waive that right’ instead of ‘could not waive that right’. 233 See s 29(3) of the Landlord and Tenant Act 1954. 234 The decision of the Court raises the question of what is meant in this and other contexts by the word ‘waiver’. This matter is treated separately in part (H) of this chapter. The Kammins decision contains a valuable analysis of the various meanings of waiver by Lord Diplock at 882–84. For present purposes, it is assumed that references to a waiver mean the operation of the doctrine of election or of some form of estoppel. See also above (n 228). 235 [1971] AC 850, 875. 236 ibid, 877.

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2.119  General Questions Relating to Estoppel 2.119  Lord Diplock analysed the question in rather more general and somewhat different terms by distinguishing between a literal and a purposive approach to statutory interpretation. A literal approach involved applying the statutory words in a strictly literal fashion. The words of the statutory requirement before the House were that no application ‘shall be entertained’ unless made within the specified period. On such an approach to interpretation, the conclusion had to be that an application made outside the allowed period could not confer jurisdiction on the court irrespective of the actions of the parties or any waiver or estoppel. As against this, the purposive approach focused on the intention of the statute in imposing the requirement and on the intention of the Landlord and Tenant Act 1954 that parties should reach agreement between themselves whenever possible with the result that the purposive approach would be served if the parties were able to agree that a particular requirement could be disregarded or if a particular requirement could be waived by the actions of the party for whose benefit it existed. On the latter approach, the possibility of a waiver of the time limit requirement would serve the overall purpose of the statute within which the requirement was contained. Lord Diplock explained his conclusion as follows: Upon the purposive approach to statutory construction this is the reason why in a statute of this character a procedural requirement imposed for the benefit or protection of one party alone is construed as subject to the implied exception that it can be ‘waived’ by the party for whose benefit it is imposed even though the statute states the requirement in unqualified and unequivocal words.237

The purposive approach to statutory interpretation, generally favoured today, therefore justifies and underpins the rule that a procedural requirement relating to the jurisdiction of a court which is for the benefit of one party may be waived by the operation of a form of estoppel.

(ii)  Distinguishing between Jurisdictional and Procedural Requirements 2.120  It is useful to revert to the distinction drawn by Lord Pearson between jurisdictional and procedural requirements which have to be satisfied if a court or tribunal is to have jurisdiction. The obvious question which then arises is how exactly to distinguish between a substantive or jurisdictional requirement, which cannot be the subject of an estoppel, and a procedural requirement, which can be the subject of an estoppel. It seems that restrictions concerning time limits or the format of applications to a court to exercise its powers are likely to be classified as procedural. By contrast, restrictions which concern the essence or the content or the boundaries of what a court is to determine under a statutorily conferred power are likely to be jurisdictional in nature. To refer back to the Kammins case, the jurisdiction of the county court is to determine whether to order the grant of a new tenancy to a tenant of premises used for business purposes. It seems extremely unlikely that where there was a contractual licence as opposed to a tenancy of premises the parties could by the operation of an estoppel confer jurisdiction on the court to order the grant of a new tenancy, since the essence of the jurisdiction depends on the current existence of a tenancy. 237 ibid, 881. Lord Diplock rejected there being any significance in the fact that linguistically the restriction was applied as a prohibition on the court itself rather than on the litigant invoking the permitted process before the court: ibid, 882.

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Estoppel and Jurisdiction  2.122 2.121  A good example of a requirement which falls on the jurisdictional side of the dividing line is Secretary of State for Employment v Globe Elastic Thread Co Ltd.238 An employee made redundant was entitled to a statutory redundancy payment from his employer with the amount of the payment depending on the length of his period of continuous employment. In some cases, employment by a previous employer could under the legislation count towards that period. When the employee had moved from one employer to another he was told that the period of employment by the former employer would count towards the calculation of any future redundancy payment, but when he was made redundant some years later by the new employer that employer refused to honour this statement. A tribunal held that the employer was estopped from denying that the period of employment under the former employer was to be taken into account in the calculation of the redundancy payment even though under the terms of the statute it could not be taken into account. The House of Lords held that this conclusion resting on estoppel was wrong in law. Lord Wilberforce held that no question of an estoppel arose and added: ‘Even if anything in the nature of an estoppel arose, that could not confer upon the tribunal a jurisdiction beyond that given by the Act’.239 2.122 The Kammins decision and the Globe Elastic decision of the House of Lords as here explained can be seen as fairly clear examples of requirements which fall on one or other side of the dividing line between jurisdictional and procedural requirements. Inevitably there are instances of statutory requirements which are less easily classified. An illustration of the difficulty is the decision of the Upper Tribunal and of the Court of Appeal in Newbold v The Coal Authority.240 A person who suffers damage to his land by reason of subsidence caused by coal mining is entitled under the Coal Mining Subsidence Act 1991 that remedial work shall be carried out to the property by the Coal Authority. No claim can be brought unless the Claimant has served on the Authority a damage notice in the prescribed form. A damage notice had been served but it was contended by the Coal Authority that it was not a valid notice since it was not fully in the prescribed form so that no claim could be sustained. Claims for remedial work were to be decided by the Lands Chamber of the Upper Tribunal. The Tribunal held that despite various deficiencies in the notice it was a valid damage notice and this finding was upheld in the Court of Appeal.241 The Claimant contended as an additional ground in support of the notice that by reason of its conduct following the receipt of the notice, attending a series of meetings and preparing reports on the basis that the notice was valid, the Coal Authority was estopped from denying the validity of the notice. The Tribunal rejected this contention on the ground that even if the elements of an

238 [1980] AC 506. 239 ibid, 518–19. The House of Lords overruled a previous decision of the Court of Appeal in Evenden v Guildford City Association Football Club Ltd [1975] QB 917. Lord Wilberforce said that the facts gave rise to a contract between the employer and the employee as to the amount of a payment which might be made between them and that this had nothing to do with estoppel or the effect of estoppel on the statutory redundancy scheme and the jurisdiction of a tribunal to determine questions under that scheme. The actual proceedings before the House of Lords arose out of a claim by the employers to a statutory rebate from the Secretary of State in respect of the additional redundancy payment made by them. It was said that a further reason for there being no relevant estoppel was that the Secretary of State could not be bound by a personal estoppel as between employer and employee even had such an estoppel existed. This decision is relevant to the distinction between a contract and an estoppel. 240 Newbold v The Coal Authority [2012] UKUT 20 (LC), [2012] RVR 157 (in the Upper Tribunal). 241 [2014] 1 WLR 1288.

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2.123  General Questions Relating to Estoppel estoppel were established, the jurisdiction of the Tribunal to decide a claim for relief could not be extended by an estoppel. This decision was reached in reliance on the Globe Elastic decision.242 The Court of Appeal, having held that the notice was a valid damage notice, did not need to determine the estoppel question but Sir Stanley Burnton, delivering the main judgment, said that he saw no answer to the reasoning of the Tribunal on the estoppel point.243 2.123  Unfortunately neither the reasoning as explained by the Upper Tribunal,244 nor the short, probably obiter, observation of Sir Stanley Burnton in the Court of Appeal, examined the exact distinction between a jurisdictional and a procedural requirement. The essence of the jurisdiction of the Upper Tribunal was its power to determine whether alleged damage to the land had been caused by past mining operations. Before a claim could be made a claimant had to observe the procedure of serving a damage notice stating that damage had occurred and setting out certain particulars. The requirement of a notice was for the benefit of the Coal Authority. The correctness or otherwise of the particulars stated in the notice (mainly descriptions of interests in the land) did not directly affect the essential question which the Tribunal had jurisdiction to determine, which was the cause of the damage. A good case can be made out for the requirement being procedural in nature and so being something which could be waived by the Coal Authority. 2.124  Explanations of the possibility of an estoppel applying to a procedural requirement usually state that such a requirement can only be waived by the person for whose benefit the restriction was introduced.245 It is a matter of common sense that only the person for whose benefit a requirement is contained in the legislation can by his statements or other conduct give up his entitlement to rely on that requirement and so can be said to be estopped from relying on it or to have waived it. Obviously a party who has the burden rather than the benefit of some requirement cannot elect to give up that which is a burden on him; thus in the Kammins case the landlords could waive the time limit for the making of an application to the court but the tenants could not themselves waive that time limit which was exclusively for the benefit of the landlords. It is possible to imagine requirements which are imposed for the benefit of both parties in which case it appears that neither party can unilaterally dispense with the need for compliance with a procedural requirement. Of course, if the parties agree to remove the need for compliance with a requirement, and if such an agreement is valid because the requirement is procedural only, then the agreement operates in accordance with the law of contract and it does not matter (subject possibly to an argument based on consideration) who gets the whole or any part of the benefit of the dispensation of the need for compliance. 2.125  In the light of the above explanation, it is necessary before leaving the subject of procedural requirements, the benefit of which may be lost by an estoppel, to state so far as possible the principle which establishes that a particular requirement relating to the jurisdiction of a court or tribunal is one which can be waived by the operation of an estoppel. 242 [1980] AC 506. 243 [2014] 1 WLR 1288, para 74. Both other Members of the Court agreed with this observation. 244 [2012] UKUT 20 (LC) paras 105–10. 245 See, eg, Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, 877 (Lord Pearson), 882 (Lord Diplock).

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Estoppel: Conflict with Statutory Provisions and Other Rules of Law  2.127 As a generality a requirement is only to be regarded as procedural, and so capable of being lost by the operation of an estoppel, if (a) the requirement relates not to the ambit of that which the court or tribunal can determine or order but to some procedural or antecedent matter such as how and when an application to the court or tribunal may be made, (b) the requirement is wholly for the benefit of the person alleged to be estopped from relying on it, and (c) there is no discernible reason of public policy which prevents reliance on the requirement being lost by reason of the operation of an estoppel.

4. Conclusion 2.126  The law on the possibility of the jurisdiction of a court or tribunal being extended or altered by an estoppel is now fairly clear and established and may be summarised as follows: (i) The fundamental rule is that when the jurisdiction of a court or tribunal to determine a specified matter or to make a specified order is conferred by statute, the parties cannot extend or alter that jurisdiction by an agreement or by a statement or representation of any sort which could give rise to an estoppel. (ii) However, some statutory requirements are not jurisdictional in nature, in the sense that they define the ambit of the powers of the court or tribunal, but are procedural in nature, in the sense that they impose restrictions, such as time limits or the form of application to the court or tribunal, on the exercise of the jurisdiction. A procedural restriction may be removed by agreement or by the operation of an estoppel and in the latter case the process is often described as ‘waiving’ the requirement. (iii) A requirement is likely to be classified as procedural only, with the possibility of the operation of an estoppel so as to remove the need for compliance with the requirement, if (a) the requirement relates not to the ambit of the powers of the court or tribunal but to some procedural or antecedent matter, (b) the requirement is wholly for the benefit of the party against whom the estoppel is operated, and (c) there is no public policy reason which prevents the removal of the requirement by the operation of an estoppel.

(F)  Estoppel: Conflict with Statutory Provisions and Other Rules of Law 1. Introduction 2.127  The doctrine of estoppel is a series of principles developed by the common law and equity. As such, and as with other non-statutory rules of law, an estoppel of any form cannot operate or prevail where it would contradict a statutory provision or deprive a statutory provision of its purpose and intended effect. To take a simple example, it is provided by section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 that a contract for the sale or other disposition of an interest in land must be in writing. An oral contract to sell land is therefore void. The principle of estoppel by convention can operate where parties to a contract act under a shared understanding or convention as to the meaning or effect of 99

2.128  General Questions Relating to Estoppel that contract even though that is not the correct meaning; in these circumstances a party who has acted under the convention is normally entitled that the other party shall not resile from the convention.246 If the parties to the oral contract subsequently acted on the shared belief that the contract was binding, it would be unacceptable that the oral contract should for that reason and because of an estoppel by convention become valid contrary to the express statement and purpose of the statute.247 2.128  The question of whether an estoppel can operate so as to contradict the purpose of a statutory provision is bound up with the question of whether parties can by an express contract remove the effect of a statutory provision (what is sometimes called ‘contracting out’ of the provision). It is generally correct to say that if a statutory provision cannot be overridden by agreement then equally the effect of the provision cannot be removed as a result of an estoppel.248 Accordingly when it comes to its relationship to statutory provisions, estoppel cannot be considered in isolation but is often bound up with the wider question of whether a statutory provision can be deprived of its effect by an agreement to do so. 2.129  There are in practice two particular areas in which a possible conflict between a statutory provision and the normal effect of an estoppel is most likely to arise. The first area is that of statutory protection which is given to certain categories of persons where that protection would not be available to them under the common law and the ordinary operation of the law of contract. The protection so provided by statute may often be to tenants of certain types of premises. Of course protection can be given by statute to other classes of persons. The second area is that of statutory provisions which prescribe certain formalities with which there has to be compliance before a particular transaction is valid and effective. A good example of this type of case is that just mentioned where certain forms of contract, such as a contract for the sale of land, have to be in writing. The question which arises is whether the parties can validly agree that, or can be bound by an estoppel such that, the special protection shall not apply to their relationship or that the transaction shall be valid despite a failure of compliance with the requisite formalities. In this part of the chapter statutory protection of the occupation of land and statutory requirements of formality are considered separately before other forms of statutory provisions are covered. 2.130  Some statutes expressly prevent the contracting out of some or all of their provisions. An example is Part II of the Landlord and Tenant Act 1954, which provides for a degree of security of tenure for tenants of premises used for business purposes. Contracting out is permitted subject to compliance with certain formalities but save in such cases an agreement which prevents the tenant from taking advantage of certain benefits under the Act is declared void.249 Obviously in cases where an agreement purporting to deprive

246 See, eg, Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84. See ch 5 for estoppel by convention. 247 The exact relationship between s 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 and the doctrine of estoppel in its various forms is most relevant to proprietary estoppel. This matter is mentioned again in para 2.138 et seq and is considered in detail in ch 7, para 7.63, on proprietary estoppel. 248 See Keen v Holland [1984] 1 WLR 251, 261; and see para 2.131. 249 Landlord and Tenant Act 1954, ss 38 and 38A. As initially enacted, contracting out was prohibited in all cases but subsequent relaxations have provided for a degree of contracting out first with the agreement of the court and later with a requirement that a statutory form of notice must be served on the tenant or prospective tenant before there can be a valid contracting out.

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Estoppel: Conflict with Statutory Provisions and Other Rules of Law  2.131 persons of the benefit of statutory provisions is stated in the statute to be void, an estoppel cannot have an effect which could not be brought about by such an agreement. 2.131  Express prohibitions in a statute on agreements (and thus on estoppels) removing or overriding the operation of provisions in the statute create no difficulty. What is less clear is cases where there is no provision in a statute which expressly prevents an agreement (and thus in appropriate cases prevents an estoppel) from altering or removing what would otherwise be the effect of the statute. In such cases the test is likely to be whether the public interest as expressed in the purpose of the statutory provisions would be adversely affected if the removal of the effect of the provisions by an agreement or as a result of an estoppel was possible in law. A high-water mark of this criterion may be the decision of the House of Lords in Johnson v Moreton250 which concerned an attempt to contract out of the protection afforded to tenants of agricultural land by the Agricultural Holdings Act 1948, replacing provisions in the Agriculture Act 1947. Lord Salmon held that such agreements were unenforceable, his reason being: The security of tenure which tenant farmers were accorded by the Act of 1947 was not only for their own protection as an important section of the public, nor only for the protection of the weak against the strong; it was for the protection of the nation itself. This is why section 31(1) of the Act of 1947, reproduced by section 24(1) of the Act of 1948, gave tenant farmers the option to which I have referred and made any agreement to the contrary void. If any clause such as clause 27 was valid landlords might well insist on a similar clause being introduced into every lease; and prospective tenants, having no money with which to buy the land they wanted to farm, would, in reality, have had little choice but to agree. Accordingly if clause 27 is enforceable the security of tenure which Parliament clearly intended to confer, and did confer on tenant farmers for the public good would have become a dead letter.251

In Keen v Holland,252 it was contended before the Court of Appeal that while there could not be an express contracting out of the same legislation protecting agricultural tenants the statutory protection could be lost by virtue of an estoppel by convention where the parties had both, although by error, concluded that they had so structured their transaction that the statutory protection would not enure to the tenant. Oliver LJ observed that if an express agreement removing the statutory protection would be void it followed that the statutory protection could not be avoided by appealing to an estoppel.253 A further aspect of the reasoning of the Court of Appeal relied on unconscionability which is a separate element of most forms of estoppel, including estoppel by convention, namely that for the estoppel to be established it must be shown that, even if all other elements of the estoppel are present, it would be unconscionable or inequitable to allow a party to depart from a representation or promise made or from a shared assumption or understanding of law or fact. The reasoning of the Court was that it would not be unconscionable for a party to assert the protection

250 Johnson v Moreton [1980] AC 37. Note that in this case there was a limited form of prohibition against ­contracting out. 251 ibid, 52–53. 252 [1984] 1 WLR 251. 253 ibid, 261. The decision in Keen v Holland is one of the foundations of the modern law of estoppel by convention and is discussed more fully in ch 5, para 5.12. A further reason for rejecting an estoppel by convention on the facts of the case was that such an estoppel had to apply to an existing contractual or other legal relationship rather than to a proposed contract between the parties: see ch 5, para 5.15.

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2.132  General Questions Relating to Estoppel which a statute had specifically conferred on him.254 An estoppel per rem iudicatam in the form of cause of action estoppel or issue estoppel cannot be used to deprive a party of a statutory protection enacted for the protection of vulnerable persons.255 2.132  It can be seen from these authorities and from others to be examined next that where there is no express provision in a statute which prevents an express agreement that the statutory provision shall not apply in certain circumstances, there are three criteria which may be applied in deciding whether contracting out (and therefore in appropriate circumstances an estoppel) is possible. (a) Contracting out or an estoppel will not be possible if it would override a public good which is a purpose of the statute, such as ensuring the production of food by agriculture in this country or protecting the weak from the strong. (b) Contracting out or an estoppel will not be possible if the result of permitting contracting out would be to render the statutory provision a dead letter. (c) An estoppel may not be allowed so as to remove the effect of a statute where, even if the other requirements of some form of estoppel are established, it would still not be unconscionable that a person should assert a statutory protection or benefit specifically conferred on persons in his position. An attempt is made later by way of conclusion, and after other authorities have been examined, to draw together certain of those considerations into a general principle subject to possible qualifications.256 2.133  A rule that an estoppel cannot operate where its operation would conflict with the purposes of a statutory provision which is enacted in the public interest may be seen as part of a wider principle which prevents an estoppel operating so as to render lawful that which would otherwise be unlawful. Circumstances which follow from, or at any rate impinge upon, such a wider principle have been discussed earlier in this chapter, namely the rule that a public authority may not be able to fetter the exercise of statutory powers or of discretions vested in it by entering into a contract or acting such that it is subject to an estoppel257 and the rule that no agreement or estoppel can extend the jurisdiction of a court or tribunal.258 Other possible instances of the application of the wider principle are estoppels against minors or against persons with mental disabilities and the rule that contracts which are illegal, such as a contract to commit a crime,259 cannot be rendered valid by an estoppel. The protection of persons under mental disabilities from contractual liability and from the operation of estoppels is of common law origin and is examined later in this part of the chapter together with the question of any possible conflict between estoppel and general principles of the common law.260

254 ibid, 261. 255 Dickinson v UK Acorn Finance Ltd [2015] EWCA Civ 1194, [2015] All ER (D) 226 (Nov). The protection in question related to the enforcement of a mortgage and was under s 26 of the Financial Services and Markets Act 2000. However the more flexible rule in Henderson v Henderson against abuse of the process was available to prevent a borrower commencing proceedings to establish that a mortgage was unenforceable by reason of this provision after an order for possession had been made and had been executed by a warrant of possession. The principles of res iudicata and the Henderson v Henderson rule are explained in ch 9. 256 See para 2.150 et seq. 257 See para 2.98 for a conclusion on this question. 258 See para 2.126 for a conclusion on this question. 259 See, eg, Pitts v Hunt [1991] 1 QB 24. 260 See para 2.158 and para 2.159.

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Estoppel: Conflict with Statutory Provisions and Other Rules of Law  2.135

2.  Protection of Occupation of Property 2.134  The law has generally been taken to be that where a statute gives some protection to people in occupation of certain types of property, the protection being over and above that given by the terms of their contract, that protection cannot be taken away by an agreement which purports to take it away or modify it or by the operation of an estoppel. As mentioned earlier, the protection given to tenants of property used for business purposes by Part II of the Landlord and Tenant Act 1954 cannot be removed by agreement (and therefore cannot be removed by an estoppel) because the statute itself prohibits any such agreement except in the circumstances permitted by the statute in its current amended form.261 It has also been explained that even in the absence of an express prohibition, the protection conferred on tenants of agricultural land by the Agricultural Holdings legislation cannot be removed by agreement or as a result of an estoppel.262 2.135  Although of much less practical importance today the Rent Acts, first introduced about a century ago, were once of wide importance in giving tenants of residential premises protection against increased rents and in giving security of tenure.263 The Rent Acts did not prevent contracting out by an express provision. It seems obvious that if landlords could prevent the operation of the statutory protection for tenants by including in the lease a clause which removed the operation of the Acts then the purpose of the legislation, to protect tenants occupying property as their residence, would be defeated and the Acts could become a dead letter. It therefore became established that an estoppel, just as an agreement, could not operate so as to remove the protection given to tenants by the legislation.264 It is a criminal offence under the Protection from Eviction Act 1977 to deprive a residential occupier of premises of his occupation of the premises or to harass such an occupier by acts such as cutting off electricity to the premises. It seems that infringements of the statute do not create a right to damages in civil law for breach of statutory duty,265 but obviously the criminal liability cannot be excluded by an agreement or an estoppel. The parties are entitled to structure their transaction in such a way that it falls outside the terms of a particular statutory protection. The Rent Acts apply to certain leases of residential property but not to licences of such property. At one time attempts were made to describe arrangements which involved the grant of exclusive possession as licences in order to avoid the operation of the Rent Acts. Such attempts failed when it was held that a grant of exclusive possession

261 See para 2.130. 262 See para 2.131. 263 The first permanent and general Act was the Rent and Mortgage Interest (Restrictions) Act 1920. The last consolidating Act was the Rent Act 1977 and after that the Housing Acts 1980 and 1988 and subsequent legislation brought about the decline in the number of lettings which could enjoy the protection of the 1977 Act. 264 Welch v Nagy [1950] 1 KB 455, 464; JF Stone Lighting and Radio Ltd v Levitt [1947] AC 209. The decisions are explained in terms of the parties not being able by an estoppel to create in the court a jurisdiction, such as the capacity to make an order for possession in terms prohibited by the statute, which it would not otherwise have. The Levitt case concerned the possibility of an estoppel leading to a ‘contracting into’ the Rent Acts where otherwise the tenancy because of its terms would not have been within the Acts. See para 2.126 for the principle that parties cannot by agreement or by an estoppel extend or alter the jurisdiction given by statute to a court or tribunal. 265 McCall v Abelesz [1976] QB 585 (a decision on s 30 of the Rent Act 1965 which contained similar provisions to those now contained in the Protection from Eviction Act 1977).

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2.136  General Questions Relating to Estoppel of property was normally in law the grant of a lease whatever label the parties chose to put on their transaction.266 A further attempt to avoid the protection of the Acts was by way of including in the transaction unrealistic provisions, never intended to be acted upon, such as requiring the occupier to share the property so suggesting that the transaction could not be a lease because there was no conferring of the right to exclusive possession which is an essential characteristic of a lease. Such provisions were regarded by the courts as a sham and were disregarded.267

3. Formalities (i) General 2.136  The general principle of law is that parties are free to effect contracts and other transactions in any form they wish. Thus, in general, a contract (subject to other requirements such as the need for consideration, certainty and an intention to create legal relations) may be made orally or in writing or partly in each of these forms. It may be made in a single document or by an exchange of correspondence or of electronic messages. This general rule is subject to various limited exceptions under which various types of formality are required by statute for contracts or other transactions. A question which arises is whether and to what extent the consequences of a failure to comply with the necessary formalities can be overridden or removed by the operation of some form of estoppel. 2.137  The main statutory requirements of formality for transactions of a contractual nature are as follows. (a) A contract for the sale or disposition of an interest in land must be made in writing.268 (b) Under Victorian legislation bills of sale (usually a form of m ­ ortgage of chattels as security for a debt) are made void unless in writing and in the statutory form.269 (c) The Statute of Frauds 1677 required that for six forms of contract the contract must be in writing, or there must be some note or memorandum of the contract which is in writing. An agreement made without the necessary formality was not rendered void but was made unenforceable. These requirements apply today only to one form of contract which is a contract of guarantee (‘a special promise to answer for the debt default or miscarriage of another person’). (d) Regulated consumer credit agreements require for their proper execution that both parties sign a document in the prescribed form.270 (e) A lease granted

266 Street v Mountford [1985] AC 809. 267 AG Securities v Vaughan [1990] 1 AC 417. 268 Law of Property (Miscellaneous Provisions) Act 1989, s 2(1). There are various ancillary rules such as that the document or documents comprising the contract must be signed by or on behalf of each party and that the document or documents must contain all the terms of the contract. This provision replaces s 40 of the Law of Property Act 1925 and s 4 of the Statute of Frauds 1677. The provision as to contracts for the sale of land is the statutory provision on formalities for contracts which is most frequently encountered today. It may be the most important statutory qualification of the common law position stated by Lord Sumption in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119, para 7, that at common law there are no formal restrictions for the validity of a simple contract. 269 Bills of Sale Act 1878 (Amendment) Act 1882. See also the Bills of Exchange Act 1882 for bills of exchange and promissory notes. 270 Consumer Credit Act 1974, s 234.

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Estoppel: Conflict with Statutory Provisions and Other Rules of Law  2.139 for a term in excess of three years is void for the purposes of creating a legal estate unless made by deed.271

(ii)  Estoppel and Contracts for the Disposition of an Interest in Land 2.138  In practical terms the most important case of potential conflict between estoppel and statutory formalities may be the interaction between the requirement that a contract for the sale or other disposition of an interest in land must be in writing, as contained in section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989, and the operation of the principle of proprietary estoppel. Proprietary estoppel, which is a burgeoning field of the doctrine of estoppel, is explained in detail in chapter seven. In brief terms, a proprietary estoppel arises when one person gives to another an assurance which creates in the other person an expectation of an entitlement to an interest in land and the other person acts to his detriment in reliance on that expectation such that it would be unconscionable to allow the first person to resile from the assurance. The estoppel may be satisfied by the court ordering the grant to the second person of the interest in land as assured or the grant to that person of other rights. There will not normally be any contract in writing between the parties and the question is whether the giving effect to the estoppel contravenes the statutory requirement of writing.272 2.139  It has been recognised in this particular area of the law that where there is a conflict between some principle of the common law or equity, and a statutory provision, the statutory provision must prevail.273 On the other hand, it is far from the case that proprietary estoppel has been deprived of a wide ambit of operation by section 2 of the 1989 Act. After all, the genesis of proprietary estoppel can be traced back at least to decisions in the eighteenth century and the essence of this form of estoppel was established, prior to its more recent flowering, by a trilogy of important decisions in mid-Victorian times.274 In none of these

271 Law of Property Act 1925, ss 52, 54(2). However, a lease for more than three years not made by deed may have effect in equity as an agreement for a lease (sometimes called an equitable lease) under the doctrine in Walsh v Lonsdale (1882) 21 Ch D 9 provided it complies with the statutory requirement of writing which applies to any agreement for the disposition of an interest in land. For this reason, estoppel is unlikely to be significant as regards leases required to be by deed, but in fact made only in writing without the formalities of a deed. For the requirements of a valid deed see ch 4, para 4.9 et seq. A lease granted for a term of three years or less or as a periodic tenancy may be made in any form, including orally. 272 It seems probable that proprietary estoppel can apply as regards interests and rights which do not have land as their subject matter and in such circumstances there will be no conflict between the operation of the estoppel and s 2 of the Law of Property (Miscellaneous Provisions) Act 1989 which is concerned only with interests in land. See ch 7, part (H). 273 Yaxley v Gotts [2000] Ch 162, 175 (Robert Walker LJ). This is of course the application of a much more general principle: see para 2.150 et seq in the conclusion of this section of the chapter. Attention in this context should also be paid to the decision of the High Court of Australia in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 which concerned an agreement for a lease of commercial premises which did not comply with s 54(1) of the Conveyancing Act 1919 of New South Wales and its provision that no action could be brought on a contract for the sale or other disposition of an interest in land unless there was an agreement in writing (in effect the same provision as in s 4 of the Statute of Frauds 1677). Nonetheless it was held that the proposed tenants were estopped from resiling from their implied promise to complete the tenancy as agreed because they knew of the actions of the proposed landlord in carrying out building work as needed for the lease and that it was unconscionable to allow the proposed tenants to resile from the agreement as they wished to do. See ch 6, para 6.18, for a further explanation of this decision. 274 See ch 7, para 7.66 et seq.

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2.140  General Questions Relating to Estoppel cases was there perceived to be any conflict between the emerging form of estoppel and the statutory requirements on the form of contracts for the disposal of interests in land which had existed since the Statute of Frauds in 1677. In modern times any potential difficulty has been reduced by the provision that the requirement of a written contract under the 1989 Act does not apply to constructive trusts.275 Some cases which might invoke a p ­ roprietary estoppel can be dealt with as constructive trusts, and there has been recognised to be an overlap between the principle of proprietary estoppel and the principle of constructive trusts, so that obviously any conflict between the 1989 Act and proprietary estoppel can be avoided if the facts of any particular case can be brought within the ambit of a constructive trust.276 2.140  Because of its importance to proprietary estoppel, and because of the uncertainty which still surrounds the subject, the relationship between section 2 of the 1989 Act and proprietary estoppel is discussed separately in chapter seven on proprietary estoppel.277 The exact relationship is still not certain but the suggestions made in that chapter as to the present state of the law can be summarised briefly in the following way. (a) Where the facts of any particular situation can be brought within the ambit of a constructive trust the operation of that trust is exempted from any requirement of writing by section 2(5) of the Act. There is an overlap between proprietary estoppel and a common intention type of constructive trust and in such cases a just result may be achieved by the operation of such a trust so avoiding any possible conflict with section 2(1) of the Act. (b) Despite section 2(1) of the 1989 Act, a proprietary estoppel may operate where the assurance which underlies the estoppel is a promise relating to an interest in land but is not a contractual promise, for example where there is no consideration for the promise or no certainty of terms, and subsequent events such as actions carried out in reliance on the assurance result in all the elements of proprietary estoppel being satisfied. In such cases section 2(1) should not operate since there is no contract with which that provision can engage. (c) The assurance and other circumstances which give rise to proprietary estoppel may have no connection with or similarity to a contract for the disposition of an interest in land, and in such a case clearly section 2(1) of the 1989 Act has no operation since that provision relates only to a contract. A leading instance of this last situation is the recent leading case on proprietary estoppel, Thorner v Major,278 in which a person worked for years for no reward or little reward on the farm of a relative on the assurance that on the death of the relative he would inherit the farm. The assurance was enforced against the executors of the relative by reason of a proprietary estoppel so that the land became vested in the Claimant. The claim was a straightforward estoppel claim without any contractual connection.279

(iii)  The Actionstrength Decision 2.141  The decision of the House of Lords in Actionstrength Ltd v International Glass Engineering SpA280 illustrates a number of aspects of the law of estoppel including the 275 Law of Property (Miscellaneous Provisions) Act 1989, s 2(5). 276 The operation of constructive trusts and their relevance to this area of the law are discussed in ch 7, para 7.66 et seq. 277 See ch 7, part (B), section 5. 278 [2009] UKHL 18, [2009] 1 WLR 776. This decision is discussed in detail in ch 7, para 7.39. 279 ibid, para 99 (Lord Neuberger). 280 Actionstrength Ltd v International Glass Engineering SpA [2003] UKHL 17, [2003] 2 AC 541.

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Estoppel: Conflict with Statutory Provisions and Other Rules of Law  2.143 relationship of estoppel with statutory provisions. The Claimants contracted with a firm of contractors to provide labour to the contractors for work being carried out by the contractors for the Defendants. The contractors were persistently late in making payment to the Claimants who threatened to cease providing labour. The Claimants came to an oral agreement with the Defendants whereby in return for the Claimants continuing to provide labour to the contractors the Defendants undertook to reimburse the Claimants for any sums due to them by the contractors but not paid. The Claimants sought to enforce the guarantee but the Defendants contended that the contract of guarantee was void by reason of section 4 of the Statute of Frauds 1677 which requires that a contract of guarantee should be in writing or supported by a note or memorandum in writing.281 The Claimants replied that they had continued to supply labour in reliance on the promise which constituted the guarantee and that there was an estoppel which overrode the absence of writing. 2.142  It was held that the contract of guarantee was unenforceable by reason of section 4 of the Statute of Frauds. The fundamental reason for the decision was that if a contract in the circumstances under consideration could have been saved by an estoppel the result would in effect have been to repeal the Statute of Frauds as regards contracts of guarantee.282 The assertion made by the Claimants would have applied to most oral contracts of guarantee since it would be a characteristic of most such contracts that the person with the benefit of the guarantee advanced credit, and so acted to his detriment, in reliance on the oral guarantee given. On this point, the Actionstrength decision reinforces and gives expression to the proposition that an estoppel cannot contravene a statutory provision or deprive that provision of its general effect. 2.143  The significance of the decision does not end there. A way in which the Claimants put their case was to contend that after the giving of the guarantee they extended further credit to the contractors and that this was equivalent to part performance by them of the contract. On this basis, they referred to the doctrine of part performance which applied to contracts to dispose of land under section 4 of the Statute of Frauds and its successor, section 40 of the Law of Property Act 1925, and argued that a similar doctrine could be applied to contracts of guarantee under section 4. The doctrine of part performance is discussed in chapter seven on proprietary estoppel since it may have a part in the origins of that form of estoppel.283 The doctrine of part performance, when it applied, permitted a party to a contract for the disposition of an interest in land within section 4 of the Statute of Frauds to rely on the enforceability of the contract even in the absence of writing or a note or memorandum in writing if it had partly performed the contract, for example by a purchaser entering the land and carrying out works on it, and the other party had stood by. This basis of the doctrine can be regarded as a form of estoppel. The doctrine goes back to

281 There was some discussion on whether the terms of the contract were within those rendered unenforceable in the absence of writing or a note or memorandum by s 4 of the Statute of Frauds 1677. It was held that the Statute did apply to the oral contract which had been made. 282 [2003] UKHL 17, [2003] 2 AC 541, para 26 (Lord Hoffmann). One way of describing this reasoning is to say that if an estoppel had been allowed to operate as suggested it would have rendered the statute a dead letter as regards contracts of guarantee. 283 See ch 7, para 7.15 et seq.

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2.144  General Questions Relating to Estoppel the decades after the passing of the Statute of Frauds but was expressed by Lord Reid in a modern decision as being: If one party to an agreement stands by and lets the other party incur expense or prejudice his position on the faith of the agreement being valid he will then not be allowed to turn round and assert that the agreement is unenforceable.284

Plainly this explanation of the justification of the part performance doctrine is one which has affinities to the concept of estoppel.285 In Actionstrength, Lord Hoffmann refused to take the estoppel analogy forward and apply the doctrine of part performance to contracts of guarantee which were conceptually different from contracts for the disposition of an interest in land. Part performance of a contract for the disposition of land was a judge-made doctrine which has now been abolished as a result of the provisions of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. 2.144 The Actionstrength decision is, therefore, important in that it applies the fundamental rule that estoppel cannot operate so as to deprive a statutory provision of its effect and refuses to permit the doctrine of part performance, one of the justifications for which is a principle akin to estoppel, to operate beyond the ambit of contracts for the disposition of an interest in land, within which it formerly operated, and into the area of contracts of guarantee. There is, however, a further residual effect of the decision. Lord Hoffmann at the end of his decision added: ‘It is not necessary to consider whether circumstances may arise in which a guarantor may be estopped from relying upon the statute’.286 This proposition was somewhat expanded upon by Lord Clyde who pointed out that the only assurance given to Actionstrength was the promise itself. He added that in order to be estopped from invoking the statute there must be something more, such as some additional encouragement, inducement or assurance.287 These observations inevitably raise the question of what else there could be to create an estoppel. If A orally guarantees to B that if C does not pay sums which are due by him to B then A will reimburse B for the sums unpaid, and B then extends credit or further credit to C in reliance on this oral guarantee, then it is not obvious what

284 Steadman v Steadman [1976] AC 536, 540. 285 A further possible justification of the doctrine is that the carrying out of the acts of part performance are themselves evidence of the existence of the contract so that the requirement of writing as evidence of the contract is rendered unnecessary. As its name suggests a reason for the enactment of the Statute of Frauds was to prevent fraudulent claims that there was an oral contract to dispose of land. 286 [2003] UKHL 17, [2003] 2 AC 541, para 29. 287 ibid, para 35. The Actionstrength decision concerned a statutory requirement that a contract of guarantee had to be in writing. Contracts of any sort may contain a provision that any variation or modification of the contract has to be in writing (usually called a ‘no oral modification’ clause). A question which could arise is whether in the event of an oral modification, a party could be bound by the modification by reason of an estoppel. Such a possibility was touched on by Lord Sumption in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119, para 16, where it was pointed out that for an estoppel to arise something more would be needed than a representation that the oral modification was valid, probably some conduct by the representee. On the facts of the case only minimal steps were taken by the party who wished to rely on the oral modification. The Actionstrength decision was cited as authority for what Lord Sumption said. International agreements on commercial contracts preserve the possibility that a party may be precluded from relying on a no oral modification clause by what amounts to a form of estoppel. See article 29(2) of the Vienna Convention on Contracts for the International Sale of Goods (1980) (not ratified by the United Kingdom) and article 2 of the UNIDROIT Principles of International Commercial Contracts, 4th edn (2016). Of course the interaction of a no oral modification clause and an estoppel has nothing to do with any statutory provision. No oral modification clauses are discussed in ch 3, para 3.79 et seq.

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Estoppel: Conflict with Statutory Provisions and Other Rules of Law  2.146 other events could occur which could create an estoppel. It can hardly be that a subsequent common assumption between A and B that the contract of guarantee is enforceable notwithstanding that it was made orally only can create an estoppel by convention since such an understanding is likely to be a characteristic of most oral guarantees, and the application of an estoppel by convention in these circumstances would deprive section 4 of the Statute of Frauds of much of its effect in relation to contracts of guarantee. It is difficult to see that any further representation or promise or assurance made by the guarantor could operate in such a way as to render the oral contract of guarantee enforceable, notwithstanding the effect of the statute. It is therefore not obvious what circumstances might be comprised in the reservations mentioned by Lord Hoffmann and Lord Clyde. It may be that the Actionstrength decision is best regarded as an ordinary and straightforward application of the fundamental principle that an estoppel cannot contradict a statutory provision or deprive that statutory provision of the whole or much of its effect.

4.  Other Forms of Statutory Provision 2.145  There are of course other forms of statutory provisions which may conflict with an estoppel beyond the protection of certain categories of occupiers of land and beyond the requirement of formalities for a contract, and examples may be given of such other possible conflict. 2.146  It is right to start by mentioning that the principle that the effect of an estoppel cannot contradict a statutory provision has not always been applied in a stringent fashion. An early decision on the modern development of the principle of proprietary estoppel is ER Ives (Investment) Ltd v High288 in which, as a result of an assurance given and action taken in reliance on the assurance, the owner of land was estopped from denying that his neighbour had a right of way over his land. In effect, a right of way was created by virtue of the equitable principle of proprietary estoppel. An issue was whether the equitable right was binding on a successor in title of the land burdened by the right of way when at the time of the purchase by the successor any right had not been registered as a land charge under the Land Charges Act 1925. Section 13 of that Act provided that certain rights, including equitable easements, were void against a purchaser unless registered as a land charge before the completion of the purchase.289 The Court of Appeal held that this did not prevent the enforcement of the right of way against a purchaser of the burdened land even though there was no registration. One possible explanation is that the right which arose under the principle of proprietary estoppel was not an equitable easement and was not a land charge. Winn LJ put the matter more starkly, saying that he could not see that the Land Charges Act had any impact on an estoppel.290 The modern law of proprietary estoppel is, expressed very briefly, that when A

288 ER Ives (Investment) Ltd v High [1967] 2 QB 379. 289 The Land Charges Act 1925 has now been replaced by the Land Charges Act 1972 with similar provisions. 290 [1967] 2 QB 379, 405. See also Lord Denning MR at 385. Yet if the effect of an estoppel is to reverse what would otherwise be the impact of a statutory provision one would have thought that the two areas of law must have an impact on each other.

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2.147  General Questions Relating to Estoppel has given an assurance to B that B will have an interest in land and B has acted to his detriment on the assurance, a court may in appropriate circumstances order the grant of the interest as assured to B or confer some other rights or benefit relating to the land on B. The subject of the effect of proprietary estoppel on third parties and the impact of the systems of land charges and land registration on that subject are matters of some complexity and are discussed in detail later as a part of the general question of the effect of forms of estoppel on successors in title to land and other third parties.291 It may be that the entitlement to a right of way pursuant to a proprietary estoppel is best regarded as a separate equitable proprietary interest which, since it is not a land charge, did not require registration under the Land Charges Act 1925. In chapter seven, a distinction is drawn between inchoate rights (such as in the Ives case) which arise when the requirements of a proprietary estoppel exist but no order of the court to satisfy the estoppel has been made, and the rights which are brought into existence by an order of the court when the estoppel is said to crystallise. 2.147  An estoppel may be denied under tax legislation where it would be contrary to the statutory provisions. Where a partnership was registered for VAT and two persons had signed the appropriate form holding themselves out as partners when they were not in fact partners, it was held that no estoppel operated so as to validate a VAT assessment against the persons in question.292 In one decision it was held that a representation made by a company could not bind the liquidator of the company following its insolvency since to operate the estoppel in this way would be to fetter or impinge upon the statutory functions of a liquidator under insolvency law.293 It has been explained that where on its true construction a statutory provision does not create a bar or limit on the jurisdiction of a court, but provides a defence for proceedings within the jurisdiction of the court, an estoppel can arise which prevents reliance on that defence.294 In such a case there is no conflict between an estoppel and the statutory provision. 2.148  Decisions of the Privy Council on legislation in Fiji illustrate the proposition that an estoppel will only be refused because of a conflict with a statutory provision if the effect of the estoppel would be in clear conflict with that provision. An illustration of this proposition is the suggestion made earlier that a proprietary estoppel will only be prevented by reason of a conflict with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 where the effect of the estoppel would be to validate an oral contract which would otherwise be void under section 2 such that the estoppel would clearly contradict the statutory provision.295 The proposition mentioned is illustrated by decisions on the effect of section 12 of the Native Land Trust Act of Fiji which provided that a lessee of certain lands shall not ‘deal with’ the land without the consent of the Native Land Trust Board. A lessee had lived in a property under a lease subject to this provision with a woman and her children and had assured her that the property would be a permanent home for her and her children in circumstances which in accordance with the principle summarised in the last 291 See part (I) of this chapter. With the widespread registration of title to land today situations of the present sort would be more likely to need consideration under the Land Registration Act 2002 than under the Land Charges Act 1972. 292 Revenue and Customs Commissioners v Pal [2006] EWHC 2016. 293 Re Exchange Securities & Commodities Ltd (In Liquidation) [1988] Ch 46. See para 2.276. 294 See para 2.110 and see Republic of India v India Steamship Co Ltd [1993] AC 410, 423–24. 295 See para 2.140.

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Estoppel: Conflict with Statutory Provisions and Other Rules of Law  2.150 but one paragraph could give rise to a proprietary estoppel in favour of the woman. The ordinary result of such an estoppel would be the grant by way of an irrevocable licence to the woman of a permanent home for her and her children in the property for the rest of her life. It was contended that such an estoppel would contravene section 12. The Privy Council held that there was no contravention since the grant of a licence was not to ‘deal with the land’ in the sense of granting a proprietary interest in it.296 This situation is to be contrasted with one under the same legislation in which there was an alleged equitable charge or lien the creation of which would have been to ‘deal with the land’.297 2.149  Litigation on bills of sale illustrates the principle that an estoppel cannot contradict or override a statutory provision. An early decision of the Court of Appeal suggests that a bill of sale may be rendered valid by an estoppel, the estoppel being a representation that the bill was valid even though there had not been the registration of it as required by statute.298 A later decision of the Court of Appeal suggests that the true explanation of the validity of the bill may have been the operation of the doctrine of election.299 The latter explanation appears to have been accepted by the Privy Council where the decision under consideration was said to be explicable on the principle that a person cannot approbate and reprobate the same transaction.300 In an appeal from Malaysia, a claim for arrears of rent due under a hiring of machinery was met by a defence that the transaction did not comply with provisions of legislation concerning moneylenders and with a required form of a bill of sale. The Plaintiffs responded that these pleas could not be asserted by reason of an estoppel per rem iudicatam constituted by an earlier default judgment against the Defendants. It was held that in light of the policy behind the legislation an estoppel could not operate in the way alleged.301

5.  Conclusion on Statutory Provisions (i)  The General Principle 2.150  The general principle is that no form of estoppel can operate so as to contradict or alter the effect of a statutory provision.302 This principle is a result of the basic constitutional rule of the sovereignty of Parliament. The principle is akin to or follows from the rule 296 Maharaj v Chand [1986] AC 898. The grant of an irrevocable licence to occupy land as a method of satisfying a proprietary estoppel has been available since the seminal decision of the Privy Council in Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699: see ch 7, para 7.22. 297 Chambers v Pardoe [1963] 1 WLR 677. See also Kulamma v Manadan [1968] AC 1062. 298 Roe v Mutual Loan Fund Ltd (1887) 19 QBD 347. 299 In Re A Bankruptcy Notice [1924] 2 Ch 76, 100 (Atkin LJ). 300 Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993, 1018 (Lord Radcliffe). This decision is examined in more detail in para 2.153. See ch 8 for the doctrine of election, a doctrine which is sometimes described as approbation and reprobation. 301 ibid. See ch 9, para 9.49, for the limited capacity of a judgment obtained in default of a pleading to operate in subsequent proceedings between the parties as an estoppel per rem iudicatam. 302 The law has most recently been stated in these terms in decisions which refer to the relationship between proprietary estoppel and the requirement that a contract for the sale or other disposition of an interest in land must be in writing contained in s 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989. See Yaxley v Gotts [2000] Ch 162, 175 (Robert Walker LJ); and Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 29 (Lord Scott).

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2.151  General Questions Relating to Estoppel that often persons cannot avoid the effect of a statutory provision by an express agreement purporting to do so. 2.151  Although the generality of the principle cannot be circumscribed it can be said to operate in four main sets of circumstances. (a) A statute may contain an express provision which prohibits an agreement, and therefore also prohibits an estoppel, the effect of which is to remove the effect of certain provisions in the statute.303 (b) A statute may state that a particular transaction is void or is void in certain circumstances. A particular example is the statement in section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 that a contract for the sale or other disposition of an interest in land ‘can only be made in writing’. The result is that what would otherwise be a valid contract is not such a contract or is void as a contract if there is no writing. The requirement cannot be overcome by an estoppel such as a subsequent common assumption by the parties, acted on by them, that an oral agreement which has been made between them and which would be valid apart from the stature is valid. (c) An estoppel cannot operate if the result of its operation would in practice be to rob a statutory provision of the whole or much of its effect, ie, to make the statutory provision a dead letter.304 (d) Although there may be no express provision in a statute on an agreement removing or modifying the effect of the statute, such an agreement will be void if it runs contrary to the purpose and intended effect of the statute. In these circumstances an estoppel also cannot operate to destroy or remove the purpose of the statute.305 Plainly these various instances of the operation of the root principle overlap and merge into each other. 2.152  It is doubtful whether there can be any substantial qualifications or exceptions to the first, second and third instances of the application of the general principle as stated in the last paragraph. Of course, in every case the operation of the general principle depends on identifying precisely what is restricted or protected by a statute and an estoppel is only prevented where it would contradict exactly that which is prohibited.306 The fourth instance is less precise since it involves identifying the purpose and intention of a statute which, at any rate in some cases, may be open to a degree of debate. Two suggestions have been made as to possible qualifications to the general principle and to certain applications of it. It may be that these possible qualifications apply, so far as they can be applied at all, mainly to the fourth instance as stated in the last paragraph.

303 An example is s 38(1) of the Landlord and Tenant Act 1954 which states that an agreement which prevents a tenant from making an application to the court for a new tenancy is void. In amendments to the legislation following its original enactment, agreements which amount to a contracting out of certain provisions in the legislation are permitted subject to certain procedural safeguards. 304 See, eg, Actionstrength Ltd v International Glass Engineering SpA [2003] UKHL 17, [2003] 2 AC 541 on the effect of s 4 of the Statute of Frauds 1677 and contracts of guarantee. See para 2.141 et seq. 305 An example is the Agricultural Holdings Act 1948 which conferred rights on tenants of agricultural land, the purpose being to protect such tenants and to protect food production in this country: see Keen v Holland [1984] 1 WLR 251; Johnson v Moreton [1980] AC 37. See also Welch v Nagy [1950] 1 KB 455 which prevents the giving of effect to agreements or estoppels which remove the effect of the Rent Acts. 306 Thus in Maharaj v Chand [1986] AC 898 proprietary estoppel was operated so as to create an irrevocable licence to occupy property as a residence and was not prevented by legislation which required the approval of a statutory body before there was any dealing with certain land since the grant of a licence was not the creation of a proprietary interest in land and therefore was not a dealing with the land within the meaning of the statute.

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Estoppel: Conflict with Statutory Provisions and Other Rules of Law  2.154

(ii)  The First Possible Qualification 2.153  The first possible qualification is founded on well-known passages from the ­judgment of Lord Radcliffe in the Privy Council in Kok Hoong v Leong Cheong Kweng Mines Ltd.307 Lord Radcliffe acknowledged the general principle, which he said emerged in many forms, that a party cannot set up an estoppel in the face of a statute.308 Despite this he went on to say that on the other hand there were statutes which, though declaring transactions to be unenforceable or void, were nevertheless not essentially prohibitory and so did not preclude estoppels. He gave as examples the Statute of Frauds, the Stamp Act and statutes of marine insurance.309 Lord Radcliffe rejected the test of whether an estoppel is to be allowed or not as depending on whether the statutory provision was imposed in the public interest or in grounds of general public policy.310 He suggested that such a principle might prove to be an elusive guide since there were few public general statutes for which such a claim might not be made. He then suggested a preferable test which he put in the following way: In their Lordships opinion a more direct test to apply in any case such as the present, where the laws of moneylending or monetary security are involved, is to ask whether the law that confronts the estoppel can be seen to represent a social policy to which the courts must give effect in the interests of the public generally or some section of the public, despite any rules of evidence as between themselves that the parties may have created by their conduct or otherwise.311

He concluded that on this test the legislation concerning moneylending and bills of exchange in Malaysia did fulfil a social policy to which the court must give effect with the result that they could not be overridden or contradicted by an estoppel. 2.154  There appear to be formidable difficulties in this qualification or reformulation of principle. In the first place, the test was specifically applied to a case where the laws of moneylending and monetary security were involved. If the suggested qualification is well founded, then there seems to be no reason why it should not be applied by way of a test to other areas of the control by the state of commercial and other activities. Secondly, the test of ‘social policy’, and ‘the interests of the public generally or some section of the public’ seems a little less elusive than the test of ‘public interest’ or ‘on grounds of general public policy’ which was rejected by the Privy Council. The ‘interests of the public’ as a part of the preferred test seems little different from ‘the public interest’ in the rejected and elusive test. Thirdly, and perhaps most radically, where Parliament confers statutory protection on 307 [1964] AC 993. 308 ibid, 1015. 309 ibid, 1015–16. As explained in para 2.143 the doctrine of part performance which operated to render enforceable agreements to dispose of land declared to be unenforceable under s 4 of the Statute of Frauds is on one view an aspect of the operation of an estoppel. In Actionstrength Ltd v International Glass Engineering SpA [2003] UKHL 17, [2003] 2 AC 541, it was held that this form of the operation of estoppel could not render enforceable contracts of guarantee which are also made unenforceable in the absence of writing or a note or memorandum in writing by s 4 of the Statute of Frauds. 310 As suggested by Atkin LJ in In Re A Bankruptcy Notice [1924] 2 Ch 76, 97. 311 [1964] AC 993, 1016. In Scottish & Newcastle Plc v Lancashire Mortgage Corporation Ltd [2007] EWCA Civ 684, para 50, Mummery LJ recognised the general rule that a party cannot rely on an estoppel to contravene the requirements of a statute but described it as a general principle and not an absolute rule. He said, citing Yaxley v Gotts [2000] Ch 162, that the application of the principle depends on the nature of the statute, the purpose of the particular provision, and its social policy. Such a qualification seems if anything even more elusive than that castigated by Lord Radcliffe. See para 2.155 for a reference to what was said in the present context in Yaxley v Gotts.

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2.155  General Questions Relating to Estoppel certain persons or classes of persons or requires that certain formalities are complied with in order for a transaction to be valid or creates similar rules, then it seems unlikely that Parliament would impose these provisions unless there was some underlying social policy or justification for them. In any event, whether there is such a social policy, or whatever the cogency of that social policy, it is surely for Parliament to decide whether those considerations justify the statutory provisions in question and not for the courts to make that judgement on behalf of the legislature. Nonetheless, it must be accepted on decided authority that a party who asserts an estoppel which on the face of it has the result of contradicting or confronting some statutory provision may be able to plead that the estoppel can nonetheless have effect because the giving of effect to the estoppel would neither prejudice some social policy justifying the statute nor prejudice the interests of the public generally or some section of the public. It does not seem very likely that such a plea in support of an estoppel would have a wide application or a wide success. 2.155  Some further support for the first qualification may be found in what was said in the Court of Appeal in Yaxley v Gotts.312 This decision concerned the interrelationship between the requirement that a contract for the sale or other disposition of an interest in land must be in writing contained in section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989, and the operation of constructive trusts and proprietary estoppel.313 In a well-known passage, Beldam LJ said: ‘The general principle that a party cannot rely on an estoppel in the face of a statute depends upon the nature of the enactment, the purpose of the provision and the social policy behind it’.314 This proposition appears to have been in response to the probability that the 1989 Act was intended to exclude proprietary estoppel from the ambit of the requirement of writing, but that that exclusion was not included by what may have been an omission in drafting.315

(iii)  The Second Possible Qualification 2.156  The second possible qualification is that in any individual case and by reference to its own individual facts a court may be entitled to balance on the one hand the harm to the purpose and intention and effect of a statute which might be caused if an estoppel was allowed, and on the other hand the particular injustice or detriment which might be caused to a person who could otherwise assert an estoppel if the estoppel was denied because of its conflict with a statutory provision. Such a qualification plainly suggests that estoppel can be allowed to contradict or override a statutory provision if the justification for the estoppel in the particular case is sufficiently strong. This suggested qualification appears to have little theoretical merit. An immediate difficulty is to know how the court is to carry out its balancing exercise and the possibility of such an exercise having to be carried out in a wide

312 [2000] Ch 162. 313 For a full discussion of this matter see ch 7, part (B), section 5. 314 Yaxley v Gotts [2000] Ch 162, 191. 315 It is not apparent why s 2(1) was excluded by s 2(5) in the case of constructive and other trusts but not in the case of a proprietary estoppel, especially given the similarity and degree of overlap between proprietary estoppel and constructive trusts. Material published by the Law Commission prior to the enactment of the 1989 Act suggests that the operation of proprietary estoppel as an equitable principle was intended to be unaffected by the requirement of writing in s 2(1).

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Estoppel: Conflict with Statutory Provisions and Other Rules of Law  2.158 variety of cases clearly adds uncertainty to the law. A more powerful objection is that what the qualification seems to amount to is that a court can say that the statutory provision shall have effect but not when its effect would create a difficult or hard case because of its conflict with the non-statutory doctrine of estoppel. It seems doubtful whether as a matter of constitutional principle a court can override or limit a statutory provision in this way. It is for Parliament to exclude hard cases from the effect of a statutory provision if it so wishes by an exception stated within a statute. Equally Parliament can, if it wishes, exclude the operation of particular common law and equitable principles from a statutory restriction.316

6.  Persons Under Disabilities 2.157  Subject to significant exceptions minors are not bound by contracts into which they enter. This rule is partly one of the common law and is partly contained in the Minors’ Contracts Act 1987. Minors are persons under the age of 18.317 Some contracts made by minors are valid, such as contracts for the provision of necessaries. Other contracts made by minors are voidable at the instance of the minor, for example contracts for the sale or purchase of land.318 A minor will not be prevented from denying liability under a contract or other provision by virtue of an estoppel because he has stated that he was 18 or over.319 Relief in equity was given against a minor who had fraudulently misstated his age, for example by ordering the restoration of benefits obtained by the minor under a contract.320 It may, nonetheless, be that exceptionally if a person under 18 enters into a contract and fraudulently and deliberately represents that he is 18 or over an estoppel will prevent him from asserting that the contract is invalid. 2.158  The basic common law rule is that a contract with a person suffering from a mental incapacity is valid and enforceable unless the other party knew of the incapacity.321 It may be sufficient to render the contract invalid that the other party ought to have known of the incapacity even if he did not actually do so.322 At common law a person suffers from mental incapacity when he does not have an understanding of what is going on and what is

316 An example of such an exclusion is s 2(5) of the Law of Property (Miscellaneous Provisions) Act 1989 which excludes the equitable principles of implied, resulting and constructive trusts from the requirement in s 2(1) that a contract for the sale or other disposition of an interest in land must be in writing. 317 Law Reform Act 1969, s 1. The age was formerly 21. It was formerly usual to refer to minors as infants. 318 For a full account see Treitel, The Law of Contract, 14th edn (Sweet & Maxwell, 2015) ch 12. 319 Re Jones, ex parte Jones (1881) 18 Ch D 109, 125. In this case a minor had admitted a debt in a liquidation petition. It was said that a minor could not by any false pleading, or by any mistake in pleading, alter his status, so that no estoppel operated. The fact that a person under age engages in trading or some similar activity would not in any event constitute a representation that he was of age since there would be nothing illegal or improper in a person under age behaving in this way. A proprietary estoppel may arise from acquiescence in the conduct of another person where the acquiescence is treated as a form of implied assurance. However acquiescence by a minor who lacks the capacity to give an assurance will not give rise to an implied assurance: Duke of Leeds v Earl of Amhurst (1846) 2 Ph 117, 123. 320 Clarke v Cobley (1789) 2 Cox 173. See today s 3(1) of the Minors’ Contracts Act 1987 which provides that the court may, if it is just and equitable to do so, require a minor to transfer to the other party to a contract entered into by him any property acquired by the minor under the contract or any property representing it. 321 Hart v O’Connor [1985] AC 1000. 322 Dunhill v Burgin [2014] UKSC 18, [2014] 1 WLR 933, para 1 (Baroness Hale).

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2.159  General Questions Relating to Estoppel involved in a transaction in which he takes part.323 When it comes to estoppel, the rational rule is that the same principle should apply so that a person suffering from mental incapacity who makes a representation or other statement which can found an estoppel will be bound by estoppel in the ordinary way, unless the representee knew or ought to have known that the representor suffered from the incapacity. The law has recently been stated in just these terms.324

7.  Non-Statutory Principles (i)  The General Approach 2.159  Estoppel as a doctrine is a creature of common law and equity. Since common law and equity are fused as principles in the application of the non-statutory law today it should follow that there is no underlying conflict between estoppel and other common law and equitable principles of law which exist. In a sense this is correct, since estoppel can be regarded as a supernumerary principle which applies within its limited scope so as to render inoperable a result in law which would ensue from the application of the rules of common law and equity without the intervention of an estoppel. To take a simple example, when a lease of land is created, and a sub-lease is then created out of the lease, the sub-lease is a derivative interest depending for its existence on the continued existence of the lease. Consequently, if the lease itself is determined then in principle the sub-lease will automatically also determine since it will then have no supporting superior interest out of which it has been created and to which it can owe its continued existence. This is a clear and rational rule of substantive law. Nonetheless, it may be affected by an estoppel. Thus, following the grant of the headlease, an understanding might arise between and be common to all parties that in certain particular circumstances the sub-lease will not determine on the determination of the headlease. That understanding would contravene the principle of law just mentioned. As a matter of legal principle, such a common understanding could amount to an estoppel by convention which meant that the parties were bound to their convention which was that the determination of the headlease would not result in an automatic determination of a sub-lease. A carefully reasoned decision of the High Court indicates that this may indeed occur.325 To this extent, and in these circumstances, the common law principle of estoppel by convention, in the limited circumstances in which it applies, overrides the common law principle as to the destruction of derivative interests with the destruction of the superior interest out of which they are derived. This is a coherent approach to the

323 See, eg, In the Estate of Park [1954] P 112 on the mental capacity of a person to enter into a marriage. A statutory definition of incapacity is contained in s 2(1) of the Mental Capacity Act 2005 which is not dissimilar to the common law definition and is used for the purposes of s 7 which provides that a person who provides necessary goods and services to a person suffering from mental incapacity is entitled to a reasonable sum for the provision of those services. 324 Bank of Scotland v Hussain [2010] EWHC 2812 (Ch) para 107. 325 PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994 (Ch), [2004] Ch 142.

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Estoppel: Conflict with Statutory Provisions and Other Rules of Law  2.161 understanding of estoppel provided that strict attention is paid to the limitations within which estoppel may operate.326 2.160  If an estoppel could not lead to a conclusion which was contrary to a rule of common law or equity, or was contrary to the application of such a rule, any estoppel which can operate as regards statements or shared assumptions of law would be substantially reduced in its scope and effect. The underlying principle must therefore be that where the requirements of a particular form of estoppel are satisfied, the estoppel can operate to bring about a result which would be contrary to that which would have been brought about by the application of rules of common law and equity if they had been applied in the absence of the estoppel. The Milton Gate decision,327 referred to in the previous paragraph, could illustrate the application of this principle if in that case all the requirements of an estoppel by convention had been met. There is no particular consideration of public policy which dictates that a derivative interest must determine at the date of the determination of the superior interest out of which it is derived. Indeed, there is an exception to this rule in the case of a voluntary surrender of a headlease.328 Even so, there may be rules of the common law or of equity which are so fundamental or so grounded on considerations of public policy that they cannot be contradicted by the operation of an estoppel, a subject which is now examined.

(ii)  Public Policy 2.161  It is explained in subsequent paragraphs that an estoppel cannot operate so as to defeat rules of the common law imposed for reasons of public policy. Before coming to this matter more generally one specific point requires mention. It has been suggested that the doctrine of consideration, the rule that a contract not contained in a deed is not valid unless backed by consideration moving from the promisee, is a rule of such fundamental importance to the English law of contract that it circumscribes the effect of a promissory estoppel. A promissory estoppel arises when a party with rights under a subsisting contract or other transaction promises not to enforce those rights or not to enforce all of those rights. The effect of the estoppel is that in certain circumstances that party is prevented from resiling from the promise not to enforce the rights.329 The result is that the promise not to enforce a right can in effect be enforced even though there is no consideration for that promise. To this limited extent the estoppel is in conflict with the full operation of the doctrine of consideration.330 It has been stated that the estoppel does not do away with the general doctrine of consideration and a possible conflict with that general doctrine has been said

326 In the decision referred to above (n 325), the facts were such that an estoppel by convention could not be established because unconscionability, which is an essential element of this form of estoppel, could not be established. See ch 5, para 5.45. This, of course, does not affect the principle that in appropriate circumstances an estoppel could have been established. 327 [2003] EWHC 1994 (Ch), [2004] Ch 142. An estoppel by convention can certainly operate in respect of a matter of law as well as a matter of fact. Recent decisions indicate that a common law estoppel by representation can also arise from a representation of law: see ch 3, para 3.18 et seq. 328 Mellor v Watkins (1874) LR 9 QB 400. See s 139 of the Law of Property Act 1925. 329 See ch 6 for a full explanation of promissory estoppel 330 See ch 6, para 6.53. If the promise had been given for consideration it would have constituted a contractual variation or even rescission of the contract: see ch 6, para 6.41 et seq.

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2.162  General Questions Relating to Estoppel to limit the scope of the operation of promissory estoppel. In one case a husband promised, for no consideration, to pay his wife £100 per year following their divorce. An attempt was made to enforce the promise under the doctrine of promissory estoppel. One reason for the failure of that attempt was that the use of promissory estoppel would have been to constitute in itself a cause of action and that was said to be contrary to the doctrine of consideration.331 There is, in fact, an independent rule that an estoppel, though it may support the establishment of a cause of action by allowing proof of the necessary elements of it, cannot itself form an independent and separate cause of action.332 This limitation applies to estoppel generally, save as to proprietary estoppel, and does not need justification in the area of promissory estoppel by way of a conflict with the doctrine of consideration. On a full analysis, therefore, there can be a conflict between the principle of promissory estoppel and the common law doctrine of consideration as a necessity to found a contract and in such a conflict promissory estoppel, within its carefully qualified and confined limits, constitutes an exception to the doctrine of consideration. That is as far as this particular matter needs to be taken. 2.162  It is not possible, in the absence of a decision on the specific point, to categorise what principles of the common law can be regarded as so important or so much in the public interest that they cannot be overridden by the operation of any form of estoppel. A good working rule may be to say that if a contractual obligation would be void or unenforceable against a party at common law by reason of illegality then the opposite result, the enforcement of the obligation, cannot be brought about by the operation of an estoppel. The reason is that the doctrine of illegal contracts is founded on the public interest.333 If a rule of law exists for the benefit of a party to a transaction, for example the rule that a sub-tenancy automatically determines with the determination of the headlease, there seems no reason why a party, such as a head landlord in this example, should not be estopped from relying on the rule. As mentioned earlier, no interest of the public is involved.334 On the other hand if a rule of law, such as the refusal by a court to enforce an illegal contract, exists for the interest of the public and not for the benefit of a defendant, as is the case,335 then a defendant cannot be estopped from relying on the defence of illegality since if he could be so estopped the public interest would be prejudiced. 2.163  The question of when exactly a contract is unenforceable for illegality or for some similar reason is itself complicated and the details are of course outside the scope of this book. A contract to commit a crime is obviously illegal. A contract intentionally to commit what the parties know is a tort, such as an assault or the issuing of a defamatory statement is unlawful.336 The variety of contracts which are unlawful as contrary to the public interest is wide, from contracts in restraint of marriage to contracts which promote sexual immorality. Gaming contracts were valid at common law but became void under certain old statutes

331 Combe v Combe [1951] 2 KB 215, 220. 332 A proprietary estoppel may, as an exception to this general rule, itself operate as constituting a cause of action. 333 Birkett v Acorn Business Machines Ltd [1999] 2 All ER (Comm) 429, 435. 334 See para 2.160. 335 As was said by Lord Mansfield in Holman v Johnson (1775) 1 Cowp 341, 343, the refusal to enforce the purported contract is not for the sake of the defendant, nor (if it comes to the point), for the sake of the plaintiff. A court is concerned to preserve the integrity of its process and to see that it is not abused. The parties cannot override that concern by private agreement. See Soleimany v Soleimany [1999] QB 785, 800 (Waller LJ). 336 Allen v Rescous (1676) 2 Lev 174 (assault).

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A Uniform Doctrine  2.165 such as the Gaming Act 1845. They have now been generally rescued from invalidity by the Gambling Act 2005 subject to certain safeguards so that any conflict between gambling arrangements and estoppel is unlikely. Contracts in restraint of trade, that is preventing commercial competition, were void at common law but today are regarded as valid as long as they are reasonable in their terms and not contrary to the public interest. Restrictions relating to the use of land, for example confining the use to residential purposes in leases or in restrictive covenants, are generally valid since their object and effect is usually to preserve amenity rather than to restrict competition. 2.164  An example may be given of where an estoppel would not be enforced because of a conflict with the principle of public policy which rendered certain agreements unlawful and void. An assignment of a bare right of action, such as a right to obtain damages for a tort committed against the assignor, is said to savour of maintenance and so be unenforceable unless exceptionally there is a sound commercial reason for it, such as that the claim is ancillary to land which is also being assigned or there is some other reason which is of a sound commercial nature.337 If there was an agreement to make such an assignment not falling within one of the exceptional categories, then because of the conflict with public policy that agreement would not be enforced. It should follow that if there was such an agreement, and it was followed by a common assumption between the parties that the agreement was valid despite its nature and one party had acted on that assumption, there should still not arise an estoppel by convention which would prevent the other party from resiling from the common assumption because, if effect was given to the estoppel, the result would be the enforcement by indirect means of the unlawful agreement and thus a breach of public policy.

(G)  A Uniform Doctrine 1.  The Underlying Substratum 2.165  A lawyer, wishing to explain what estoppel means to an intelligent layman or to someone not familiar with the common law system, might (after a pause) say that it was a principle which ordained that in certain circumstances a person was held to what he had stated even though he had not entered into a contract or other formal arrangement which bound him to that statement. The difficulty for the expositor would then be to explain just what were those circumstances. It would soon become apparent that there was no single set of circumstances which justified the application of an estoppel, but rather a series of significantly different circumstances of which the most that could be said was that most of them had some important features in common. It might have to be explained, perhaps by way of apology for the number of different sets of circumstances, that the different varieties of estoppel arose at different times in the development of the law. Common law estoppel by representation is sometimes thought of as the fundamental form of estoppel and was

337 Trendtex Trading Corporation v Credit Suisse [1982] AC 679; Simpson v Norfolk and Norwich University ­Hospital NHS Trust [2012] QB 640.

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2.166  General Questions Relating to Estoppel established by the early seventeenth century or earlier. By way of a contrasting example, proprietary estoppel arose initially from decisions of the former Court of Chancery going back nearly as far but was not recognised as a coherent form of estoppel until its flourishing as a clearly defined principle in recent decades. It is not surprising, given these separate streams of legal development, that different rules have arisen for different estoppels. 2.166  In this book, estoppel as a whole is called a doctrine and its various varieties are called forms of estoppel. The initial question to ask, now that various forms of estoppel are reasonably clearly established with their own requirements, is whether a single and unified doctrine to cover all forms of estoppel can be articulated. An early problem is that one form of estoppel is estoppel per rem iudicatam, which is an estoppel based on decisions of the courts on disputes between litigants where the decision binds the parties in any further disputes which arise between them relating to matters determined in the earlier decision and which, under the generic name of estoppel by record, has existed as long as common law estoppel by representation. This form of estoppel cannot be brought within any overall statement of the doctrine. Most other forms of estoppel can be described as ‘reliance based’ in that they depend on the proponent of the estoppel having acted in reliance on some form of statement made to him. Any overall statement of a unified doctrine would have to encompass at least the forms of reliance-based estoppel. 2.167  This part of the chapter explores some arguments and suggestions advanced in decisions and elsewhere in support of the formulation and operation of such a uniform doctrine, and the practicality of achieving this. The general conclusion reached is that no such unification is practical but that there is substantial scope for a process, which can already be seen to be under way in some recent decisions, which is to unify certain important elements of the main forms of estoppel.338 2.168  Despite the difficulty of unification most estoppels, save for estoppel per rem iudicatam, have underlying features in common. The five other main forms of estoppel are common law estoppel by representation, estoppel by convention, estoppel by deed, promissory estoppel and proprietary estoppel, the last two being often classified as the two forms of equitable estoppel. Estoppel by deed is an ancient form of estoppel which has its own rules and which has two largely separate aspects.339 However, if one concentrates on the other four, and perhaps most general and important, forms of estoppel it can be seen that they have an underlying substratum of features in common. First, they are all initiated by some type of statement made, either a statement of fact or a statement of law or a promise or assurance about future conduct. Estoppel by convention is no exception in that it depends on a communication between the parties of a common assumption of law or of fact which has been made. Secondly, the four estoppels all require that there shall be some form of action carried out by the recipient of the statement in reliance on the statement. Thirdly, all four estoppels will only be given effect to in all, or nearly all, cases where the recipient of 338 A notable contribution to the discussion of a possibility of a uniform doctrine, and certainly something which repays careful study, is E Cooke The Modern Law of Estoppel (Oxford University Press, 1999). A conclusion of Cooke is that we should cease to treat all forms of estoppel as a collection of discrete types and should instead regard it as a whole, albeit not entirely seamless, entity. It is suggested that it is best to regard reliance-based estoppel as a single area with persuasive characteristics in spite of the distinctions and exceptions within it. 339 Estoppel by deed operates on a statement of fact contained in a deed and does not depend on factors such as reliance and detriment and an overall consideration of what is equitable.

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A Uniform Doctrine  2.170 the statement would suffer some detriment or prejudice if the maker of the estoppel was not held to it. Fourthly, all four forms of estoppel require that it would be inequitable or unconscionable that the maker of the statement should be allowed wholly to resile from what has been stated. Fifthly, if the ingredients of the estoppel are established the court usually has a discretion as to the correct order to be made in order to avoid any actual or potential injustice. The simplest order is that the maker of the statement is held fully and completely to what he has stated, and that is usually (though probably not necessarily always) the result of an estoppel by representation. On the other hand, with the two forms of equitable estoppel, the remedies available are more diverse such as an order that the maker of the statement should be held to it for a limited time only or even that he should pay monetary compensation if there is a departure from what has been stated. All of these characteristics are discussed as each of the forms of estoppel is explained in subsequent chapters. The question to be explored in this part of this chapter is therefore whether, and to what extent, these underlying basic characteristics of the four forms of reliance-based estoppel here considered can or should lead to an acceptable and useful unification of principle.

2.  The Proliferation of Forms of Estoppel 2.169  An attempt is made in chapter one to set out the 20 or so descriptions or labels which have been given to the various varieties of estoppel.340 The number of descriptions is scarcely satisfactory, but for a number of reasons the situation is not as bad as it might at first appear. As is explained in chapter one, some of the supposed estoppels, estoppel by silence, estoppel by negligence and estoppel by conduct, are on a proper analysis varieties of estoppel by representation. Also, some descriptions are different names for the same thing. Estoppel by acquiescence is the same as, or is a type of, proprietary estoppel. Estoppel by representation is itself a modern name for what Coke described as estoppel in pais. Quasi-estoppel is a name which was once given to promissory estoppel. Equitable estoppel is best regarded today as a compendious description of promissory and proprietary estoppel. One way forward is to adopt a uniform system of classification and of description and an attempt is made to do this in the text of this book.341 One thing at least is clear and is that some movement towards synthesis should not be impeded by the proliferation of descriptions of forms of estoppel which has emerged over the years. 2.170  A major proponent of a unified theory of estoppel, encompassing statements of fact or of law or promises, has been Lord Denning who described the situation as it has arisen in the following vivid passage: There has been built up over the centuries in our law a big house with many rooms. It is the house called Estoppel … By our time we have so many rooms that we are apt to get confused between 340 See ch 1, para 1.6, and see the table in ch 1, para 1.36. It is difficult to be confident that any list captures every description which at some time has been given to forms of estoppel. 341 Even today there is some disagreement on classification. In recent decisions of the House of Lords proprietary estoppel has been described as, together with promissory estoppel, one of the two forms of equitable estoppel, or as a sub-species of promissory estoppel. See Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 14 (Lord Scott); and the postscript to the judgment of Lord Walker in Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 67. In the classification and terminology used in this book the view of Lord Walker, that promissory and proprietary estoppels are the two forms of equitable estoppel, is adopted.

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2.171  General Questions Relating to Estoppel them. Estoppel per rem iudicatam, issue estoppel, estoppel by deed, estoppel by representation, estoppel by conduct, estoppel by acquiescence, estoppel by election or waiver, estoppel by negligence, promissory estoppel, proprietary estoppel and goodness knows what else. These several rooms have this much in common: they are all under one roof. Someone estopped from saying something or other, or doing something or other, or contesting something or other. But each room is used differently from the others. If you go into one room you will find a notice saying, ‘Estoppel is only a rule of evidence’. If you go into another room you will find a different notice. ‘Estoppel can give rise to a cause of action’. Each room has its own separate notices. It is a mistake to suppose that what you find in one room you will also find in others.342

2.171  There are certainly too many rooms. A significant advance would be made by casting aside many of the descriptions of estoppel so liberally created and concentrating on what, apart from estoppel per rem iudicatam, are the five forms of estoppel in use at the present time, common law estoppel by representation, estoppel by deed, estoppel by convention, promissory estoppel and proprietary estoppel. This book is organised around this classification. To revert to the Denning metaphor, the question is whether all the rooms in the house can be brought together into one room with one notice or whether at any rate some of the divisions between rooms can be removed.

3.  Differences between Forms of Estoppel 2.172  Given the underlying characteristics which are common to, at any rate, four of the main forms of estoppel, ie, the four reliance-based estoppels, and given that all descriptions of estoppel can (save estoppel per rem iudicatam and estoppel by deed) be accommodated within these four forms, it is possible to ask whether the four forms could not be brought into one simple principle which can be formulated and applied. The division of estoppels into estoppel by representation, estoppel by convention, promissory estoppel and proprietary estoppel, might then, it is supposed, be abolished in favour of the application of the single and unified doctrine. Before coming to the possibility of unification and the authorities which do support or reject such a possibility, it is appropriate to make two preliminary points both of which militate against any ground or overall unification of forms of estoppel into a single principle, the first point being that the different forms of estoppel as they now exist have substantially different basic requirements and areas of operation, and the second being that due to decisions over the last few decades the boundaries between the forms of estoppel have been explained and are now tolerably clear.

(i)  Differences between Initial Statements, Areas of Use and Subject Matter 2.173  A difficulty with this somewhat utopian prospect of a general unification is that it comes up against the clear differences between the areas of operation of the different forms of estoppel, the differences in the more detailed rules which characterise the different forms of estoppel, and the differences between some of the essential elements of the different forms of estoppel. These differences repay a degree of examination. 342 McIlkenny v Chief Constable for the West Midlands [1980] QB 283, 317 (sometimes referred to as Hunter v Chief Constable for the West Midlands Police).

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A Uniform Doctrine  2.177 2.174  While all four estoppels require some statement or communication, the nature of the statements which initiate the estoppels is radically different. Common law estoppel by representation is founded on a statement of existing fact (or, according to recent authority, probably of law) and the nature of such a statement is radically different from that of a promise which founds a promissory estoppel and from the usual form of the assurance which founds a proprietary estoppel. A promise is a statement of what the promisor will or will not do in the future, intended to be binding on the promisor and intended to be acted upon by the promisee. A promise is obviously in the general understanding of language quite different from a statement of existing fact where the representor merely states the fact and does not bind himself to do or not do anything. The communication of a common assumption of fact or law, which is the foundation of an estoppel by convention, is again significantly different from a statement of fact or a promise. It is a statement that the parties share a common view of some legal or factual aspect of an existing transaction or relationship between them. 2.175  An important rule of estoppel by representation and promissory estoppel is that the representation or promise must be clear and unequivocal (or, what amounts to the same thing, must be precise and unambiguous). This requirement for promissory estoppel appears to have been derived from the older rule which applies to estoppel by representation. Yet this requirement has been rejected for the assurance which initiates a proprietary estoppel where all that is necessary is that the assurance is ‘clear enough’.343 The difficulties of moulding these forms of estoppel into a single capacious principle can be seen at once. An exception or qualification would be needed for proprietary estoppel so cutting across the desired simplicity of a single principle. 2.176  An estoppel can be used in support of some cause of action or in resisting some cause of action but, with one important exception, cannot be used as a cause of action in its own right. The exception is proprietary estoppel which can be, and often is, used as a cause of action in its own right.344 This radical difference between the status and effect of forms of estoppel would need to be recognised in any unification. 2.177  Estoppels are radically different in their possible subject matter. An estoppel by representation can have any existing matter (including now probably a proposition of law) as its subject matter. It is not dependent on there being some existing legal relationship between the parties at the time of the representation although there may be such a relationship. Promissory estoppel applies only where the promise is not to enforce some right, whether under a contract or under some other relationship, which exists at the time of the promise.345 The subject matter of the estoppel is therefore substantially circumscribed as compared with some other estoppels. An estoppel by convention requires a common assumption of law or of fact made by the parties and communicated to each other and the assumption must relate to an existing legal relationship between those parties. Again, therefore, the subject matter of this form of estoppel is circumscribed. Proprietary estoppel normally depends on an express or implied assurance concerning an interest in a defined 343 It is explained in ch 7, para 7.143, that the operation of proprietary estoppel would be emasculated if the ­assurance which initiates the estoppel had in all cases to be clear and unambiguous. 344 This is the ‘sword or shield’ question and is explained in part (B) of this chapter. 345 See ch 6, part (F).

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2.178  General Questions Relating to Estoppel area of land of the person giving the assurance so that again its subject matter is limited.346 The important point which here emerges again is that while the major forms of estoppel may have a substratum of uniform characteristics, their fields of operation are different and in some instances substantially limited in different ways.

(ii)  Generally Clear Boundaries 2.178  The differences between the forms of estoppel would only be of practical utility if their essential elements and the boundaries of their operation were generally clear and were consistently applied. Fortunately a reasonable degree of clarity does now exist. The essential elements of each estoppel can be specified such that their field of operation and boundaries can be readily ascertained. An attempt is made at the end of each chapter of this book which explains the main forms of estoppel to summarise these essential elements.347 These elements are not entirely free from doubt. As an example, a view can sometimes be asserted that an estoppel by convention can operate not only as regards an existing transaction between the parties but also as regards a proposed transaction even though there is strong authority that such a wider application of the estoppel does not correctly state the law.348 It is possible to point to certain suggestions in the authorities to the effect that detriment to the promisee is not an essential element of promissory estoppel.349 These and other possible areas of doubt are noted where they are relevant for a particular form of estoppel but a predominant view of the law on such once unclear subjects has now been established. It may well be that, rather than attempting to achieve the unattainable goal of a unified overall doctrine, the way forward is a clearer and more exact delineation of the boundaries between, and of the areas of operation of, the different forms. This desideratum has been significantly achieved in recent decisions as is explained throughout this book.350

346 It is likely that proprietary estoppel, despite its origins in land law, can in principle apply to chattels as well as land and may apply to rights which have no corporeal objects as their subject matter, such as rights of intellectual property. This is a field of possible future expansion of the estoppel which will require further consideration by the courts. See ch 7, part (H). 347 See the summaries at the end of chs 3–7 and 9. A summary is also provided of the doctrine of election in ch 8. 348 Keen v Holland [1984] 1 WLR 251; PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994 (Ch), [2004] Ch 142. 349 See ch 6, para 6.192. 350 For a different view see E Cooke, The Modern Law of Estoppel (Oxford University Press, 1999) ch 4. Over the last two decades major advances have been made in clarifying the boundaries of the forms of estoppel. For example, in Crabb v Arun District Council [1976] Ch 179 proprietary and promissory estoppel were regarded in the Court of Appeal as indistinguishable for the purposes of deciding cases, whereas today the essential elements and boundaries of proprietary estoppel have been established in two important decisions of the House of Lords in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752 and Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776. A further example is that the components of estoppel by convention have been tabulated in a series of propositions by Briggs J in Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174, para 52. The citation is set out in ch 5, para 5.6. In Australia and New Zealand the tendency has been to concentrate on equitable estoppel as an overall concept without dividing it into the two forms of promissory and possessory estoppel. See below (n 365). The classification now usually adopted in England appears to be clearer and more useful because of the differences between the two forms, such as that a proprietary estoppel can itself constitute a cause of action which a promissory estoppel cannot, and that a promissory estoppel must be founded on a clear and unequivocal promise whereas this degree of clarity is not required for a proprietary estoppel.

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A Uniform Doctrine  2.181 2.179  A feature of estoppel as a general doctrine is that whereas it has been applied for centuries in common law and Chancery courts, important forms of estoppel as applied today have either emerged or been carefully described and analysed as such only in the last half century or so. It is fair to say that during this period the essential elements of the forms of estoppel and the divisions between the various forms were not always recognised or applied. Numerous instances of this situation could be given and parts of subsequent chapters contain an account of the development of what are now recognised as separate forms of the doctrine of estoppel. As an illustration, in 1976 it was said in the Court of Appeal that the division between promissory and proprietary estoppel had no part to play in the practical application of estoppel and was of no more than academic interest.351 Today the differences between these two forms of equitable estoppel are recognised as substantial and are fairly clear. At about the same time it was said that the validity of the then developing principle of promissory estoppel was not to be denied but that the principle lacked the attributes of a coherent doctrine which still needed to be worked out.352 Promissory estoppel does now have a coherent and detailed content. Proprietary estoppel has moved from not being recognised as a form of estoppel at all (leading textbooks on land law in the early 1960s dealt with the subject not as one in its own right but as something relevant to the law of licences),353 to being sometimes treated as a formless doctrine resting on little more than what seemed just in individual cases,354 to a principle the essential elements of which have now been authoritatively stated and the detailed rules of which, such as the identity of the land to which the estoppel must relate, have been to a considerable extent worked out.355 2.180  If the nature and the essential elements of each form of estoppel are clearly understood and applied there need be no undue difficulty in distinguishing between the forms and applying the appropriate form to any factual situation. As with many boundaries between legal principles there may be borderline cases but in most instances there need be no blurring of the boundaries. It is not difficult to distinguish between a representation and a promise or to appreciate that both promissory estoppel and estoppel by convention operate only where there is some existing transaction or relationship between the parties. Any difficulty encountered in distinguishing between the forms of estoppel is not inherent in their characteristics and elements and areas of operation but is due to a number of causes which as the law now stands can be readily avoided. 2.181  First, it is undeniable that in the past, and as the development of certain of the main forms of estoppel as they stand today proceeded, the boundaries between different forms of estoppel, as those boundaries are now understood, were not fully articulated or respected. Secondly, there may have been a tendency to describe as an estoppel a legal result which is due to the application of some other principle of the law. An illustration of this process is a decision in which one party to a proposed lease stated that if the lease was granted it would not enforce one of the proposed terms. That party was bound to its promise not because there was an estoppel (although this was suggested as a reason in one of the judgments of 351 See Crabb v Arun District Council [1976] Ch 179, 193 (Scarman LJ). See above (n 350). 352 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741. 353 See, eg, Megarry & Wade, The Law of Real Property, 2nd edn (Sweet & Maxwell, 1959). 354 See the trenchant observations of Lord Scott in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 17. 355 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776. See ch 7 for a full account of this process.

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2.182  General Questions Relating to Estoppel the Court of Appeal), but because the facts disclosed a separate contract between the parties collateral to the lease with the result that that contract could be enforced in the ordinary way under the law of contract.356 There has been a tendency to rest the enforcement of facts agreed as a term of a contract to be correct for the purposes of that contract not on the simple application of the law of contract but on a newly designated ‘estoppel by contract’. The third reason is that in advance of agreement between the parties or a determination by a court, the facts of any situation may be unclear and in dispute with a consequential doubt on the form of estoppel (if any) which is relevant to the situation. In such cases two or more forms of estoppel can be asserted in the alternative, if necessary in pleadings, so that the facts can be ascertained and then the principle of the appropriate form of estoppel applied to those facts. The reality is that, as the law has been developed and now stands, the main forms of estoppel do have generally clear boundaries and generally clear elements and components which have to be established if reliance is to be placed on that form of estoppel. This is not in itself a reason to resist at least a degree of amalgamation and a degree of synthesis but it does at least indicate that such a synthesis is not essential to the satisfactory overall operation of estoppel as a doctrine of law.

4.  A Possible Unification (i)  The Authorities 2.182  The only way in which a general unification of the forms of estoppel could be brought about is by statutory intervention or by decisions of the highest courts. It is fair to say that although the matter has been referred to in decisions of appellate courts there appears to be little enthusiasm in the authorities for a unification of estoppel into some general and overall theory or even for the unification of certain of the main forms of estoppel. 2.183  Since the end of the last war estoppel has flowered into its present day forms with their present separate elements and their now reasonably clear boundaries. Probably nobody has contributed more to this process than Lord Denning as a Judge of first instance and as an appellate Judge.357 He was perhaps the foremost proponent of a unification of estoppels. A plea for unification or synthesis was put forward by Lord Denning MR in Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd358 which is a leading case in the development of estoppel by convention. He spoke of estoppel being ‘overloaded’ with cases and as having evolved over 150 years in a sequence of separate developments as well as being limited by a series of maxims, such as that an estoppel cannot give rise to a cause of action. Lord Denning added: All these can now be seen to merge into one general principle shorn of limitations. When the parties to a transaction proceed on the basis of an underlying assumption – either of fact or of

356 Brikom Investments Ltd v Carr [1979] QB 467. For a further discussion of this case see ch 6, para 6.162. 357 eg, the decision of Denning J in Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130 can be said to be the resuscitation, and in a sense the beginning of the modern law of promissory estoppel. As is apparent from more than one chapter of this book, major contributions to the clarity of aspects of the law of estoppel have over recent decades been made by Lord Walker and Lord Neuberger. 358 [1982] QB 84.

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A Uniform Doctrine  2.185 law – whether due to misrepresentation or mistake makes no difference – on which they have conducted the dealings between them – neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so. If one of them does seek to go back on it, the courts will give the other such remedy as the equity of the case demands.359

Johnson v Gore Wood & Co360 was a decision of the House of Lords which is relevant mainly to the exercise by the court of a power to strike out proceedings as an abuse of the process. However, one of contentions advanced to the court was that an application to strike out the proceedings as an abuse of the process was precluded by an estoppel by convention between the parties that the bringing of the action was not an abuse of the process. Lord Bingham cited the above passage from the judgment of Lord Denning MR which both parties before the House accepted as correct. He then applied the principle to reach the conclusion that there was an estoppel by convention as was contended.361 2.184  It is notable that in the same case Lord Goff, who had decided the Texas Bank case at first instance, was unwilling to follow Lord Denning’s wide enunciation of some general principle of estoppel. Lord Goff said that he was inclined to think that the many circumstances capable of giving rise to an estoppel could not be circumscribed within a single formula.362 The decision in Gore Wood can therefore be seen as an important decision on an application of the principle concerning an abuse of the process of the courts and does not, taken as a whole, constitute any unanimous or even general support in the House of Lords for the wider generalisation of Lord Denning. 2.185  A further source of, and support for, the proposition that distinctions between forms of estoppel should to a certain extent be abandoned or truncated is the decisions of the High Court of Australia in Waltons Stores (Interstate) Ltd v Maher363 and Commonwealth v Verwayen (Voyager Case).364 These decisions are explained in greater detail when 359 ibid, 122. This is not of course the only general description given of the doctrine of estoppel. Other such statements are that of Lord Denning in Moorgate Mercantile Co Ltd v Twitchings [1976] 1 QB 225, 241, and that of Lord Scott in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 14, mentioned in ch 1 (n 5). See also Scottish Equitable Plc v Derby [2001] 3 All ER 818, para 48 (Robert Walker LJ). The view of Lord Denning on a merged general principle is somewhat in contrast to his description of estoppel only two years earlier as a big house with the various forms of estoppel as separate rooms within the house, each with its own rules and areas of operation: see McIlkenny v Chief Constable for the West Midlands [1980] QB 283, 317, cited in para 2.170. The enthusiasm for a general merger of the main forms of estoppel has been greater in New Zealand than in this country. About 20 years ago it was said in the Court of Appeal of New Zealand that recent developments in this area of law meant that there may be ‘no distinction in degree between what was once called common law estoppel and equitable estoppel’: Gold Star Insurance Co Ltd v Gaunt [1998] 3 NZLR 80, 86 (Howard J, delivering the judgment of the Court). There is said to be a united doctrine of equitable estoppel in New Zealand, based on the unconscionability principle, comprising promissory and proprietary estoppel: see Equity and Trusts in New Zealand, 2nd edn (Wellington, Thompson Reuters, 2009) para 19.1.3. Academic writing in New Zealand goes further and it is suggested that a broad united doctrine of equitable estoppel may be thought of with some certainty as embracing at least 16 different doctrines and a jumble of principles, rules and maxims including common law estoppel by representation, promissory and proprietary estoppel, but excluding estoppel by record: Equity and Trusts in New Zealand, ibid, para 19.1.2. However, no comprehensive statement of the combined doctrines is given. The contrast between the approaches in England and in New Zealand is noted: Equity and Trusts in New Zealand, ibid, para 19.1.3(4). 360 [2002] 2 AC 1. 361 ibid, 33–34. However, neither Lord Goff nor Lord Millett was prepared to accept that an estoppel by convention had been established on the facts. 362 ibid, 41. 363 (1988) 164 CLR 387. 364 (1990) 170 CLR 394.

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2.185  General Questions Relating to Estoppel promissory estoppel, to which they may be most relevant, is explained.365 A proposition of this nature as regards an estoppel being used as a cause of action was urged before the Court of Appeal in Baird Textile Holdings Ltd v Marks & Spencer Plc.366 The Court refused the invitation to extend estoppel so that it could be regarded generally as capable of creating in itself a cause of action. It did so on the basis of established authority and concluded that if there was to be any such radical extension of principle it was a matter for the House of Lords.367 A little earlier in a decision concerning estoppel by deed, Millett LJ provided a brief historical account of the origins of estoppel and added: Spencer Bower’s valiant attempt to demonstrate that all estoppels other than estoppel by record are now subsumed in the single and all-embracing estoppel by representation and that they are all governed by the same requirements has never won general acceptance. Historically unsound, it has been repudiated by academic writers and is unsupported by authority.368

Any such proposition in favour of unification remains largely unsupported by authority today. Further support for the view so expressed by Millett LJ was provided a few years later by Potter LJ where, having cited what had been said by Millett LJ, he added: ‘Despite some advances in this direction made in Commonwealth jurisdictions, it seems to me that the position remains unchanged in this country to date’.369 A more restrictive understanding of the nature of estoppel has been advanced by Lord Scott in a case concerning proprietary estoppel where he said that an estoppel ‘bars the object of it from asserting some fact or facts, or, sometimes, something which is a mixture of fact and law, that stands in the way of some right claimed by the person entitled to the benefit of the estoppel’.370 A wide-ranging description of the nature of estoppel, though not a definition of the doctrine, was given by Dixon J in the High Court of Australia in Grundt v Great Boulder Pty Mines Ltd371 in a passage referred to in a number of important subsequent English decisions, a description described by Denning LJ, himself a leading judicial figure in the development of estoppel, as the most satisfactory formulation of the principle of estoppel of which he knew.372 365 See ch 6, paras 6.18 and 6.19. In the Verwayen case Mason CJ at 333 said: ‘[I]t should be accepted that there is but one doctrine of estoppel, which provides that a court of Common Law or Equity, may do what is required, but not more, to prevent a person who has relied upon an assumption as to a present, past or future state of affairs (including a legal state of affairs), which assumption the party estopped has induced him to hold, from suffering detriment in reliance upon the assumption as a result of the denial of its correctness’. Although it says nothing as to the differing detailed requirements for the various forms which estoppel has come to take, this very general statement is perhaps as near as it is possible to come to describing estoppel as an overall doctrine. 366 [2001] EWCA Civ 274, [2002] 1 All ER (Comm) 237. 367 ibid, para 39 (Morritt V-C). 368 First National Bank Plc v Thompson [1996] Ch 231, 236. Reported decisions are not short in recording instances of somewhat desperate last throws at finding some generalised estoppels when the specific requirements of a particular form of estoppel are not satisfied. An instance is K Lokumal & Sons (London) Ltd v Lotte Shipping Co Pte Ltd (The August Leonhardt) [1985] 2 Lloyd’s Rep 28 in which, after an estoppel by convention was rejected since the common assumption had not ‘crossed the line’, it was submitted that an estoppel should be allowed on the basis of ‘a general equitable estoppel’. The Court of Appeal thought it unnecessary to express an opinion on this point. 369 National Westminster Bank Plc v Somer International (UK) Ltd [2002] QB 1286, para 38. 370 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 14. Lord Scott added that an estoppel became a proprietary estoppel if the right claimed was a property right. It is suggested when proprietary estoppel is examined in ch 7 that that definition is unduly restrictive at any rate as regards that form of estoppel: see ch 7, para 7.109. 371 Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641, 674. 372 Central Newbury Car Auctions Ltd v Unity Finance Ltd [1957] 1 QB 371, 380. The Australian decision was later described in the Court of Appeal as a classic authority: ING Bank NV v Ros Roca SA [2012] 1 WLR 472, para 61.

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A Uniform Doctrine  2.188 2.186  Courts have on occasions considered not just the possibility of an overall amalgamation of the forms of estoppel but the more limited prospect of the amalgamation into a single principle of two or more of the forms of estoppel. Here again there has been no enthusiasm for such a process. The view was advanced in the thirtieth edition of Chitty on Contracts that there was little point in preserving any separate category of estoppel by deed since the basis of that form of estoppel appeared to be covered by estoppel by representation or by estoppel by convention.373 This proposition was considered by the Privy Council in Prime Sight Ltd v Lavarello.374 Lord Toulson referred to the reservation of Lord Goff about attempting to emasculate the many circumstances capable of giving rise to an estoppel within a single formula, in part because consideration as a fundamental part of the law of contract is not to be reduced out of existence by the law of estoppel, and concluded that the proposition under review might be going too far.375 A wider suggestion is that estoppel by deed, estoppel by convention, and what is sometimes referred to as estoppel by contract or contractual estoppel, should be bought together into one principle. The view expressed in this book and elsewhere is that estoppel by contract is not a true estoppel at all but is simply an application of the law of contract.376 The possibility of an amalgamation of principles has also extended to a unification into a general principle of constructive trusts and proprietary estoppel. There is undoubtedly a degree of overlap between these two principles, but a recent observation shows no enthusiasm for such a unification.377 2.187  The judgment of Lord Steyn in Republic of India v India Steamship Co Ltd (No 2)378 is a leading modern exposition of the law of estoppel by convention and its elements.379 One question which was debated before the House of Lords was whether estoppel by convention and estoppel by acquiescence were but aspects of one overarching principle. Lord Steyn accepted that at a high level of abstraction such an overarching principle could be formulated but was persuaded that to restate the law in terms of such an overarching principle would tend to blur the necessary separate requirements, and distinct terrain of application, of the two kinds of estoppel.380 Again, therefore, an invitation to proceed even towards a limited amalgamation of forms of estoppel was declined.

(ii)  The Theory 2.188  The bringing together of various principles operating within one general area or doctrine of law into one general principle which can then be stated and operated is naturally attractive. Such a process could be seen as a move towards simplicity and clarity and towards the avoidance of a plethora of detailed rules and distinctions. The attraction is all

373 Chitty on Contracts, vol 1, 30th edn (Sweet & Maxwell, 2008) para 1-112. 374 [2014] AC 436. 375 ibid, para 30. The reservation of Lord Goff was explained in Johnson v Gore Wood & Co [2002] 2 AC 1 as stated in para 2.184 above. The Lavarello decision is discussed in ch 4, para 4.52, in connection with estoppel by deed. 376 See ch 3, part (G). The important differences between proprietary estoppel and promissory estoppel, which would stand in the way of any amalgamation of the two equitable principles, are itemised in ch 7, para 7.57. 377 Stack v Dowden [2007] UKHL 17, [2008] 2 AC 432, para 37 (Lord Walker). The subject of constructive trusts and their relationship to proprietary estoppel is discussed in ch 7, para 7.66 et seq. 378 [1998] AC 878. 379 See ch 5, para 5.17 et seq, for a full explanation of this decision. 380 [1998] AC 878, 914.

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2.189  General Questions Relating to Estoppel the greater with estoppel as a doctrine which is burdened with a multiplicity of designations of different forms. A desire to reduce apparent complexity into an underlying simplicity, reductionism, appears to be a human intellectual characteristic.381 Notwithstanding these general considerations, there are major obstacles to the attainment of some unified theory of estoppel which can now be briefly considered and which make it unlikely that any such unification will be achieved. Attention is drawn to three possible obstacles. 2.189  First, there is the central question of the form which a unified principle should take so as to encompass within it what are now seen as essential elements of each form of estoppel. More than one formulation has been suggested but it is useful to take as an example that put forward by Lord Denning. His formulation has been cited earlier:382 When the parties to a transaction proceed on the basis of an underlying assumption – either of fact or of law – whether due to misrepresentation or mistake makes no difference – on which they have conducted the dealings between them – neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so.383

What this formulation appears to amount to is that (a) there must be an underlying assumption made by two or more persons, (b) dealings between them have taken place on the basis of that assumption (what is usually called reliance), and (c) that it would be unjust to allow one party to go back on the assumption. Undoubtedly these words give the flavour of the operation of most forms of estoppel in most circumstances. At the end of the day what it seems to mean is that where two parties have made a common assumption of any kind concerning their relationship and their dealings, a court will hold them to that assumption if it thinks it just to do so. It may be pertinent in relation to general statements of this nature to refer to what Lord Scott said when considering the nature and boundaries of proprietary estoppel. He referred to the language of Deane J in the High Court of Australia: Under the law of this country – as, I venture to think, under the present law of England … proprietary rights fall to be governed by principles of law and not by some mix of judicial discretion, subjective views about which party ‘ought to win’ … and ‘the formless void’ of individual moral opinion.384

Only 10 or so years ago proprietary estoppel was sometimes considered, and applied, as little more than requiring a consideration of the words and actions of the parties and a conclusion as to whether it was unconscionable to hold one party to what had been said. Lord Scott considered that a finding of proprietary estoppel, based on the unconscionability of the behaviour of the person against whom the finding was made but without any coherent formulation of the content of the estoppel, or of the proprietary interests that the

381 Thus, a great achievement of physics has been to reduce the apparent complexity of the physical world into a few basic components. More than 99% of the matter of the world, from our bodies to the centre of the earth, is composed of three basic particles: electrons, and two forms of quarks. A goal of physics is to produce a unified understanding of the three fundamental forces of nature: the gravitational, the electromagnetic and the nuclear force. The difference between physics and law is of course that physics deals with the external world which we did not create and which at its fundamental level we cannot alter, whereas law is entirely a man-made concept. 382 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 122. 383 See para 2.183 for the longer passage. 384 Muschinski v Dodds (1985) 160 CLR 583, 615–16.

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A Uniform Doctrine  2.191 estoppel was designed to protect, invited criticism of the sort made by Deane J in Australia.385 Since that time, a coherent formulation of the content of the estoppel has emerged with the requirements, for example, that the estoppel must relate to a particular unidentified area of land and that what was said must have created a reasonable expectation in the mind of the person asserting the estoppel that he was or would be entitled to some interest in or rights over land. These are important limitations on the operation of proprietary estoppel and it does not seem an advance to throw away such a coherent formulation of the content of this form of estoppel in favour of a wide formulation such as that favoured by Lord Denning. There are other important requirements of other forms of estoppel, for example the requirement that a promissory estoppel applies to the non-enforcement of some legal right or the requirement that an estoppel by convention will only be binding if the convention or assumption has ‘crossed the line’ between the parties, which again are not mentioned within Lord Denning’s general formulation and probably cannot all be captured within any similar general formulation. 2.190  Secondly, when the general principle was put forward in the Texas Bank case it was described as one general principle ‘shorn of limitations’.386 Two of the shorn limitations were stated as the rule that estoppel cannot give rise to a cause of action and that estoppel cannot do away with the need for consideration.387 The stated general principle does not refer to either of these limitations. It seems to follow that on the basis of this general principle without any limitations estoppel can be used as a cause of action in its own right where it would be fair and just that that estoppel should be applied. Yet Lord Denning himself had said previously in the early days of the post-war development of the principle of promissory estoppel that the principle never stands alone as giving a cause of action in itself.388 The other limitation mentioned was the doctrine of consideration in the law of contract, and again Lord Denning had previously said that promissory estoppel ‘can never do away with the necessity of consideration when that is an essential part of the cause of action. The doctrine of consideration is too firmly fixed to be overthrown by a side wind’.389 It seems scarcely satisfactory that such fundamental restrictions on the operation of estoppels should be simply abandoned without a careful examination of the need for the restrictions and of the consequences of such an abandonment. 2.191  The true position with the presently suggested, or indeed any other, general principle appears to be that there are two possibilities. One is that fundamental limitations on the law of estoppel such as those mentioned are abandoned. The doctrine of precedent is such that this could only be achieved by the Supreme Court and the thread of authority as discussed earlier suggests that it is very unlikely that this will happen. The other possibility

385 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 17. One of the most important decisions in the more recent development of proprietary estoppel is that of Oliver J in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 154, in which he took a different view, entering a plea in favour of a broad test of unconscionability without the necessity of forcing the circumstances in which unconscionability arose into ‘a Procrustean bed constructed from some unalterable criteria’. See ch 7, fn 5. 386 See the full citation from the judgment of Lord Denning set out in para 2.183. 387 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 122. 388 Combe v Combe [1951] 2 KB 215, 220. 389 ibid. In fact, as is argued in ch 6, the enforcement in limited circumstances of a promise given without consideration in promissory estoppel does cut across the doctrine of consideration.

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2.192  General Questions Relating to Estoppel is that any general principle as so expressed would have to be qualified by so many rules and sub-rules that it would lose any effectiveness as a useful general principle. One such rule would be the rule that an estoppel cannot by itself found a cause of action save in the case of proprietary estoppel where it can do, and often does, just that. The second possibility seems the more practical, but if a general principle has to be hedged and limited and qualified by a large range of different sub-rules, then one can query what utility the general principle has except as a very general description of the nature and overall effect of the different forms of estoppel. 2.192  Thirdly, there is the function of law within a highly developed legal system. Estoppel as an overall doctrine applies across a wide spectrum of the civil law including commercial relationships, transactions involving land, and family and domestic situations. A root purpose of clear rules of law is that those involved in such transactions and relationships, and those who as lawyers and other professionals are called on to advise them, should be able to predict and explain with reasonable certainty what is the effect of an area of law, such as estoppel or any of its forms, on the rights and obligations of the parties. Such advice can only effectively be given if the rules of law in question are reasonably clear and precise and detailed. If the only resort available to lawyers and others is some very widely expressed principle purporting to capture within it all forms and aspects of estoppel, then what it comes to in practice is that the only sensible advice which lawyers can give to those whom they advise may sometimes be no more than ‘it’s all very general and it’s up to the particular judge’. Of course, a balance has to be struck between wide generalities and excessive rigidities but it is suggested that to promulgate the law of estoppel as a whole as contained within one very generally expressed sentence, even if it does not quite lead to the formless void referred to by Australian and English judges, may still offer less than the guidance which parties to transactions and relationships, potential litigants and legal and other advisers, are entitled to expect from a legal system.390

(iii)  A More Modest Way Forward 2.193  The unification of at any rate large parts of the law of estoppel into a single generally expressed principle therefore seems to have little support in authority and may be faced by significant obstacles as a matter of practicality and legal theory. Even so, a significant movement towards cohesion is attainable and is presaged in recent decisions. An examination of the characteristics common to the main forms of estoppel,391 and of the main elements or components of those forms of estoppel, suggests that for important components a common rule could be stated and applied to certain estoppels. A good starting point is the components of (a) a sufficiently clear statement made, (b) an intention by the maker of the statement that the recipient of the statement should rely on it and act on it,

390 In Gillett v Holt [2001] Ch 210, 225, Robert Walker LJ pertinently pointed out that a form of equitable estoppel, flexible as it was, must be formulated in a disciplined and principled way and that certainty was important in property transactions. Equally pertinently, Lord Neuberger pointed out in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160, para 62, that while there were limited exceptions to the principle of estoppel per rem iudicatam it was not acceptable to reject the application of the principle in any particular case simply because it might be thought to be just to do so on the facts of that particular case. 391 As summarised below, and as mentioned in para 2.168.

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A Uniform Doctrine  2.194 (c) action reasonably taken by the recipient of the statement in reliance on it, (d) detriment that would or might ensue if the maker of the statement was permitted to resile from it, and (e) an overall consideration of unconscionability. These components apply to estoppel by representation, estoppel by convention, promissory estoppel and proprietary estoppel, ie, what are sometimes called the reliance-based estoppels. It ought to be possible to frame a common rule or requirement for these components across these forms of estoppel. In Steria Ltd v Hutchison392 Neuberger LJ, in a case concerning a representation or promise made by a contributor under a pension scheme, and therefore raising potential questions of estoppel by representation or promissory estoppel, referred to the overall test of unconscionability and said that a person asserting an estoppel would be unlikely to be able to satisfy that test unless he could satisfy the three classic requirements. He then described those requirements in the following way: They are (a) a clear representation or promise made by the Defendant upon which it is reasonably foreseeable that the Claimant will act, (b) an act on the part of the Claimant which was reasonably taken in reliance upon the representation or promise, and (c) after the act has been taken, the Claimant being able to show that he will suffer detriment if the Defendant is not held to the representation or promise.393

A somewhat similar statement of principle by Neuberger J can be found, dealing with estoppel by convention, in that he said that in order for an estoppel by convention to be established the court must generally be satisfied that (a) the claimant will suffer real prejudice if the other party or parties to the convention are not kept to it, and (b) that prejudice arises from its reliance on the convention.394 It is also apparent that for the four estoppels here discussed there is a further common component in that the maker of the form of statement which initiates the estoppel, the representation or promise or communication of a common assumption or an assurance, must intend that the statement shall be relied on and acted on. As with other components of estoppel the requisite intention is determined by way of an objective test. This requirement can also be taken forward into a limited definition. 2.194  Based on these formulations it would appear possible to move forward to some general statement of important elements of what may be the four most important of the main forms of estoppel which demonstrates a uniformity in some of their important elements. A broad-brush formulation of the following nature might be at least a starting point: Subject to the further requirements of each form of estoppel, a party who seeks to rely on an estoppel by representation, or a promissory estoppel or an estoppel by convention or a proprietary estoppel must establish (a) that there was made to it either expressly or as an inference from the facts some form of statement of sufficient clarity, whether a representation or a promise or a communication of a common assumption or an assurance, (b) that the statement was intended by its maker to be relied upon and acted upon by the recipient of it, the existence of that intention being judged objectively, (c) that that party as the recipient of the statement reasonably acted in reliance on the statement, reliance meaning that the statement was at least a factor which significantly influenced the action, and (d) that it would in all the circumstances be unconscionable to



392 Steria

Ltd v Hutchison [2006] EWCA Civ 1551. para 93. 394 PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994 (Ch), [2004] Ch 142, para 222. 393 ibid,

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2.195  General Questions Relating to Estoppel allow the maker of the statement wholly to resile from it, a requirement which will normally be satisfied where the party asserting the estoppel would or might suffer significant detriment or a significant risk of such detriment as a result of its actions in reliance on the statement if such a resiling was allowed. The burden of proof on all these matters is on the party who asserts the estoppel.

This formulation attempts to make clear what is sometimes disputed, namely that for the four forms of estoppel there is an overriding requirement of unconscionability which must in every case be satisfied before an estoppel can be put into effect. That unconscionability will normally flow from actions taken in reliance on the initial statement and the resulting detriment or risk of detriment if there is no estoppel. Even so, there may be exceptional cases in which, despite the presence of reliance and detriment it would not be unconscionable if an estoppel was refused. An example of this last situation would be where a third party, who had no connection with the events needed to establish the estoppel, would or might be adversely affected by the operation of the estoppel. A further example might be where the detriment or risk of detriment, albeit significant, was small particularly when compared with the loss to the party against whom the estoppel is being asserted which would ensue if the estoppel operated. 2.195  The limitations of such a formulation are at once apparent. It does not cover estoppel by record or estoppel by deed. The opening words indicate, as is the case, that each form of estoppel may have essential elements which are not covered by the formulation. For instance, a promissory estoppel must rest on a promise not to enforce existing rights and an estoppel by convention must rest on a shared assumption about some existing transaction or relationship between the parties. The rules as to a sufficiency of clarity in the statement are different in that for an estoppel by representation or a promissory estoppel the statement must be clear and unambiguous, whereas for a proprietary estoppel the statement need be only ‘clear enough’. There is nothing in the formulation about the knowledge or foresight of the maker of the statement as to the actions taken in reliance on it where these aspects are important for different forms of estoppel.395 Nor is there any reference to the means of giving effect to the estoppel which vary between forms. Notwithstanding its obvious inadequacy as a complete overall formulation of the four types of estoppel, some formulation of the above nature does at least suggest a way forward, founded on authority, towards a degree of uniformity in certain essential elements, namely the initial statement, acts in reliance on it, detriment and unconscionability, in major forms of estoppel.396

395 As an example of the differences, the usual view is that the maker of an assurance which founds a proprietary estoppel must at the time of the assurance have knowledge of the rights which will be affected if effect is given to the assurance, whereas the maker of a promise which founds a promissory estoppel need not at the time of the promise have knowledge of the rights the enforcement of which is the subject of the promise. See ch 7, para 7.158 (proprietary estoppel) and ch 6, para 6.147 (promissory estoppel) where the contrast is pointed out. 396 An aspect of the unification arises from the matter of the burden of proof in establishing factual matters needed to support an estoppel. The general rule in civil proceedings is that the burden of proof on any matter of fact rests on the party who asserts the fact (Constantine Line v Imperial Smelting Corporation [1942] AC 154, 174) and this rule applies to estoppel generally so that the person who asserts the estoppel bears the burden of proving essential factual components of the estoppel such as the making of a representation or a promise or an assurance and the actions taken by him following that event. It is a further necessary component that the actions taken were taken in reliance on the statement made whatever its form. Yet as regards proprietary estoppel there is significant authority in support of the view that once an assurance and actions following it have been proved by the party asserting

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A Uniform Doctrine  2.197 2.196  A further subject in which the formulation of a single rule for reliance-based estoppels is desirable may be described as the matter of substantiality, one of the five general matters or factors affecting these estoppels and discussed as such in chapter one.397 Substantiality in respect of the events which must follow a statement or promise of any sort which founds a reliance-based estoppel is relevant in three circumstances. (a) The party asserting the estoppel must have acted in reliance on the statement or promise. It is well established that for reliance to be proved the statement or promise need not have been the only or the predominant factor which brought about the subsequent actions of the party claiming an estoppel, but must have been something which at least influenced these actions. The question is whether there is some limiting factor such as that which would rule out an estoppel where the influence was very small or even trifling. (b) The requirement of detriment as a component of the estoppels raises the question of how substantial the detriment has to be if the estoppel is to be relied on. (c) On occasions, the occurrence of detriment is or will be certain if no estoppel is operated. On other occasions, there will be only a risk that if there is no estoppel, detriment will occur. The question is then how high the risk of detriment has to be if an estoppel is to be established. 2.197  In statements of the principle of the various forms of estoppel there is sometimes no limitation stated on whether a matter such as detriment has to be substantial or, if so, how substantial. In other statements of a form of estoppel there is some qualification stated. For example, adjectives such as ‘substantial’ or ‘real’ are sometimes used.398 It is difficult to describe requirements such as are here discussed with precision. A sensible solution which sets some limit to the minimum amount of influence or of detriment or of the risk of detriment would be a requirement for all of the reliance-based estoppels that the influence of a statement or promise on the future conduct of the recipient of it, and the necessary detriment or risk of detriment, must be at least significant if there is to be the operation of an estoppel. This requirement could be stated uniformly across the four reliance-based estoppels in respect of the relevant requirements. Unless this threshold test was satisfied there could be no estoppel. Once the threshold test has been satisfied the degree of the influence or of the detriment or of the risk of detriment would then be a consideration

the estoppel the burden of proving that the actions were not carried out in reliance on the assurance is borne by the person against whom the estoppel is asserted. This matter is discussed more fully in ch 7, para 7.217 et seq, where it is suggested that there is little to justify this anomalous shifting of the normal burden of proof. It would assist uniformity between the main forms of estoppel if this possible shifting of the burden of proof, applicable it seems only to proprietary estoppel (although it has been suggested that a similar rule might apply to promissory estoppel), was abandoned. In New Zealand the modern approach is said to be to subsume the reliance-based estoppels, estoppel by representation, promissory estoppel, proprietary estoppel, and estoppel by convention, into a single form of ‘modern equitable estoppel’. It seems that the fundamental probanda of this merged doctrine are very similar to those suggested in the formation in para 2.194. The requirements have been stated in a textbook as being (a) that a belief or expectation has been created or encouraged by the party against which the estoppel is alleged, (b) that the belief or expectation has been reasonably relied on by the person alleging the estoppel, (c) that detriment will be suffered if the belief or expectation is departed form, and (d) that it would be unconscionable for the person against whom the estoppel is alleged, to depart from the belief or expectation. See Equity and Trusts in New Zealand, 2nd edn (Thompson Reuters, Wellington, 2009) para 19.2.1. 397 See ch 1, para 1.55 et seq. 398 Thus, in a case involving estoppel by representation it has been said that there must be substantial prejudice (see Fung Kai Sun v Chan Fui Hing [1951] AC 489); and in a case involving estoppel by convention it has been said that the detriment shown must be real (see PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994 (Ch), [2004] Ch 142, para 222 (Neuberger J)).

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2.198  General Questions Relating to Estoppel when the final and overall element of the estoppel, the requirement of unconscionability, was examined such that in any individual case the small, albeit significant, nature of the influence or the detriment or the risk of detriment could still, when balanced with other relevant considerations in that particular case, lead to the overall conclusion that it would not be unconscionable to permit the maker of a statement to resile from what had been said or written so that no estoppel is in the end applied. This possible movement towards consistency and uniformity is taken into the broad-brush formulation of aspects common to reliance-based estoppels as suggested in the formulation just put forward. When specific forms of estoppel are discussed in detail, the view consistently put forward in this book is that a twofold test as just indicated is the preferable approach.

(iv)  Further Advances in the Doctrine of Estoppel 2.198  A benefit of common law, as opposed to statutory, doctrines of law is that they can be advanced and adapted usually by decisions of appellate courts without the need for amending legislation. An obvious historical example of this process is that following the decision of the House of Lords in Jorden v Money399 in 1854 it might have been supposed that an estoppel was confined to representations of fact. Yet two decades later in Hughes v Metropolitan Rly Co,400 the House of Lords in effect enforced in limited circumstances a promise relying on what was described as a first principle of equity in what became a predecessor of the modern law of promissory estoppel. Two further adaptations may be under way. One is that there is a powerful suggestion backed by first instance decisions that the dependence of estoppel by representation on a statement of fact or of mixed law and fact may be abandoned and that the statement which forms this form of estoppel may also be one of law.401 The other is that proprietary estoppel may be applied in areas beyond interests in land so as to operate on rights to chattels and on legal rights generally.402 Both developments are to be welcomed in principle and both demonstrate the adaptability of common law doctrines. Both can be accommodated within the broad-brush formulation just suggested.

5. Conclusion 2.199  It is possible to conclude this explanation by drawing three conclusions on the considerably discussed suggestion of a uniform statement of principle of the various forms of estoppel. These conclusions assume the drawing together of the proliferation of titles and descriptions of estoppel into six major forms of estoppel.403 The first conclusion is that there is little support in the authorities for the creation of a single and meaningful uniform statement of the doctrine of estoppel which encompasses the main elements of the various forms



399 Jorden

v Money (1854) 5 HLC 185. v Metropolitan Rly Co (1877) 2 App Cas 439. 401 See ch 3, para 3.18. 402 See ch 7, part (H). 403 See ch 1, para 1.35. 400 Hughes

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Waiver  2.200 of estoppel. Nor is there support at the present time for the amalgamation of two or more forms of estoppel into one single form. Secondly, there are major theoretical and practical obstacles to the creation of any overall principle which is not either so general or so hedged with exceptions and qualifications that it would have little practical utility. Thirdly, there is significant scope for isolating and stating in a single general formulation a number of the essential elements of the four ‘reliance-based’ estoppels which are estoppel by representation, promissory estoppel, estoppel by convention and proprietary estoppel, and there is some judicial support for at least a part of this process.

(H) Waiver 1.  The Concept and Definition of Waiver 2.200  The general understanding of the concept of waiver is that a party who possesses a legally enforceable right by its conduct, which may be words or other actions, gives up in whole or in part its capacity to enforce that right either permanently or temporarily. The noun ‘waiver’ and the verb ‘waive’ are used frequently and repeatedly in legal discussion, sometimes with an understanding that the words have the general meaning just suggested, but often without any precise analysis of the rule of law which is being relied on to bring about the loss of a right. The words are sometimes used in statutes.404 The words are frequently used in the context of the law of estoppel, which is unsurprising since the frequent effect of some forms of estoppel is that a party is prevented from asserting rights which it might otherwise be able to assert, but are also used to describe the operation of legal doctrines outside the confines of estoppel. Waiver is in effect a shorthand expression which denotes the operation, or a part of the operation, of one of these doctrines. Because the words ‘waiver’ and ‘waive’ are so imprecise and can refer to the effect of so many principles of law, forms of estoppel and other principles, the use of the words is generally avoided in the description of estoppel in this book.405 A total avoidance of the language is probably impossible in any legal discussion. The general purpose of this part of the chapter is to try to achieve some clarity by describing the various ways in which the words are used and the various meanings of the words. 404 See, eg, the Insurance Act 2015 referred to in para 2.205. 405 ‘Waiver is a word which is sometimes used loosely to describe a number of different legal grounds on which a person may be debarred from asserting a substantive right which he once possessed or from raising a particular defence to a claim against him which would otherwise be available to him’: Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, 882 (Lord Diplock). Waiver was used in this case to denote the conduct of landlords who allegedly gave up their right to object to an application to the court made by tenants for a new tenancy under Part II of the Landlord and Tenant Act 1954 on the ground that the application was made outside the time limits prescribed by the Act. In Oliver Ashworth (Holdings) Ltd v Ballard (Kent) Ltd [2000] Ch 12, 28–29, Robert Walker LJ, referring to what had been said by Lord Diplock in the Kammins decision, added that waiver was not a precise term of art and that as well as being used to describe the operation of the doctrine of common law election (such as ‘waiver of forfeiture’ in the law of landlord and tenant) it was often used ‘in a wider sense of any deliberate decision by a party not to stand on his strict legal rights’. See para 2.204 for a further description by the same Judge in this decision of ‘elective waiver’ and ‘waiver by estoppel’. In Banning v Wright [1972] 1 WLR 972, 978, 979, Lord Hailsham pointed out that ‘waived’ is derived from the same word as ‘waif ’ – a thing or person abandoned.

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2.201  General Questions Relating to Estoppel 2.201  Other definitions of waiver can be found. One such definition, contained in a modern textbook, is that ‘waiver’ in the true sense of the word can be crudely described as ‘a voluntary or intentional relinquishment of a known right claim or privilege. Put bluntly waiver is an informed choice manifested in unequivocal conduct’.406 The same textbook differentiates between four forms of waiver, waiver by election (ie, the doctrine of common law election), pure waiver, total waiver and unilateral waiver.407 What is certainly clear is that waiver is used in connection with the loss or reduction of rights under a contract but may also apply to the loss or reduction of any legally enforceable rights whatever their subject matter or origin. Waiver may apply to the loss of a right used as the foundation of an assertion of a claim or the loss of a right to rely on some defence to a claim which is being asserted.408 2.202  Given that waiver can have wide and various meanings, at least as far as the principle of law which is said to bring about the waiver is concerned, there are two primary questions which arise for consideration. One question is the ways in which the concept of waiver is used or applied, something which requires a classification of the various ways in which a right may be lost by the operation of different principles of law. The forms of estoppel (other than estoppel by record) are included under this classification but other important principles of law are also involved. The second question is whether there is some separate and independent principle of waiver under which a right may be lost, but not by the operation of any of the established principles of law classified and described in the answer to the first question.

2.  The Various Meanings of Waiver (i)  The General Approach 2.203  It must not of course be supposed that every loss of a right of a party is a waiver of that right. The essence of the concept of waiver is that there are voluntary actions, words or other conduct, of a party which results in the loss of a right which would otherwise be available to that party. The actions must be voluntary if there is to be a waiver but the loss of a right which results from the words or other actions of a party need not result from an intention of that party to give up the rights. In some cases, the party who loses a right by a waiver has no intention of giving up that right but the loss of the right is imposed on that

406 S Wilkin and K Ghaly, The Law of Waiver, Variation and Estoppel, 3rd edn (Oxford University Press, 2012) para 3.14. This work in chapter 3 contains a full discussion of the concept of waiver and the ways in which that concept is used and repays careful study. 407 In Wilkin and Ghaly, chapter 3, pure waiver is described as a situation where a party to a contract has not been put to an election but nevertheless decides to accept different future performance by another party under the contract; total waiver is described as a situation where a party under a contract has failed to perform its obligations and another party accepts that non-performance as proper performance under the contract so foregoing the right of the other party to repudiate the contract and sue for damages; and unilateral waiver is described as a situation where a party under a contract foregoes a right under that contract which enured solely for the benefit of that party. 408 See the Kammins decision referred to above (n 405) which was concerned with the alleged waiver of a statutory right to object to an application made to a court where that application was itself made in pursuance of a statutory right.

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Waiver  2.204 party by a rule of law such as under the doctrine of election. Under this doctrine, a party who has inconsistent rights may act so as to assert one of those rights. That party thereby loses the ability to assert the other right even though it did not have the intention that the other right was to be given up.409 Nonetheless, voluntary conduct by the person who waives a right, the communication of a decision to enforce one of the inconsistent rights, is central to the concept of election. Rights under a contract may be lost by various means, such as by the operation of the doctrine of frustration which generally depends on the happening of external events outside the control of the parties so as to remove the substratum of the contract,410 or by the rescission of a contract for misrepresentation, which is the result of a decision of the misrepresentee to rescind the contract, something which brings the contract to an end and so removes the right of either party to enforce the contract in the future. It would be unusual to describe any circumstances of this nature as a waiver of rights. The classification of the meanings of waiver is therefore here confined to ways in which contractual or other rights are lost as a result of the voluntary conduct or action of the person entitled to those rights. 2.204  As a generality there are three broad ways in which the concept of waiver is used or applied. (a) A waiver of a right may mean the result of the operation of the doctrine of common law election, a choice between the exercise of inconsistent rights. If waiver is to be used at all as a description of the operation of a legal principle, it may be best to confine its usage to election. A waiver in the sense of an election can then be distinguished from the operation of a form of estoppel.411 (b) A waiver of a right may be a way of describing the result of the operation of one or more of the forms of estoppel. If waiver is to be used in this fashion it may be most apt as a description of the result of the operation of promissory estoppel under which a party with a contractual or other right promises not to enforce that right with the intention that the promise is to be acted upon and the promisee does act in reliance on the promise to his detriment. The promisor may then be prevented from resiling from his promise.412 (c) A right may be lost, without the operation of the principles of election or of any form of estoppel, by a sufficiently long course of action or, more usually, inaction by the possessor of the right from which the permanent abandonment of the right is inferred. It is possible to describe the result of the operation of this separate principle of law as a waiver. A useful guide to a number of the ways in which waiver is used as a description is the classification of the uses of the word by Lord Diplock in the Kammins decision.413 Reference is made to the descriptions of various forms of waiver given by Lord Diplock

409 See ch 8 for a full explanation of the doctrine of common law election. 410 It is possible that one party to a contract brings about the events which lead to the frustration of the contract, something termed self-induced frustration. 411 The use of waiver in the sense of a common law election and in contradistinction to the operation of an estoppel is illustrated by the decision of the High Court of Australia in Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394. The issue was whether the government was prevented from asserting a limitation defence when it had previously stated that it would not rely on that defence and had not pleaded such a defence in its initial pleading. In the majority decision of the Court two Judges considered that the Government had lost the right to rely on limitation by reason of a common law election and two Judges considered that the Government had lost that right by the operation of a form of estoppel. See ch 6, para 6.19, for a fuller description of the Verwayen decision. 412 See ch 6 for a full description of promissory estoppel. 413 [1971] AC 850, 882–83.

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2.205  General Questions Relating to Estoppel in subsequent paragraphs. The Kammins decision, while useful for differentiating various uses of the concept of waiver, is now nearly half a century old and the classification and the more precise definition of the various forms of estoppel have considerably advanced over that period. More recently, Robert Walker LJ has described waiver when used to describe the first or second of the above three principles as respectively ‘elective waiver’ and ‘waiver by estoppel’.414 2.205  Apart from the operation of the principles of law mentioned in the last paragraph a right may of course be waived by the operation of a provision in a contract to that effect or under a statutory provision which permits a waiver. For example, under section 10(2) of the Insurance Act 2015 an insurer is not liable for any loss which occurs after a breach of warranty by the insured but before the remedy of that breach, but section 10(3)(c) provides that the exclusion of liability does not apply where the insurer waives the breach of warranty. Again no independent doctrine of waiver is engaged. In the first case the waiver depends on the operation of the law of contract, and in the second case the waiver depends on the language of the statutory provision.

(ii)  Classification of Meanings 2.206  The three broad ways in which the word ‘waiver’ is used have just been described. It is now necessary to look somewhat more closely at the usages of the word. It is not practicable to provide an exhaustive account of the ways in which waiver has been used as a description of a legal result in a multitude of decisions of courts and other legal writings. The words ‘waive’ or ‘waiver’ have been used in many judicial decisions and other legal writing and it would be hubristic to suppose that the following descriptions comprehend every possible usage of the words. The present attempt at classification aims to describe briefly the six main uses of the concept. In some instances references are given to a fuller description of the legal principles involved found later in this book. The uses are (a) an agreed variation of a contract involving a loss of a right, (b) a common law election, (c) a promissory estoppel, (d) some other form of estoppel, (e) the doctrine of implied abandonment, and (f) the voluntary renouncing of a right in legal proceedings in order to secure the enforcement of a contractual or other right. 2.207  The first use of waiver is to describe the result of an agreed variation of a contract. Parties to a contract are free to make a further contract which varies their rights and obligations under an existing contract. It is essential to the enforceability of the contract of variation that it is supported by consideration, a requirement of every contract unless contained in a deed. Consequently a purported variation of a contract which does no more than reduce the obligations of one party without any consideration for that reduction will

414 Oliver Ashworth (Holdings) Ltd v Ballard (Kent) Ltd [2000] Ch 12, 30. A similar view was expressed by Lord Hailsham in Banning v Wright [1972] 1 WLR 972, 978, where he said that the primary meaning of the word ‘waiver’ in legal parlance was ‘The abandonment of a right in such a way that the other party is entitled to plead the abandonment by way of confession and avoidance if the right is thereafter asserted, and is either express or implied from conduct’. He added that waiver may sometimes resemble a form of election and sometimes be based on ordinary principles of estoppel.

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Waiver  2.209 not be enforceable as a contract. If A undertakes to supply goods to B for a stated price at a stated date an agreed variation which reduces the price payable by B but does nothing more will not be enforceable since no consideration is given for the promise to accept a reduced price.415 However, if there is also a variation extending the time for delivery of the goods by A the promises constituted by both variations of the terms of the contract will be valid and enforceable since there is consideration for each promise constituted by the promise of the other party.416 This matter is examined in more detail in chapter six on promissory estoppel since there are circumstances in which a promise amounting to a variation is enforceable even in the absence of consideration by way of a promissory estoppel.417 The significance of these rules for present purposes is that an agreed variation of a contract which reduces a contractual obligation is sometimes described as a waiver of the right to insist on full performance of the contract. It is of course possible that there is an enforceable contract which varies rights which are not themselves contractual. 2.208  The second use of waiver is as a description of the operation of the doctrine of common law election, ie, the principle that where a person has two or more inconsistent rights and communicates to the party who has the corresponding obligations his decision to rely on one of the rights, he is thereafter prevented from asserting the other right or rights. The doctrine of election is distinct from any form of estoppel and there are important differences between an election and an estoppel which are described later.418 The description as a waiver of one of the circumstances in which an election occurs, the right to forfeit a lease for breach of covenant, has become engrained through centuries of use. A landlord who demands or accepts further rent due when he knows that a breach of covenant has occurred is taken to have waived the right to forfeit the lease by reason of any such breach which has occurred up to the date of the demand or acceptance. The reason is that the exercise of the right to receive the rent is inconsistent with the right to forfeit the lease, since the forfeiture brings the lease to an end including the duty to pay any future rent, so that the receipt of the rent brings about an election not to forfeit the lease.419 If the expression ‘waiver’ is to be used it is suggested that its usage is confined to the operation of common law election where, at any rate as regards the forfeiture of a lease, that usage has become traditional and well understood.420 2.209  The third use of waiver is as a description of the result of a promissory estoppel. A promissory estoppel is a promise not to enforce a legal right against a person in reliance on which the promisee acts to his detriment with the result that the promisor may be

415 Where the contract is for the repayment of a sum of money the principle applied can be described as the operation of the rule in Pinnel’s Case (1602) 5 Co Rep 117a. This rule is discussed in connection with promissory estoppel in ch 6, para 6.47 et seq. 416 The situation in law where the parties agree that a contract can be enforced even though a condition precedent which is wholly for the benefit of the party seeking to enforce the contract is not fulfilled is discussed in para 2.213 in connection with whether there is an independent doctrine which permits the waiver by a party of a contractual provision which is wholly for the benefit of that party. It is there suggested that what is involved in such a situation can be best regarded as a separate contract to vary the first contract which is supported by consideration. 417 See ch 6, para 6.41 et seq. 418 See ch 8, para 8.121 et seq. 419 See ch 8. 420 Election is the first type of waiver identified by Lord Diplock in the Kammins decision (at 833).

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2.210  General Questions Relating to Estoppel prevented from going back on his promise. The effect is that the promisor loses permanently or temporarily a right which would otherwise be available to him.421 In these circumstances the promisor can be said to have waived his right even though there was no consideration for the promise not to assert that right.422 What is significant is that the result does not arise from the promise alone but depends on the subsequent actions of the promisee. As with election, if waiver is used as a description of the effect of a promissory estoppel it describes the effect of a specific principle of law with its own requirements for its operation.423 An indication of waiver being used as the creation of a promissory estoppel is the decision of the Court of Appeal of New Zealand in Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd.424 2.210  The fourth use of waiver is as a description of the operation of some form of estoppel other than promissory estoppel. Thus, if a person makes a clear representation of an existing matter and the representee acts on the representation to his detriment a common law estoppel by representation arises so as to prevent the representor from asserting the contrary of what he has stated. It can be said that in these circumstances the representor has waived the right to assert or rely on the true facts. A proprietary estoppel arises where the owner of land gives to someone an assurance that that person will acquire an interest in or rights over the land and the recipient of the assurance acts to his detriment in reliance on the expectation of an entitlement to that interest or rights, for example by performing a substantial period of unpaid services to the person who gave the assurance.425 In this situation a court may order the vesting of the interest or rights in the recipient of the assurance.426 Major examples of the operation of this form of estoppel are assurances that a person will inherit land or an interest in land on the death of the owner who gives the assurance. It can be said that the owner of the land has waived his right to deal with his land by a sale of it or to leave it on his death to any beneficiary that he wishes. Where a contract or some other transaction has a particular meaning, the parties to it may nonetheless form a shared assumption that it has a different meaning and if one party acts on that assumption to his detriment the other party may then be bound by the shared assumption as to the meaning which has been attributed to the contract or transaction. In this way there arises an estoppel by convention.427 It can be said that a party to a contract or other transaction, by entering into the shared assumption with the result 421 This is a brief description of the essence of promissory estoppel. This form of estoppel is described in more detail in ch 6. If there is consideration for the promise then of course it operates as an ordinary contract to remove or alter the right in question. It is sometimes suggested that promissory estoppel can result only in a suspension of rights but there seems no reason why the principle should not have a permanent effect. 422 This type of waiver was described as a quasi-estoppel by Lord Diplock in the Kammins decision (at 883). This is not a description of promissory estoppel which has passed into general usage. 423 A promissory estoppel must be distinguished from a common law estoppel which was described by Lord Diplock in Kammins (at 883) as ‘an estoppel in the strict sense of the term’. A common law estoppel by representation is referred to in the next paragraph. 424 [2014] 3 NZLR 567 in which a tenant ‘waived’ a right of first refusal to purchase the freehold and was held to the waiver by reason of a promissory estoppel since the landlord had acted to its detriment by incurring loan fees in reliance on the ‘waiver’. 425 Proprietary estoppel is described in detail in ch 7. Lord Diplock in the Kammins decision (at 883) described this as the doctrine of acquiescence as explained by Fry J in Willmott v Barber (1880) 15 Ch D 96. Estoppel by acquiescence is a name sometimes given to proprietary estoppel. 426 There is a wide range of orders which, following the establishment of a proprietary estoppel, the court may make instead of giving precise and literal effect to the assurance. These are described in ch 7. 427 See ch 5 for estoppel by convention.

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Waiver  2.212 that the other party acts on the assumption in question, has waived his right to insist on giving effect to the true meaning of the transaction. As with promissory estoppel, and as with the doctrine of election, none of these instances of the use of the word ‘waive’ involves some separate doctrine of waiver. All that the use of the word does is to indicate by way of a shorthand description the effect of the operation of a separate doctrine of law, namely the particular form of estoppel which arises. 2.211  The fifth possible use of the concept of waiver is to describe the effect of the doctrine of the abandonment of rights. It has been held in a series of decisions that when a party has a contractual or other right that another party shall not act in a particular way, such as rights under a restrictive covenant or rights under a covenant in a lease, and there has been to the knowledge of the first party a long series of breaches of the obligation over a substantial period without any protest by it, the first party is taken to have impliedly abandoned any right to enforce the obligation in the future. The best example of the modern application of this doctrine is Attorney General of Hong Kong v Fairfax428 in which a restrictive covenant on development had been imposed over a substantial area of land in a demise by the Crown in Hong Kong and there had been repeated breaches of the covenant by the construction of various developments over a period of 40 years without any objection or protest by the Crown or the Government to what had been done. It was held that by reason of these events the Crown had lost the right to prevent a further development which was in breach of the terms of the covenant. The same principle has been applied in the law of easements where the party entitled to the benefit of an easement has stood by and tolerated without objection for a long period repeated breaches of the easement, and this conduct can be said to constitute an intention by that party to abandon any further reliance on the easement by itself or any capacity to transfer the benefit of the easement to any other person.429 It can be said that by its conduct the owner of the right in question has waived any ability to enforce the right in the future. If waiver is used in this sense it must be distinguished from waiver by election. To revert to the facts of the Fairfax decision, if the Crown had accepted rent due after a single breach of covenant with knowledge of that breach then there would have been a waiver by the Crown of the right to forfeit the lease for that breach, but the right to enforce the covenant in respect of any future breaches by any means available would not have been lost. Abandonment is different in that it prevents any further reliance on the obligation in question and any further enforcement of it as to future events by any means.430 2.212  A sixth possible use of waiver is to describe circumstances in which in connection with legal proceedings a party to a transaction unilaterally and voluntarily gives up some benefit in order to succeed in the litigation. A party may of course at any time reach its own decision on whether at that time to enforce or not enforce some right or benefit

428 Attorney General of Hong Kong v Fairfax [1997] 1 WLR 149. See also Gibson v Doeg (1857) 2 H&N 615; Hepworth v Pickles [1900] 1 Ch 108. There is no exact period over which the passive absence of protest has to endure for an abandonment of a right to be inferred. Much depends on the facts of each case, such as the frequency and seriousness of the breaches. It is sometimes thought that a period of at least 20 years is required by analogy with the period of the exercise of some activity, such as the use of a way over another person’s land, which may bring about the creation of an easement by prescription either at common law or under the Prescription Act 1832. 429 Gotobed v Pridmore (1971) 217 EG 759; Tehidy Minerals Ltd v Norman [1971] 2 QB 528. 430 Banning v Wright [1972] 1 WLR 972, 989. See paragraph A[3082] of Hill & Redman’s Law of Landlord and Tenant (LexisNexis).

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2.213  General Questions Relating to Estoppel a­ vailable to it, in litigation or otherwise. That party can at a later time if it wishes, and if having regard to the passage of time and other circumstances the right is still available, choose to enforce it.431 It would be straining language to call such a situation by itself a waiver.432 On the other hand, a party to a contract may have the benefit of a provision in the contract, for example a condition to which the contract is subject, which is wholly for the benefit of that party and that party may decide and announce unilaterally and without any agreement of the other party to give up reliance on that provision in order to be able to enforce the contract, if necessary by legal proceedings. The giving up of the benefit can be described as a waiver.433 It may be that a situation of this nature is an example, and perhaps the only example, of the voluntary and unilateral giving up of a right which results in the right being lost otherwise than by the operation of some separate principle of law such as an estoppel or election or agreement. In such a case, the waiver is confined to the circumstances of securing the enforcement of the contractual or other right by court proceedings if necessary and ceases to be relevant after that right has been enforced. It is said that a provision to be capable of being waived in the circumstances here considered not only has to be solely for the benefit of the party who waives it but also has to be a provision which does not go to the root of the contract.434 It is suggested under the next heading of the examination of the meaning of waiver that the sixth possible meaning of waiver here discussed may be the only example of a waiver which can result in the loss of a right without there being the operation of some separate principle such as an election or an estoppel. 2.213  A unilateral decision by a party not to rely on a provision which is wholly for the benefit of that party is to be distinguished from an agreement between the parties that that provision shall be ignored. Where the enforceability of a contractual or other right is subject to a condition which is wholly for the benefit of one party, that party may offer to give up reliance on the condition and so gain the ability to enforce the right without recourse to litigation and the other party may agree. Although this situation can be described as waiving the condition, the true analysis may be that it is a separate contract varying the terms of the 431 Where a party to subsisting litigation fails to raise some claim which it could or should then have raised, an attempt to assert the same or a similar claim in later proceedings may be prevented not because of an ordinary estoppel, but by reason of it being an abuse of the process of the court. This aspect of abuse of process is examined in ch 9. 432 If the non-enforcement of a right is a decision between two mutually inconsistent rights communicated to the other party, then the selection of the right to be enforced may mean the loss of the inconsistent right by reason of the doctrine of election. Election is sometimes called a waiver and is described in para 2.208 as the second of the six main uses of the concept of waiver. 433 An example of waiver used in this sense is Morrell v Studd & Millington [1913] 2 Ch 648. An offer and acceptance for the sale of land created a binding agreement subject to the balance of the purchase price being paid within two years from completion and subject to a condition that security for the delayed payment should be secured to the vendors’ satisfaction. Prior to the completion date, and before the terms of the security had been agreed, the purchasers purported to resile from the contract. The vendors succeeded in obtaining specific performance of the contract, it being said that the provision for securing the balance of the purchase price was a term inserted solely in their favour and that they were entitled to waive it in the court proceedings. 434 Lloyd v Nowell [1895] 2 Ch 744, 747. In this case a contract for the sale of land was subject to the completion of a formal contract and it was held that the vendor could not waive this provision and turn the subject to contract agreement into an enforceable contract, one reason being that the provision went to the root of the contract. The provision in question was of course one in a non-binding agreement which was for the benefit of both parties in that it determined for both of them the status of their arrangement. If a provision is truly for the benefit of one party only and may be waived in the limited circumstances here under discussion, it is not clear why such a waiver is not possible because the provision is an important one.

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Waiver  2.214 enforceability of the right. Consideration moves from the first party in that it gives up reliance on a condition wholly for its benefit and consideration moves from the other party in that it gives up the capacity to prevent enforcement of the right. Conceptually, the situation may be no different from the parties agreeing to dispense with a condition which is for their mutual benefit. The future inability of either party to rely on the condition in both cases depends not on a waiver but on the operation of a contract of variation.

3.  A Possible Separate Meaning 2.214  A question which requires an answer is whether there is a separate and independent principle of waiver which allows a party voluntarily and unilaterally to give up a right available to it, with the result that it is bound in the future by his giving up of the right, even though the losing of the right cannot be justified by the application of some other doctrine such as election or a form of estoppel.435 The simple question is this: if A has a right against B and announces to B that he gives up the whole or a part of that right, is A thereafter entitled to enforce that right or enforce that right in full against B whether or not B has acted in some way upon what has been announced to him and irrespective of any other requirements? The answer is, or should be, that a right cannot be lost in this way by some independent doctrine of waiver. If A is owed £1,000 by B and A tells B that he will accept £500 as the full discharge of the obligation the well-established rule of law is that if these are the only relevant circumstances A can still recover the full £1,000 or can recover the £500 balance of the £1,000 if B has paid £500. This is the effect of the rule in Pinnel’s Case436 which remains a part of the law of England. If the rule was otherwise and A could not recover the full amount there would be an enforcement of a promise made without consideration or the variation of a contract made without consideration.437 Such a result would also make a nonsense of promissory estoppel under which a party can be bound to its promise not to assert a right or the whole of a right but only if the other party with the corresponding obligation has acted to its detriment in reliance on the promise. If the same result could be reached without reliance or detriment then there would be little purpose in the principle of proprietary estoppel where reliance and detriment are cardinal elements or requirements of the estoppel.438 It can hardly be the case that in the example just given A can sue for the full amount if there

435 This is the second of the two primary questions identified in para 2.202. 436 (1602) 5 Co Rep 117a. The same principle was applied by the House of Lords in Foakes v Beer (1884) 9 App Cas 605. See ch 6, para 6.48. An attempt to outflank this simple rule, founded on the doctrine of consideration, has over recent years been made by recourse to the doctrine of so-called ‘practical consideration’. This is a subject in its own right which is to some extent bound up with promissory estoppel and is discussed by reference to recent authorities in ch 6, para 6.61 et seq. 437 As Lord Goff put it in Johnson v Gore Wood & Co [2002] 2 AC 1, 40: ‘The law of consideration may not be very popular nowadays but, although its progeny, the law of privity, has recently been abolished by statute, the doctrine of consideration still exists as part of our law’. Given these uncertainties it is not surprising that the Supreme Court has recently indicated that the present subject, including Foakes v Beer, is ripe for re-examination by that Court: MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119, para 18 (Lord Sumption). 438 The requirements of promissory estoppel are described in ch 6. There is a view, despite strong authorities to the contrary, that detriment or prejudice to the promisee if no promissory estoppel is established is not an essential element of promissory estoppel and this point is discussed in ch 6, para 6.192. Detriment is undoubtedly an essential element of proprietary estoppel which is the other form of equitable estoppel.

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2.215  General Questions Relating to Estoppel has been an agreement that the debt shall be reduced to £500 but that if A voluntarily and unilaterally announces that he will accept £500 as a full discharge of the debt he is bound by his statement. A leading decision on promissory estoppel, and the beginning of the modern establishment of the principle, is that of Denning J in Central London Property Trust Ltd v High Trees House Ltd439 in which landlords promised not to enforce the full rent under a lease for a limited period. A covenant to pay rent is wholly for the benefit of the landlord and if such a right could be lost as a result of a simple statement that the right was being ‘waived’ then no promissory estoppel, with its additional requirements of reliance, detriment and unconscionability, would have been necessary to justify the decision that the promise was binding by virtue of a promissory estoppel. 2.215  There are decisions or judicial statements which can be read as the operation of a separate principle of waiver. It is difficult to find any simple articulation of this supposed separate principle.440 What is sometimes said is that a party can waive a stipulation which is entirely for its benefit such that that party is thereafter bound by its waiver.441 Presumably, if such a doctrine exists it is at least necessary that the party waiving the right communicates his decision to the party against whom the right is exercisable. Yet on closer scrutiny some of these decisions can be seen as the application of some other principle or rule of law. A decision of the Court of Appeal which might be considered as the operation of a separate waiver principle is Hawksley v Outram.442 A gave to B a power of attorney enabling B to sell A’s property. B agreed to sell a business in which he and A and others held a part, to a purchaser with a stipulation that the vendors would not carry out any like business within 50 miles of the location of the business sold. It was suggested that the stipulation was in restraint of trade and that the power of attorney did not entitle B to enter into such a stipulation. The purchaser sought specific performance of the agreement stating that he was willing to give up the benefit of the stipulation. Specific performance was ordered on the footing that the stipulation was given up. Specific performance is an equitable remedy and there is no reason why it should not be ordered on condition or on an undertaking that a particular provision in a contract is not enforced by the person seeking specific performance. This situation is not the same as would have arisen if the agreement for sale had been completed with the stipulation in question and the purchaser had then unilaterally announced that he would not enforce the restraint of trade provision. It is doubtful if the purchaser could have been held to his announcement in the absence of other circumstances such as would have created a promissory estoppel enforceable against him. It may be that the type of unilateral renunciation by a party of a right wholly for the benefit of that party, as here illustrated, is confined to such a renunciation in legal proceedings made as a means of obtaining the enforcement of a contractual right, and that such circumstances are the only true instance of a waiver

439 [1947] KB 130. 440 One clear statement of a principle in a modern decision in a commercial setting is that of Potter LJ in Glencore Grain Ltd v Flacker Shipping Ltd: The Happy Day [2002] EWCA Civ 1068, [2001] 1 All ER (Comm) 659, where he said: ‘Unilateral waiver arises where X alone has the benefit of a particular clause in a contract and decides unilaterally not to exercise that right or to forego the benefit conferred by that particular clause’. 441 Such a rule might be dignified by the latin expression: ‘quilibot potest renunciare iure pro se introducto’ (a person may renounce a right introduced for his benefit): Beawfage’s Case (1572) Co Rep 101a; Wilson v McIntosh [1894] AC 129, 133. 442 Hawksley v Outram [1892] 3 Ch 359, 376 (Lindley LJ).

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Waiver  2.217 which is not the operation of some other principle of law.443 It is suggested in this part of the chapter that the two primary meanings of waiver are a description of the doctrine of common law election and of various forms of estoppel, particularly promissory estoppel, as well as a description of the doctrine of the inferred abandonment or rights by long and repeated non-enforcement. All of these meanings are the operation of well-established and separate principles of law. 2.216  Other decisions which are stated to rest on a waiver can be understood today as being the application of one of what have become the established forms of estoppel. An instance is Panoutsos v Raymond Hadley Corporation of New York444 in which a contract for the sale of flour contained a provision that payments were to be made by the purchaser by confirmed letters of credit. The contract proceeded and was implemented by shipment of goods, including an extension of time given to the vendors. Letters of credit were issued but were not ‘confirmed’. The vendors purported to cancel the contract because of this omission by the purchaser. It was held that the vendors were not entitled to cancel the contract without giving reasonable notice so that the purchasers had an opportunity to rectify the omission. It is possible that on the current understanding of the law these circumstances would have created a shared assumption that the confirmation of letters of credit was not necessary for the continuation of the transaction, something on which the purchasers relied by making payments and operating the contract. It is therefore possible that what was being applied by the Court was an estoppel by convention as that form of estoppel is now understood.445 Nevertheless, Lord Reading CJ described the result as attributable to the proposition that ‘It is open to a party to a contract to waive a condition which is wholly for his benefit’.446 2.217  A vivid illustration in more recent times of the operation of what has become established as promissory estoppel being described as a waiver is Barratt (Bros) Ltd v Davies.447 A person involved in a motor accident had the benefit of a contract of insurance of which it was a condition that he should send to the insurers any notice of intended prosecution which he received. The insured received such a notice but did not forward it to the insurers. The insurers obtained the necessary data from the police. They purported to repudiate liability under the contract by reason of the failure of the insured to forward the notice to them. The insurers had written to the insured stating that proceedings against him were being taken in the magistrates court and asking why he had not notified them of the proceedings since they would wish to arrange his defence. It was held that the repudiation of liability by the insurers was unlawful. Lord Denning MR put the principle of waiver as follows:448 If one party by his conduct leads another to believe that the strict rights arising under the contract will not be insisted on, intending that the other should act on that belief, and he does act on it,

443 This type of situation is discussed in para 2.212 where it is suggested that it may constitute a separate form of waiver as the sixth of the six usages of that expression there identified. 444 Panoutsos v Raymond Hadley Corporation of New York [1917] 2 KB 473. 445 It is also possible to recognise this decision as an illustration of a promissory estoppel, an inferred promise by the vendors not to insist on the confirmation of letters of credit, a promise on which the purchasers relied in continuing to pay for goods sent to them. 446 [1917] 2 KB 473, 477–78. 447 Barratt (Bros) Ltd v Davies [1966] 1 WLR 1334. 448 ibid, 1339. See also on waiver, Salmon LJ (at 1340).

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2.218  General Questions Relating to Estoppel then the first party will not afterwards be allowed to insist on the strict rights when it would be inequitable for him to do so: see Plasticmoda Societe per Azoni v Davidsons (Manchester) Ltd’.449

This appears to be an articulation of the principle of promissory estoppel, the only omission being that the person asserting the estoppel must, on the modern understanding of the law, not only have acted but have acted to his detriment in reliance on what was stated. Once again, therefore, one sees that what is described as a waiver is in truth no more than the application of an established form of the law of estoppel but with the designation of waiver given to its effect.450

4. Conclusion 2.218  The word ‘waiver’ is used by lawyers and others in many circumstances to indicate that a right of some sort has been voluntarily renounced. The context is usually clear and the loss of the right can generally be seen to be attributable to the operation of some established legal doctrine such as common law election or a form of estoppel. It is possible that there is some separate and unilateral concept of waiver which permits a party voluntarily and unilaterally to renounce reliance on a right which exists wholly for the benefit of that party, such that thereafter and without any other requirements the party is bound by that renunciation. It is difficult to reconcile such a general concept (a) with the doctrine of consideration since there is no apparent consideration for such a promise to renounce a right, and (b) with the principle of promissory estoppel under which a party can be bound by a promise not to enforce a right available to that party, but only if the other requirements of the estoppel, reliance on the promise to its detriment by the promisee, are satisfied. It may be that a waiver constituted by a voluntary renunciation of a right which is wholly for the benefit of its owner, and not falling within any other separate principle of law, operates in a binding fashion only where it is in effect an undertaking given to a court in legal proceedings with the purpose of obtaining some order or remedy. It is suggested that for the reasons mentioned in this discussion it would most conduce to clarity if the use of the word ‘waiver’ were either avoided or confined to a description of the effect of the doctrine of common law election.

(I)  Estoppel and Third Parties 1. Introduction 2.219  Most forms of estoppel come into operation as a result of a statement of some kind made by one party, intended to be acted upon, such as a representation of fact or a promise or an assurance or a communication of a common assumption, followed by action in

449 Plasticmoda Societe per Azoni v Davidsons (Manchester) Ltd [1952] 1 Lloyd’s Rep 527, 530. 450 This view certainly coincides with the analysis of waiver explained by Lord Diplock in Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, 882–83.

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Estoppel and Third Parties  2.221 reliance on the statement by the person to whom the statement was given. The estoppel therefore operates with its various results as between the maker and the recipient of the statement. A question of fundamental importance is whether in certain circumstances a person other than the maker of the statement can be bound by the estoppel, and whether a person other than the immediate recipient of the statement can take the benefit of the estoppel. Questions of this nature are not confined to the law of estoppel. In other areas of the law fairly well-established rules have emerged as to who, in addition to the initial parties, may take the benefit or must bear the burden of contractual and other provisions. The position is especially well detailed in the area of the law of real property where, by reason of the indestructible nature of the property as the subject matter of interests and rights, it is important to know whether the burden of interests and rights affecting land can pass to successors in title of the land originally burdened by those interests and rights. Unfortunately, in the law of estoppel there is a deficiency of clear authority and of clear principles on the same overall subject. It has been accepted since the earliest statements of the law of estoppel that it can create rights and burdens which are not necessarily entirely personal to the immediate parties and can extend to their ‘privies’.451 The question is whether the benefit or the burden of an estoppel can pass to parties other than the original parties to the events which give rise to the estoppel whether or not those other parties can be described as privies. A rule that the benefit or the burden of the estoppel cannot so pass has been described as the rule of privity.452 2.220  Before coming to such explanation as can be given of the specific rules on the present subject, it helps to mention four general matters. These matters are (a) the form of estoppel involved since the rules may be different for different forms of estoppel, (b) the passing to third parties of the burden or the benefit of the estoppel, since the rules are not necessarily the same in each case, (c) the particular question of interests and rights in land and the particular effect of a proprietary estoppel which generally relates to such rights and interests, and (d) the statutory requirements of registration of interests and rights affecting land if they are to bind third parties. 2.221  Such guidance as can be found in the authorities is discussed in the explanation of the law to be given. In many cases the authorities do not discuss underlying principles.453 On occasions, general statements are made on the subject of a stranger not being able to benefit from an estoppel.454 At the end of this part of the chapter, and by way of conclusion, 451 According to Coke on Littleton an estoppel is binding on the parties to it and their privies: Co Litt 352a and 352b. A privy ‘signifies him that is partaker, or hath an interest, in any action or thing’: Covel’s Interpreter (1672). Today a privy to an estoppel generally means a successor in title to an interest, usually an interest in land, held by an original party to the estoppel. 452 In Hunter v Chief Constable of the West Midlands Police [1980] QB 283, 317, Lord Denning MR in the Court of Appeal described the principle of privity in relation to estoppel by record as being that ‘The only persons who can take advantage of the estoppel or are bound by it are the two parties to the previous proceedings themselves or their privies. No third person can take advantage of it or be bound by it because he was not a party to the previous proceedings’. 453 An exception is the judgment of Lord Mustill in the Privy Council in the appeal from New Zealand in Goldcorp Exchange Ltd (In Liquidation) [1995] 1 AC 74: see para 2.273 where relevant principles are discussed, including the nature of an estoppel by representation. 454 An example is the statement of Mellor J in Knights v Wiffen (1870) LR 5 QB 660, 666, that the reason for an estoppel ceasing at once when a stranger to the arrangements sought to avail himself of statements was that they were not made as a basis for him to act upon, adding that such statements ‘are for a stranger evidence against the party making the statement, but no more than evidence which may be rebutted’.

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2.222  General Questions Relating to Estoppel an attempt is made to suggest certain general principles by way of guidance on the general subject of the transfer of the burden and the benefit of estoppels to third parties.455

(i)  Different Forms of Estoppel 2.222  The importance of the possible effect of an estoppel on third parties varies across the main forms of estoppel. An estoppel by representation requires the court as between the representor and the representee to treat as correct a fact which is in reality not correct. This operation of the estoppel depends on the previous actions towards each other of the parties to the litigation. There may be in some cases no reason to treat a fact differently from the reality in respect of anyone else who has not carried out the previous conduct in question. The same may be the case for the purposes of an estoppel by convention where the shared assumption which founds the estoppel is between two parties who are the parties to a contract or other transaction between them, and where the benefit of the contract or other transaction may be assigned. 2.223  Third parties are more likely to be affected by a promissory estoppel since the promise not to enforce a right which is the basis of the estoppel may often involve an interest in land and the three leading cases which establish this form of estoppel all concerned leases of land.456 To take the High Trees457 case as an example, the landlords of a block of flats let on a 99 year lease promised in 1940 that they would require payment of only a half of the contractual rent for the duration of the war. It would have been strange if the original landlords were held to their promise by the application of the principle of promissory estoppel but that the estoppel would cease to operate if the landlords had sold the reversion to a successor in title after six months. A proprietary estoppel has traditionally involved the creation of an interest in land in the claimant by an order of the court following some form of assurance made to the claimant.458 If the interest involved is a proprietary interest such as a lease or an easement then following the implementation of the order that interest will be enforceable just as if the interest had been created voluntarily and not by an order of the court. A more difficult question is the effect on the claim where the interest of the defendant landowner is transferred between the date when the estoppel comes into effect by reason of an assurance having been given and actions having been taken in reliance on the assurance and the date of what has become known as the crystallisation of the estoppel which is the date when the court by its order decides how to give effect to it. It seems obvious that in the type of situation considered in this paragraph some rules need to be established as to the effect of the two forms of equitable estoppel, promissory and proprietary estoppel, on third parties.

455 See para 2.291 et seq. 456 Hughes v Metropolitan Rly Co (1877) 2 App Cas 439; Birmingham and District Land Company v London and North Western Rly Co (1889) 49 Ch D 268; Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. Later decisions applied the principle of promissory estoppel to rights other than rights in land such as a licence to manufacture articles using a patent: see Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd [1955] 1 WLR 761. 457 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. 458 It is likely that today this form of estoppel can relate to rights in chattels and rights not involving any corporeal property: see Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764, and see ch 7, part (H).

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Estoppel and Third Parties  2.227 2.224  It is because of these differences in the potential for different forms of estoppel to affect third parties that in this part of the chapter the subject is treated by reference to the five main forms of estoppel. In this survey no reference has been made to estoppel by record. Estoppel by record, and its main component of estoppel per rem iudicatam, stand to a considerable extent outside the general doctrine of estoppel. A brief reference to estoppel by record is made later in this part of this chapter but the general question of when an estoppel by record benefits or burdens a party who was not a party to the judgment which creates the estoppel is best explained in detail in chapter nine which explains the overall subject of estoppel by record.

(ii)  The Burden and the Benefit 2.225  In discussing the effect on third parties of rights under contracts and rights which constitute interests in land, it is usual to distinguish between the transfer of the benefit of rights and the transfer of the burden of obligations. For instance, quite different rules govern the transfer of the burden and the benefit of restrictive covenants affecting land when the burdened or the benefited land is transferred. A similar distinction may sometimes be useful in relation to estoppels. A party entitled to assert the estoppel can be said to have the benefit of it and a party bound by the estoppel can be said to bear the burden of it. 2.226  Some forms of estoppel can be said to attach to persons with interests in land, the obvious example being proprietary estoppels. Leaving aside interests in land, there may be situations in which the benefit of an estoppel could reasonably pass to a third party. If A and B enter into a contract which on a proper construction has one meaning there may be an estoppel by convention arising out of a shared assumption of a different meaning which benefits A and on which he acts so as to bind B to that shared assumption. A then has the benefit of the estoppel. In general, the benefit of a contract is assignable and A may wish to assign the benefit of his contract. If the benefit of the estoppel cannot pass to the assignee of the benefit of the contract, A may be denied the full advantage which he should have from the estoppel. B may also assign his rights under the contract and the question will then be whether the assignee of B’s contractual rights will be bound by the burden of the estoppel such that like B he will be held to the shared assumption on the meaning of the contract. The same questions arise in principle if during the course of the contract one party makes a representation to another such that as between them there is an estoppel by representation. What has to be decided is whether the estoppel will continue to operate as regards the assignees of either party to the contract. It is because of matters such as these that when the forms of estoppel are discussed it is sometimes useful to consider separately the transfer of the benefit and burden of estoppels.

(iii)  Interests in Land 2.227  Rights which have land as their subject matter can be divided into proprietary and non-proprietary interests. A proprietary interest is an interest which can in principle bind successors in title to the land in which the interest exists. Interests of tenants under leases (which became proprietary interests in late medieval times), under easements (which also achieved this status in early law), and under the benefit of restrictive covenants (which came 151

2.228  General Questions Relating to Estoppel to enjoy this status only in the nineteenth century),459 bind successors in title to the land to which they relate subject where necessary to registration. Other rights relating to land, notably licences, do not bind successors in title to the land burdened.460 Any form of estoppel may in principle relate to interests in land but the forms most likely to generate the question of whether the estoppel can affect successors in title to the original parties to it are promissory and proprietary estoppel. If a promissory estoppel arises from a promise not to enforce a right appurtenant to an interest in land, such as a promise not in some circumstances to enforce an easement, the question is whether that promise binds, in that case, a successor in title to the dominant land owned by the promisor. If it did not, the promissory estoppel might be of little practical use to the owner of the servient land since the owner of the dominant land who had made the promise could transfer his land with the benefit of the easement which would then become enforceable without restriction in the hands of the transferee notwithstanding the promise and the estoppel. 2.228  It is probably as regards proprietary estoppel that the question of an estoppel enduring for the benefit of, or as a burden on, successors in title to the land affected becomes most important. Although probably not confined to rights and interests in land, proprietary estoppel has in nearly all cases operated as regards such rights and interests.461 In some instances, the order of the court may solve any problem. The order may be for the vesting in the claimant of a recognised proprietary interest in land such as the fee simple or an easement. The order should be completed by a grant or transfer of the interest in question in the proper form as if there had been a voluntary creation or transfer of the interest. The benefit of the interest would then be transferable, and the burden of it would bind any successor in title, such as a subsequent owner of the servient land if there is an easement, in the ­ordinary way. 2.229  There are two problems concerning land which potentially arise out of proprietary estoppel. The first is the status in law of the interest which the claimant to the estoppel has between the time when the essentials of the estoppel are satisfied (when the estoppel can be said to come into existence) and the time when the court makes an order to give effect to the estoppel (when the estoppel can be said to crystallise). The question is what happens if during this period a person purchases the land which is bound by the estoppel. The second question is what is the status of rights, such as a licence to occupy land, granted to the claimant in satisfaction of his equity. If these rights are not a proprietary interest in land then it could be argued that they could be destroyed by a transfer of the ownership of the land by the person whose interest is affected by the estoppel. In such circumstances, the right of occupation granted might mean little. There is a similar question to be raised in connection with rights under a promissory estoppel. An attempt is made in this part of the chapter to analyse and suggest answers to problems such as these.

459 Tulk v Moxhay (1848) 2 Ph 774. 460 Ashburn-Anstalt v Arnold [1989] Ch 1. 461 See ch 7, part (H), for a consideration of the operation of proprietary estoppel on rights other than rights ­relating to land.

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Estoppel and Third Parties  2.231

(iv) Registration 2.230  Prior to modern methods of statutory registration of land, and of interests affecting land, the law as to the binding effect of proprietary interests in land on successors in title to the land burdened by the creation of the interest was (a) that a legal interest in land bound any successor in title, and (b) that an equitable interest bound all successors in title except a bona fide purchaser for value of the legal estate without actual or constructive knowledge of the interest.462 These rules have been largely superseded by two systems of statutory registration with the common characteristic that many rights and interests in land are only binding on successors in title to the land affected if registered in a centrally organised register. The purpose is to simplify conveyancing and to avoid the need for long investigations of title when land is purchased. One system is the registration against the name of the owner of land of various classes of proprietary interests as land charges, for example equitable easements, and is now contained in the Land Charges Act 1972.463 This system has been to a large extent replaced by registration under the Land Registration Act 2002 which applies where title to the land is registered.464 For the purposes of an estoppel, the present state of the law on this subject raises a further question. If the burden of an estoppel concerning land can in principle run with the land so as to bind successors in title, the question is whether that binding effect is dependent on the prior registration of the benefit of the estoppel against the land or against the title or the name of the owner of the land under one or other of the two systems of registration just outlined.

2.  Proprietary Estoppel (i)  General Considerations 2.231  It is appropriate to start with proprietary estoppel since this form of estoppel, being concerned at any rate primarily with rights and interests in land, is the most likely form to bring into focus the question of the effect of an estoppel on successors in title to the land held by the original parties to the estoppel. In the language used in Coke on Littleton, a successor in title to land held at the time of the creation of an estoppel is the most obvious example of a ‘privy’ of the original party to the estoppel. In connection with the matters being discussed,

462 See Megarry & Wade, The Law of Real Property, 9th edn (Sweet & Maxwell, 2019) para 5.005 et seq. 463 The land charges system is a system of registration of interests in land known as land charges against the estate owner of an area of land rather than against the registered title of the owner of land (something which is one of its deficiencies), whereas the land registration system is a system of registration of rights and interests against the registered title of the owner of the land, usually by an entry in the charges register of the title. The present legislation replaces the initial legislation which was contained in the Land Charges Act 1925 and the Land Registration Act 1925. 464 Land registration is a complex system and the details can be found in a specialist textbook such as Ruoff & Roper, Registered Conveyancing (Sweet & Maxwell, 2018) or C Harpum and J Bignall, Registered Land: The New Law (Jordan Publishing, 2012). Other, perhaps more satisfactory, systems of registration apply in other parts of the common law world, the main other system being the Torrens system which applies in Australia and New Zealand and parts of the Caribbean.

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2.232  General Questions Relating to Estoppel a number of considerations have to be taken into account in deciding whether a successor in title to the land affected will be bound by, or can take the benefit of, a proprietary estoppel. These considerations include (a) the nature of the estoppel which is a claim to such rights as the court will think proper to satisfy the equity created, something which cannot be known until the court makes its order, (b) the general requirement of unconscionability which has to be satisfied before there can be an estoppel which may not be the same for the original parties as it is for successors in title, (c) the difference between the passing of the burden and of the benefit of the estoppel, (d) the time at which the question arises, particularly whether the estoppel has crystallised by the court making an order, (e) the nature of the interest or equity created in a person who satisfies the test for establishing a proprietary estoppel before the court has made an order to satisfy that estoppel, and (f) the matters of registration of title and registration of land charges. A number of these considerations are discussed in detail in chapter seven where proprietary estoppel is explained. All of the considerations are to an extent or in some circumstances relevant to the questions examined in this part of this chapter. 2.232  It must be accepted that there are few hard and fast rules to be derived from the authorities on the questions which arise. Given the variety of relevant considerations, the approach to an explanation here taken is to discuss (a) the passing of the burden of the equitable rights of a claimant to a successor in title of the land affected prior to the crystallisation of the estoppel by an order of the court, (b) the passing of that burden after an order of the court, (c) the question of unconscionability and the discretion of the court, and (d) the passing of the benefit of the estoppel to a successor in title.

(ii)  The Transfer of the Burden Prior to Crystallisation: The General Rule 2.233  The question is whether the equity which arises in a claimant for a proprietary estoppel is an equitable proprietary interest in the sense explained, that is an interest in land which is in principle capable of binding a successor in title to the land affected by the interest. It is not possible to provide a general definition of the boundaries of what is or is not an equitable interest. ‘There is certainly nothing exhaustive about the expression “equitable interest” – just as certainly it has no clear boundaries’.465 It is possible that the equity could be regarded as a purely personal right enforceable only against the owner of land who has given the assurance which founds the proprietary estoppel. Such an approach, if it ever existed, verges on the unrealistic and is decisively rejected by old as well as by modern authority. 2.234  It will be explained when proprietary estoppel is discussed in detail in chapter seven that this principle and this form of estoppel, although now enjoying a modern description, originated from a series of decisions of the former Court of Chancery from the seventeenth century onwards. One such decision was Duke of Beaufort v Patrick.466 The land of a landowner was subject to compulsory acquisition under an Act of 1794 for the construction of a canal subject to the payment of compensation. The canal was built but no compensation



465 Shiloh 466 Duke

Spinners v Harding [1973] AC 691, 721 (Lord Wilberforce). of Beaufort v Patrick (1853) 17 Beav 60.

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Estoppel and Third Parties  2.236 was agreed and there was no transfer of land by the owner to the builders of the canal. It was held that in equity the owner or a successor in title of the owner of the land was not able, years later, to recover the land since the canal had been built with the full consent and approbation of the owner but the compensation remained payable to the owner. This can be seen as an early application of the principle of proprietary estoppel, namely an implied assurance that some party has an interest in the land of the owner, that party being here the constructors of the canal, with that party acting to its detriment by carrying out the canal works. The important point for present purposes is that it was held that the estoppel bound a person who had bought the land of the owner with knowledge of the events giving rise to the estoppel.467 2.235  In more recent times, the same rule has been enunciated by the Court of Appeal. In Inwards v Baker,468 one of the earliest of the modern cases on proprietary estoppel, a son had built a bungalow partly at his own expense on his father’s land subject to certain assurances given to him and it was held that he had a right to occupy the bungalow as long as he wished by virtue of a proprietary estoppel. The right was held to be enforceable against trustees of the father’s will. The law was stated as follows by Lord Denning MR: Mr Goodhart put the case of a purchaser. He suggested that the father could sell the land to a purchaser who would get the son out. But I think that any purchaser who took with notice would clearly be bound by the equity. So here, too, the present Plaintiffs, the successors in title of the father, are clearly themselves bound by the equity. It is an equity well recognised in law. It arises from the expenditure of money by a person in actual occupation of land who is led to believe that, as a result of that expenditure, he will be allowed to remain there. It is for a court to say in what way the equity can be satisfied.469

2.236  A possible difficulty in recognising the rights of a claimant to an equitable proprietary estoppel here under consideration as an equitable interest in land is that the rights are what have been called inchoate in the sense that the exact content of the rights depends on the discretion of a court in making an order to satisfy the estoppel and the equity. However, other rights recognised in equity as being of a proprietary character are also uncertain and inchoate in the same sense, an example being a right to rectification of a document which depends on the precise order and discretion of a court.

467 ibid, 78 (Sir John Romilly MR). 468 [1965] 2 QB 29. 469 ibid, 37. Other decisions are to a similar effect: see, eg, ER Ives Investment Ltd v High [1967] 2 QB 379, 400 and 405; Lloyds Bank Plc v Carrick [1994] 4 All ER 630; Ahmad Yar Khan v Secretary of State for India (1901) LR 28 LA 211, 218 (Lord Macnaghten). In Voyce v Voyce (1991) 62 P & CR 290 it was held that a proprietary estoppel, arising out of an imperfect gift of land, was binding on a subsequent donee of the land (the facts of this case echo those of Dillwyn v Llewelyn (1862) 4 De GF & J 517, examined in detail in ch 7, para 7.19). In Williams v Staite [1979] Ch 291 a licence to occupy a cottage for life had been ordered in favour of the Defendants against a successor in title of those who had given the assurance which founded the estoppel. In Lloyd v Dugdale [2002] 2 P & CR 13 a proprietary estoppel would have been enforced against a successor in title of the person who gave the original assurance but was held in the event not to be enforceable since the equitable interest had not been registered and the claimant for the estoppel was not in actual occupation of the land at the relevant time. It was accepted in Lee-Parker v Izzet (No 2) [1972] 1 WLR 775 that a right under a proprietary estoppel could be an overriding interest binding the land affected. In Salvation Army Trustee Co Ltd v West Yorkshire Metropolitan County Council (1980) 41 P & CR 179 a proprietary estoppel was enforced against a local authority who were statutory successors of a power to acquire land for highway purposes when the conduct which constituted the necessary assurance was that of the authority in which the powers were at the time vested.

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2.237  General Questions Relating to Estoppel 2.237  Reference in this context should also be made to the proviso to section 4(1) of the Law of Property Act 1925 which states that after the commencement of that Act ‘An equitable interest in land shall only be capable of being validly created in any case in which an equivalent equitable interest in property real or personal could have been validly created before such commencement’. Any difficulty posed by this provision is probably resolved by the fact that, even if not described in those terms, a claim to a proprietary estoppel was in substance treated as an equitable interest in land capable of binding a successor in title before 1926.470 2.238  Assuming that the rights available to a claimant for a proprietary estoppel prior to an order made by the court for the satisfaction of those rights are an equitable proprietary interest in land, there remains the question of whether that equitable right should be classified as an equitable right in the fullest sense of that term or as only a ‘mere equity’. Whereas in principle an equitable right was not binding on a purchaser for value of a legal estate without actual or constructive notice of the equitable interest, a mere equity was also not binding on a purchaser for value of an equitable interest in the land without actual or constructive notice of the equity, and for that reason was a less fully protected interest.471 There is said to be a sharp distinction between the two types of equitable interest.472 An example of a mere equity is a right to rectification of a document which was executed in a particular form due to a common mistake. It may therefore in certain limited circumstances be necessary to determine whether the rights under an inchoate proprietary estoppel are a full equitable interest in the land or a mere equity. 2.239  The status of a claim to a promissory estoppel prior to an order of the court as an equitable proprietary interest is confirmed by statute. It is stated in the Land Registration Act 2002 that as regards registered land, an equity by estoppel and a mere equity are interests which are capable of binding successors in title to the land.473 It is true that this provision applies only to registered land but the provision is said to be ‘for the avoidance of doubt’ which suggests that an equity by estoppel would be a proprietary interest under the general law apart from the statutory provision. The correct conclusion when all these matters are considered therefore seems to be that the rights of a party where the requirements of a proprietary estoppel have been satisfied in his favour, but before any order of a court giving effect to the estoppel, constitute an equitable proprietary interest in the land affected which is in principle capable of binding a successor in title to the land affected of the person whose assurance has given rise to the estoppel.

(iii)  The Transfer of the Burden Prior to Crystallisation: Registration 2.240  As an equitable right in land, the right of a person entitled to claim a proprietary estoppel is subject to the requirements of statutory registration. If the owner of land against whom the estoppel is to be established has a registered title under the Land Registration

470 See Duke of Beaufort v Patrick (1853) 17 Beav 60, discussed in para 2.234. 471 Phillips v Phillips (1862) 4 De GF & J 208. 472 Shiloh Spinners v Harding [1973] AC 691, 721; National Provincial Bank Ltd v Hastings Car Mart Ltd [1965] AC 1175, 1238. 473 Land Registration Act 2002, s 116.

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Estoppel and Third Parties  2.242 Act 2002, the provisions of that Act will determine whether the rights of a claimant can be asserted against a transferee of the land. The basic principle of the Act is that a purchaser of the land affected is not bound by any rights or interests unless those rights or interests are protected by an entry in the register or are an overriding interest. On the other hand, a donee of the land is bound by any rights or interests which bound the transferor. It is for a claimant to protect the inchoate rights under a proprietary estoppel by a notice or caution. It will be explained in chapter seven on proprietary estoppel that such an estoppel will frequently arise in domestic or informal circumstances, and in practice the person who is entitled to the estoppel will often be unaware of the need for protection under the 2002 Act. However, the main category of overriding interests is the rights of a person in actual occupation of the land and claimants for an estoppel may often fall into this category so that a purchaser of the land will be bound by the rights of such a claimant. It should be made clear that the running of the burden of a proprietary estoppel in the case of registered land depends on the mechanistic application of these rules and is unaffected by any notice or knowledge of the rights of a claimant on the part of a purchaser of the land. The law is that a person with rights amounting to a proprietary estoppel will not be able to assert those rights against a purchaser of the registered land unless he has protected the rights by an entry in the register or was in actual occupation at the time of the transfer.474 2.241  If the land affected by the estoppel does not have a registered title, something which is today becoming increasingly unlikely, it is necessary to consider the provisions of the Land Charges Act 1972. Under this Act there are certain categories of land charges but the right to the benefit of a proprietary estoppel prior to its crystallisation does not fall within these categories and so is not a land charge. Accordingly, the old law applicable before the introduction of registration of title and registration of land charges as part of the 1925 property legislation continues to apply. The law therefore is that an equitable proprietary interest in unregistered land of the nature of a proprietary estoppel binds all persons who acquire an interest in the land affected, except the interest of a bona fide purchaser for value of a legal interest in that land without actual or constructive notice of that equitable interest.475

(iv)  The Transfer of the Burden after Crystallisation 2.242  Once the court has made an order to satisfy the equity created by a proprietary estoppel the question is one of whether the new rights or interest of the claimant over the land as ordered will bind a successor in title to the owner of the land. The law on this subject depends on the nature of the rights or interest ordered by the court for the benefit of the claimant. There are four sets of circumstances to be examined. 474 The rules as explained in this paragraph are contained in the Land Registration Act 2002, ss 28 and 29 and schedule 3. See Lee-Parker v Izzet (No 2) [1972] 1 WLR 775, 780, where it was accepted that a right arising from a proprietary estoppel could be an overriding interest; and see Lloyd v Dugdale [2002] 2 P & CR 13 for a case in which a claim to a proprietary estoppel failed because the claimant was not in actual occupation of the property at the relevant time. The meaning of actual occupation in the Land Registration Act 2002 is more limited and qualified than in the Land Registration Act 1925. The details of the law under the 2002 Act are explained in para 6.086 et seq of Megarry & Wade, The Law of Real Property, 9th edn (Sweet & Maxwell, 2019). 475 If the rights under a proprietary estoppel are only a mere equity, then as well as binding a donee they will also bind a purchaser for value of a different equitable interest in the land affected unless that purchaser had no actual or constructive notice of the mere equity. See para 2.238 for the nature of a mere equity.

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2.243  General Questions Relating to Estoppel 2.243  The first set of circumstances is where the court has ordered the creation or transfer in favour of the claimant of a proprietary interest in the land. The most obvious case is where the order is for the transfer of the freehold to the claimant. The claimant will then become the new freehold owner and may transfer or otherwise deal with that interest as he wishes. Other types of proprietary interests may be created, such as the grant of an easement or the grant of a lease to the claimant in accordance with the order of the court. The order should be put into effect by an ordinary grant to the claimant if necessary under the supervision of the court. The interest so granted will then in principle bind any transferee of the land of the owner burdened by the new interest subject to the ordinary rules on registration under the Land Registration Act 2002 or the Land Charges Act 1972. The necessary registration will ordinarily be carried out as part of the normal conveyancing procedure for the grant which gives effect to the order of the court. 2.244  The second possible situation is where the court orders that the claimant is to have rights over the relevant land which do not constitute a proprietary interest. The usual example of these circumstances may be where it is ordered that the claimant is to have a right of occupation of property either perpetually or for his life or for as long as he wishes. An early example of a perpetual licence is the order of the court giving such a right to the claimant over a jetty and a warehouse in Plimmer v Mayor, etc, of Wellington,476 and an example of a lesser form of licence is the order of the court in Inwards v Baker477 that the claimant should be entitled to occupy a bungalow for as long as he wished. The juridical nature of such rights of occupation is discussed in chapter seven where it is suggested that subject to any specific terms in the order the rights created in favour of the claimant should be categorised as a licence.478 The difficulty arising from this situation is that a licence is not a proprietary interest in land and is not binding on a successor in title of the land affected, whether at the time of the transfer the transferee of the land knows or does not know of the existence of the licence.479 The logic of this situation is that even a perpetual licence might in principle be defeated by the landowner transferring the ownership of the land shortly after the order of the court.480 It is difficult to believe that this is a satisfactory result and a more acceptable reasoning may be that the continuing rights of the claimant are attributable not only to his status as a licensee but also to the terms of the order of the court and that a purchaser of the land as anyone else is bound by the terms of that which was ordered, which is that the occupation of the claimant should not be disturbed provided it is carried out in accordance with the terms, including the terms as to its duration, as ordered by the court. Lord Denning MR has stated that a licence to occupy land for life pursuant to a proprietary estoppel cannot simply be revoked at the will of the owner of the land.481 The possible

476 (1884) 9 App Cas 699. This decision is discussed in detail in ch 7, para 7.22. 477 [1965] 2 QB 29. 478 See ch 7, para 7.298 et seq. 479 Ashburn-Anstalt v Arnold [1989] Ch 1. 480 That this is a possible effect of the law is suggested in para 15.006 of Megarry & Wade, The Law of Real Property, 9th edn (Sweet & Maxwell, 2019). 481 Williams v Staite [1979] Ch 291, 297. Lord Denning referred with approval to a passage in the 4th edn (1975) of Megarry & Wade, The Law of Real Property 778, where it was stated that the principle of estoppel may operate to prevent revocation of a licence which one party has led the other to suppose was permanent and that the revocation of a licence may be restrained by injunction on equitable grounds. See now paras 33-012 and 33-013 of the current 9th edition of this work.

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Estoppel and Third Parties  2.247 vulnerability of a ­licensee to adverse actions by the owner of the property may induce a court to satisfy the equity by ordering that the fee simple or some other larger interest be vested in the claimant.482 2.245  The third possible set of circumstances arises from the fact that the court has a wide discretion on the type of order which may be made to satisfy a proprietary estoppel, and one possible order is that the claimant shall be paid a sum of money in satisfaction of his claim.483 A possible reason for such an order as opposed to the grant of an interest in land might be the position and rights of a person who had bought the land or a part of it prior to the order of the court.484 In such a case the money has to be paid by the transferor of the land and no question arises of proprietary rights or successors in title. 2.246  The fourth situation to consider is one in which the land is subject, at the time of an order vesting it in the claimant, to a subsisting interest not connected with the facts which gave rise to the estoppel. For example, if the freehold of land is to be vested in the claimant that land might be subject to a lease of a part of it and subject to an easement of way across it. Such interests will bind the interest ordered to be granted to the claimant in the same way as they would if that latter interest had been granted as a purely voluntary transaction between the parties. In this last example, the lease and the easement or other interest will therefore bind the land in the hands of the claimant just as it bound the land prior to the order of the court subject always to any necessary protection for any interest under the Land Registration Act 2002 or the Land Charges Act 1972.

(v)  The Transfer of the Burden: The Discretion of the Court 2.247  In formulating the appropriate order, a court will have regard to the interests of third parties. In some instances there may be no adverse effect of the order on third parties, such as a long-standing tenant of a part of commercial land where the tenancy will continue to subsist after the vesting of the freehold in the claimant just as it would if that vesting had been achieved by an ordinary conveyance or transfer or by the putting into effect of a provision in a will on the death of the person against whom the order operates. By contrast, the prospect of an order granting a right to occupy property may lead to future conflict where the person against whom the estoppel operates is also entitled to occupy the property, and in such a case a court may prefer to order the payment of a monetary sum to the claimant in satisfaction of his rights but without any right to take or resume occupation of the property.485 There can be a combination of orders which respect the rights of third parties. If a part of the land to which the assurance and the estoppel relates has been sold to a third party prior to the crystallisation of the estoppel but with that purchaser knowing nothing of the circumstances which gave rise to the estoppel against the previous owner, it may be fair to order that the land remaining unsold is vested in the claimant but that money is paid to the claimant as compensation for the absence of any interest in the part of the land which has been sold.486

482 Pascoe

v Turner [1979] 1 WLR 431, 438–39. variety of possible orders which may be made is discussed in ch 7, part (I). 484 See, eg, Gillett v Holt [2001] Ch 210. 485 See, eg, Baker v Baker (1993) 25 HLR 408. 486 As in Gillett v Holt [2001] Ch 210. 483 The

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2.248  General Questions Relating to Estoppel

(vi)  The Transfer of the Benefit 2.248  If a proprietary right or interest has been ordered to be vested in the claimant, then subject to any particular terms of the order of the court the right or interest may be transferred by the claimant following its creation in the ordinary way. A lease granted is freely assignable subject always to an absolute or qualified covenant against assignment. The benefit of an easement granted to the claimant in respect of his land may be transferred with the land, the dominant land, to which it is appurtenant. The position as regards a right to occupy land under a licence may be not quite as simple. Subject to its express terms the benefit of a contractual licence may be assigned. If the licence is perpetual with no time limit and there are no special terms, as the perpetual licence ordered in Plimmer’s Case,487 then an inability to transfer the benefit of the licence would mean that the value of its unlimited duration would be seriously reduced. The order of a court may itself limit the duration and the assignability of a licence to occupy land such as where the right ordered is a right to occupy property for the remainder of the life of the claimant or a right to occupy the property as long as the claimant wishes to exercise it.488 In the latter case, the licence would be non-assignable since if the claimant wished to continue to occupy the property he would not wish to assign the licence to occupy it. 2.249  It is difficult to see how the equitable interest of a claimant in the period between the coming into effect of the estoppel and its crystallisation by a court order could be transferred. Relevant events at any time up to the order of the court could affect the form of order made or indeed whether an order in favour of a claimant was made at all. The means of giving effect to the interest cannot be known until the court determines its order, and the circumstances creating the equitable interest, an assurance of an entitlement to an interest in land and actions carried out in reliance on that assurance, create rights which as far as the claimant is concerned are essentially personal in their nature. Even so it can be noted that in Plimmer’s Case the jetty was constructed by Mr John Plimmer whose rights were sold by him to Joseppi Joseph who in turn granted a 21-year lease to the Applicants. It was held by the Privy Council that the interest of the Applicants which entitled them to compensation was the residue of their 21-year lease. It was in effect a lease of an irrevocable licence.

(vii)  Chattels and Other Rights 2.250  It appears that as a matter of principle proprietary estoppel is probably applicable to rights in chattels and to other rights as well as to rights in land.489 In one modern case a proprietary estoppel was considered in relation to a musical copyright, although it was concluded that on the facts no estoppel could be established.490 There is no authority on whether or in what circumstances the benefit or the burden of the estoppel could be transferred prior to the crystallisation of the estoppel in such cases although the statutory provisions for the registration of interests in land would not of course apply. If A owns a chattel or other rights and the circumstances are such that B has gained a proprietary

487 Plimmer

v Mayor, etc, of Wellington (1884) 9 App Cas 699. right of occupation of the latter sort was ordered in Inwards v Baker [1965] 2 QB 29. 489 See ch 7, part (H). 490 Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764. 488 A

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Estoppel and Third Parties  2.251 estoppel in connection with the chattel or rights but before an order of a court A transfers the ownership of the chattel or the rights it will be a matter for the discretion of the court whether the estoppel can be asserted against the transferee by an order such as vesting the chattel or rights in B in satisfaction of the estoppel. A factor likely to influence any court is whether the transferee was aware of the events, normally an assurance to B followed by acts by B in reliance on that assurance, which gave rise to the estoppel.491 It is in circumstances of this sort that unconscionability, an essential element of proprietary estoppel, may have a significant part to play in any decision of a court.

(viii) Summary 2.251  The following is a brief summary of the status and transmissibility of the burden and benefit of rights under a proprietary estoppel where the estoppel relates to land. The summary states first the passing of the burden and then the passing of the benefit. (a) The rights of the claimant to the satisfaction of an estoppel are an equitable proprietary interest in land from the time at which the essential requirements of the estoppel are satisfied and the estoppel comes into effect. (b) The equitable proprietary interest is therefore in principle capable of binding successors in title of the land to which it relates. (c) The passing of the burden of the estoppel will depend on the protection obtained by the claimant by satisfying the necessary requirements in the Land Registration Act 2002 where the land to which the estoppel relates has registered title, in practice either protection by a registration of a notice or caution against that title or by reason of the claimant being in actual occupation of the land. The equitable interest of the claimant is not a land charge under the Land Charges Act 1972 and where the land affected does not have registered title will bind all transferees of the land except a bona fide purchaser for value of a legal interest in that land without notice of the interest. (d) After the crystallisation of the estoppel by an order of the court vesting in the ­claimant a proprietary interest in the land, such as a lease or an easement, the interest in question will bind a transferee of the land affected according to the general principles of law applicable to such interests including any necessary registration. (e) An order sometimes made is that the claimant shall have an entitlement to occupy land. This entitlement amounts to a licence. As a general principle of law, a licence is not a proprietary interest and does not bind successors in title to the land affected. In the case of a licence to occupy land which is ordered as the satisfaction of a proprietary estoppel it may be that the binding effect of the licence on successors in title to the land affected can be derived from the terms of the order made by the court. (f) In all cases the court has a discretion on what order to make to satisfy the estoppel. In some cases an unfair adverse effect on third parties may be a good reason for not making an order for the vesting of land or for a right of occupation of land but only for the payment of a monetary sum to the claimant. 491 However, as explained in para 2.273 it has been held that an estoppel by representation relating to the ownership of chattels cannot bind a third party who acquired the chattel from the representor: Re Goldcorp Exchange Ltd [1985] 1 AC 74.

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2.252  General Questions Relating to Estoppel (g) It is unlikely that the benefit of the inchoate equitable interest which enures to a claimant from the time when the estoppel comes into effect but before it is crystallised by an order of the court is capable of transmission to a third party. (h) A proprietary interest in land or rights created by an order of the court will generally be transmissible by the claimant in accordance with the ordinary principles applicable to the transmission of such interests. (i) It is probable that the benefit of a licence to occupy land granted by an order of the court is also transmissible by the claimant unless the terms of the order, such as that the occupation shall be personal to the claimant or shall last as long as he wishes to continue in occupation, make it clear that there can be no transmission of the benefit of the licence.

3.  Promissory Estoppel 2.252  Promissory estoppel, as the second form of equitable estoppel, differs from proprietary estoppel. It rests on a promise not to enforce a legal right with the promisee acting to its detriment in reliance on that promise. The question of the transfer of the burden and the benefit of the estoppel can arise as with proprietary estoppel but two important facets of promissory estoppel, as compared with proprietary estoppel, are significant for the answer to this question. First, whereas proprietary estoppel applies, at any rate primarily, to interests and rights in land promissory estoppel may apply to such rights but may also have a wide application to the giving up of other rights. Secondly, proprietary estoppel may of itself constitute a cause of action but promissory estoppel cannot be employed in this role. It is best to consider the question of the transfer of the burden or the benefit of the estoppel by examining first circumstances where interests or rights in land are the subject of the estoppel and then by examining cases where the estoppel relates to rights other than rights in land.

(i)  Rights in Land: Transfer of the Burden 2.253  A party may promise not to assert some particular right or rights appurtenant to its interest in land either permanently or for some particular period. The genesis of the modern law on promissory estoppel is the High Trees case where landlords in 1940 promised that they would accept only a half of the rent as specified in the lease for the duration of the war and this was held to constitute a promissory estoppel.492 It seems unacceptable that if in such circumstances the landlord, or any similar owner of property who has become bound by a promissory estoppel relating to the property, could in effect always defeat the estoppel simply by transferring its interest. If the law is that the estoppel can have no more than a personal effect between the promisor and promise, the person seeking to assert the estoppel would have no ability to do so after a transfer of the interest of the party estopped so that the transferee could assert its full contractual rights in an untrammelled fashion. Nor would the party asserting the estoppel have any remedy against the promisor since the estoppel cannot 492 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. See ch 6, para 6.12, for a full ­description of this decision.

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Estoppel and Third Parties  2.256 constitute a cause of action of itself and there would normally be no other cause of action against the promisor. If such reasoning is correct and is applied to the High Trees case, if the landlords had transferred their interest a year after the promise the tenants would have been obliged to pay the full rent for the remaining four years of the war. 2.254  Such limited assistance as can be gained from authority suggests that the result described in the last paragraph as unacceptable is not the law. One of the two Victorian cases which were the origin of promissory estoppel as a separate principle involved landlords promising their tenants under a building lease that certain building obligations need not be carried out while proposals for a new railway scheme relating to the land were finalised. The landlords’ interest was transferred to the Defendant railway company which sought to treat the lease as terminated by reason of the period when no construction took place, so ignoring the effect of the promise made by their predecessors in title.493 It was held by the Court of Appeal that the railway company were bound by the promise and so could not treat the building lease as terminated. This result appears to be based on the view that the burden of a promissory estoppel could pass to a transferee of the land of the promisor. 2.255  There is in truth a good theoretical basis for concluding that as a matter of principle the burden of a promissory estoppel relating to an interest in land can run with the land. The rights of the promisee are equitable and a question is whether such rights amount to an equitable proprietary interest capable of binding successors in title to the land of the promisor. This question has been answered in the case of proprietary estoppel in the sense that the rights of the person entitled to the estoppel are an equitable proprietary interest in the land affected and so can in principle bind a successor in title to that land.494 There is a case for saying that the same reasoning and conclusion should apply to a promissory estoppel relating to an interest in land of the promisor. One of the foundations for the equity created by a proprietary estoppel amounting to a proprietary right in the land concerned is section 116 of the Land Registration Act 2002 which states that in relation to registered land an ‘equity by estoppel’ is an interest capable of binding successors in title.495 This provision is introduced by the expression that it is for the avoidance of doubt and an equity by estoppel is likely to have the same status as regards unregistered land. The words ‘an equity by estoppel’ are as apt to describe a promissory estoppel as they are to describe a proprietary estoppel so that each form of equitable estoppel should have the same status when it relates to land.496 2.256  If the analysis just stated is correct then the binding effect of a promissory estoppel on a successor in title of the promisor will be constrained by the need for registration in the same way as is the binding effect of a proprietary estoppel. If the land of the promisor has registered title then, in order for a promissory estoppel to bind a successor in title to that land, either the estoppel will need to be protected by way of an entry in the register or the party asserting the estoppel must be in actual occupation of the land burdened by the 493 Birmingham and District Land Company v London and North Western Rly Co (1889) 40 Ch D 268. The purpose of the railway company was to avoid their statutory duty to pay compensation for the acquisition of the interest of the building lessees. See ch 6, para 6.11, for a fuller description of this decision. 494 The reasons for this conclusion as regards proprietary estoppel are explained in para 2.233 et seq. 495 See para 2.239. 496 The distinction between the two forms of equitable estoppel is now clearly understood, but it was at one time thought that there was little practical significance in the distinction: see Crabb v Arun District Council [1976] Ch 179, 193 (Scarman LJ).

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2.257  General Questions Relating to Estoppel promise and the estoppel.497 If the land of the promisor has no registered title at the time of the transfer, then the equitable interest in the hands of the promisee will not be a land charge and so will not be affected by the provisions of the Land Charges Act 1972. In such a case, the equitable right of the promisee will bind every successor in title to the land of the promisor except a bona fide purchaser for value of a legal estate in that land without actual or constructive notice of the equitable right.498 Finally, it must be remembered that the court has a discretion as to how it will best give effect to the equitable rights created by a promissory estoppel; for example, it may be ordered that the effect of the promise can be brought to an end by the giving of reasonable notice. Any terms or conditions of this nature which the court may impose may be affected by the fact that the estoppel is being asserted not against the original promisor but against a successor in title to the land burdened by the promise.

(ii)  Rights in Land: Transfer of the Benefit 2.257  Where the promisee has an interest in land which is itself assignable and the promise relates to that land there seems every reason why the promisee should be able to assign the benefit of the estoppel together with the interest in land. An exception would of course be where the promise was expressly or impliedly limited to the promisee personally. As with the transfer of the burden the estoppel might in some cases, especially where it was to have a long-term effect, be deprived of a substantial part of its value if no assignment of the benefit with the interest affected was possible. To revert again to the High Trees case, the value of the promise to accept a half of the rent contractually due during the period of the war might have been diminished if the tenants wished and were able to assign their lease but were prevented from or prejudiced in doing so by a rule that the benefit of that which had been promised and which related to their interest would necessarily end upon the assignment. 2.258  Again decided authority offers only limited assistance. In Brikom Investments Ltd v Carr,499 leases were granted containing in their terms an obligation on the tenants to contribute towards the repair of a roof. Prior to the grant, the prospective landlords had promised that the contributions would not be levied. It was held in the Court of Appeal that the benefit of the promise could be taken not only by the original lessees but also by assignees of the leases. The decision was put by Lord Denning MR as the operation of a promissory estoppel. The difficulty in this analysis is that a promissory estoppel has to be founded on a promise not to assert existing rights of the promisor, and that at the time of the promise and in the absence of a lease or a binding agreement for a lease at that time there were no existing rights. It may be that this decision is best regarded as one based on a collateral contract relating to the proposed leases and this is how the majority of the Court saw the matter.

(iii)  Other Rights 2.259  A promissory estoppel may operate on a promise not to enforce rights which have no connection with land such that the possible transferability of the benefit and burden of

497 This

is the general effect of the Land Registration Act 2002. law is explained in further detail in para 2.230. 499 [1979] QB 467. 498 The

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Estoppel and Third Parties  2.261 the estoppel is not connected with the transfer of the interests in land to which the estoppel relates. An example might be that A, the owner of a patent, licensed the use of the patent by B for manufacturing purposes carried out by B for a period of three years with a licence fee calculated by reference to the value of the products so manufactured. Seeing that B was in financial difficulties, A might promise B after six months that for the remaining duration of the contract A would accept only 75 per cent of the fee, and B in reliance on the promise might enter into commercial arrangements which B would not have made apart from the promise. Such circumstances might well give rise to a promissory estoppel binding on A. The duration of the estoppel would be clear since the promise was expressly limited to the remainder of the duration of the three-year agreement. 2.260  If A withdrew the promise after a further six months, it is likely that B could prevent this by reason of the estoppel. It is difficult to believe that if A transferred its rights under the transaction to a purchaser that purchaser, even with full knowledge of the 75 per cent promise, could at once insist on receiving the full licence fee from B leaving B to continue to suffer the prejudice from the arrangements into which B had entered. There would be no question of B’s estoppel being a proprietary interest since no land is involved. Yet B would lose all its rights created by the estoppel if the estoppel was regarded as being purely personal, that is exercisable only as between the original promisor and promisee. A similar question could arise if B sold its manufacturing business purporting to pass the benefit of the estoppel to the purchaser. An obvious answer to the difficulty is that as a matter of general law the assignee of rights cannot by reason of the assignment become in a better position than the assignor as regards other parties. In the example given, the purchaser takes the right to recover the licence fee and must do so subject to the liability created by the estoppel that the fee will be reduced to 75 per cent. Nor is there any reason why B should not assign the benefit of the estoppel so as to allow the assignee to enforce it against A and against any purchaser of A’s contractual rights. This conclusion can be reached for the purposes of promissory estoppel but the same principles apply to estoppel by representation and estoppel by convention where the subject matter of the estoppel is rights under some transaction and the matter is discussed in more detail for the purposes of estoppel by representation.500

4.  Estoppel by Representation 2.261  It would be convenient if some overall rule or rules could be stated on when the burden of an estoppel by representation can pass to a third party or the benefit of an estoppel by representation can be asserted by a third party. No such overall rule or rules can be gathered from the authorities. All estoppels by representation relate to some existing matter and the nature of the estoppel is that some fact (or possibly today some proposition of law) 500 See in particular paras 2.265 and 2.266 where it is explained that the type of situation here under review was considered by the Court of Appeal of New Zealand in Bay of Plenty Electricity Ltd v Natural Gas Corporation Energy Ltd [2002] 1 NZLR 173 in connection with the transfer of the burden of an estoppel by representation to an assignee of a contract and it was held that the burden of the estoppel passed to the assignee. The same conclusion should hold good if the estoppel is a promissory estoppel. Where the parties to a transaction such as is described in this paragraph are companies, an assignment of rights may be effected by the sale of shares in the company and thus control of the company. In such a case the parties to the transaction remain the same but with different ownership and no question of the enforcement of rights under an estoppel by or against third parties arises.

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2.262  General Questions Relating to Estoppel which is not true must be taken as true by a court. The effect of the estoppel has been aptly described as ‘a pretence’.501 The pretence may be used in legal proceedings either to assist a party in asserting a right or to assist a party in resisting a right asserted against that party. The most useful method of explanation is to examine first whether the burden or benefit of the estoppel or the pretence may pass to a third party where some general right is the subject matter of legal proceedings and then to consider a number of cases of particular or special rights.

(i)  General Rights: Transfer of the Burden 2.262  The basic situation to consider is where A and B have rights against each other under some contract or other transaction, and A assigns the benefit of the contract or its rights under it to X. B may be able to assert an estoppel against A which assists B in claiming its rights against A. The questions are (a) whether in principle B can assert the estoppel against X as the assignee of A’s rights, and (b), if so, whether in order to do so it is necessary for B to show that X knew of the facts giving rise to the estoppel at the time of the assignment of A’s contract to it. 2.263  A logically anterior question in this type of situation is whether in law the rights of A can be validly assigned. The benefit of a contract is generally assignable unless some express or implied provision in the contract prevents assignment. Despite this, some rights or choses in action, such as a right to recover damages for a tort, are not readily assignable having regard to the law of maintenance and champerty.502 It is assumed for present purposes that in the illustration given the assignment by A of its contract or rights to X is in principle valid. 2.264  Unlike the case of a proprietary or promissory estoppel, with the prospect of an equitable proprietary interest in land and the impact of matters of registration, the answer to the first question raised above503 is more straightforward as is the legal rationale for the answer. As a general principle of law, a party who takes an assignment of rights under a contract or other transaction also takes any existing limitation or restrictions on the exercise of that right at the time of the assignment. The assignment cannot, in relation to third parties, put the assignee in a better position than the assignor. An example of this rule is Dawson v Great Northern Rly Co504 in which the benefit of a statutory claim for compensation for injurious affection to land (damage to land) was held to be assignable but the assignee could not make any claim not open to the assignor. Other authority reiterates the same rule. In Mangles v Dixon,505 it was held that in the absence of fraud an assignee of a

501 Re Goldcorp Exchange Ltd [1995] 1 AC 74, 94. 502 Trendtex Trading Corporation v Credit Suisse [1982] AC 679. 503 See para 2.262. 504 Dawson v Great Northern Rly Co [1905] 1 KB 260. See also Taylor v Needham (1810) 2 Taunt 278 for a ­statement of the same principle by Lord Mansfield, and see Hopgood v Brown [1955] 1 WLR 213, 229 (Jenkins LJ); see para 2.269. The statement by Lord Mansfield is set out below (n 517). 505 Mangles v Dixon (1852) 3 HLC 702, 735, where Lord St Leonards said: ‘The authorities upon the subject, as to liabilities, show that if a man does take an assignment of a chose in action he must take his chance as to the exact position in which the party giving it stands’.

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Estoppel and Third Parties  2.266 chose in action stood in exactly the same position as did the assignor in respect of equities binding upon it. In Phips v Lovegrove,506 it was held that when a chose in action is assigned a third party having rights relating to that chose in action has the same equities against the assignee as he would have had against the assignor. A similar principle has been applied to estoppel by deed to justify the transfer of the burden of an estoppel created by a statement in a deed to devisees of the original party to the deed.507 There seems every reason why this same general principle should apply to an entitlement to take advantage of an estoppel by representation which can be asserted against an assignor of a right; that same entitlement under the principle of estoppel should be enforceable against the assignee of a right since otherwise the assignor and the assignee of a right would benefit from the assignment at the expense of the person entitled to assert the estoppel. The assignment would in substance destroy the effect of the estoppel. 2.265  The law has been stated to just this effect in a clear modern decision of the Court of Appeal of New Zealand in Bay of Plenty Electricity Ltd v Natural Gas Corporation Energy Ltd.508 Companies A and B entered into a joint venture agreement to construct and operate a plant at Kapuni to produce electricity from natural gas. Company A was to purchase electricity generated at the plant from company B at an agreed price per unit. The plant was constructed and company A sold its business to company X. Company X refused to pay the contractual unit rate alleging that the plant had not been constructed in accordance with the agreement and that the supply agreement had not commenced. There was clear evidence that company A had represented that the supply agreement had commenced and that company B had acted to its detriment on that representation. Therefore, an estoppel arose between companies A and B and an issue was whether company X was bound by the estoppel following the assignment to that company. Thomas J, delivering the judgment of the Court of Appeal, held that company X was bound by the estoppel. He reviewed some of the authorities mentioned in the last paragraph, together with Australian authority,509 and on that basis considered that the law could not be clearer. It is submitted that this decision was patently correct. If so, the answer to the first of the two questions raised earlier510 is answered as a generality in the affirmative. It is of course possible that in the circumstances here under discussion company X, by reason of being bound by the estoppel, would have some redress against company A under the terms of the assignment but this does not affect the general question.511 2.266  The Court of Appeal of New Zealand also considered the question of whether company X could be bound by the estoppel even though it had not received notice of the estoppel when it took the assignment of the rights of company A under the joint venture agreement. Indeed, this absence of notice was the gravamen of the case for company X that it was not bound by the estoppel. This argument was also rejected by the Court. This element

506 Phipps v Lovegrove (1873) LR 16 Eq 80. 507 Dalton v Fitzgerald [1897] 2 Ch 86. See below (n 552). 508 [2002] 1 NZLR 173, paras 45–49. 509 Southern British National Trust Ltd (In Liquidation) v Pither (1937) 37 CLR 89, 105. 510 See para 2.262. 511 The joint venture agreement provided that no amendment, variation or waiver was binding unless it was in writing signed by the parties. The Court held that this provision could not be construed so as to prevent a party being bound by an estoppel. For no oral modification clauses, see ch 3, para 3.79 et seq.

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2.267  General Questions Relating to Estoppel of the decision therefore answers the second question raised above.512 This last point should be considered with a possible qualification. Like most estoppels, unconscionability is an element which a person asserting an estoppel by representation has to establish. The fact that in the example here used the assignee did not know of the estoppel and that the assignor did not reveal it or the circumstances which gave rise to it, does not itself make it unconscionable that the estoppel should be enforced against the assignee. Such circumstances had nothing to do with company B. However, there could be circumstances which raised an element of unconscionability. For instance, in the terms of the example given company B may have acted in some way, possibly by not answering reasonable enquiries, which showed that it was a contributor to the ignorance of the assignee. In such circumstances, a court might wish to consider whether it was unconscionable to allow company B to assert the estoppel against an assignee even if all other elements of the estoppel were established.

(ii)  General Rights: Transfer of the Benefit 2.267  Assuming that the burden of an estoppel by representation can be transferred to an assignee of contractual or other rights to which the estoppel relates and on which it is a burden, it should follow that the benefit of the estoppel relating to contractual rights is capable of being transferred with the assignment of the rights. To take the Bay of Plenty case513 as an example, company B had a contractual right that company A should purchase electricity from it at a specified rate per unit of electricity. If company B assigned its contractual rights with the requirements of an estoppel relating to those rights in existence, it seems reasonable that the capacity to assert the estoppel should be capable of being transferred to the assignee of the rights. There could of course be no question of the benefit of the estoppel being assigned to any party except the assignee of the contract since the estoppel would be ancillary to the rights to which it related. In ordinary circumstances, the burden of the estoppel on company A would not be increased by the assignment.

(iii)  Interests in Land 2.268  A sensible rule would be that when an estoppel by representation is a burden on a person who owns an interest in land and relates to that interest, the burden should in general bind not only the person who made the representation which created the estoppel but also a successor in title to the land affected. The general rule would then follow the rule, explained above, applicable to rights generally which are not rights in land. The rights of the representee under an estoppel by representation are not an ‘equity by estoppel’ as is the case with rights created under a proprietary or promissory estoppel,514 and so are not an equitable proprietary interest and for that reason only binding on successors in title subject to the rules on registration. The rule regarding an estoppel by representation where interests in land are concerned is therefore not constrained by technical rules concerning land law.



512 See

para 2.262. 1 NZLR 173. 514 See para 2.233 et seq. 513 [2002]

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Estoppel and Third Parties  2.270 As so often, it is difficult to find any examination of the principles involved in the decided authorities. A useful way of considering this subject is to consider first the possibility of a proprietary estoppel where land is concerned and then to consider the general rule applicable to an estoppel by representation concerning land and the transfer of the burden and finally to mention theoretical considerations. 2.269  A proprietary estoppel generally concerns land and is initiated by an assurance which creates in the recipient of the assurance an expectation of an entitlement to an interest or rights in the land affected. One form of assurance which can create such an estoppel is a representation of fact.515 Consequently it may be possible to categorise a representation concerning land as an assurance which creates a proprietary estoppel, and if this is possible the rules on the transfer of the burden of a proprietary estoppel would apply. An example of a possible proprietary estoppel arising out of a representation concerning land is Hopgood v Brown.516 A property was divided into a northern and southern plot owned by different persons and the exact boundary between the two plots was not clearly identified on any plans. The owner of the southern plot built a garage of which the boundary wall impinged upon what may have been a part of the northern plot. The building of the garage was carried out pursuant to an arrangement between the two parties. The northern plot was subsequently conveyed to the Plaintiff. It was held that because of the agreement the Plaintiff was estopped from contending that the garage impinged over the boundary of the northern plot. The effect is that the burden of the estoppel passed with the land transferred to the Plaintiff. The decision was made before the modern understanding of the complete principle of proprietary estoppel, but it seems that today the arrangement reached between the parties could amount to an assurance that the owner of the southern plot was entitled to the ownership of the land up to the boundary of the garage and as such would be an instance of a proprietary estoppel. 2.270  Coming to authority, if this last decision cannot be categorised and explained as an instance of a proprietary estoppel and is to be considered, as Lord Evershed thought, as an estoppel by representation it is an authority in support of the proposition that the burden of an estoppel by representation relating to a right or interest in land can pass to a successor in title of the right or interest involved.517 In Hammersmith and Fulham LBC v Top Shop Centres Ltd,518 an estoppel by representation arose so as to operate against landlords of

515 In most instances, proprietary estoppels rest on assurances which are of the nature of a promise or are implied from passive acquiescence rather than resting on a representation of fact. 516 [1955] 1 WLR 213. Lord Evershed MR relied on a passage in the first edition of Spencer Bower on Estoppel by Representation, published in 1923, and concluded that there was a representation made by the then owner of the northern land to the owner of the southern land. In early editions of this work, what is today recognised as a proprietary or promissory estoppel was regarded as a variety of estoppel by representation. 517 The only authority referred to in support by Lord Evershed was the decision of Lord Mansfield CJ in Taylor v Needham (1810) 2 Taunt 278 who said: ‘Exclusive of all the dicta, it would be a very odd thing in the law of any country, if A could take, by any form of conveyance, a greater or better right than he had who conveys it to him; it would be contrary to all principle. But it does not rest entirely on the general principle, for if you look into all the books upon estoppel, you find it laid down, that parties and privies are estopped, and he who takes an estate under a deed, is privy in estate, and therefore can never be in a better situation than he from whom he takes it’. Jenkins LJ put the same point (at 229), saying that a successor in title cannot be in a better position than the immediate recipient of a representation relating to an interest in land. 518 Hammersmith and Fulham LBC v Top Shop Centres Ltd [1990] Ch 237, 258. The point was not in dispute and was not canvassed before the Court.

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2.271  General Questions Relating to Estoppel property in favour of sub-tenants. It was held that the estoppel bound a successor in title of the landlords. 2.271  The two above decisions concern the transfer of the burden of an estoppel when the land burdened by it is itself transferred. If the burden can indeed be transferred then it seems obvious that the benefit of an estoppel by representation where it involves an area of land can also be transferred by a transfer of that area of land to a successor in title. Thus, on the facts of Hopgood v Brown519 if the Defendant had transferred the land on which the garage had been built, the benefit of the estoppel constituted by the agreement made between him and a predecessor in title of the Plaintiff should have passed to the transferee of the southern plot. 2.272  Such authority as exists therefore indicates that where there is a true estoppel by representation relating to land, as opposed to what could be regarded today as a proprietary estoppel, the same general rule applies to the transfer of the burden and the benefit of the estoppel as probably applies to a transfer of the burden and the benefit of contractual and other rights which do not have land as their subject matter. In the case of such general rights, the burden and the benefit are capable of passing to the assignees of contracts.520 Such a rule is to be welcomed. It avoids the complexities of land law, of the exact meaning of equities by estoppel, and of the need for registration which is different for registered land and land without registered title. Fairness suggests that a purchaser of land who is aware of an estoppel by representation which affects the land should be bound by that estoppel. There may be circumstances in which a purchaser is unaware of the facts giving rise to the estoppel, and could not have established those facts by reasonable diligence before he agrees to purchase the land. In such a case, there is a conflict between unfairness to the person with the benefit of the estoppel if his rights arising from the estoppel are destroyed by the transfer of the land, and unfairness to a purchaser who could be bound to accept as correct some fact which is not correct when he had no knowledge, actual or constructive, before the agreement of sale of the circumstances giving rise to the estoppel. A reasonable answer to such a difficulty lies in the fact that he who asserts an estoppel by representation must always show that it would be unconscionable if the estoppel was not operated. The balance of hardship can be accommodated within the requirement that a court can refuse an estoppel by representation when it would not be unconscionable to allow a party to assert the true facts without regard to any representation and there could be circumstances in which the purchaser of land could successfully plead that it would not be unconscionable to allow him to assert the true facts when all relevant circumstances were taken into account.

(iv)  Ownership of Chattels 2.273  It appears that a different rule from that applicable to estoppel by representation and contractual rights may operate when the representation which initiates the estoppel concerns the ownership or title to chattels and third parties. To understand the leading authority on this matter it is necessary to have regard to a basic rule of law which is that



519 [1955] 520 See

1 WLR 213. para 2.262 et seq.

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Estoppel and Third Parties  2.274 when there is a sale of unascertained goods, no title passes to the purchaser at the date of the contract. One instance of a sale of unascertained goods is a sale ‘ex bulk’, by which is meant that by the contract the goods are to be supplied from a fixed source from which, subject to the terms of the contract, the seller may make his own choice.521 In Re Goldcorp Exchange Ltd,522 dealers in gold coins and bullion in New Zealand contracted to sell a quantity of gold coins on an unascertained basis. Accordingly no title or proprietary interest in chattels passed to the purchasers.523 The dealers represented that the purchasers owned the goods sold so that as between the dealers and the purchasers the dealers were prevented by an estoppel by representation from asserting that the purchasers did not own the coins. The Bank of New Zealand owned a floating charge over the assets of the dealers and, upon the insolvency of the dealers, appointed receivers so that the charge crystallised. An issue was whether the benefit of the estoppel relating to the ownership of the coins could be asserted by the purchasers against the Bank. It was held by the Privy Council that the estoppel available to the purchasers against the dealers could not prevail against the true title held by the Bank.524 It was said that the estoppel created in the purchaser no more than a pretence of title, binding upon the parties to the estoppel, but not binding on a third party who had no part in the creation of the estoppel. The principle was put as follows: Valuable as it [the pretence] may be where one party to the estoppel asserts as against the other a proprietary cause of action such as trover, this cannot avail the purchaser in a contest with a third party creditor possessing a real proprietary interest in a real subject matter, whereas the purchaser has no more than a pretence of a title to a subject matter which does not actually exist.

2.274  This decision, which is in any event not binding in this country being an appeal from New Zealand, may be read in two ways. It may relate to an estoppel by representation only as regards the ownership of chattels and on this footing has relevance particularly to contracts for the sale of goods. If A, the owner of chattels, represents to B that B is the owner then as between A and B, A cannot deny the ownership of B but if A then sells and transfers the title to the chattels to X the purchaser, X, is unaffected by the estoppel, is unaffected by the rights of B under the estoppel, and can assert his true title to the chattels as against A and B. Alternatively, the decision may be read as support for a proposition that any estoppel affects only immediate parties to it, in the case of an estoppel by representation only the representor and the representee, and that this proposition applies whatever the subject matter of the representation and is not confined to the ownership of chattels. The logic and language of the decision suggest that the latter interpretation is more likely to have been intended. Such a meaning can scarcely be wholly true for estoppels generally; a proprietary estoppel creates a proprietary interest in land and is clearly capable in principle of binding a successor in title to the land affected by it. Even if what was said is confined to an ­estoppel by representation,

521 Re Goldcorp Exchange Ltd [1995] 1 AC 74, 89. Lord Blackburn in his writing on the sale of goods, an inspiration for the Sale of Goods Act 1893, wrote that this rule had existed at all times and was to be found in the earliest English law books. A further form of the sale of unascertained goods is the sale of ‘generic goods’ which means that the seller is to decide how and from what source he will obtain the goods needed to satisfy his contractual obligations. 522 ibid. 523 See s 18 of the New Zealand Sale of Goods Act 1908. 524 Re Goldcorp Exchange Ltd [1995] 1 AC 74, 93–94 (Lord Mustill).

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2.275  General Questions Relating to Estoppel it is possible to query why an estoppel can probably bind an assignee of general contractual rights but not the assignee of a right relating to the ownership of a chattel.

(v) Insolvency 2.275  A further area of uncertainty is whether an estoppel by representation binding on a party will also bind a liquidator or a trustee in bankruptcy of that party if the party becomes insolvent. There is substantial authority to the effect that a liquidator or trustee is bound and that, since they have a similar duty to perform, no distinction is to be drawn for these purposes between a liquidator and a trustee in bankruptcy. It has been held that an estoppel against a bankrupt bars a trustee in bankruptcy.525 In another case, share certificates were issued which represented the shares to be fully paid up and a person to whom some of the shares were issued sold them to a third party who bought on the faith of the representation. It was held in the House of Lords that against such a purchaser both the company and the liquidator were bound by the statement.526 In a further decision of the House of Lords, a person lent money to a company taking shares in the company as collateral with the shares being represented as fully paid up. No money had in fact been paid up on the shares. It was held that the liquidator of the company was estopped from contending that the shares were not fully paid up and that the lender was entitled to have his name removed from the list of contributories.527 On the other hand, it has been said in the Court of Appeal that a trustee in bankruptcy is entitled to go beyond the form of matters to get at the truth and that the estoppel to which the bankrupt may have subjected himself will not prevail against the trustee.528 2.276  The question under discussion has been considered more recently in Re Exchange Securities & Commodities Ltd.529 A company carried on the business of speculating in commodities and shares on behalf of customers, including the Respondent, who paid money to the company for this purpose. The company issued reports stating falsely that large profits had been made by its activities which had been credited to the account of its customers. On the subsequent liquidation of the company one issue was whether the Respondent (and others) could assert against the liquidator an estoppel arising from what was stated in the reports. It was held by Harman J, after a consideration of certain of the earlier authorities, that no estoppel bound the liquidator. A number of reasons were given for this decision. First, it was said that estoppel was no more than a rule of evidence. However, it established today that estoppel is not just a rule of evidence but is a principle of substantive law.530 Secondly, reliance was placed on the ‘probanda’ of estoppel stated in the

525 Harris v Truman (1882) 9 QBD 264. 526 Burkinshaw v Nicholls (1878) 3 App Cas 1004, 1016 (Lord Cairns). See also In Re London Celluloid Company (1888) 39 Ch D 190 in which it was held that purchasers of shares not fully paid up were held to be required to pay up on cause as against a liquidator since when they had bought the shares they knew that the shares had not been paid up. Consequently, there could be no estoppel by representation as against anyone since no actions had been taken in reliance on the truth of any representation. 527 Bloomenthal v Ford [1897] AC 156. 528 In Re Van Laun [1907] 2 KB 23, 30 (Sir HH Cozens-Hardy MR). 529 [1988] Ch 46. 530 See part (C) of this chapter.

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Estoppel and Third Parties  2.277 third edition of Spencer Bower & Turner: Estoppel by Representation (1977), one of which was that the ­original representation was made by the party sought to be estopped or by some person for whose representation that party is deemed in law to be responsible and was made to the party setting up the estoppel. If this statement of law is taken to mean that estoppel has a purely personal effect between only the two original parties to the relevant event it is not a correct general statement of the law today.531 Thirdly, the Judge referred to the possibility of abuse if an estoppel or series of estoppels could be made by a company or person immediately before the insolvency and with a view to defeating the rights of creditors. In reality the prospect of such an abuse could readily be avoided by the principle that in such circumstances, even if (which may be doubtful) the other requirements of an estoppel could be asserted by such representees, it might not be unconscionable to allow a liquidator to assert the truth and not be bound by what was represented, the important point being that unconscionability is an element of all reliance-based estoppels including estoppel by representation. Fourthly, and perhaps most powerfully, the Judge considered that to allow an estoppel to operate against a liquidator could defeat the statutory provisions which govern the law of insolvency. He relied on a leading case in the relationship between estoppel and the performance of statutory functions532 and concluded: Applying that [the principle in the decision of the Privy Council considered] to this case, the court must consider the nature of the obligation imposed by the statutory scheme – that is to distribute such assets as there are rateably among the true creditors and then to say ‘Will an estoppel operate in any way to defeat that?’ And the answer plainly is ‘Yes’, because it will allow inflated or fictitious creditors to come in and deplete the estate. It seems to me that that observation is highly material and relevant to the decision here.

2.277  The general question of the relationship between the various forms of estoppel and statutory provisions has been considered earlier.533 This last reason may somewhat beg the question. A person who asserts an estoppel by representation is certainly able to rely on some fact which is not correct and what is done can therefore be called a fiction or a pretence. However, despite these pejorative words the rights of a person entitled to assert an estoppel are real and substantive rights in law, and if it would have been unconscionable to allow a person or company to go back on what had been asserted then, provided that the other elements of the estoppel are made out, it may be equally unconscionable to allow the liquidator to do so even though it may represent some disadvantage to the creditors of the insolvent company. It does appear that Harman J was of the view that no assignee of the rights of a representor can be bound by an estoppel made by the representor relating to those rights and that a liquidator was in the same position as any assignee.534

531 See para 2.262 et seq; and see the decision of the Court of Appeal of New Zealand in Bay of Plenty Electricity Ltd v Natural Gas Corporation Energy Ltd [2002] 1 NZLR 173. 532 Maritime Electric Co Ltd v General Utilities Ltd [1937] AC 610, a decision of the Privy Council on appeal from Canada. This decision is discussed in para 2.79. 533 See part (F) of this chapter. 534 Re Exchange Securities & Commodities Ltd (In Liquidation) [1988] Ch 46, 59. It should be noted that in Prime Sight Ltd v Lavarello [2013] UKPC 32, [2014] AC 436, a statement in a deed which operated as an estoppel by deed was held to bind the Official Trustee in Gibraltar of the person who had made the statement after that person had become bankrupt. This was so even though all parties to the deed knew that the statement in question, that money payable on an assignment of a lease had been paid, was untrue. For this decision see ch 4, para 4.33.

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2.278  General Questions Relating to Estoppel 2.278  The question of whether a person entitled to rely on an estoppel by representation made by a party can assert that estoppel against a trustee in bankruptcy, or liquidator of that party, therefore still remains the subject of some dispute. As so often with the effect of estoppel on third parties the final answer may await consideration by the higher courts.

5.  Estoppel by Convention 2.279  Estoppel by convention is described in detail in chapter five. In its full modern understanding it operates when the parties to an existing transaction come to entertain a shared assumption of fact or of law relating to the transaction and one party acts to its detriment in reliance on that assumption. The other party may then be prevented from asserting the contrary of the assumption when it would be unconscionable to allow that party to do so.535 An estoppel by convention may relate to any subject matter, including interests in land, but may most frequently apply to contractual and similar rights. There is no clear authority in relation to the transmissibility of the burden and benefit of an estoppel by convention to third parties, but it seems reasonable to suppose that the same principles should apply as to the transmission of the burden and benefit of estoppel by r­ epresentation.536 If A and B enter into a contract and then come to have between them a shared assumption as to the meaning of a provision within the contract on which B acts, so that B can hold A to the shared assumption, it seems reasonable that in principle B should be able to assert the same estoppel against a purchaser from A of the benefit of the contract and of A’s rights under the contract. This appears to be the situation where the estoppel rests on a representation made by A and there seems no reason for a different principle to apply where the estoppel is an estoppel by convention.537 The transmissibility of the burden of the estoppel rests on the principles that an assignee of rights cannot be in any better position than that of the original holder of the rights.538 2.280  There may of course be exceptional circumstances in which it would not be unconscionable that an assignee should be permitted to assert the true state of fact or law and not be bound by the estoppel, and such a situation can be dealt with by reason of the principle that a person asserting an estoppel by convention, whether against an original party to the convention or against a successor in title of that party, must establish unconscionability. The same general principle should apply to instances in which the estoppel by convention relates to an interest in land. An estoppel by convention is not an ‘equity by estoppel’,539

535 See the statement of the essential elements of estoppel by convention by Lord Steyn in Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878, cited in ch 5, para 5.4. The principle is sometimes said to be derived from estoppel by deed. The requirement that the estoppel must relate to an existing transaction, although supported by authority in the Court of Appeal and at first instance, may be open to some query: see ch 5, para 5.44 et seq. 536 See para 2.261 et seq. 537 As to the situation in estoppel by representation see para 2.265 et seq. 538 In Bay of Plenty Electricity Ltd v Natural Gas Corporation Energy Ltd [2002] 1 NZLR 173 it was held that a representation that an electricity supply agreement had commenced bound not only the original party to the contract who had made that representation but also an assignee of the rights of that party. It is difficult to believe that the situation would have been different if the estoppel had been categorised as an estoppel by convention rather than as an estoppel by representation. 539 See para 2.233 et seq.

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Estoppel and Third Parties  2.284 so that no question of the need for registration of the estoppel either as a land charge or as against the title of a person with registered title arises. The decision of the Court of Appeal in Keen v Holland540 is a case in which it was held that no estoppel by convention bound the parties to a lease to the proposition of law that the lease was not within the protection given to tenants of agricultural holdings by statute on the reasoning that an estoppel would have contravened the purpose of the statute. However, if there had been an estoppel by convention relating to the lease, such as to the meaning of a particular covenant in it, then it seems reasonable that in principle the burden of that estoppel should have bound assignees of the reversion and the benefit of it should have been available to assignees of the lease.

6.  Estoppel by Deed (i)  The Basic Rule 2.281  It is explained in chapter four that estoppel by deed is an ancient principle which has two aspects of which the first operates where a deed contains a statement of fact or of mixed law and fact with the result that the parties to the deed are estopped from denying the truth of the statement.541 This brief description is subject to a number of qualifications which may themselves limit who may be bound by the estoppel such as that the estoppel can only operate against a party to the deed whose statement is the subject of the alleged estoppel.542 The question of who is bound by or can take the benefit of the estoppel can arise in connection with both aspects of estoppel by deed.543 2.282  The basic rule is that only parties to the deed who have executed it and their privies can take advantage of the estoppel, and only parties to the deed, whose statement is the subject of the estoppel, and their privies can be bound by the estoppel.544 2.283  The basic rule is not without possible exceptions. It appears that a person may be bound by the covenants in a deed, and may presumably be bound through estoppel by a statement contained in a deed, even though he has not executed the deed, but he has assented to the deed and takes the benefit of it.545 2.284  A decision sometimes put forward to support the proposition that a party who is not a party to a deed may assert an estoppel against a party to the deed because he has acted to his detriment in reliance on a statement in the deed is Re King’s Settlement.546 In that case, a father granted by a deed of gift two houses to his son and daughter-in-law. By a separate

540 [1984] 1 WLR 251. 541 The rules are summarised in ch 4. 542 See ch 4, para 4.42 et seq. 543 The two aspects of estoppel by deed are described in ch 4, paras 4.1 and 4.2. 544 Co Litt 352a: ‘First, that every estoppel ought to be reciprocal, that is, to bind both parties, and this is the reason, that regularly a stranger shall neither take advantage, nor be bound by the estoppel’. The rule was stated in the words of Coke by Tindall CJ in Doe d Marchant v Errington (1839) 6 Bing (NC) 79, 83 in proceedings to recover possession of chambers in Lincoln’s Inn owned by the Benchers of the Inn. See also Tindall CJ in Grant v Wiseman (1836) 3 Bing (NC) 69. 545 Webb v Spicer (1849) 13 QB 886, 893, where Denman CJ stated the law to this effect relying on Co Litt 231a and Comyn’s Digest (1762–1767), tit, Fait (A, 2). 546 Re King’s Settlement [1931] 2 Ch 294 (Farwell J).

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2.285  General Questions Relating to Estoppel deed poll the grantees declared trusts in favour of the father and other beneficiaries. The deed of gift contained no reference to these trusts. The grantees created equitable interests in the properties not mentioning the secret trusts. The father commenced proceedings against the grantees and the equitable mortgagees impeaching the transactions. It was held that the father was estopped as against the equitable mortgagees from asserting that the deed of gift was anything except an absolute conveyance of the property. On a correct analysis, the estoppel which bound the father, and of which the equitable incumbrancers took advantage, seems to have been not an estoppel by deed but an ordinary estoppel arising out of a representation that the grantees were absolute owners. This treatment of the estoppel appears from the judgment and from the observation of the Judge that an estoppel can only arise in favour of a person who has acted on the faith of the representation.547 Reliance is an essential element of an estoppel by representation but not of an estoppel by deed. A further difficulty in treating this decision as an estoppel by deed is that the statement that the deed of gift was absolute appears to be an implication from its terms and the general rule is that an estoppel by deed cannot arise from an implied statement.548 The decision is therefore a doubtful basis for the proposition of law as part of the law of estoppel by deed as stated at the beginning of this paragraph. It may be that this decision is another example of the need to categorise an estoppel which arises as being clearly one and not another form of the overall doctrine of estoppel.

(ii) Privies 2.285  An estoppel may be asserted by or against the privies of the original parties to the deed which contained the statement of fact creating the estoppel.549 By privy is here meant a person claiming under the original party such as successors in title to an interest in land of that party. In this case, at least the rule as to estoppel and third parties is clear as compared with that applicable to other forms of estoppel. The two aspects of estoppel by deed550 need to be considered separately but as regards the second aspect, the creation of an interest by estoppel when a party grants an interest without sufficient title or capacity to do so, the benefit and burden of the estoppel bind successors in title of the original parties.551 An illustration of third parties being bound by an estoppel within the second aspect is a case in which a person took a life interest under a settlement with remainders over land which the settlor had no title or capacity to include in the settlement. When the purported beneficiary of the life interest claimed title to the land by adverse possession against the true owners of the land, it was held that he was bound by the statements in the deed of settlement in the land and that his interest was no greater than that of a tenant for life and that accordingly he could not have asserted a title by adverse possession. On this basis, the estoppel bound not

547 ibid, 299. 548 See ch 4, para 4.26. 549 Co Litt 352a, 352b. The concept of privity in connection with estoppel by deed is similar to one of the categories of privity which apply to estoppel per rem iudicatam. See ch 9, part (E). 550 See ch 4, paras 4.1 and 4.2 for a description of the two aspects. 551 In Webb v Austin (1844) 7 Man & G 701, 724, Tindall CJ said that such an estoppel ‘bound the estate of the lessor etc, and therefore continues in force against the lessor, his heirs, etc. It also binds the assigns of the lessor and of the lessee’.

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Estoppel and Third Parties  2.288 only him but his devisees.552 A succinct statement of the rule is that of Lord Maugham in Greer v Kettle553 who said: ‘Estoppel by deed is a rule of evidence founded on the principle that a solemn and unambiguous statement or engagement in a deed must be taken as binding between parties and privies and therefore as not admitting any contrary proof ’.554 2.286  Although a successor in title of a party to a deed may take the benefit of an estoppel by deed available to the original party to the deed, that successor in title cannot place himself in a better position than the original party.555 Therefore, if the original party to the deed could not rely on an estoppel based on a statement in the deed because his claim was not based on the deed, so a successor in title could not rely on an estoppel by deed for the same purpose.556

(iii)  Transferees of Land and the Burden of the Estoppel 2.287  Estoppel by deed often concerns interests in land although there is no rule that it must always do so. There is no difficulty about the benefit of an estoppel by deed which passes to a transferee of land from an original party to the deed who can assert the estoppel. The party to the deed burdened by the estoppel as the original party can ascertain the burden of that estoppel by looking at the terms of the deed which he has executed so that he suffers no injustice. 2.288  There is a possible problem where an estoppel by deed binds a transferee of an interest in land from the person originally bound by the estoppel as a party to the deed. Obviously the estoppel, depending on its content, can be a significant burden on the land purchased or otherwise acquired. The question is how the transfer of the burden of an estoppel by deed to a transferee of the land affected by the estoppel is to be accommodated within the underlying general principles of English land law. The development of land law over centuries has involved the recognition of proprietary interests in land in the sense of interests which can bind successors in title to the land burdened by the interest, such as leases or easements or restrictive covenants. An associated question has been how to protect purchasers of land from taking the land subject to proprietary interests of which they were unaware. The traditional answer is that the land in the hands of a transferee is bound by legal interests such as leases, and is also bound by equitable interests such as the benefit of a restrictive covenant save that a bona fide purchaser for value of a legal estate in the burdened

552 Dalton v Fitzgerald [1897] 2 Ch 86. Lopes LJ said (at 93): ‘Estoppel binds not only the parties but their privies. The Defendants [the devisees of the original party to the deed], therefore, were in no better position than [the original party to the deed] and if he was estopped they are estopped’. 553 [1938] AC 156, 171. 554 A recent example of the burden of an estoppel by deed passing to a person claiming through a party to a deed is Prime Sight Ltd v Lavarello [2013] UKPC 32, [2014] AC 436, in which the Official Trustee in Gibraltar administering the affairs of a bankrupt was required to accept the burden of a statement in a deed of assignment of a lease that the purchase price had been paid at the date of the assignment even though in truth, and as was known to the parties to the deed, the price had not been paid. The situation may be different where in England a trustee in bankruptcy administers the affairs of a bankrupt person who has made representations which create an estoppel. See Re Exchange Securities & Commodities Ltd (In Liquidation) [1988] Ch 46, and see para 2.276. 555 This is a general principle applicable to an assignment of rights: see Taylor v Needham (1810) 2 Taunt 278 (Lord Mansfield); Dawson v Great Northern Rly Co [1905] 1 KB 260. 556 See ch 4, para 4.38 et seq for the principle involved.

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2.289  General Questions Relating to Estoppel land who had no actual or constructive notice of an equitable interest, takes free of it. This system became to a large extent overtaken by the statutory system of land charges and land registration the general effect of which is that interests had to be protected by registration on a centrally operated register before they could bind successors in title to land.557 The statutory system was designed to simplify conveyancing and to protect purchasers. A question which has not been determined in authorities is how the burden of an estoppel by deed falls into this system. The probable answer is that the burden of an estoppel by deed is capable of binding a transferee of the land concerned and is unaffected by any consideration of whether the transferee, whether a purchaser or otherwise, knew of the estoppel and is unaffected by matters of statutory registration. The statement in the deed creating the estoppel will usually be apparent from the terms of a deed relating to the land transferred. Under the old system of conveyancing, a purchaser would investigate the relevant deed as part of his duty to investigate title but under today’s system of land registration that could only be done if the deed was identified and available, and an essential purpose of the statutory system is to avoid the need to investigate title and former deeds as was previously necessary.558

7.  Estoppel by Record 2.289  Estoppel by record stands apart from the other main forms of estoppel in that it depends not on statements and actions by the parties but on the final judgment of a court which binds the parties to the judgment in any further proceedings between them. Estoppel by record is a series of three main principles imposed by the law so as to prevent an abuse of the process of the court and so as to secure finality in litigation and prevent oppression of a party. There has developed in this area of law the concept of ‘privies’ which is a description of persons who were not parties to the judgment creating the estoppel but who have such a close connection to one of those parties that they may take the benefit or must accept the burden of the estoppel,559 the binding nature of the judgment, as if they had been parties. 557 The law is now contained in the Land Charges Act 1972 and the Land Registration Act 2002 which replace earlier legislation enacted in 1925. The rights of a person entitled to a proprietary estoppel concerning land, and before the crystallisation of that estoppel by an order of the court, are probably an equitable proprietary interest in the land and do require registration: see para 2.240. 558 At one time prior to the system of registered land it was incumbent on a purchaser of land to investigate title back to a good root of title, such as a conveyance or a will, which was at least 60 years old and then to investigate the conveyancing steps which had taken place since that date. The period was reduced by statute to 40, and then to 30, and then to 15 years. For a full account see Megarry & Wade, The Law of Real Property, 9th edn (Sweet & Maxwell, 2019) paras 5.02 and 5.021. 559 See Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160, para 17 (Lord Sumption) for a description of the various aspects of estoppel by record and for the basis of the estoppel. See ch 9, para 9.7 et seq for the three main forms of privity applicable to estoppel by record which are (a) privity by blood (ancestor and heir under the old law of inheritance); (b) privity of estate or title (eg, successors in title to land held by a party to the original judgment); and (c) privity by interest (a more general category the exact boundaries of which are not very closely defined). The application of privity within estoppel by record is to the two main principles which make up that form of estoppel, namely cause of action estoppel and issue estoppel which are together described as estoppel per rem iudicatam. The third principle, the rule in Henderson v Henderson, is not subject to the concept of privity as such and is subject to the more general consideration that a person may be prevented from making a claim or raising some matter in proceedings because that claim or matter should have been raised in previous proceedings when the person who is so prevented was not a party to the previous proceedings but has a close connection with that party.

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Estoppel and Third Parties  2.292 Where a party not involved in the actions which bring about one of the other forms of estoppel is bound by the estoppel or may take the benefit of it, that party is also sometimes called a privy to a party involved in the actions but the same principles of privity which apply to estoppel by record have not been generally applied to other forms of estoppel.560 2.290  Given this situation, it is best to explain privity in its application to estoppel by record separately in chapter nine which covers this form of estoppel. Nonetheless, when it comes to the question of persons taking the benefit or bearing the burden of some other form of estoppel when they were not parties to the statement or other actions which bring about the other form of estoppel, there seems no reason why some guidance should not be obtained from the concept of privity as applied to estoppel by record. This may be particularly so where it comes to successors in title to land as regards which the rule for estoppel by record is reasonably clear in that when a judgment has as its subject matter an interest in land, not only a party to that judgment may be bound in subsequent proceedings relating to the land by an estoppel per rem iudicatam, but a person who acquires an interest in that land after the date of the judgment may also be bound.

8. Conclusion 2.291  The last half century has seen the clarification of important aspects of estoppels including the establishment of the essential elements of proprietary estoppel and estoppel by convention as well as the organisation of promissory estoppel into a comprehensive principle. Unfortunately, no such general clarification has emerged for the important question of whether and in what circumstances the burden or the benefit of an estoppel can pass to parties other than those who carried out the actions which created the estoppel. Such authorities as exist sometimes state an answer in particular circumstances but do not attempt to elaborate any overall principle or draw distinctions between the various forms of estoppel. Even a particular question, such as whether an estoppel by representation can be asserted against a liquidator or trustee in bankruptcy on the insolvency of the representor, is the subject of conflicting authority. As explained here and in chapter nine, the greatest degree of clarity has been achieved for the purposes of estoppel by deed and estoppel per rem iudicatam. 2.292  Two extreme answers could be suggested for the question under discussion. It might be suggested that all estoppels were personal in the sense that only the parties to the actions or events which created the estoppel could take the benefit of, or be bound by, the relevant estoppel. There is some suggestion that such a view is tenable and is justified by the proposition that an estoppel is of its nature a pretence between two parties and that the pretence cannot affect anybody else.561 This view cannot be reconciled with the authorities

560 eg, a liquidator of an insolvent company is bound by privity to a judgment to which the company was a party in subsequent proceedings between the liquidator and the other party to the judgment but this principle has not been applied to estoppel by representation: see Re Exchange Securities & Commodities Ltd (In Liquidation) [1985] Ch 46, and see para 2.276. 561 Re Goldcorp Exchange Ltd [1995] 1 AC 74. See para 2.273. The discussion of the nature of an estoppel in this case may be confined to estoppel by representation or to a representation concerning the ownership of chattels.

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2.293  General Questions Relating to Estoppel which state that, for example, the rights under a proprietary estoppel before its crystallisation by an order of the court are an equitable proprietary interest in the land affected and bind successors in title to the land of the person who made the original assurance.562 Authority also suggests that an estoppel by representation relating to contractual rights is binding on assignees of the benefit of the contract and of those rights.563 2.293  An equally simple solution is that in all cases the burden of an estoppel passes to a successor in title of the assets and rights (including, but not confined to, land) of the original party to an estoppel which are affected by the estoppel, and that the benefit of an estoppel is fully assignable with the assets and rights to which the estoppel relates. Although this is fundamentally a preferable answer it also suffers from its disadvantages. Such a uniformly applied rule could cause hardship to third parties in some instances. It stated without qualification the rule would pay no heed to the need for registration before certain interests in land can bind successors in title to the land affected.564 2.294  If a uniform answer to the question under review is to be sought, that answer should be more flexible in its nature. To take first the burden of an estoppel, a person who acquires by transfer an interest or rights in land, or who acquires the ownership of a chattel or contractual or other rights, should as a generality take that which is transferred subject to rights exercisable against the transferor. The transferee should not in general be able to put himself in a better position than the transferor as regards the rights of third parties. Where a right is exercisable against a transferor by virtue of an estoppel against the transferor, for example a right that the transferor cannot deny the truth of that which he has represented, that right should also in principle and generally be exercisable against a transferee of any assets, corporeal or incorporeal, which are the subject matter of the statement.565 2.295  This last proposition can be stated as a generality. Like many generalities it may be subject to limited exceptions. It is suggested that the main exceptions could here be of the following nature. 2.296  First, where the estoppel constitutes an equitable proprietary interest in the land affected, which is the case with proprietary estoppel, the enforcement of the estoppel against a transferee of the land should be subject to the ordinary rules concerning the enforcement of equitable rights in land against successors in title. Today these rule are, in summary, (a) that the rights under the estoppel must be properly noted on the register where the land affected has registered title or must constitute an overriding interest, and (b) that where there is no registered title the equitable rights will not bind a bona fide purchaser for value of a legal estate in the land without actual or constructive notice of the circumstances giving rise to the estoppel. 2.297  Secondly, in all cases of reliance-based estoppel, including the creation of nonproprietary interests in land as a result of the crystallisation of a proprietary estoppel such as a licence, a transferee of land or another asset or of rights affected should be able to plead 562 See para 2.233 et seq. 563 See para 2.262 et seq. 564 See para 2.240 et seq. 565 There are certain authorities which are in conflict with such a general principle such as Re Goldcorp Exchange Ltd [1995] 1 AC 74 (concerning the title to chattels); and In Re Exchange Securities & Commodities Ltd [1988] Ch 46 (concerning liquidators and trustees in bankruptcy).

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Estoppel and Third Parties  2.298 that due to exceptional circumstances it would not be unconscionable if the estoppel was not enforced against him. This is a wide exception and its operation would include an examination of all relevant circumstances. An instance of the possible operation of the exception might be where the transferee prior to the completion of the transfer had raised queries with the person entitled to the benefit of the estoppel, but that person had declined to give an answer or to provide information reasonably obtainable or had provided an untrue or misleading answer. The fact that the transferee had no notice of the estoppel would not in itself be a reason for applying the exception but would be one relevant circumstance to be taken into account. It would be difficult for a transferee who had notice of the circumstances giving rise to the estoppel against the transferor to plead successfully that it would not be unconscionable to refuse the operation of the estoppel against him. An exception of this nature would fall squarely within the general nature and operation of reliance-based estoppels where it has been said that unconscionability permeates the law of estoppel566 so that no new general concept is introduced. 2.298  Equally, the benefit of an estoppel which benefits an interest in land or other assets or contractual or other rights should generally pass with the transfer of the interest or asset or rights. It would be helpful if the benefit of the estoppel were generally taken to be annexed to the interest in land or other asset or rights involved so as to avoid the necessity for an express assignment of the benefit of the estoppel. There would again be limited exceptions to such a principle, such as the terms of the underlying statement which initiated the estoppel. For instance, a promissory estoppel might be created by a promise which in express terms confined the duration of the promise to the period during which a particular interest to which the promise related was held by the promisee. The rights under a proprietary estoppel following an assurance and before the crystallisation of the estoppel by an order of the court, are also in most instances inherently personal to the person who has received the assurance and who acts to his detriment on the faith of that assurance. An assignment of the benefit in such circumstances would generally be unacceptable. It is also possible that the terms of the transfer of an interest in land or an asset or other rights expressly excluded the transfer of the benefit of any estoppel which related to that which was transferred.



566 Gillett

v Holt [2001] Ch 210, 225 (Robert Walker LJ). See ch 1, para 1.44 et seq.

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3 Estoppel by Representation (A) Introduction 1.  Nature and Origins 3.1  The form of estoppel most frequently met and applied in legal proceedings is probably estoppel by representation. It is also the most straightforward form of estoppel to describe and apply since it depends on a statement or representation of some existing matter intended to be acted on and in fact acted on by the person to whom the statement was made. Given these characteristics, the law ordains that in certain circumstances the maker of the statement cannot in legal proceedings to which it is a party deny the truth of what it has stated. In this way a person is kept to his word and the principle involved illustrates what is ultimately the moral basis of and justification for the general doctrine of estoppel.1 There are many authoritative statements of the principle. In Bloomenthal v Ford2 Lord Halsbury described the principle in the following way: There is a long series of cases, no one of which it is important to quote, because the proposition of law has never been doubted, so far as I am aware, that if you induce a man to act upon a statement of yours, meaning him to act upon it, and that statement is untrue, and he does act upon it because he believes it, it is not competent then for the person who has made the representation to say afterward, ‘I will shew another state of facts than that which I represented, and you ought not to have believed it’.

3.2  Coke in his Commentaries on Littleton’s Tenures identified three forms of estoppel, estoppel by record, estoppel by writing and estoppel in pais.3 Estoppel by record has become 1 See ch 1, para 1.1 A more detailed statement of the essential elements of estoppel by representation is given in para 3.11. 2 Bloomenthal v Ford [1897] AC 156, 165. In Knights v Wiffen (1870) LR 5 QB 660, 665, Blackburn J defined estoppel as arising: ‘When one states a thing to another, with a view to the other altering his position, or knowing that as a reasonable man, he will alter his position, then the person to whom the statement is made is entitled to hold the other bound, and the matter is resolved by the state of facts imported by the statement’. This definition omits the requirement that in order to establish an estoppel by representation it must be shown that the representee did in fact alter his position in reliance on the representation made as well as that the representor intended the representee to act in some way in reliance on the representation. See also the judgment of Baron Parke in Freeman v Cooke (1848) 2 Exch 654; and for a further early formulation of the principle of estoppel by representation see the statement by Lord Denman in Pickard v Sears (1837) 6 Ad & El 469, 474, cited below (n 118). These definitions, as that of Lord Halsbury, omit to state the requirement, considered important today, that it would be unjust or unconscionable to allow the representor to resile from his statement, something which is usually shown by the fact that the representee will suffer detriment if there is such a resiling. This last requirement is today considered central to most forms of estoppel and its application to estoppel by representation is examined in para 3.122 et seq. 3 Co Litt, 352a. ‘There be three kinds of estoppels, viz, by matter of record, by matter in writing, and by matter in pais’.

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Introduction  3.2 the modern estoppel per rem iudicatam. Estoppel by writing has become estoppel by deed. By estoppel in pais, Coke meant an estoppel created by certain public or recorded actions.4 An estoppel in pais is literally an estoppel in the country.5 The general application of estoppel in pais was, therefore, very limited but it came to be extended, culminating in the modern principle of estoppel by representation.6 Estoppel by representation is also sometimes called common law estoppel to distinguish it from the two forms of equitable estoppel which are promissory estoppel and proprietary estoppel.7 The distinction between common law and equitable estoppel is less than totally clear, since estoppel by representation was applied in Chancery as well as in common law courts.8 It also appears that what is today called estoppel by representation was developed in the eighteenth century to some extent in courts of equity and often in connection with marriage settlements.9 Whatever the exact historical origins of the various forms of estoppel, in this book the designation of equitable estoppel is confined to promissory estoppel and proprietary estoppel and all other forms of estoppel are regarded as common law estoppels, whether those originally stated by Coke or those

4 Coke states that an estoppel in pais is ‘by matter in pais, as by liverie, by entry, by acceptance of rent, by partition, and by acceptance of an estate, as here in the case that Littleton putteth (s 667): whereof Littleton make of the special observation that a man shall be estopped by matter in the countrey, without any writing’. The concept of estoppel was therefore known to English law at least as early as in the 15th century when Sir Thomas Littleton wrote his Tenures, and according to Lord Denning was brought over by the Normans: see Hunter v Chief Constable of the West Midlands in the Court of Appeal at [1980] QB 283, 317, and see ch 1, para 1.72 et seq. 5 Pais has the same derivation as the French word ‘pays’ which means country. 6 The possibility of an estoppel arising from a representation made in general circumstances appears to have been recognised at a fairly early stage following the writings of Coke. In Hobbs v Norton (1682) 1 Vern 136 a landowner stated incorrectly to a proposed purchaser of an annuity that the annuity was charged on his land. It was held following the purchase of the annuity that the landowner was bound by the truth of what he had stated. By 1801 Lord Eldon was able to say in Evans v Bicknell (1801) 6 Ves 174 that it was ‘a very old head of Equity, that if a representation is made to another person, going to deal with a matter of interest on the faith of that representation, the former shall make that representation good, if he knows it to be false’. Today knowledge by the maker of the falsity of a representation made is not a necessity for the founding of an estoppel on an untrue representation: see para 3.95. In Freeman v Cooke (1848) 2 Exch 654, 663, Parke B said that estoppel in pais was, generally speaking, a mere application not of any technicality but of common sense, a characteristic which he thought was not shared by estoppel by record or estoppel by deed. 7 First National Bank Plc v Thompson [1996] Ch 231, 236 (Millett LJ). 8 During the development of estoppel as an overall doctrine little attention was sometimes paid to the division between common law and equitable estoppel. Estoppel by representation is often regarded as the primary example of a common law estoppel going back to the time of Coke in the 17th century and to the time of Littleton whose work on Tenures was published about 1481. However in Citizens’ Bank of Louisana v First National Bank of New Orleans (1873) LR 6 HL 352, 360, Lord Selborne LC referred to ‘the doctrine of equitable estoppel by representation’ and said that a person making such representations ‘shall, so far as the powers of a court of equity extend, be treated as though the representations were true’. See also Williams v Pinckney (1897) 67 LJ Ch 34, 66 (Chitty J). In Jorden v Money (1854) 5 HLC 185, 210, the leading decision of the House of Lords which established that estoppel by representation had to be founded on a statement of fact as opposed to a promise of future conduct, Lord Cranworth LC pointed out that the principle of this form of estoppel was a principle equally of law and equity. It is mentioned above (n 6) that in 1801 Lord Eldon appeared to regard an estoppel by representation as a very old head of equity. In Low v Bouverie [1891] 3 Ch 82, 111, a leading decision on the nature of a statement which can bring about an estoppel by representation, Kay LJ said that relief by way of estoppel would be given in law and equity. More recently in National Westminster Bank Plc v Somer International (UK) Ltd [2002] QB 1286, para 43, Potter LJ pointed out that it was clear that the doctrine of estoppel by representation stems from and is governed by considerations of justice and equity. See ch 6, para 6.8 et seq, where the origin of promissory estoppel as a principle of equity is discussed. What is today called proprietary estoppel had its origin in principles of equity developed and applied in the former Court of Chancery in the 18th and the earlier part of the 19th century. 9 See, eg, Montefiori v Montefiori (1762) 1 Black W 363.

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3.3  Estoppel by Representation derived from later developments of the original forms of estoppel.10 The development of forms of estoppel is an interesting aspect of legal history and can be mentioned here only in outline.11 3.3  The brief statement of the nature and effect of an estoppel by representation just given states that the estoppel, when established, will operate against the maker of a representation in legal proceedings to which he is a party. This statement goes to the heart of the estoppel as a principle of law. An estoppel is not generally a cause of action and does not in itself create a cause of action as does, for example, the commission of a tort or a breach of contract. The most that an estoppel, such as an estoppel by representation, can do is to assist in asserting or resisting a cause of action in that the estoppel may prevent a party to legal proceedings based on a cause of action from denying the truth of a statement which that party has made and this inability, if it is on the part of a claimant, may prevent that claimant from succeeding in his cause of action or, if it is on the part of a defendant, may allow the claimant to succeed in a cause of action.12 In principle, an estoppel is available to any party to legal proceedings. Of course, the making of an untrue statement of fact may have other consequences in law beyond the law of estoppel, including the creation of a cause of action. Such a statement if made negligently may give an action in tort for the breach of a duty of care, or such an untrue statement may enable a contract to be rescinded for misrepresentation, or the making of an untrue statement may in some circumstances constitute a crime. None of this has anything to do with estoppel. Similarly, an estoppel only operates against a party to legal proceedings where the rights or obligations of that party are in issue. Thus, if a person is called to give evidence as a witness in proceedings to which he is not a party there can be no question of that person being prevented by an estoppel against him from stating that a previous statement made by him is in fact untrue.

2.  Relationship to Other Forms of Estoppel and to Election 3.4  As long as the general concept or doctrine of estoppel in English law remains divided for historical and other reasons into various forms of estoppel, it is necessary to state how estoppel by representation differs from other forms of estoppel. Mention needs to be made of promissory estoppel, estoppel by deed, estoppel by convention, proprietary estoppel and what is sometimes called estoppel by contract or contractual estoppel. It is explained later that an aspect of estoppel by representation is sometimes called estoppel by conduct, and

10 Estoppel by record and estoppel by deed are also common law estoppels and estoppel by convention is a form of common law estoppel sometimes said to have been developed from estoppel by deed. There is a table classifying the six main forms of estoppel in ch 1, para 1.36. 11 See Holdsworth, A History of English Law, Volume IX (1944) 161. There is an erudite and interesting account of the development of estoppel by representation in E Cooke, The Modern Law of Estoppel (Oxford University Press, 1999) ch 3. 12 This raises the general question of the use of any form of estoppel as a shield and not a sword and this matter is considered in detail in ch 2, part (B), in connection with estoppel as a general doctrine. An exception to the principle that an estoppel cannot in itself constitute a cause of action is proprietary estoppel where a court can satisfy the estoppel by ordering the creation or transfer of an interest in property. See ch 7. It is explained in ch 2, part (B), that the law as stated in the present paragraph and as more fully explained in ch 2 means that the ‘sword or shield’ metaphor is less than helpful.

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Introduction  3.5 that estoppel by representation is sometimes referred to as evidential estoppel to distinguish it from what is sometimes described as contractual estoppel.13 Other expressions sometimes used are estoppel by silence and estoppel by negligence. As is explained later in this chapter, these are not separate forms of estoppel and are best regarded as varieties of estoppel by representation.14 A full catalogue of the many designations that have been applied to the varieties of estoppel, together with a brief description of what is meant by each designation, is given in chapter one.15 A question which has arisen in modern decisions is the relationship between estoppel by representation and the law of restitution which permits in certain circumstances the recovery of money paid under a mistake. A point which arises in connection with this last matter is whether in principle the estoppel can operate with a pro tanto or partial effect so as to allow a representor to contradict a part but not the whole of a representation made.16

(i)  Promissory Estoppel 3.5  Estoppel by representation and promissory estoppel have different historical origins. Estoppel by representation in its modern form is a development from the restricted estoppel in pais referred to by Coke in the seventeenth century. It was developed in both Chancery courts and common law courts, although probably at first in the Chancery courts. It can now apply in principle to representations wherever and however made, save that representations or statements made in a deed enjoy their own particular status as a separate form of estoppel. There are two stark differences between estoppel by representation and promissory estoppel. Estoppel by representation rests on a statement of an existing matter, usually of some existing fact or past event.17 A promissory estoppel, as its name indicates, rests on a promise, that is, a statement of the intended future conduct of the promisor intended to bind him. The other difference is that the subject matter of an estoppel by representation may be any existing matter whereas the subject matter of the promise in a promissory estoppel must be that some existing legal right available to the promisor will not be enforced or fully enforced. The two forms of estoppel do, however, share the common element that the estoppel cannot be established unless the representee or promisee shows there would be injustice or unconscionability in the absence of an estoppel, usually because he has acted to his detriment or prejudice in reliance on what has been stated.18 The two estoppels also

13 See part (F) of this chapter. For estoppel by conduct giving rise to an inferred representation see para 3.42 et seq. 14 For estoppel by silence see para 3.50 et seq; for estoppel by negligence see part (H) of this chapter. 15 Ch 1, para 1.6 et seq. 16 This question is discussed in detail in part (F) of this chapter. A similar question arises for estoppel by convention and is discussed in ch 5, para 5.86 et seq. The remedies for the two forms of equitable estoppel, promissory and proprietary estoppel, are more flexible so that the same problem does not arise. 17 Recent decisions suggest that an estoppel by representation may be created by a representation of law as well as a representation of fact, but this extension of the principle awaits authoritative examination in appellate courts: see para 3.18 et seq. 18 See ch 6 for promissory estoppel. The essential elements of promissory estoppel are defined in ch 6, para 6.24. The relationship between injustice or unconscionability and reliance and detriment is not wholly free from doubt as regards estoppel by representation and is examined in para 3.110 et seq. It seems apparent that the law of estoppel as a whole would gain in clarity and simplicity if a uniform approach was applied towards the need for injustice if an estoppel is to be established and towards the normal components of injustice which are reliance

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3.6  Estoppel by Representation share the common characteristic that the statement or promise which is their foundation must be clear and unequivocal, the expression often applied to the promise in promissory estoppel, or precise and unambiguous, the expression often applied to the statement in estoppel by representation. There seems to be no significant difference in meaning between these two sets of adjectives.

(ii)  Estoppel by Deed 3.6  Estoppel by deed was regarded by Coke as a separate form of estoppel which he called estoppel by matter in writing. Estoppel by deed as it is generally understood today has two aspects, the first of which is similar to estoppel by representation in that it rests on a statement of fact, provided of course that the statement is contained in a deed. One important difference between the two forms of estoppel is that the first aspect of estoppel by deed will operate without proof that the party to the deed alleging the estoppel has acted to its detriment in reliance on the statement contained in the deed. The fact that the statement is contained within the formal setting of a deed is considered sufficient to justify its capacity to give rise to an estoppel. There is no requirement of injustice or unconscionability in estoppel by deed. In this, together with estoppel by record, estoppel by deed is alone among the main forms of estoppel. Since no reliance is required, estoppel by deed is not one of the reliance-based estoppels and does not share certain of the common characteristics of reliance-based estoppels.19 The second aspect of estoppel by deed relates to the creation of interests in land by estoppel and is different from estoppel by representation both in its origins and its effect.20

(iii)  Estoppel by Convention 3.7  An estoppel by convention is fundamentally different from an estoppel by representation in that an estoppel by convention rests on the existence of an assumed state of fact or of law which becomes shared by the parties to some transaction. Estoppel by convention, therefore, involves the participation by the two or more persons in the shared assumption or convention as compared with an estoppel by representation where the foundation of the estoppel is that which is stated by one party to another. An estoppel by convention may extend to assumptions of law including assumptions of general principles of law, whereas the application of estoppel by representation to statements of law is less certain.21 Estoppel by convention is a more modern development than estoppel by representation or estoppel by deed. It shares with estoppel by representation the requirement that the person alleging the estoppel by convention must show that there would be injustice or unconscionability in

and detriment. Such a uniform approach could apply to estoppel by representation, promissory estoppel, estoppel by convention and proprietary estoppel. Modern authority is leading in that direction: see Steria Ltd v Hutchison [2006] EWCA Civ 1551; and see para 3.111 for a citation from this decision. The prospect of such a degree of uniformity is discussed in ch 2, part (G). 19 The reliance-based forms of estoppel are estoppel by representation, estoppel by convention, promissory estoppel and proprietary estoppel. See ch 1, para 1.35. 20 See ch 4 for the two aspects of estoppel by deed. 21 See para 3.18 et seq.

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Introduction  3.9 the absence of an estoppel usually because he has acted to his detriment or prejudice in that case in reliance on the shared assumption.22

(iv)  Proprietary Estoppel 3.8  Proprietary estoppel is a form of estoppel developed in the eighteenth and nineteenth centuries mainly by the Court of Chancery and established and recognised as an overall principle only in more recent decades.23 There is some current suggestion that what is called proprietary estoppel24 is not a self-contained principle but is composed of three separate principles, acquiescence-based estoppel, representation-based estoppel and promise-based estoppel, and that the three principles should not be combined or confused.25 An aspect of this suggestion is that representation-based proprietary estoppel is no more than common law estoppel by representation under another name. This suggestion is not supported in this book and the matter is discussed in chapter seven where it is pointed out that there are substantial differences between the principle of estoppel by representation and the application of proprietary estoppel even where that latter principle is founded on a representation.26 A fundamental difference between the two forms of estoppel is that proprietary estoppel can, and often does, result in an order of the court vesting in a claimant an interest or rights in land. It can also be used as in itself the foundation of a cause of action. Neither of these characteristics applies to estoppel by representation.

(v)  Estoppel by Contract 3.9  What is sometimes termed estoppel by contract is dealt with in this chapter, partly as a matter of convenience and partly because the alleged estoppel is sometimes associated with, or compared with, estoppel by representation. In the comparison, estoppel by representation is occasionally called evidential estoppel. The expression ‘estoppel by contract’ is applied to statements agreed by parties to a contract, and as a part of the contract, to be true, at any rate for the purposes of the contract and often as a preliminary or background matter to the obligations which the parties undertake to each other in the contract. The type of statement often agreed to be correct is that the contract was not induced by any representation, the purpose being to preclude any later attempt to obtain damages or the rescission of the contract on the ground of misrepresentation. It is suggested in the later examination of this topic that the enforceability of such statements depends on the fact that they are terms of the contract and therefore depends on the general nature and operation of the law of contract, and that this simple explanation is preferable to the erection of some yet further form of estoppel.27

22 See ch 5 for estoppel by convention. 23 See ch 7 for proprietary estoppel. 24 See ch 7. Proprietary estoppel has sometimes been called estoppel by acquiescence or estoppel by expectation or quasi-estoppel. 25 Snell’s Equity, 33rd edn (Sweet & Maxwell, 2015) para 12.033 et seq. 26 See ch 7, para 7.48 et seq. 27 See para 3.185 et seq for estoppel by contract.

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3.10  Estoppel by Representation

(vi) The Doctrine of Election 3.10  Lastly, mention should be made of estoppel by representation and the doctrine of election. A common law election operates when A, having two or more inconsistent rights against B, communicates by some means to B a decision to enforce one of those rights. A is then prevented from subsequently enforcing the other inconsistent right or rights. A common law election is in some ways akin to promissory estoppel and the similarities and differences are explained in the chapters dealing with these two principles. An election has few similarities to estoppel by representation,28 although an instance of the interrelationship of the two principles of law is mentioned later in this chapter.29

(B)  The Essential Elements of the Estoppel 3.11  The same format is adopted in this chapter as that used in subsequent chapters in the description of most forms of estoppel in that the essential elements of the estoppel are stated and then examined separately and in turn. An estoppel by representation arises where A makes to B a representation of an existing matter intending that B shall act upon that representation and there would be injustice in the absence of an estoppel usually because B in reliance on the representation acts in such a way that he would or might suffer detriment if A could deny the truth of the representation. The representation may be a written or oral statement or may arise as an inference from some other form of conduct by the ­representor.30 Accordingly, there are three essential elements of this form of estoppel. The elements are (a) a representation of an existing matter,31 (b) an intention by the representor that the representation will be acted upon by the representee, and (c) injustice or unconscionability if no estoppel is allowed, something which will normally be established by conduct by the representee in reliance on the representation which has the result that the representee will or may suffer detriment if the representor is allowed to deny the truth of the representation.32 Neuberger LJ has recently referred to and stated the ‘classic r­ equirements’

28 See ch 6 for promissory estoppel and ch 8 for election. There is a further doctrine called equitable election, also covered in summary in ch 8, which has no connection with estoppel by representation. 29 See para 3.17. 30 See para 3.42 et seq for inferred representations. Where the representation which creates the estoppel is inferred from some conduct of the representor other than a written or oral statement, the estoppel which may arise is sometimes called estoppel by conduct. An estoppel which arises in these circumstances is a type of estoppel by representation and no further classification is normally necessary. 31 The more traditional view is that the representation must be of fact, that is of some present fact or past event. Recent authority suggests that the representation may also be one of law but this extension of the principle awaits detailed examination in appellate courts. This question is discussed in para 3.18 et seq. In this chapter the discussion of estoppel by representation usually proceeds by describing it as founded on a representation of an existing matter so indicating that at any rate on one view it can include a representation of law. 32 The better view is that today, in the light of modern judicial statements of the elements of estoppel by representation, the third element is an overarching requirement that before the estoppel can operate it must be unjust or unconscionable that the representor should be allowed to deny the truth of what he has stated. This matter is discussed later in this chapter (see para 3.110 et seq) in connection with the third element. Reliance and detriment or the risk of detriment are examined separately later in this chapter, since in all or nearly all cases these two components will have to be shown if the third element of the estoppel, injustice, is to be established.

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The Essential Elements of the Estoppel  3.13 of estoppel by representation33 and although the above statement of the elements of the estoppel does not follow the exact language of what was there said, it is based on and is fundamentally in accord with what was described in the judgment as a relatively broadbrush formulation. An examination in detail of the three elements shows that the mental condition of the representor or of the representee at a particular time is important to the establishment of the estoppel (the obvious example being that the representor must have intended that the representation should be acted upon). The course taken in the subsequent examination of the elements is that the exact mental state of the representor (for example, whether he intended the representee to act in the precise way in which that person did in fact act) is considered within an examination of the second of the elements and the exact mental state of the representee (for example, how important was the representation as a factor which motivated the actions of the representee) is considered within an examination of the third of the elements. 3.12  Most of the remainder of this chapter is taken up with an examination of these elements of the estoppel. A further matter which requires separate consideration following an examination of the essential elements is the exact operation and effect of an estoppel by representation once it has been established that a court will in principle allow the estoppel. As with most forms of estoppel, certain general questions arise which apply to estoppel by representation. These general questions can most conveniently be dealt with together in chapter two where their impact on estoppel generally, and where necessary on different forms of estoppel, can be examined and compared.34 The main general questions are (a) whether estoppel by representation can be analysed as a part of some wider or overarching general doctrine of estoppel, (b) the effect of estoppel by representation on successors in title of the original representor and representee, (c) the use of estoppel by representation as, or in support of, a cause of action (the ‘sword or shield’ question), (d) the use of estoppel by representation in public and administrative law, (e) the relationship between estoppel and statutory provisions, and (f) whether estoppel is better regarded as a rule of evidence or as a substantive rule of law. All of these general matters may be relevant to estoppel by representation in certain circumstances. As will be discussed later, the last of these general questions is of some possible and specific importance to an important aspect of the exact operation or effect of an estoppel by representation.35 3.13  Coke writing in the seventeenth century considered that estoppels must be ‘mutual’.36 If mutuality means that an estoppel must affect at least one other person beyond the representor, namely the person to whom the representation or other form of statement is made and who asserts the estoppel and whose actions are normally necessary if the essential

33 Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93. The relevant passage is set out in para 3.111. There is a succinct statement by Lord Wright of what he called the essential elements of estoppel by representation in Canada and Dominion Sugar Co Ltd v Canadian National (West Indies) Steamships Ltd [1947] AC 46, 56, in the Privy Council where he described the elements as ‘that statement to be acted on, action on the face of it, resulting detriment to the actor’. 34 A summary of the nature of these general questions and of the overall answer to them is given in ch 2, para 2.3 et seq. 35 See para 3.163. 36 Co Litt, 352a.

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3.14  Estoppel by Representation elements of an estoppel are to be established, this statement is obviously correct. In most forms of estoppel the person who relies on the estoppel must have acted in some way such as acting in reliance on a representation or promise or assurance made or, in the case of estoppel by convention, by participating in and then acting on the shared assumption which is needed for that form of estoppel. In the case of estoppel by representation, the necessary action by the representee in reliance on the estoppel appears to be the only form of mutuality involved. When parties to a contract stipulate in the contract that a particular factual situation exists the result is sometimes said to be an estoppel by contract, and mutuality in the sense of consideration provided by both parties is certainly an essential element of any contract not contained in a deed. However, as is subsequently explained in this chapter there is no reason to erect a further and separate form of estoppel to meet this situation.37 Mutuality is sometimes associated with privity as an attribute of estoppel by representation and of other estoppels, privity in this context meaning that the estoppel has effect only between the parties whose actions have given rise to the estoppel and does not affect third parties. It is usually said, following the description by Coke, that an estoppel binds not only the original parties but also the privies of those parties. The question of the passing of the benefit and burden of estoppels to third parties is dealt with for estoppel generally in chapter two. Mutuality is discussed in chapter one in connection with the nature and characteristics of estoppel generally and it may be that its main importance is in regard to estoppel by record.38

(C)  The Representation 3.14  A representation such as will support the estoppel is the core of estoppel by representation. The representation has to be one of an existing matter, and possibly must be of an existing fact, such that the starting point is to distinguish a representation from other forms of statement which may be made but which, whatever their effect in other areas of law, will not support the present form of estoppel. It is necessary to go on to establish the rules of law which have developed concerning the content of the representation and how that content is to be determined. Finally, there are a number of separate rules of law concerning the necessary representation, such as that of the burden of proof in establishing it and the somewhat complicated question of the circumstances in which a representation can be inferred from silence or inactivity.

1.  The Nature of the Representation (i)  A False Statement 3.15  An obvious initial point must be made. The nature of estoppel is that a person making a statement of an existing matter and in certain circumstances is not thereafter permitted to



37 See 38 See

para 3.185 et seq. ch 1, para 1.48.

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The Representation  3.17 deny the truth of the statement so made. A statement made must be either true or false. If the statement is true then no question of an estoppel arises. The maker of the statement need do nothing more than assert that what he has stated was correct and that he relies on the correctness of that statement so made. Estoppel only comes into play if the statement made was untrue, in which case provided the elements of the estoppel are made out, the maker of the statement is prevented in legal proceedings from asserting the truth, and is bound by the falsity, of what he has represented. It follows, and scarcely needs any further elaboration, that an estoppel by representation only operates as a principle of law in respect of statements made which are false.39 Consequently, the way in which a court often proceeds is to determine whether a statement made was or was not true and then, if it is found to be untrue, to determine whether the requirements of an estoppel are satisfied so that the representor is prevented from relying on the fact that the statement was untrue and is prevented from asserting and relying on the true state of matters. 3.16  The obvious point just explained is illustrated by the decision of the House of Lords in Moorgate Mercantile Co Ltd v Twitchings.40 The owner of a car subject to a hire purchase agreement with a finance company sold the car to a dealer stating that there was no hire purchase agreement relating to it. Both the dealer and the finance company were members of an organisation which kept central details of vehicles and hire purchase agreements affecting them. Due to various errors the agreement was not properly recorded in the files of the organisation and the organisation stated to the dealer that their files contained no recorded hire purchase agreement in respect of the car. It was held that there was no representation of fact which could have created an estoppel since the content of the statement made was literally true. 3.17  It follows that if a person is the recipient of a representation of fact that is untrue he may have two choices in subsequent legal proceedings involving the representor. He can of course rely as a fact on that which is true. Alternatively, and subject to the other requirements of estoppel by representation, he may assert that the representor is bound by an estoppel to what he has represented and cannot assert the true facts. It is here that the doctrine of election may come into operation. The representee in the present situation has two mutually inconsistent rights, one being to assert the true facts and the other being to rely on the estoppel and so in effect to rely on the untrue facts and prevent the representor asserting the true facts. In a leading decision on the doctrine of election, a person delivered goods to a partnership which he believed at the date of the delivery was constituted as a partnership between A and B. In fact, as a result of the retirement of one partner and his replacement by another, the partnership at the date of the delivery of the goods was constituted between B and C. The law of partnership and of agency are such that until the true facts and the alteration of the constitution of the partnership were communicated to the person delivering the goods there was an implied representation to him that A and B remained the partners and an estoppel arose as a result of that representation.41 It was held

39 In stating the proposition of law which constitutes estoppel by representation, and which he thought had never been doubted, Lord Halsbury LC in Bloomenthal v Ford [1897] AC 156, 165, described an element of the principle as being that the statement made was untrue. See the citation from the judgment of Lord Halsbury in para 3.1. 40 Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890. 41 Scarf v Jardine (1882) 7 App Cas 345.

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3.18  Estoppel by Representation that when the supplier of the goods had elected to hold B and C liable for the price, as on the true facts he was entitled to do, he could not subsequently decide to hold A and B liable by reason of an estoppel.42

(ii)  Representations of Fact and of Law 3.18  The view which has been long and traditionally taken is that a common law representation depends on a statement of fact, that is of some existing fact or past event as at the date of the making of the representation. On this view a statement of law cannot found such an estoppel. There is a plentiful body of authority to support this view. In Bloomenthal v Ford,43 Lord Halsbury stated that the representor after the making of a representation which had been acted upon could not afterwards say ‘I will show you another state of facts than that which I represented’. The leading case of Jorden v Money44 established that an estoppel by representation could not arise from a promise as to future conduct, and Lord Cranworth stated that the principle of estoppel ‘does not apply to a case where the representation is not a representation of fact but a statement of something which the party intends to do’.45 The decision of the Privy Council in Kai Nam v Ma Kam Chan46 appears to be founded on the proposition that an estoppel by representation cannot rest on a statement of law. Other decisions could be cited to the same effect.47 3.19  On the other hand, it must be accepted that the exclusion of statements of law from the ambit of estoppel by representation has not always been applied with great rigour. For instance in Gwyther v Boslymon Quarries Ltd48 an estoppel was founded on a representation that tax was properly deductible by a tenant on royalties payable under a lease, which appears to be a representation of law. In Farrow v Orttewell49 an implied representation was held to have arisen that a notice to quit given by a landlord was a valid notice when the landlord was a contractual purchaser of the reversion and held no legal title. The validity of

42 ibid, 350 (Lord Selborne LC): ‘The two principles are not capable of being brought into play together: you cannot at once rely upon estoppel and set up the facts; and if the estoppel makes A and B liable, and the facts make B and C liable, neither the estoppel nor the facts, nor any combination of the two, can possibly make A, B and C all liable jointly’. See ch 8, para 8.14 for a more detailed examination of Scarf v Jardine and its place as a leading authority on the doctrine of election. 43 [1897] AC 156, 165. The full passage is set out in para 3.1. 44 (1854) 5 HLC 185. 45 ibid, 215. 46 Kai Nam v Ma Kam Chan [1956] AC 358. This decision is discussed in para 3.28. 47 See, as examples: In Re A Bankruptcy Notice [1924] 2 Ch 76; Territorial and Auxiliary Forces Association of the County of London v Nicholls [1949] 1 KB 35; Lyle-Meller v A Lewis & Co Ltd [1956] 1 WLR 29, 41 (Hodson LJ); Citizens Bank of Louisiana v First National Bank of New Orleans (1873) LR 6 HL 352, 361 (Lord Selborne LC); TCB Ltd v Gray [1986] Ch 621, 634, where Sir Nicolas Browne-Wilkinson V-C described a representation of fact as being one of the necessary elements of an estoppel by representation. In his definition of estoppel by representation in Knights v Wiffen (1870) LR 5 QB 660, 665, (cited above (n 2)) Blackburn J said that the consequence of a statement intended to be acted upon was that the matter became ‘resolved by the state of facts imported by the statement’. Three of the four propositions enunciated by Denham CJ in Carr v London and North Western Rly Co (1875) LR 10 CP 307, 316, referred to statements of fact being made. 48 Gwyther v Boslymon Quarries Ltd [1950] 2 KB 59. 49 Farrow v Orttewell [1943] Ch 480. See also Sidney Bolsom Investment Trust Ltd v E Karmios & Co (London) Ltd [1956] 1 QB 529 (statement of validity of a request for a new tenancy under a statute held to be a sufficient representation); and see De Tchitatchef v Salerni Coupling Ltd [1932] 1 Ch 330 (statement on the effect of an agreement held to be a sufficient representation).

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The Representation  3.21 a notice to quit in such circumstances again appears to be a matter of law. Lord Denning in Lyle-Meller v A Lewis & Co50 took the view that it was unnecessary to go into ‘refinements about law and fact’. The difficulty of a strict rule confining estoppel by representation to statements of fact and excluding statements of law has been compounded by the d ­ ifficulties in finding a clear and consistent rule to distinguish between what is a statement of law and what is a statement of fact, and by the fact that statements of mixed law and fact of a somewhat hybrid nature are sufficient to bring about an estoppel by representation.51 3.20  This situation was a possible factor which led to the view which has been expressed in recent decisions that an estoppel by representation may be founded on a statement of pure law. The decision of Newey J in Briggs v Gleeds52 concerned deeds relating to a pension scheme which had not been properly executed by certain of the parties as required by section 1(3) of the Law of Property (Miscellaneous Provisions) Act 1989. An issue was whether the supply of the deeds by or on behalf of one party was a representation by that party that the deeds were valid in law despite the lack of execution. It was in this context that the Judge held that there was before him a statement which was in principle capable of being a representation which could found an estoppel even though the statement in question was one of law.53 This perhaps radical alteration of the law as previously understood was said to be justified by three reasons. The first reason is that the House of Lords had in recent times altered the previously long-standing rule of law that under the law of restitution money paid under a mistake could be recovered but only if the mistake was one of fact and had held that recovery was in principle permissible if the payment of the money had been under a mistake of law.54 The second reason was that a not dissimilar alteration in the law had taken place in the law of misrepresentation where it had been held that a misrepresentation with consequences such as the right to rescind the contract could arise from a statement of law, reversing the traditional view that a statement of fact alone could bring about such an effect.55 The third reason was that it has now been established by the House of Lords that an estoppel by convention can arise from a shared assumption as to a state of law as well as to a state of fact.56 3.21  The view that an estoppel by representation can be based on a representation of law has been to an extent supported by subsequent decisions. NRAM Plc v McAdam57 is a decision in which an estoppel was upheld to the effect that an agreement was a registered

50 [1956] 1 WLR 29, 35. See the contrary view of Hodson LJ noted above (n 47). 51 These difficulties are explored in para 3.26 et seq. 52 Briggs v Gleeds [2015] Ch 212. 53 No estoppel was held to arise on the facts because, among other matters, the particular form of deed was not put forward on behalf of only one of the parties. A further aspect of this case is that an estoppel might have had the effect of contradicting a statutory requirement for the valid execution of a deed. It is doubtful whether any form of estoppel can have this effect. This is a subject of general importance to the law of estoppel and is discussed in detail in ch 2, part (F). 54 Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349. 55 Pankhania v Hackney LBC [2002] EWHC 2441 (Ch) para 57. The Court of Appeal in Brennan v Bolt Burdon [2005] QB 303, para 10, observed, in the context of the effect of a mistake on a contract, that the effect of the Kleinwort Benson case had permeated the law of contracts. 56 Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878. See ch 5, para 5.4 where a citation from the judgment of Lord Steyn is set out. 57 NRAM Plc v McAdam [2014] EWHC 4174 (Comm).

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3.22  Estoppel by Representation agreement under the Consumer Credit Act 1974. It was held that an estoppel by convention on the basis of a shared assumption could have this effect. In relation to estoppel by representation it was held by the Judge that the rule for estoppel by convention, that the shared assumption might be one of law as well as one of fact, applied to an estoppel by representation.58 3.22  As a matter of theory and policy there is much to be said for the view, emerging if it has not yet fully emerged, that a common law estoppel by representation can now, and contrary to the traditional view, be rested on a representation of law. It is difficult to see why a shared assumption between two parties on a matter of law and acted upon should be capable of creating an estoppel by convention but a representation of law made by one party to another and acted upon should not be capable of creating an estoppel by representation. The two forms of estoppel, though distinct in important characteristics, sometimes on particular facts merge into each other. In addition, the extension of estoppel by representation to representations of law avoids the sometimes difficult question of distinguishing between a statement of fact and a statement of law and of having to have recourse to the proposition, equally difficult to define with any precision, that a matter of mixed law and fact may found an estoppel by representation whereas a matter of pure law may not. 3.23  Nonetheless, this is an emerging aspect of the law of estoppel by representation. The judgment of Newey J in Briggs v Gleeds59 is an impressively argued decision on the point but the law awaits reasoned consideration by appellate courts. The best that can be done in present circumstances is to state that certainly as a matter of probability on the authorities, and also as a matter of theory and policy, it is probable that today an estoppel by representation may be established as a result of a representation of pure law. Nonetheless, there is at present no certainty. In these circumstances, and until there is further authority and a reasoned consideration of the point by the highest courts, it is prudent to consider the distinction between representations of law, representations of mixed law and fact, and representations of pure law. That course is therefore taken in succeeding paragraphs of this explanation of the subject of estoppel by representation. In the meantime, it may be prudent to describe estoppel by representation in general terms and in general discussion as requiring a representation of some existing matter, so that at least a clear distinction can be drawn between a representation which can establish an estoppel by representation and a promise relating to future events which plainly cannot establish an estoppel by representation. 3.24  If, as appears probable, the law now is that a representation of pure law may found an estoppel by representation then certain consequential points emerge. An estoppel by representation has to be something which results from a precise and unambiguous statement. If the statement in question can be one of law then that statement should itself be precise and unambiguous. Undoubtedly statements of law can exhibit this characteristic but

58 ibid, para 30 (Burton J). On appeal from this decision at [2016] 3 All ER 665, para 43, it was said to be common ground that an estoppel might be based on a representation of law. In Mears Ltd v Shoreline Housing Partnership Ltd [2015] EWHC 1396 (TCC), (2015) 160 Con LR 157, para 53, Akenhead J said that in the light of recent decisions there was little in logic or reason for holding that estoppel by representation could not be created by a representation of law. 59 [2015] Ch 212.

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The Representation  3.25 the nature of propositions of law is that, in contrast to propositions of fact, they are often expressed (perhaps especially by persons who are not lawyers) in tentative and guarded terms. It will therefore be necessary to determine whether the representation of law does satisfy this criterion of precision and absence of ambiguity if it is to be the foundation of an estoppel by representation. The representations which create a common law estoppel by representation may often be made by non-lawyers in the context of commercial and other discussions. It may be that such representations will sometimes be expressed in guarded or tentative or uncertain terms. One way of expressing statements of law is to phrase them as matters of opinion rather than as unambiguous assertions. An expression of an opinion on a matter of fact is not sufficient to establish an estoppel by representation60 and it should follow that an expression of opinion, or a guarded statement, of a matter of law should also be not sufficient to create an estoppel by representation. An associated point of some significance is that, as explained later in this account,61 a person can only assert an estoppel by representation if he was reasonable in acting in some way in reliance on a representation made. It may not be reasonable to act on a statement of law made by a non-lawyer in general or guarded terms. 3.25  There may be other matters to be considered before there is a wholesale acceptance of the proposition that an estoppel by representation can be created by a representation of pure law of any sort or width. Matters of law can range from the detailed and particular to the very general. The interpretation of a provision in a private contract is a matter of law. A statement of general principles applicable to the law generally is also a matter of law. It is stated on high authority that an estoppel by convention can apply to shared assumptions of law,62 and there is a subsequent decision to the effect that for this purpose the assumption of law can relate to general principles of law such as the rule that the determination of a headlease automatically brings about the determination of a sub-lease as an interest derived from the headlease.63 If there is no limit on the width of propositions of law which have to be accepted because of a representation of law, courts would be obliged, where an estoppel arose, to decide cases on a view of the general law which was known to be wrong, and even to be blatantly wrong. To take a possible example, the general law is that an arrangement for the occupation of property which does not confer a right of exclusive possession on the occupier cannot be a lease.64 A landowner might represent that this fundamental rule did not apply to the occupation by a particular person of his property. If the landowner subsequently wished to assert that the arrangement was not a lease because there was no grant of exclusive possession, he might be held by his representation to be bound, as the court would be bound, to hold that a lease was created contrary to the fundamental principle of law that there cannot be a lease of land where there is no exclusive possession. Matters such as this suggest a pause for thought before the wholesale extension of estoppel by representation to all representations of law however wide.

60 See para 3.31. It appears that a representation of law may arise as an inference from conduct as well as from express words: see Gwyther v Boslymon Quarries Ltd [1950] 2 KB 59; and see para 3.45. 61 See para 3.111 et seq. 62 Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878. 63 PW & Co v Milton Gate Investments Ltd [2004] Ch 142. 64 Street v Mountford [1985] AC 809.

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3.26  Estoppel by Representation

(iii)  Distinction between Statements of Fact and of Law 3.26  If estoppel by representation is confined to representations of fact, the difficulty which this restrictive rule poses is to distinguish between what is a statement of fact and what is a statement of law. There is no difficulty with statements at one or other end of the spectrum. A statement that a promise in an agreement not made by deed is not enforceable unless backed by consideration is plainly a statement of law; a statement that a building is over 20 metres in height is equally plainly a statement of fact. It is of course the intermediate cases which cause the difficulty. The distinction between law and fact is important for many purposes. Appeals are sometimes confined to questions of law. In this context, courts have tended to hold that obvious errors or inconsistencies of fact do raise questions of law in order to broaden their jurisdiction and achieve justice.65 The distinction in this procedural context is also affected by the rule that a decision of fact by a judicial body which could not reasonably have been reached on the evidence discloses for that reason an error of law.66 The distinction was also important under the old rule of the law of restitution that money paid under a mistake of fact could be recovered but money paid under a mistake of law could not.67 A further important instance of the fact or law distinction was the rule that a contract may become voidable if it was induced by a representation of fact but not where the representation was one of law. It seems that today this rule has altered and that a misrepresentation of law is sufficient.68 3.27  There has never been a universally established and recognised test for distinguishing on all occasions between statements of fact and statements of law. One reason is that the question arises in different contexts where different approaches may be justified. Another reason is that some statements made are of a composite character with a conclusion stated which has elements of fact and elements of law within it or leading to it. This last situation has led to the proposition that a statement may be one of mixed law and fact. One main problem is that of accommodating into one or other category statements which are conclusions from primary facts. Primary facts are those matters which are ascertained directly by the application of one or more of the senses and, if in issue, are usually proved by evidence of witnesses. For example, the fact that a collision between two vehicles occurred at a certain time and at a certain location and in certain weather conditions, and that one driver was using a mobile phone while driving and that the other driver was driving at a certain speed, are all primary facts. The conclusion that one driver alone caused the accident is a conclusion or statement of secondary fact. A question which arises (or certainly could arise until recently) for the purposes of estoppel by representation is whether statements of the second character are statements of fact (or possibly of mixed law and fact). It would be difficult

65 See, eg, Railtrack Plc v Guinness Ltd [2003] 1 EGLR 124. 66 Edwards v Bairstow [1956] AC 14. 67 Today money paid under a mistake of law may be recovered by proceedings in restitution: Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349. For a decision relevant to estoppel where the former rule and distinction in the law of restitution were of importance see Avon County Council v Howlett [1983] 1 WLR 605, discussed in para 3.157 et seq. 68 Pankhania v Hackney LBC [2002] EWHC 2441 (Ch). As explained in para 3.20 these changes in the law of restitution and in the law of misrepresentation with the abolition of the need to distinguish between statements of law and of fact add impetus to the proposition that estoppel by representation should also extend to representations of law.

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The Representation  3.29 to argue that such statements were statements of pure law since they plainly have a strong factual element. 3.28  At least three answers have been given to this last question. (i) One answer is that once the primary facts are established any conclusion on whether those facts bring the case within some legal provision is a question of law.69 An illustration of this approach can be found in relation to estoppel by representation. In one case,70 buildings in Hong Kong had been demolished in the war and in the rebuilding the old foundations and the lower parts of the old walls were retained. These were the primary facts. A question was whether the rebuilt structure was ‘an entirely new building’ within the meaning of an Ordinance. It was held in the Privy Council that any statement made on this last question was one of law.71 (ii) A second, and somewhat different, view is that whereas the correct construction of a statute is a question of law, the meaning of an ordinary word or expression in the English language is a question of fact.72 The application of this approach to the question can be seen in Solle v Butcher73 in which the issue was whether a flat damaged in the war had been reconstructed to such an extent that it became in substance a new flat and so was outside the protection of provisions in the Rent Acts. The Court of Appeal held that this was a question of fact. It is explained in the last sub-paragraph that when a similar question arose under Hong Kong legislation, the Privy Council held that the question was one of law.74 The earlier decision in Solle v Butcher was not cited before the Privy Council. The difference between the ways in which the two courts approached what appears to be much the same question illustrates the difficulty in providing a comprehensive test for distinguishing between matters of fact and matters of law. (iii) An intermediate view has been espoused by Denning LJ who has said that a conclusion drawn from primary facts is a question of fact where the conclusion can be drawn as well by a layman as by a lawyer but if the correct construction requires determination by a trained lawyer it is a question of law.75 3.29  Other views can be found on what is the exact test for distinguishing between matters of fact and matters of law. A particular rule is that English law has taken the view that the construction of a document is a question of law.76 When it comes to the question 69 Farmer v Cotton’s Trustees [1915] AC 922, 932 (Lord Parker). 70 Kai Nam v Ma Kam Chan [1956] AC 358. 71 See para 3.18. 72 Brutus v Cozens [1973] AC 854, 861 (Lord Reid). The expression under consideration was ‘insulting … behaviour’ in s 5 of the Public Order Act 1936. 73 Solle v Butcher [1950] 1 KB 671. 74 Kai Nam v Ma Kam Chan [1956] AC 358. 75 British Launderers Research Association v Hendon Borough Rating Authority [1949] 1 KB 462, 471–72. 76 Bentsen v Taylor Sons & Co (No 2) [1893] 2 QB 274; Holt v Markham [1923] 1 KB 504, 512 (Warrington LJ) (construction of Orders made by the Admiralty); Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741, 758 (Viscount Dilhorne). See however De Tchihatchef v Salerni Coupling Ltd [1932] 1 Ch 330, 342, in which Luxmoore J said that estoppel by representation applied even if the representation is as to the legal effect of a document if there is no qualification in the representation suggesting that the document, and not its effect as represented, is to govern the relationship of the parties. See also Brikom Investments Ltd v Seaford [1981] 1 WLR 863, discussed in ch 6, para 6.100. A reason why the interpretation of a document is taken to be a matter of law has been said to be that if it was a matter of fact it would under older procedures have been determined by a jury, and jury members were sometimes illiterate: Carmichael v National Power Plc [1999] 1 WLR 2042.

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3.30  Estoppel by Representation of whether for the purposes of an estoppel a representation made is one of fact or of law, no comprehensive test has ever been established which provides an answer to the question. One reason may be that different criteria apply where the question arises in different areas of the law. As just explained, a particular difficulty in this as in other areas of law is to know whether a representation stated as a conclusion from primary facts is a representation of fact or of law. The rule that estoppel by representation is confined to representations of fact as opposed to representations of law is itself of arguable utility and may no longer be correct. It is suggested that within this area of law even if the representation has to be one of fact, considerations of policy militate in favour of allowing a wide application of this form of estoppel and in favour of applying a generous interpretation of what is a representation of fact. On this basis, representations made which are conclusions drawn from primary facts should normally be considered to be representations of fact and so always apt in principle to form the foundation of an estoppel by representation.

(iv)  Mixed Law and Fact 3.30  It is said that an estoppel by representation can arise out of a statement of mixed law and fact.77 This is a further expression which has not been authoritatively defined. A common meaning is that the statement is a conclusion which depends on considerations of law and considerations of fact, so that it is to be compared with statements which are purely of law. In one case relating to estoppel, a statement that an option to acquire a new lease subsisted and was capable of being exercised at a certain date was held to be not a statement of law but a representation of a present fact as regards the existence of a private right even though considerations of law may have been involved.78 A further aspect of the interrelationship between fact and law arises from a statement of fact which may involve some knowledge or application of law. A well-known example is that given by Sir George Jessel MR in Eaglesfield v Marquis of Londonderry79 which was that of a statement that a person was in possession of an estate of £10,000 per year, where possession is a legal notion and an entitlement to a yearly income may involve legal considerations. It was said that in these circumstances the statement remained one of fact. One, perhaps unsatisfactory, attempt to disentangle the various types of statement was made by Sir George Jessel in the same decision. He suggested that if the facts were stated and a conclusion of law was then drawn separately then the statement was one of law, whereas if there was a single bare conclusion it

77 Covell v Sweetland [1968] 1 WLR 1466, 1474. The representation under consideration was an inferred representation to the effect that an agreement by a husband to pay maintenance to his estranged wife was to last only during the existence of the marriage and was not for life. In Holt v Markham [1923] 1 KB 504, 516, Scrutton LJ held that a representation inferred from the payment of a sum of money could found an estoppel when the mistake which gave rise to the payment (although said not to be concerned with the payment of the money) was partly one of fact and partly one of the construction of a document. See also what was said by Lord Scott in the context of proprietary estoppel in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 14. 78 Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 158. Oliver J in this case considered various forms of estoppel but at this point his reasoning applied to an estoppel by representation. A good example of what was described as ‘a mixed question of law and fact’ was the decision in Green v Britten & Gilson [1904] 1 KB 350, 355 (Collins MR), that a railway arch used partly for retail and partly for storage purposes was a warehouse. 79 Eaglesfield v Marquis of Londonderry (1876) 4 Ch D 693, 703.

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The Representation  3.32 was one of fact.80 Although the law cannot be stated with certainty on this subject, one way of avoiding the complexities and refinements of disentangling complex statements and of justifiably extending the ambit of estoppel would be to say that even if estoppel by representation does not apply to statements which are statements purely of law, this form of estoppel can apply where the statement is one the making of which involves consideration of both factual and legal matters.

(v)  Statements of Opinion 3.31  A representation of fact is a statement of a presently existing fact or a statement that a previous event has or has not occurred. The statement is of its nature either true or untrue. No element of opinion or judgement is normally involved. The maker of the statement may himself be in doubt whether a statement of fact is true, but in the end when all relevant matters are ascertained it can be decided whether the fact stated is true or it is not true. On the other hand, opinions are statements which either by their nature or by reason of the linguistic form in which they are expressed are not definitively correct or incorrect. A statement of opinion or of judgement is not sufficient to found an estoppel by representation.81 A statement may be one of opinion and so insufficient to create an estoppel for two reasons. The subject matter of the statement may inherently be such that only an opinion on it can be stated even though the language of the statement is not expressed in terms of an opinion. For example, a statement that one property has a better outlook than another is inherently a matter of judgement even though it is expressed as a matter of fact without qualification. Alternatively, a matter which could be stated as a matter of fact may be expressed in overtly qualified terms such that it is only an opinion. For example, it might be said that in the opinion of the writer one property contained more trees than another. In both cases no representation of fact is involved and no estoppel can arise. 3.32  There are two very similar qualifications to the generality of the above explanation, both of which involve implied statements of fact. First, a statement of opinion may contain an implied statement that the person making it has no knowledge of facts which render the opinion inaccurate. This situation is most likely to arise where the maker of the statement is alone in a position to know the facts which relate to the opinion expressed. An obvious instance of this type of situation was where a seller of property subject to a lease described the tenant as a ‘most desirable’ tenant when the tenant had in fact been late in paying rent. It was held that what was stated was or included an implied statement of fact that there were no facts known to the representor which contradicted the glowing description of the tenant.82 The second qualification is that where a person makes a statement which is in form

80 ibid, 702–03, and see the illustration there given of this proposition. 81 See, however, the recent statement by Newey J in Briggs v Gleeds [2015] Ch 212, para 31, that it was clear that a statement of opinion could give rise to an estoppel but with the qualification that such an estoppel might not greatly assist a representee. Presumably an expression of an opinion will usually contain within it an implied statement that the person expressing the opinion does as a matter of fact genuinely hold that opinion. This subject is touched on in the next paragraph. It is not clear how what was said by Newey J on this point is to be reconciled with what was said by the Privy Council in Bisset v Wilkinson [1927] AC 177 referred to in para 3.33. The later decision was not cited to the Judge. 82 Smith v Land and House Property Corporation (1884) 28 Ch D 7.

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3.33  Estoppel by Representation a matter of opinion, the statement may constitute an implied representation of fact that the maker of it is aware of facts which make the statement reliable.83 These two qualifications both involve an inferred or implied representation of fact arising from express statements. Inferred representations may also arise from non-linguistic conduct by a person alleged to be estopped and the subject of inferred representations is covered generally below.84 3.33  It is clear that whatever its linguistic content the true nature of a statement made must be elucidated. In a case determined by the Privy Council the vendor of an area of land in the South Island of New Zealand expressed the opinion that the land sold had a carrying capacity of 2,000 sheep. The Privy Council held that the Court below was correct in concluding that this was no more than an expression of opinion on the subject and did not constitute a representation of fact that the land was able to accommodate the stated number of sheep.85 The vital question to be considered in each case is whether the words of a statement, whatever their technical or linguistic content, amount in substance to a representation of fact or at least to a representation that the maker of the statement is aware of facts which render the statement correct. If on a correct analysis the statement made is but an expression of opinion it cannot form the foundation of an estoppel by representation but if the statement is, or at least contains by inference, a statement of fact then it is capable of founding an estoppel of that form.

(vi) Promises 3.34  The important characteristic which distinguishes representations from other types of statement is that a representation must be of some existing matter. A statement as to the future is not a representation. A statement as to the future may be that some event will occur over which the maker of the statement has no control. Thus, A may state that B will pay to C a sum of money by a certain date. If such a statement is a part of a contract it may constitute an enforceable guarantee creating a liability by A to C if B does not pay the sum stated by the time stated. One particular type of statement as to the future is a statement of that which a person making the statement himself intends to do and which he regards as something which binds him. If that is so it is a promise. It has been clear since the decision of the House of Lords in Jorden v Money,86 if it was not previously apparent, that an estoppel based on a representation of an existing matter, or common law estoppel, requires just that and cannot be founded on a promise as to future conduct. However, since that date following decisions in Victorian times, and following the resuscitation of the principle enunciated in those decisions in Central London Property Trust Ltd v High Trees House Ltd,87 it has also become apparent that a different form of estoppel may be asserted in certain limited circumstances where the statement made is not a statement of an existing matter but is a statement of intention or a promise as to the future conduct of the promisor. There are therefore now two separate forms of estoppel within the overall catalogue of estoppels, a common law estoppel



83 Reese

River Silver Mining Co Ltd v Smith (1869) LR 4 HL 64. para 3.42 et seq. 85 Bisset v Wilkinson [1927] AC 177. 86 (1854) 5 HLC 185. 87 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. 84 See

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The Representation  3.36 by representation and an equitable promissory estoppel based on a promise. It is necessary for the purpose of both forms of estoppel to distinguish carefully between a representation and a promise. The reason is that the requirements for the establishment of the two estoppels differ, not only as regards the nature of the statement made but also as regards other essential elements of the estoppel. Most notably, a statement of an existing matter (probably now including a statement of law) which founds a common law estoppel by representation may be a statement of any matter, whereas a promise which founds a promissory estoppel must be a promise not to enforce or not fully to enforce an existing legal right available to the promisor. 3.35  The distinction between a representation and a promise is not difficult to make. A representation of an existing matter is a statement that some matter does or does not exist or that some event in the past has or has not occurred looked at as at the date of the statement. A promise is a statement that the promisor will or will not act in some way in the future intended to be binding on the maker of the statement. Subject to the other requirements of the estoppel, a statement of the first type may found an estoppel by representation, a form of common law estoppel, and a statement of the second type may found a promissory estoppel, a form of equitable estoppel.88 3.36  A possible difficulty is occasionally caused by the well-known statement of Bowen LJ in Edgington v Fitzmaurice89 that the state of a man’s mind is as much a fact as the state of his digestion. This matter is more fully elaborated on in the chapter on promissory estoppel although any problem in this context is common to both forms of estoppel with their different requirements.90 There is in truth no difficulty. If a person makes a promise, for example a landlord promises that for a limited period he will accept a half of the rent due as a good discharge of the whole rent, he clearly makes a promise in the sense just defined.91 It is true that at the time of the promise the landlord has a certain state of mind which leads him to make the promise and that that state of mind is an existing fact at that time. It is possible that a representation that this state of mind exists as a fact is implicit in the making and the terms of the promise. However, this will not avail the promisee in relying on an estoppel by representation since, if the promisor breaks his promise in the future, the promisor will not be denying that he did at one time have a certain state of mind; what he will be asserting is that he has changed his mind and the only way in which he can be prevented from doing so

88 For a decision in which it does not seem wholly clear whether a representation of fact or a promise was made see Brikom Investments Ltd v Seaford [1981] 1 WLR 863. On occasions phraseology is used which may blur the distinction between representations and promises: see, eg, the expression ‘representations of intention’ used by Lord Scott in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 38. ­Therefore a promise in the sense just indicated may have two wholly separate effects in law. (a) If given for valuable consideration (or if contained in a deed) the promise, whatever its content, may be enforceable under the general law of contract. (b) If the promise is not to enforce an existing obligation of the promisor then, subject to the other requirements of the estoppel and irrespective of consideration, it may be enforceable as a promissory estoppel. The relationship between consideration and promissory estoppel is discussed in ch 6, part (C), section 4, ­including the theory of ‘practical’ consideration and the probable demise of that theory following observations in the Supreme Court in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119. What at least is clear is that a promise cannot operate as a common law estoppel by representation. 89 Edgington v Fitzmaurice (1885) 29 Ch D 459, 483. 90 See ch 6, para 6.104 et seq. 91 This is what occurred in Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, a leading decision on promissory estoppel and one origin of its application in more recent times.

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3.37  Estoppel by Representation is if the promise is backed by consideration and so has contractual effect, or a ­promissory estoppel can be enforced against him. There is therefore no practical problem, and any difficulty arising from the words of Bowen LJ is more philosophical than real.92

2.  The Content of the Representation 3.37  In principle, the subject matter of the representation may be any matter including any existing fact or any event in the past. Examples range from a statement that certain goods were at a warehouse93 to a statement by a person, in response to a local authority making enquiries prior to a proposed compulsory purchase of land, that the person had no interest in the land.94 The main questions which arise in connection with the content of the application are how clear the content has to be and the test to be applied in ascertaining the exact meaning of the words used. The need for clarity does not prevent an estoppel being based on a representation inferred from matters other than an express statement, provided that the existence and content of the inferred representation are both clear. The subject of inferred representations is therefore dealt with in this part of the chapter. As mentioned a little earlier, it is now probable that a representation of pure law can found an estoppel by representation and, if that is so, the same requirements apply as to a statement of fact, specifically the need for clarity and the assessment of the meaning of the representation by an objective test as are now explained.

(i)  The Need for Clarity 3.38  The language of the representation must be precise and unambiguous if it is to give rise to an estoppel. The classic statement of this rule is that of Bowen LJ in Low v Bouverie,95 a decision on a statement made by a trustee of a settlement who had received a query from a person intending to lend money to a beneficiary with a life interest under the settlement. With reference to estoppel by representation Bowen LJ said: The language upon which the estoppel is founded, must be precise and unambiguous. That does not necessarily mean that the language must be such that it cannot possibly be open to different constructions, but it must be such as will be reasonably understood in the particular sense by the person to whom it is addressed.96

92 The proposition that the state of a person’s mind at a particular time is a matter of fact may have significance for the second element of estoppel by representation. That element is that at the time of the making of the representation the representor intended his representation to be acted on by the representee. The existence of this intention is a matter of fact. If the representor did not have the requisite intention at the time of the representation, that fact cannot be altered by some later event such as that the representor finds out later that his representation has in fact been acted on. See para 3.101. 93 Seton v Lafone (1887) 19 QBD 68. 94 Milford Haven UDC v Foster (1961) 13 P & CR 289. The representor was prevented from subsequently asserting against the local authority that he held a tenancy of the land. 95 [1891] 3 Ch 82. 96 ibid, 106.

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The Representation  3.40 The need for clarity in the representation has been consistently applied and repeated.97 3.39  The requirement of clarity and an absence of ambiguity is found in the operation of other forms of estoppel. Thus a statement in a deed, if it is to found an estoppel by deed, must be clear and precise98 or definite and precise.99 When promissory estoppel, with its origin in Victorian cases and its resuscitation by Denning J in Central London Property Trust Ltd v High Trees House Ltd,100 came to be considered by the House of Lords in more recent times, the authorities on estoppel by representation were used to support the principle that the promise in a case of promissory estoppel had to exhibit the same clarity if the estoppel was to be established as was required for the representation in estoppel by representation.101 It should follow that as a matter of principle the degree of precision and clarity required to be contained in a statement should be the same whether the statement is a promise and so capable of founding a promissory estoppel, or is a statement of an existing matter and so capable of founding an estoppel by representation. If it is the case, as suggested by recent decisions, that an estoppel by representation can be founded on a statement of law as well as on a statement of fact, then it should be the rule that the statement of law in question has to be precise and unambiguous.102 3.40  One matter which has been established in connection with promissory estoppel therefore applies equally to estoppel by representation. It is the relationship between the degree of clarity in a statement needed if that statement is to bring about an estoppel as compared with the degree of clarity needed if that statement is to constitute an enforceable term of a contract. This subject is fully explained in chapter six on promissory estoppel, where the foundation of the matter as derived from the judgment of Lord Salmon in Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd103 is examined, so that only a summary is needed here.104 Three categories of representations of an existing matter may be considered. (a) A statement may be precise and unambiguous in its terms and in its meaning. 97 See, eg, Canada and Dominion Sugar Co Ltd v Canadian National (West Indies) Steamships Ltd [1947] AC 46, 55 (Lord Wright); Weld-Blundell v Synott [1940] 2 KB 107, 114 (Asquith J); Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567, para 44(b) (Randerson J, delivering the judgment of the Court of Appeal of New Zealand). The most recent reiteration of the requirement of an unequivocal representation is in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119, para 16, in connection with the possibility that a party to an agreement with a provision that any variation of the agreement had to be in writing might have represented that an oral variation was sufficient so as to give rise to a form of estoppel. 98 Onward Building Society v Smithson [1893] 1 Ch 1, 14 (Brett LJ). 99 In Re Holland, Gregg v Holland [1902] 2 Ch 360, 387 (Cozens-Hardy LJ). See ch 4, para 4.25. 100 [1947] KB 130. 101 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741, 755 (Viscount Hailsham LC). The alleged promise in this case was held not to be sufficiently precise to create a promissory estoppel. See ch 6, para 6.107. It is usual to describe the need for clarity in a promise by the adjectives ‘clear and unequivocal’ whereas the description most usually applied to statements of fact is that they must be ‘precise and unambiguous’. It does not seem that this linguistic difference represents any significant difference in meaning. It seems that in practice a similar degree of clarity may be required in the shared assumption of law or of fact which must be established if reliance is to be placed on an estoppel by convention. See ch 5, para 5.40. A strict test of meaning of this nature is considered unsuitable when it comes to the assurance which is the first element of proprietary estoppel. For that form of estoppel it is sufficient that the assurance is ‘clear enough’: Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 56 (Lord Walker). 102 See para 3.18 et seq. 103 [1972] AC 741, 771. 104 See ch 6, para 6.121 et seq for the fuller examination of this matter.

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3.41  Estoppel by Representation Nonetheless, it may be possible without total implausibility to suggest an alternative meaning even though that alternative meaning is unlikely to be a true meaning. A statement with this degree of clarity may found an estoppel by representation or a contractual term. The fact that some alternative meaning could conceivably be urged is not enough to prevent the statement having either status.105 (b) A statement may be one with a significant degree of genuine ambiguity to which it is reasonably possible to attribute more than one meaning. In these circumstances, if it is sought to enforce the statement as a contractual term, a court will, by using established principles, ascertain what is the correct meaning of the statement where that can be done. The meaning so attributed to the statement will be that which a reasonable person knowing all relevant facts known to the parties to the contract would attribute to it.106 It follows that a statement with a significant degree of ambiguity in it, and readily capable of bearing two or more meanings, may still operate as a valid and enforceable contractual term. However, the degree of ambiguity and absence of clarity in such a statement is likely to prevent it from being capable of giving rise to an estoppel by representation since it will fail the test of being precise and unambiguous. (c) It is possible that the statement in question is so ambiguous or vague or general that it is impossible to give to it any precise meaning such as would be necessary if it was to constitute a term of a contract. Such a statement, therefore, cannot be a contractual term and it necessarily follows that such a statement cannot be the foundation of an estoppel by representation. 3.41  The clarity of the representation may also be relevant to the second of the three essential components of an estoppel by representation which is that the representor intended the representee to act upon the representation. A representation may be sufficiently clear in its own right to satisfy the first element, the need for a plain and unambiguous representation, but its form and content, and the circumstances in which it was made, may not be sufficiently clear for it to be inferred that the representor intended that the representation should be acted upon. It has been said that the representation must be made in such circumstances as to convey an invitation to act upon it.107 Therefore, when considering the language and content of a representation said to found an estoppel there may be two questions to be asked, one being whether the language of the statement was sufficiently clear to be precise and unambiguous in its meaning, and the other being whether the language of the statement, combined with the surrounding circumstances, was sufficiently clear such that there could be inferred an intention on the part of the representor that it should be acted upon by the representee.108

105 This proposition as regards estoppel by representation is apparent from the citation from the judgment of Bowen LJ in Low v Bouverie [1891] 3 Ch 82, 106, set out in para 3.38. 106 This principle of the interpretation of contracts is established by Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896. For a recent examination and application of the principle, see Arnold v Britton [2015] AC 1619. 107 Sidney Bolsom Investment Trust Ltd v E Karmios & Co (London) Ltd [1956] 1 QB 529, 541 (Denning LJ). 108 The need for an intention on the part of the representor that the representation is to be acted on is examined in para 3.84 et seq. It has been said that when a statement is made with a form of disclaimer in it, that may be sufficient to prevent the statement being a representation which can give rise to an estoppel: Hammersmith and Fulham LBC v Top Shop Centres Ltd [1990] Ch 237, 257. The reason may be that the disclaimer prevents the statement being precise and unambiguous, or another reason may be that the language of the disclaimer shows that the maker of the statement did not intend anyone to act in reliance on it. Of course much may depend on the exact form of the disclaimer.

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The Representation  3.43

(ii)  The Rule as to Inferred Representations 3.42  The requirement of clarity does not mean that a representation cannot arise as an inference from conduct either from what has been expressly said or from some nonlinguistic conduct. Examples of a representation of fact inferred from express language have already been given, such as that a statement of opinion may contain an implied statement of fact that the person expressing the opinion is not aware of, facts which make the opinion inaccurate or misleading.109 A representation by conduct means that the conduct of a person is such that a reasonable person aware of that conduct would infer that a representation of some state of things was impliedly being made.110 Implication and inference here have much the same meaning. The terminology used in this context is sometimes that there is an estoppel by conduct, but in truth there is no separate form of estoppel by conduct. The more accurate description of the situation is to say that an estoppel by representation may arise as a result of a precise and unambiguous express statement, but that the necessary representation which creates the estoppel may also be inferred from a linguistic expression or from any non-linguistic conduct. The inference of some form of statement from conduct is found in other forms of estoppel, the most obvious example being proprietary estoppel where an assurance concerning an interest or rights in land may be inferred from passive acquiescence, this is the failure of an owner of land to challenge or make any protest at actions by another person which infringe that interest or rights.111 3.43  The representation may be inferred from any form of conduct and from any document.112 When the exact line of the boundary between two properties was uncertain and one owner prepared a plan marking out what he believed to be the true boundary to which the other owner assented, there were held to be mutual representations of fact that the boundary as so marked on the plan was the correct boundary.113 Given that there is no limit on the type of conduct which can bring about the inferred representation which creates the estoppel there is no purpose in multiplying examples, and a few illustrations of implied representations deriving from diverse facts will suffice.114 Before coming to these illustrations, there should be mentioned a decision sometimes cited as an instance of a

109 Smith v Land and House Property Corporation (1884) 28 Ch D 7. See para 3.32. 110 In Freeman v Cooke (1848) 2 Exch 654, 663, Parke B cited Lord Denman in Pickard v Sears (1837) 6 Ad & EL 469, 474, for the proposition that an estoppel may arise where a person by his words or conduct wilfully causes another person to believe in the existence of a certain state of things. See below (n 118) for the full citation from Pickard v Sears. See also Bell v Marsh [1903] 1 Ch 528, 541 (Collins MR). 111 See ch 7, para 7.113 et seq. 112 For instance, the presentation at the counter of a bank of a cheque for a definite amount, which the customer authorised to be presented in order to be cashed, although the customer actually intended that it should be cashed for a different amount, is an inferred representation by the customer that the bearer presenting the cheque has authority to receive payment: London Joint Stock Bank v Macmillan and Arthur [1918] AC 777, 817 (Viscount Haldane). A representation may also be inferred from silence or inactivity in limited circumstances: see para 3.50 et seq. 113 Hopgood v Brown [1955] 1 WLR 213. Such circumstances could in some cases also give rise to an estoppel by convention as is explained in ch 5. An estoppel by convention depends on a shared assumption regarding some existing legal relationship such as a contract, whereas mutual representations to the same effect may not concern such a relationship and so cannot amount to an estoppel by convention. This decision is also sometimes referred to in the context of proprietary estoppel since it relates to the ownership of an area of land. 114 A substantial number of illustrations of representations arising from conduct are gathered together in Halsbury’s Laws, vol 47, 5th edn (LexisNexis, 2014) para 361.

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3.44  Estoppel by Representation representation by conduct, Jennings v Great Northern Rly Co.115 An employer bought tickets for a railway journey for himself, his servants and horses. During the journey the train was divided into two with the employer taking one train and the servants and horses proposing to take another. The railway bye-laws required that a person should show a ticket when requested. The company refused to carry the servants and horses on the second train since the employer had retained all the tickets issued to him. The employer was awarded damages of five pounds and twelve shillings. The decision is cited as an example of an implied representation by the railway company, possibly a representation when dividing the train that it would not rely on the particular bye-law, but may perhaps be more simply explained as a breach of contract by that company.116

(iii)  Illustrations of Inferred Representations 3.44  A good example of an inferred representation occurs where a person issues some purportedly valid document which is eventually found to be invalid and when that person then tries for his advantage to assert the invalidity of the document. Such a situation arose in Farrow v Orttewell117 in which a contractual purchaser of agricultural land served a notice to quit on a tenant, something which entitled the tenant to statutory compensation when he gave up possession pursuant to the notice. The landlord later denied the validity of the notice and thus any entitlement of the tenant to compensation on the basis that when the notice was given he only had the benefit of a contract to acquire the land and had not become the legal owner. The Court of Appeal held that the giving of the notice to quit was an implied representation that the giver had power to give it as a good notice and that he was estopped from denying the validity of the notice.118 A further example is Re King’s Settlement119 in which, by a deed of gift, land was vested in grantees without any mention of the execution of a separate deed which declared that the land was held subject to certain secret trusts for beneficiaries which included the grantor. The grantees created equitable mortgages of the land. It was held that the deed of gift, which on its face was an absolute disposition of the land, operated in favour of the equitable incumbrancers as an implied representation that the gift was absolute. 115 Jennings v Great Northern Rly Co (1865) LR 1 QB 7. 116 ibid, 9, where the judgment of Cockburn CJ in the Court of Queen’s Bench puts the matter in this way. See also Covell v Sweetland [1968] 1 WLR 1466, in which the possibility was raised of an inferred representation relating to the construction of an agreement between an estranged husband and wife. 117 [1943] Ch 480. 118 ibid, 498 where Lord Hanworth MR applied the general rule or definition of estoppel by representation as stated by Lord Denman in Pickard v Sears (1837) 6 Ad & EL 469, 474: ‘But the rule of law is clear, that, where one by his words or conduct wilfully causes another to believe the existence of a certain state of things and induces him to act on that belief, so as to alter his own previous position, the former is precluded from averring against the latter a different state of things as existing at the same time’. One possible difficulty with the Farrow decision is that the implied representation as to the validity of the notice to quit in the circumstances which arose appears to be rather one of law than of fact. However, recent authority indicates that an estoppel by representation may be rested on a statement of law: see para 3.18 et seq. The decision is also of significance in that it illustrates the use of an estoppel in support of a cause of action, the cause of action being compensation under the statute, thus showing that estoppel is not confined to use as a shield or defence to a cause of action: see ch 2, part (B). 119 Re King’s Settlement [1931] 2 Ch 294. This decision is sometimes taken as an estoppel by deed since the implied statement was contained in a deed. A decision which could be categorised as constituting an inferred representation is Blomqvist v Zavarco Plc [2016] EWHC 1143 (Ch), [2016] All ER (D) 146 where a company applied for the listing of its shares on the Frankfurt Stock Index. A requirement of listing was that all the shares in a listed company were fully paid up. It was held that the application for listing constituted a representation to the public that all shares in the applicant company were fully paid up.

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The Representation  3.46 3.45  A further illustration involves a situation in which a sum of money is accepted as properly calculated and paid such that there is an implied representation by the payee that the sum as so tendered and accepted is the correct payment under a contract or other instrument. This situation is illustrated by Gwyther v Boslymon Quarries Ltd120 in which tenants of land were entitled to remove sand and gravel from the land in return for a payment of royalties to the landowner. The tenants deducted tax from certain payments, and accounted for the sums deducted to the Revenue, and the landowner for a time accepted this situation, for instance by asking for certificates of tax deducted. In fact on a correct interpretation of the law no tax was deductible. It was held that the conduct of the landowner was an implied representation by him that tax was properly deductible and that the sums tendered were therefore the correct payments with the result that he was estopped from asserting that no deduction should have been made.121 In a somewhat similar way, the acceptance of premiums by an insurer under an insurance policy may be a representation that the insurance policy is valid despite some matter which the insurer knows of at the time of the acceptance, such as a breach of a condition in the policy, with the result that the insurer is estopped from asserting the invalidity of the policy by reason of that matter.122 3.46  Possibly the clearest instance of an implied representation comes from the law of agency. The relationship of principal and agent can arise not only from actual (express or implied) authority conferred on an agent but also from an ostensible or apparent authority. This last form of agency is often called agency by estoppel and arises when one person has so conducted himself that his conduct leads another person reasonably to believe that the first person has authorised someone to act on his behalf and as his agent. Although no actual authority or status as an agent has been conferred on the person held out as having authority, the person who has so conducted himself is estopped as against a third party who has dealt with the person so held out from denying the authority of the person so held out. This principle of the law of agency is firmly based on the doctrine of estoppel by representation. It has been said that ostensible or apparent authority is a form of estoppel and cannot be called in aid unless the essentials of an estoppel, including a representation, are ­established.123 The estoppel may operate both so as to create an apparent or ostensible agency by estoppel and so as to delineate the authority of an agent. As with all estoppels 120 [1950] 2 KB 59. Again the representation that tax was properly deductible under the relevant tax legislation appears to be one of law rather than of fact. It now seems likely that an estoppel by representation may be founded on a representation of law as well as on a representation of fact: see para 3.18 et seq where this matter is discussed. If so, this decision may be seen as an implied representation of law. In this case the inferred representation by the landlord was contradicted by him after a time such that after that time actions taken by the tenants could no longer give rise to an estoppel since they had not been carried out in reliance on the original representation: see para 3.69. 121 On the converse situation, ie, where the question is whether the payment of money results in an inferred representation by the payer that the sum paid is due, Lord Goff observed in Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548, 579, that in cases where a plaintiff has paid money directly to a defendant it has been argued (though with difficulty) that the plaintiff had impliedly represented to the defendant that he was entitled to the money. Of course when a sum of money is paid there may be an express statement, made at the time of the payment or later, that the money is due to the payee and this statement may bring about an estoppel, as occurred in Avon County Council v Howlett [1983] 1 WLR 605: see para 3.157 et seq. While the simple payment of a sum of money without any explanation may not amount to an implied representation that the sum paid is legally due, such an inference may more readily arise when the payer, such as an employer, is under a duty to calculate the amount due. 122 Wing v Harvey (1854) 5 De GM & G 265. An estoppel operating in these circumstances is closely concerned with the operation of common law election as explained in ch 8. 123 Rama Corporation Ltd v Proved Tin and General Investments Ltd [1952] 2 QB 147, 150.

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3.47  Estoppel by Representation by representation, the extent of the estoppel depends on the content of the representation. Consequently, if the person dealing with an ostensible agent by estoppel knows that the authority of that agent is limited so as not to include entering into a particular transaction, then in respect of that transaction, the ostensible agent will have no authority to act and the third party will not have relied on any contrary representation and so cannot rely on the agency in respect of that transaction.124 3.47  It should not be thought that there is any inconsistency between the rule that a representation which founds an estoppel by representation must be precise and unambiguous and the existence of representations as an inference from conduct. Where a statement alleged to create the representation is a written or oral statement there is obviously a possibility of ambiguity within what is said, and the rule as to clarity operates such that the statement must be precise and unambiguous in the sense described earlier if it is to be the foundation of an estoppel by representation. Equally, if the alleged representation is an inference from some form of conduct other than linguistic statements, then again forms of conduct may be uncertain as to their implications and effect. In such a case, the requirement of clarity operates such that in respect of this type of alleged representation the inference to be drawn from what was done must be precise and unambiguous if it is to constitute an inferred representation sufficient to form the foundation of an estoppel by representation. The principle therefore is that both the inference of a representation from conduct, and the content of the inferred representation, must be precise and unambiguous.

(iv)  An Objective Test 3.48  Since the representation has to be precise and unambiguous if it is to be the basis of an estoppel by representation, it should follow that in most cases the meaning of the representation cannot be in doubt. If there is substantial doubt or ambiguity in the meaning of the representation, there should for that reason be no question of an estoppel. This is one of the differences between a representation and a term of a contract where a court will normally determine the correct meaning of an ambiguous term. Nonetheless, to the extent that an interpretation of a representation relied on as creating an estoppel is required, the correct method of interpretation is to apply an objective test. The meaning of the representation, and that to which the representor will be bound if there is an estoppel, is that meaning which the representation would convey to a reasonable person in the position of the representee and having the knowledge available to the representee.125 The fact that the representor subjectively intended the representation to have a different meaning is irrelevant.126

124 Russo-Chinese Bank v Li Yau Sam [1910] AC 174; Armagas Ltd v Mundogas SA [1986] AC 717, 777. 125 Bremer Handelsgesellschaft GmbH v Vanden Avenne-Izegem [1978] 2 Lloyd’s Rep 109, 126 (Lord Salmon). See also Argo Systems FZE v Liberty Insurance (Pte) Ltd [2011] EWCA Civ 1572, para 46 (Aikens LJ); Seechurn v Ace Insurance SA-NV [2002] EWCA Civ 67, para 54 (Ward LJ). An objective test is generally applied in the law of estoppel in deciding whether the elements of a form of estoppel are satisfied. For example, the existence of an intention on the part of a representor that the representee shall act upon the representation is determined objectively and the intention behind an assurance is determined objectively for the purposes of proprietary estoppel. An objective test as one of the factors common to forms of estoppel is discussed in ch 1, para 1.53. 126 It should follow that a representor should be unable to give evidence that he subjectively intended the representation to have a different meaning from that to be attributed to it on an objective test. The general rule is that a term of a contract is to be assessed objectively so that a party to the contract cannot give evidence as to his own

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The Representation  3.50 3.49  The objective test and its effect and justification are more fully discussed in connection with promissory estoppel where the estoppel depends on a clear and unequivocal promise.127 The need for clarity in the promise was derived from the same requirement as that which applies to a representation creating a common law estoppel, and it must be the law that the requirement of clarity and the objective mode of interpretation where ­interpretation is required apply to both a representation and a promise.

3.  Other Aspects of Representations (i)  Silence or Inaction: The General Principle 3.50  A question which sometimes arises is whether a representation can arise from silence. Obviously mere silence cannot give rise to an express representation, but there may be limited circumstances in which silence can give rise to an inferred representation. It has often been said that silence following a legal or moral obligation to speak on a subject may give rise to a form of representation sufficient to create an estoppel. The question of whether a failure to observe a legal or a moral duty to impart information can bring about an estoppel by representation is considered separately below.128 In addition, a failure to speak may in limited circumstances be enough to form an ingredient of a proprietary estoppel129 or even a promissory estoppel.130 It seems unlikely that silence can create the shared assumption subjective understanding of the meaning of the term. However, it seems that such evidence may be allowed where the contract is wholly or partly oral or is dependent on actions other than solely the execution of a document: see Carmichael v National Power Plc [1999] 1 WLR 2042, 2048–51 (Lord Hoffmann). This has led to the possibility that as regards an assurance which founds a proprietary estoppel, the same exceptional approach to the meaning of an oral assurance might be permissible: Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, paras 82–83 (Lord Neuberger). If these relaxations are allowed for ascertaining the meaning of an oral contractual term or an oral assurance, there is a logical case for extending the relaxation to an oral representation. The view of Lord Hoffmann was that, where a contract was constituted in whole or in part by oral conversations or events rather than being solely contained in a written document or documents, it was pedantic to describe what the parties thought the contract meant as pure subjective belief. See ch 7, para 7.152, on proprietary estoppel for further discussion on this matter. 127 See ch 6, para 6.141 et seq, and see the judgments in Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741. Paragraph 6.141 et seq of ch 6 also discuss the justification for the application of an objective test which is a justification that in general terms applies equally to representations relied on to found an estoppel by representation. The general rule that statements within the law of estoppel of any form must be assessed objectively was one of the reasons which led to the House of Lords in Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, overturning the decision of the Court of Appeal which applied a subjective test to the meaning of, and the intention behind, an assurance leading to the expectation of an entitlement to an interest in land. 128 See para 3.55 et seq. 129 In Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 144, Oliver J defined proprietary estoppel as encapsulated in the following proposition: ‘[I]f A under an expectation created or encouraged by B that A shall have a certain interest in land, thereafter, on the faith of such expectation and with the knowledge of B and without objection by him, acts to his detriment in connection with such land, a Court of Equity will compel B to give effect to such expectation’. A further suggestion of a definition is made in ch 7, para 7.2. It is certainly possible that the expectation in question might in certain circumstances be created or encouraged by silence on the part of the person alleged to be the subject of the estoppel. Indeed proprietary estoppel is sometimes divided into categories (or even separate principles) and one such category is acquiescence-based estoppel. Acquiescence is often no more than a silent standing by when a person carries out work to land: see ch 7, para 7.113 et seq. Proprietary estoppel is sometimes described as estoppel by acquiescence and decisions based on acquiescence figure in the early development of what is today the modern principle of the estoppel. 130 The possibility that silence can give rise to a promissory estoppel is discussed in ch 6, para 6.125 et seq.

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3.51  Estoppel by Representation which is the basis of an estoppel by convention if only because the assumption has to ‘cross the line’, that is, be communicated between the parties, but there are some suggestions that even this form of estoppel can be created by silence or inactivity.131 3.51  A fundamental difficulty which faces any suggestion that a positive representation can be inferred from silence is that silence is of itself and of its nature normally equivocal. Inaction or silence, by contrast with positive conduct or a statement, is colourless; it cannot influence a person to act to his detriment unless it acquires a positive content such that that person is entitled to rely on it.132 Even so, in limited circumstances this difficulty can be overcome and an inference of a representation can be made, possibly where the silence is in the context of a series of communications or is the only response to a specific question. The proposition that, in the absence of some duty to speak owed by the alleged representor, a representation will not generally be inferred from silence is illustrated by the decision of the Privy Council in Mercantile Bank of India Ltd v Central Bank of India Ltd.133 Merchants who had purchased goods passed railway receipts, which indicated their entitlement to the goods, to a bank as part of a charge or pledge on the goods which was security for a loan made to them by the bank. The bank passed the receipts back to the purchaser in order to facilitate the physical transfer of the goods from the possession of the merchants to the bank’s own godown or warehouse. The merchants then fraudulently used the receipts to obtain a second loan from a different bank. It was held that there was no representation by the first bank that the merchants had the right to pledge the goods as a further security. There was nothing more than silence from the first bank on the question of the availability of the goods to form a lawful security for a second loan. 3.52  This decision of the Privy Council in this last case illustrates the general rule that in the absence of a duty to impart information, a representation will not be inferred from silence. Even so, there are decisions in which such an inference was made. In the old case of Pickard v Sears,134 the mortgagor of machinery who had retained possession of it defaulted to another creditor and the machinery was seized in execution by the sheriff. The mortgagee made no mention of his claim although he was aware of what had occurred. It was held that he was estopped from asserting as against the other creditor his claim to the machinery. An illustration of an unusual case in which a representation on a particular matter was inferred from conduct, but in the absence of any express statement on the particular point

131 See ch 5. 132 Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890, 903 (Lord Wilberforce); Argo Systems FZE v Liberty Insurance (Pte) Ltd [2011] EWCA Civ 1572; Morris v Tarrant [1971] 2 QB 143; Allied Marine Transport Ltd v Vale Do Rio Doce Navegacao SA [1985] 1 WLR 925, 937 (Robert Goff LJ). As Lord Wilberforce explained in the Twitchings case, it is the failure to carry out a duty to speak which may give silence a positive content. A similar question arises under the doctrine of common law election where the question is whether a decision between inconsistent rights, including the required communication of that decision, can be derived or inferred from silence: see ch 8, para 8.94. 133 Mercantile Bank of India Ltd v Central Bank of India Ltd [1938] AC 287. 134 (1837) 6 Ad & EL 469. It is probable that today the principle of proprietary estoppel can be applied to the loss of rights other than rights in land by acquiescence or a failure to protest against an infringement of those rights, so that the decision in this case might possibly have been reached today on the basis of a proprietary estoppel. See ch 7, part (H) for a discussion on the application of proprietary estoppel beyond the ambit of interests and rights in land.

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The Representation  3.53 in question, is Holt v Markham.135 Officers in the Royal Air Force were entitled to a gratuity on demobilisation but the amount of the gratuity was reduced for those on the Emergency List. The Defendant was on the Emergency List but by what appears to have been some sort of error the larger gratuity was paid to him. The Air Council through their agents sought to recover the excess amount under the law of restitution as money paid under a mistake of fact. It was held that the excess sum was not paid under a mistake of fact and that, even if it had been so paid, the Plaintiffs were estopped from asserting that the payment was under a mistake of fact. Here the representation seems to have been inferred from silence on the question of what was the exact nature of the mistake, if indeed there was any mistake. At the time of this decision, money paid under a mistake of law was irrecoverable by an action in restitution, a rule that has now been reversed.136 If the same facts arose today, a claim for recovery of the excess sum under the law of restitution might be made on the basis that the money was paid under a mistake of law but might still be resisted on the ground that the recipient of the money had altered his position in good faith in that he had incurred expenditure or otherwise acted to his detriment in the belief that the payment was correct.137 A possibly simpler example of a representation being inferred from silence is a decision in which a Council did not reply to a request from an employee for an assurance that his pension entitlements would not be prejudiced by a change in his job with the Council. The Council were held to be estopped from alleging that the pension rights of the employee were in fact reduced by the change.138 The circumstances in this case shade into the type of situation, considered below, in which the recipient of a request for information or for an assurance can be said to have some sort of moral duty as a reasonable person to give an answer to the request. In one case, the court considered that a representation might be inferred as to how long an agreement to pay maintenance to an estranged wife was to last from silence on the matter by the wife.139 3.53  While there may be occasions on which a representation can be inferred from silence, the general principle that in the absence of a duty to speak or to impart information silence is equivocal, and does not lead to any inferred representation, is likely to prevail in most cases. If a person’s signature is forged on a transfer of assets, a failure to reply to a letter from the bank or company making the transfer is unlikely to give rise to any form

135 [1923] 1 KB 504. See also Skyring v Greenwood (1825) 4 B&C 281 in which it was held that when a sum of money had been erroneously credited to an army officer those responsible for the mistake could not subsequently assert that no payment was due. This appears to be a form of estoppel arising from silence, the failure to correct a mistake, but Abbott CJ (at 288) said that it was not necessary to decide whether there was an estoppel. Both of these decisions have a bearing on the question of whether, and when, an estoppel by representation can operate in a ‘pro tanto’ or partial fashion and this matter is explained in para 3.147 et seq. See Weld-Blundell v Synott [1940] 2 KB 107, 115, for a consideration of these decisions. 136 Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349. 137 See Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548. The interrelationship between estoppel and this aspect of the law of restitution is discussed in para 3.173 et seq. 138 Algar v Middlesex CC [1945] 2 All ER 243. See also Bell v Marsh [1903] 1 Ch 528 for a further decision in which an estoppel by silence was alleged against a solicitor who had failed to provide certain information to a client in a conveyancing transaction. The estoppel was rejected because the client could not show that he had acted in reliance on a representation which might be inferred from silence. This decision is examined more fully in para 3.210 in connection with ‘estoppel by negligence’. 139 Covell v Sweetland [1968] 1 WLR 1466.

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3.54  Estoppel by Representation of estoppel.140 A party to a contract was not estopped from making a contention as to the meaning of the contract on the ground that he did not answer a letter which referred to the meaning of the contract.141 In one case, a landlord obtained the seizure and sale of furniture on the property let by way of execution to enforce the recovery of rent due from the tenant. The furniture was the subject of a hire purchase agreement and the owners of the furniture, although informed of the seizure prior to the sale, gave no notice of their rights. It was held that silence did not mean that the owners were estopped from asserting that the furniture belonged to them.142 An option for a tenant to renew a lease is often made conditional on the proper performance of the tenant’s covenants. A landlord was not estopped from resisting the exercise of an option to renew the lease by reason of a breach of a covenant to decorate the premises even though he had remained silent on the matter and had made no previous complaint as to the lack of decoration.143 In a case in which a squatter in premises of a local authority claimed title by adverse possession against the Council, it was alleged by the Council that the Claimant was estopped from relying on his occupation of the property for a period because he had failed to complete and submit to the Council forms containing information on occupation of the property as required by regulations connected with the then community charge. The Court of Appeal upheld the decision that there was no estoppel because the Council had not proved detriment to them flowing from any representation. It is, however, fair to say that the Court contemplated that in principle a representation might have arisen from inaction or silence constituted by the failure to provide the requisite information. The possibility of a representation may be explained on the basis that there was a legal duty to provide the information to the Council.144 3.54  It is apparent that there is some degree of conflict in the authorities, and a lack of authoritative principle, on the question of when, in the absence of a duty to speak or to impart information, a representation sufficient to found an estoppel can be inferred from silence or inaction. The principle of law appears to be that in the absence of a duty to speak (a) in general, silence or inaction cannot give rise to an inferred representation since silence or inaction is normally of its nature equivocal and so lacks the clarity or precision which must characterise a representation, whether express or inferred, if the representation is to be sufficient to found a common law estoppel, and (b) nonetheless in some limited and exceptional circumstances, a representation may be inferred from silence or inaction. There is no clear definition of what will constitute the limited or exceptional circumstances although a deliberate failure to answer a reasonable question or request for information may be one such circumstance, particularly where there is a subsisting legal relationship, such as that of employer–employee, between the parties.

140 Barton v London and North Western Rly Co (1889) 24 QBD 77, 87 (Lindley LJ), 89 (Lord Esher MR); Welch v Bank of England [1955] Ch 508, 599 (Harman J). However, a failure to comply with a duty to provide information to a bank when there is a suspicion that a cheque has been forged is likely to give rise to an inferred representation and an estoppel. See Greenwood v Martins Bank Ltd [1932] 1 KB 371, and see para 3.56. For this decision on appeal see [1933] AC 51. 141 Lesley & Co v Works Commissioners (1914) 78 JP 462. 142 Jones Brothers (Holloway) Ltd v Woodhouse [1923] 2 KB 117. cf Pickard v Sears (1837) 6 Ad & El 469. 143 West Country Cleaners (Falmouth) Ltd v Saly [1966] 1 WLR 1485. 144 Ellis v Lambeth LBC (1999) 32 HLR 596.

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The Representation  3.56

(ii) Silence or Inaction: Duty to Speak 3.55  The general principle therefore remains, namely that save in exceptional (though not clearly defined) circumstances, silence or inaction does not by itself give rise to any inferred representation of fact and so cannot bring about an estoppel by representation. There is a substantial exception to this general principle which is that silence may bring about an estoppel as against a person who remains silent when that person has a duty to speak. The exception has been stated by Lord Wilberforce in the following terms: In order that silence or inaction may acquire a positive content it is usually said that there must be a duty to speak or to act in a particular way, owed to the person prejudiced, or to the public or to a class of the public of which he in the event turns out to be one.145

The exception as so stated is the subject of substantial authority sometimes in the context of an estoppel being rejected because there was no duty to speak.146 An illustration of the general principle to which the duty cases are an exception is a decision of the Privy Council on appeal from India referred to earlier147 in which a bank obtained a pledge of a quantity of groundnuts as security for an advance of money to the merchants who had purchased the goods. The pledge was supported by the delivery to the bank of railway receipts showing an entitlement to the nuts. The bank passed the receipts back to the merchants in order to facilitate the transfer of the goods to the bank’s own godown or warehouse, but the bank omitted to put its stamp on the receipts. The merchants then fraudulently used the receipts to obtain a further loan from a different bank. It was held that the first bank was not estopped from asserting that the merchants had no right to effect the purported second pledge of the goods. Lord Wright, having reviewed the authorities, pointed out that for there to be an estoppel founded on the failure of the first bank to stamp the receipts, the existence of a duty to act by carrying out the stamping was essential and there was no such duty.148 Of course, other essential elements of an estoppel by representation must be present if an estoppel is to operate in the case of a breach of duty. The person affected by the breach of duty must show detriment caused by the breach.149 It is largely situations of this kind, where a representation is inferred from a failure to comply with a duty to provide information, which have led to the suggestion that there is a separate form of estoppel called estoppel by negligence. This topic is discussed later in this chapter where it is suggested that there is no need for such a designation of a further and different form of estoppel.150 3.56  Some of the decisions which establish the principle of the duty to speak exception are instances where an estoppel was rejected because there was no duty to speak or to

145 Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890, 903. 146 See, eg, Freeman v Cooke (1848) 2 Exch 654, 663 (Parie B): ‘that conduct [ie the conduct which creates a representation and an estoppel], by negligence or omission, where there is a duty cast upon a person, by usage or trade or otherwise, to disclose the truth, may often have the same effect’; Swan v North British Australasian Co Ltd (1863) 2 H & C 175 (Blackburn J): ‘it must be the subject of some duty which is owing to the person led into that belief ’; Ogilvie v West Australian Mortgage and Agency Corporation Ltd [1896] AC 257; London Joint Stock Bank v MacMillan and Arthur [1918] AC 777, 836 (Lord Parmoor); Re Jones Ltd v Waring & Gillow Ltd [1926] AC 670, 693 (Lord Sumner). See also the decisions cited below (n 151). 147 Mercantile Bank of India Ltd v Central Bank of India Ltd [1938] AC 287. See para 3.51. 148 ibid, 304. 149 M’Kenzie v British Linen Co (1881) 6 App Cas 82 where the element of detriment was missing. 150 See para 3.207 et seq.

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3.57  Estoppel by Representation act in some way, such as by stamping railway receipts as explained in the last paragraph. An example often cited of a decision where there was held to be an estoppel by reason of a duty to speak and a failure to comply with that duty is Greenwood v Martins Bank Ltd.151 A wife had forged her husband’s signature on cheques in order to obtain sums of money from his account with a bank. The husband found out about the forgeries but at the instigation of the wife failed to carry out his contractual duty to inform the bank. It was held that this breach of duty estopped the husband from recovering the sums paid by the bank on the forged cheques, and the basis of the estoppel was that failure to speak out led to an inferred representation that the forged cheques were validly signed and in order. If such a representation had been the truth, then of course the bank would have been entitled to pay out on them and the customer would have had no claim against the bank. The detriment which the bank suffered was that if they had been informed earlier of the forgeries, as the law then stood they would have been able to sue the husband for the tort committed by his wife.152 In fact, the wife committed suicide when the forgeries were discovered so that this p ­ ossibility of recovery then ceased to be available to the bank.

(iii)  Duty to Speak: The Questions Which Arise 3.57  The rule that a failure to carry out a duty to speak or to act in a certain way may give rise to an inferred representation of fact, and thus in appropriate circumstances to an estoppel, raises three questions of law. There is the question of why such a wide exception is needed to the general principle that silence or inaction is usually equivocal and so cannot lead to an inferred representation. There is then the question of what positive representation is to be derived by inference or implication from a failure to speak or act. Finally, there is the question of what exactly is meant in the present context by a duty to speak or act in a certain way. The third question is examined under the next sub-heading of this chapter. 3.58  Taking the first question, if a party has a legally enforceable duty to speak out or impart some information available to him or to act in a certain way, that duty is owed to a person or persons who have a correlative right to enforce the duty usually including the right to seek recompense, such as an award of damages if the duty is not performed. The question is why the failure to comply with the duty should not in some cases be enforced by ordinary legal processes and remedies without the need to have recourse to a doctrine such as estoppel with its requirement of an inferred representation and its other complexities and requirements. For example,153 if a customer of a bank has a contractual duty to inform the bank of any information he obtains which indicates that a cheque drawn on his account

151 Greenwood v Martins Bank Ltd [1933] AC 51. The basis of the estoppel as an inferred representation arising from a failure to carry out a duty to speak was stated by Greer LJ in this decision in the Court of Appeal at [1932] 1 KB 371, 388. See also Gregg v Wells (1839) 10 Ad & El 90; Freeman v Cooke (1848) 2 Exch 654, 633 (Parke B); M’Kenzie v British Linen Co (1881) 6 App Cas 82; William Ewing & Co v Dominion Bank [1904] AC 806; Muir’s Executors v Craig’s Trustees 1913 SC 349; London Joint Stock Bank v Macmillan and Arthur [1918] AC 777, 817 (Viscount Haldane). 152 At the time of this decision a husband was generally liable for torts committed by a wife ‘during coverture’, ie, while the wife lived under the protection of the husband. 153 The example is based on Greenwood v Martins Bank Ltd [1933] AC 51, discussed in para 3.56. For the duty owed by a customer of a bank when he draws a cheque on the bank, see Schofield v Earl of Londesborough [1896] AC 514; London Joint Stock Bank v Macmillan and Arthur [1918] AC 777, 814–16 (Viscount Haldane).

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The Representation  3.59 may be forged, and he fails to inform the bank of that which he knows or suspects, should he thereafter seek to obtain from the bank the money paid out of his account he may be met by a counterclaim for damages for breach of his duty. In addition, a claim may sometimes be met by the application of the principle that a person cannot benefit from his own wrong, the wrong being the breach of duty.154 A further reason for reflecting the loss to a person, where there is a breach of contract by him constituted by a failure of disclosure, by way of damages awarded for the breach, is that in an appropriate case the damages can be assessed as a loss of a chance with an appropriate reduction to reflect the risk that the change may not bring a successful outcome, something which seems to be a generally just and flexible result. If the matter is dealt with under the principles of estoppel, detriment caused by a loss of a chance has to be treated as a loss of a certainty which is less flexible and may exaggerate the true loss.155 This raises the somewhat vexed matter of whether and in what circumstances an estoppel by representation can in principle operate ‘pro tanto’ so as to relate only to the amount of detriment which the representee has in fact suffered, a subject which is discussed in more detail later in this chapter.156 This first question of course only arises when the duty to speak or act is a legally enforceable duty, with the possibility of some redress other than under the law of estoppel by the person to whom the duty is owed, and it is apparent that the principle of law under discussion extends beyond the boundaries of such duties, a matter examined as the third question.157 Nonetheless, and despite these general considerations, the law as established by abundant authority is that a failure to comply with a contractual or other legal duty to speak can give rise to an estoppel. 3.59  The second question is that of the exact representation which is to be inferred from silence. A representation has to be precise and unambiguous if it is to found an estoppel. This requirement can be readily applied where the content of the representation is derived from express words or other positive actions. The exact content of the inferred representation may be more difficult to articulate where the representation has to be derived from a failure to speak or to act. To take the example of the forged cheque given in the last paragraph, the bank customer by his silence would be taken to have implicitly represented that the cheques were properly signed and could not thereafter deny that fact. A different way of stating what in practice occurs, is that a person who fails to carry out a duty to speak or act is estopped from asserting that which would have become known to the person to whom the duty is owed if the duty had been properly carried out. Thus, to take again the factual example given in the last paragraph, the customer of the bank is estopped from alleging against the bank that the cheques were forged, since that fact would have become known to the bank if the customer had carried out his duty to the bank to give them as soon as possible any relevant information known to him concerning the forgery.158 A yet further way of 154 For the general principle that a person cannot benefit from his own wrong see, eg, Alghussein Establishment v Eton College [1988] 1 WLR 587 (failure to carry out building obligations under an agreement for lease); New Zealand Shipping Co Ltd v Societe des Ateliers et Chantiers de France [1919] AC 1 (construction of a ship). 155 Greenwood v Martins Bank Ltd [1932] 1 KB 371, 383–84 (Scrutton LJ in the Court of Appeal). This decision was affirmed by the House of Lords at [1933] AC 51. 156 See para 3.133 et seq. It seems clear today that in some circumstances, mainly where there is a mistaken representation that a sum of money is due, an estoppel by representation can have effect in a partial or pro tanto fashion where that is necessary to avoid an unjust or unconscionable result. 157 See para 3.60 et seq. 158 This is how the matter was put by Scrutton LJ in Greenwood v Martins Bank Ltd in the Court of Appeal: see [1932] 1 KB 371, 383–84.

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3.60  Estoppel by Representation putting the same point is to say that a person cannot deny the truth of an assumption made by a person to which the duty to speak was owed when that assumption arose by reason of the failure to speak. The customer therefore could not deny the correctness of the assumption made by the bank that the cheques were signed by him. In the same way, in Mercantile Bank of India Ltd v Central Bank of India Ltd,159 if there had been a duty on the Respondents to stamp the railway receipts which were a component of the pledge of the goods to them, their failure to perform that duty might have estopped them from asserting that the goods had been pledged to them. The reasoning might have been that, in the absence of a stamp, the second bank might have assumed that there was no prior pledge. The estoppel plea in that case in fact failed since there was no relevant duty on the Respondents which had been breached.

(iv)  Duty to Speak: Moral Duty 3.60  Coming to the third question, it is sometimes said that where a person is under a moral duty to speak or impart information to another person the failure to do so means that, subject to other essentials of the estoppel, an estoppel by representation will arise such that the first person cannot deny the truth of an assumption made by the other person brought about by the failure to speak. The estoppel is rationalised on the basis of an inferred or implied representation created by the silence of the person who should have spoken out. A leading authority on the subject is the decision of the Court of Appeal, given by Buckley LJ, in Spiro v Lintern.160 The owner of a house allowed his wife to make arrangements for a sale of the property but gave her no authority to enter into a contract of sale. The wife did enter into a purported contract of sale to the Plaintiff who then carried out repair works to the property. The owner, with knowledge of these matters, said nothing about his wife’s lack of authority to enter into the contract. It was held that in the circumstances the owner had impliedly represented that his wife had authority to enter into the contract. The way in which the Court explained the inferred representation that the wife had authority to execute the contract to sell the property was on the basis that the owner was under a duty to disclose to the proposed purchaser the fact that his wife, in entering into the contract, was acting without his authority.161 Since the owner had no legal obligation to disclose the lack of authority of his wife, the duty which was broken and which gave rise to the implied representation was a moral duty. The principle was explained by the Court as being: If A, having some right or title against B, sees B in ignorance of the right or title acting in a manner inconsistent with it, which could be to B’s disadvantage if the right or title were asserted against him thereafter, A is under a duty to B to disclose the existence of his right or title. If he stands by and allows B to continue in his course of action A will not be allowed, if the other conditions of estoppel are satisfied, to assert his right or title against B.162

159 [1938] AC 287. See para 3.51 for the facts of this decision. 160 Spiro v Lintern [1973] 1 WLR 1002. 161 ibid, 1011. 162 ibid, 1010. Where the facts relate to title to land or transactions in land the principle bears some similarities to proprietary estoppel which is explained in ch 7. Indeed, the similarity of the principle stated by Buckley LJ and the principle of proprietary estoppel may be all the greater since proprietary estoppel, which developed as a principle applicable to interests in land and transactions concerning land, is today probably extended to other types

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The Representation  3.63 The Court refused to accept that any inferred representation was not sufficiently precise and unambiguous.163 The same principle has been applied to similar facts in New Zealand.164 3.61  Where the alleged duty to speak is a legally enforceable duty, a court can decide as a matter of law whether that duty existed. Where the alleged duty is a moral duty there is no clear criterion by reference to which the existence of the necessary duty can be ascertained. One possible general test for the existence of a duty to speak, in the absence of a legal duty, is that a fair and reasonable person with knowledge of the relevant facts would have spoken out. This seems a wide test but as a proposition it may be justified by the formulation advanced by Buckley LJ, and such a test is discussed in the next paragraph. 3.62  A very similar way of expressing the general test for the existence of a duty (other than a legally enforceable duty such as under a contract) before a representation can be inferred from silence, and one backed by authority, is to ask whether a reasonable person who asserts the estoppel would have expected the person alleged to be estopped, if he acted reasonably and honestly, to have taken steps to make his claim or right known.165 In Pacol Ltd & Others v Trade Lines Ltd and R/I Sif IV (The Henrik Sif)166 in a claim for damages, an extension of time under a contractual time limit was sought but against the wrong party. It was held that there was a moral duty on the relevant party to point out the error and that the failure to do so did give rise to an inferred representation and an estoppel.167 The Judge relied on what had been said by Lord Wilberforce in the Moorgate Mercantile decision.168 3.63  The duty to correct a mistake made by another person as described in the last ­paragraph arose in circumstances where at the time of the breach of the duty there was a dispute between parties and may be justified under the principle as stated in wide terms by Buckley LJ in Spiro v Lintern169 which applies to events which fall generally within the formulation of of property and to rights generally. The principle as described by Buckley LJ seems to bear substantial similarities to certain of the earliest decisions on proprietary estoppel, such as Huning v Ferrers (1711) Gilb Rep 85 and the decision of Lord Hardwicke in Steed v Whitaker (1740) Barn Chancery 220, explained in ch 7, paras 7.6 and 7.7. No proprietary or promissory estoppel was asserted by the Plaintiff. The Plaintiff could not rely on the ratification of the contract by the owner because of the rule that an undisclosed principal cannot ratify a contract made without his authority: Keighley, Maxsted & Co v Durant [1901] AC 240. See Gregg v Wells (1839) 10 Ad & El 90 in which Lord Denman said that a party who negligently or culpably stands by and allows someone else to contract on the faith of a fact which he can contradict cannot afterwards dispute that fact in an action against the person whom he has himself assisted in deceiving. See also Freeman v Cooke (1848) 2 Exch 654, 663 (Parke B); and see Hunsden v Cheyney (1690) 2 Vern 149 for an early instance in which a form of estoppel operated against a mother who was entitled to an entailed interest in property and who stood by while a marriage settlement was arranged for her son on the footing that she held only a life interest in the property. A failure to impart information or to correct a mistake may have given rise to the notion of estoppel by negligence which is discussed in para 3.211. 163 Spiro v Lintern [1973] 1 WLR 1002, 1011. 164 West v Dillicar [1921] NZLR 617. 165 Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890, 903 (Lord Wilberforce in his dissenting judgment); Tradax Export SA v Dorada Compania Naviera SA (The Lutetian) [1982] 2 Lloyd’s Rep 140, 157 (Bingham J); ING Bank NV v Ros Roca SA [2012] 1 WLR 472, para 92 et seq (Rix LJ). In The Lutetia Bingham J (at 157) said: ‘The duty necessary to found an estoppel by silence or acquiescence arises where a reasonable man would expect the person against whom the estoppel is alleged, acting honestly and reasonably, to bring the true facts to the attention of the other party known by him to be under a mistake as to their respective rights and obligations’. 166 Pacol Ltd & Others v Trade Lines Ltd and R/I Sif IV (The Henrik Sif) [1982] 1 Lloyd’s Rep 456. 167 The reasoning behind this holding was applied in The Stolt Loyalty [1993] 2 Lloyd’s Rep 281, although with caution as to the establishment of any general rule. 168 See para 3.55. 169 [1973] 1 WLR 1002. The facts are summarised in para 3.60. At the time of the breach of duty not to correct the error of the proposed purchaser no dispute had arisen.

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3.64  Estoppel by Representation the principle, whether or not there is a dispute between the parties at the time of the failure to speak out. In the context of a dispute, and particularly when litigation has started, there may be limits to the duty to provide information and to correct mistakes and to the possibility of an estoppel arising from a breach of such a duty. Litigation is of its nature an adversarial process carried out within rules of procedure and in which advisers of parties have a duty to act fairly and not to mislead the court or tribunal, but have no duty to behave in a friendly or chivalrous or sportsmanlike way.170 There is a fine line between, on the one hand, one party to legal proceedings not providing to another party information which he has and which may assist the other party, as to which there is no duty,171 and, on the other hand, a failure to correct an obvious mistake made by the other party, which may be a breach of duty.172 Sometimes the matter is put in wide terms, such as that the failure to impart information to another party to the dispute must be in some way unconscionable or deceitful or sharp practice if it is to constitute a breach of a moral duty and so be capable of giving rise to an estoppel.173 It may be that a distinction on the existence of a moral duty to provide information in legal proceedings may be drawn between court proceedings and arbitration proceedings, since in the latter type of proceedings the parties may be under express or implied contractual obligations to each other as to the procedural conduct of the proceedings.174 In litigation, the duty to disclose matters and breaches of it drawn from any general principle to speak may be of primary significance for procedural steps in disputes. When it comes to substantive matters, specific rules provide for the disclosure of all relevant matters, such as the provisions requiring disclosure of all relevant documents within the control of a party, whether they assist or harm its case, and the rule that an expert witness must bring to the attention of a court or tribunal any facts known to him relevant to his expert opinion whether or not the facts support his opinion. It must be accepted that in the present state of the law, with the confines of the duty to provide information or to correct errors made of a party being so uncertain, legal and other advisers are in a difficult situation. If an adviser fails to provide information to another party when he should do so, his client may be subject to an estoppel under the general principle here discussed, whereas if he provides information when strictly he has no duty to do so, he may be in breach of his obligations to his own client.175 3.64  Two further situations in which it could be suggested that there arose a moral duty to speak and state the true facts, such that a failure to do so might create an estoppel from silence, are discussed later in this chapter.176 One is where a person makes a statement

170 Ernst & Young v Butte Mining Plc [1996] 1 WLR 1605. 171 As noted below, a legal representative such as a solicitor who does impart information to another party when under no duty to do so may be in breach of his obligations to his own client. 172 Ernst & Young v Butte Mining Plc [1996] 1 WLR 1605, 1622 (Walker J). 173 Thames Trains Ltd v Adams [2006] EWHC 3291 (QB) para 56. The resolution of the side of the line on which any situation falls may be described as ‘fact sensitive’ which is a way of saying that it is difficult to formulate any precise rule, and that the best that can be done in the context of very general rules is to look at the individual facts and circumstances of any particular case. 174 Bremer Vulkan Schiffbau Und Maschinenfabrik v South India Shipping Corporation Ltd [1981] AC 909; Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal [1983] 1 AC 854. 175 Both barristers and solicitors have professional bodies which publish rules or codes of conduct from which guidance may be gained on when there is a duty to disclose information to another party in litigation. 176 See para 3.105.

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The Representation  3.66 which is untrue but without any intention that it be acted upon but subsequently finds that it has been acted upon. The other is where a person makes an untrue statement intending it to be acted upon by one person and it is in fact and to his knowledge acted upon by another person.

(v)  Contradictions and Withdrawals: The General Principle 3.65  A person may make a statement and then contradict or qualify what has been said by a later statement to the recipient of the first statement. The later statement may be an express contradiction or recantation or qualification referring to the earlier statement or may simply be something which is inconsistent with the earlier statement. Plainly, the second statement cannot of itself automatically prevent an estoppel arising from the first statement. If, following the first statement, the representee has acted in reliance on that statement it would be wrong in principle to prevent him setting up an estoppel because of a later contradictory statement following his actions. Nonetheless, a second representation contradicting or altering the first may have important effects for an estoppel. If the second and contradictory representation is clear and made to the same representee as the first, and if the representee has not up to that time acted upon the first representation, then to base an estoppel on the first representation is likely to be impossible. The reason is that the representee may not be able to establish that he had acted in reliance on the first representation since any actions by him following the contradiction would have to be in the light of that contradiction. Therefore, the representee might be unable to establish the third of the essential elements of estoppel by representation which is injustice to the representee by reason of his having acted and acted reasonably to his detriment in reliance on the representation which founds the estoppel.177 3.66  In circumstances of the kind here under discussion at least two problems may arise. First, if the representee acts in some way following the second statement of which he is aware, his conduct must be judged in the light of both statements. Where the second statement is a clear and overt contradiction of the first, any subsequent actions by the representee may not plausibly be said to be in reliance on the first statement which has been contradicted. Even a second statement which is less clear in its effect, and particularly in its effect on the first statement, may prevent an estoppel. In such a case, the representee must make his decisions on how to act with knowledge of both statements so that if the second statement obscures the meaning of the first, the representations may have insufficient clarity taken as a whole to form the foundation of an estoppel.178 Secondly, a further difficulty facing the assertion of an estoppel in the circumstances just postulated is that it is a requirement of an estoppel by representation, as of other reliance-based estoppels, that actions taken by a representee in reliance on a representation were reasonably so taken.179 Actions taken after a second statement which casts doubt on the earlier statement may be said not to have been reasonably taken.

177 See para 3.110 et seq. 178 For the requirement that the representation is precise and unambiguous, see para 3.38. 179 The requirement of reasonableness in the actions of the representee is explained as part of the third main element of the estoppel in para 3.115 et seq.

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3.67  Estoppel by Representation

(vi)  Contradictions: Subsequent Acts 3.67  Another problem to be addressed arises where the representee has acted in reliance on the first statement but may have only partially completed a project or course of action in reliance on that statement when the statement is contradicted or corrected. The question then is whether the representee will be entitled to continue his course of action and use an estoppel to prevent the correction of the first statement having any effect even as regards his later actions after the correction. An illustration may be given as a guide to the correct answer. Suppose that an area of land is demised under a lease with a covenant that no building shall take place on the land save with the consent of the landlord. The landlord mistakenly tells the tenant that consent had been given by a predecessor in title of his to carry out building over the whole of the land. The tenant in reliance on this statement of fact builds a self-contained building on a part of the land with an intention to erect two further buildings later when he obtains funds to do so. After the completion of the first building, the landlord realises that in fact no consent had been given and informs the tenant that this is the true situation. Plainly, the erection of the first building was carried out in reliance on the initial representation of the landlord, and in any legal proceedings relating to the erection of that building, the landlord will be estopped from asserting that no consent had been given. However, if the tenant proceeds to erect the other buildings he will not be able to set up the same estoppel, since once the mistake in the first representation has been clearly corrected he cannot act in reliance on the assumed existence of the consent derived from that representation and so will be unable to establish an essential element of estoppel by representation. 3.68  The situation may be different if, on the facts as just recited, the tenant in reliance on the initial statement had commenced and partly completed a single building covering the whole site when the correction was made. It would be unjust in these circumstances that the tenant should be prevented from completing and using the whole building, and he would be likely to be able to raise an estoppel which prevented the landlord from asserting that there was no consent for the whole of the tenant’s course of action. In other words, the correction of an incorrect initial statement may prevent further separate actions carried out in reliance on the initial but corrected statement but is unlikely to prevent the completion of a single and self-contained course of action commenced in reliance on the initial and uncorrected statement. Borderline situations may arise between the two examples just given and the key to whether the representee may be entitled to continue to rely, at any rate for a time and for certain purposes, on the original and uncontradicted representation may be whether it was reasonable in all the circumstances for him to continue in his course of action. Similar questions arise in connection with estoppel by convention which depends on a person acting in reliance on an assumption which is shared by that person and another person or persons. Once the assumption has ceased to be shared, no estoppel will generally be created by reason of, or have effect in relation to, further and separate acts carried out in reliance on the assumption. A not dissimilar situation may arise in promissory estoppel where a promise not to enforce a legal right may sometimes be withdrawn but often only after reasonable notice has been given to the promisee to allow him to resume his position.180 A further



180 See

ch 5, para 5.89, for estoppel by convention; and ch 6, para 6.112, for promissory estoppel.

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The Representation  3.70 not dissimilar issue arises under the principle of proprietary estoppel when the maker of an assurance relating to an interest or rights in land becoming available to another person revokes the assurance or deals with the land in a way inconsistent with the creation or transfer of that interest or rights.181 3.69  The position in law as just described is illustrated by Gwyther v Boslymon Quarries Ltd.182 Tenants of land paid a royalty rent calculated by reference to the sand and gravel which they extracted. The tenants deducted tax from the royalties with a view to themselves paying to the Revenue the tax deducted. The landlord accepted, and to a degree cooperated for a time with, that procedure such that there was held to be an inferred representation by him that tax was properly deductible. In fact on a correct view of the law, tax was not deductible. After a time the landlord objected to the deduction of tax and by this time the tenants had paid to the Revenue some but not all of the tax which they had deducted. In proceedings by the landlord to obtain the tax deducted, it was held that he was estopped from asserting that the tax paid to the Revenue by the tenants was not properly deducted but the estoppel did not extend to the tax which had been deducted but not paid to the Revenue. A reason given was that once the landlord objected to the deduction, the tenants could no longer rely on the conduct of the landlord and the inferred representation that tax was properly deductible.183

(vii) Admissions 3.70  In principle, an admission of a fact or of law or of some matter of mixed law and fact should be as capable of being the foundation of an estoppel by representation as is any other statement.184 It will of course be necessary that the recipient of the admission should have acted in reliance on the admission if he is to set up an estoppel. For example, if a vehicle which caused an accident had A and B in it at the time there may be some doubt over who was driving the vehicle. If A admits by letter to a person injured that he was the driver that person might then sue A but omit to commence proceedings against B within the limitation period. A would be estopped from withdrawing his admission or representation since the representee had acted to his detriment in reliance on the admission. It is necessary to look carefully at the nature of what is said to be an admission. The statement made by a representor may not be a statement of a present fact or of a past event or, probably, of law such as is necessary to create a common law estoppel by representation, but may be a promise that some legal right available to the promisor will not be enforced. If this is the correct analysis

181 See ch 7, para 7.173, where this issue is considered. Much depends on what actions have been taken by the recipient of the assurance before it has been revoked. In Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174, para 60, it was suggested as regards an estoppel by convention, that when the shared assumption which justified the estoppel ceased, a party who had acted in reliance on the assumption should be allowed a further limited period to act to protect itself from the consequences of the true legal or factual position. A similar sensible solution could be applied when the incorrect nature of a representation was revealed to a representee. 182 [1950] 2 KB 59. This decision is also an authority on implied or inferred representations: see para 3.45. 183 ibid, 75, where Roxburgh J said that the later deduction of tax was due not to an implied representation but to the over-confidence of the tenants that their view of the law on taxation was correct. 184 Heane v Rogers (1829) 9 B & C 577, 586.

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3.71  Estoppel by Representation of what is stated, any estoppel which might arise is likely to be a promissory estoppel, a form of equitable estoppel, which may be used in limited circumstances to prevent the maker of a promise going back on what has been promised.185 3.71  Where legal proceedings have been commenced, formal procedural rules, now the Civil Procedure Rules, have effect as regards proceedings in the Court of Appeal, the High Court and the county court. A formal admission of the truth of the whole or any part of another party’s case may be made by giving notice in writing such as in a pleading or by a letter.186 Such an admission may only be withdrawn or amended with the permission of the court.187 The Rules also create the procedure of a formal notice in writing admitting the whole or a part of another party’s case made before proceedings are commenced, and such an admission may only be withdrawn after the commencement of proceedings by the consent of all parties to the proceedings or by the permission of the court.188 Under the formal system of pleading required by the Rules, parties to some proceedings may provide statements of case which include a particulars of claim, a defence and a reply to a defence. These documents, and particularly the last two, may contain admissions. Indeed, a traditional form of defence is formally to admit or deny specific allegations as made in a particulars of claim. Any form of statement of case may be amended after it has been served by the written consent of all parties or with the permission of the court.189 One form of amendment which may be allowed is the withdrawal or amendment of an admission. 3.72  Where admissions are made in existing legal proceedings or for the purposes of contemplated legal proceedings within the formal framework for written admissions and pleadings, as just summarized, there is little or no scope for the operation of the doctrine of estoppel in its various forms, although elements of the moral basis of some forms of estoppel can be seen in the principle that a person may be refused permission to resile from an admission if that resiling would cause prejudice to the recipient of the admission that cannot be compensated for in some way. It is possible that an admission is made in legal proceedings which is not a formal admission within the CPR, such as an oral statement by a party or a statement made in court by a legal representative of a party. Solicitors and counsel have authority to make admissions on behalf of their client at a trial or in interlocutory proceedings. The ordinary principles of estoppel by representation apply to 185 See ch 6 for promissory estoppel. A statement that a legal right available would not be used as a defence, in that case a limitation defence, was considered in the context of estoppel by the High Court of Australia in Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394: see ch 6, para 6.19. 186 Civil Procedure Rules (CPR), Part 14.1(1), (2). Extensive explanations and commentaries on the CPR are found in the White Book (Sweet & Maxwell) and in the Green Book (LexisNexis). 187 CPR, Part 14.1(5). 188 CPR, Part 14.1A(1), (3). 189 CPR, Part 17.1(2). In dealing with an amendment which permits the withdrawal or alteration of an admission under rule 17.1(2) the court must have regard to the formal rules on admissions in CPR Part 14. The principle which governs amendments to pleadings has been said to be that amendments in general ought to be allowed so that the real dispute between the parties can be adjudicated upon provided that any prejudice to the other party caused by the amendment can be compensated for in costs: see Cobbold v Greenwich LBC (1999, Court of Appeal, unreported, Peter Gibson LJ). In many cases, prejudice to a party where an admission previously made in his favour is allowed to be amended or withdrawn can be prevented by an order that the party permitted to make the amendment should pay any costs which are thrown away as a result of the amendment. An alternative form of procedure is available under Part 8 of the CPR which does not involve pleadings and is appropriate when there are, or no substantial, issues of fact between the parties. Evidence in Part 8 proceedings is given at an early stage by witness statements and these may of course contain admissions.

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The Representation  3.74 such admissions. In one case, a barrister by error admitted in court that a contract of sale executed by his client’s solicitor was executed with the authority of the client.190 It was held that the admission could be withdrawn so as to allow the client to obtain leave to defend an action to enforce the contract. The reasoning of the Court of Appeal was that a statement made by counsel, just as a statement made by the client, if acted upon by the other party to its prejudice, could not be withdrawn because an estoppel would then arise.191 There was in that case no estoppel arising from the erroneous statement made by counsel since it was not acted upon by the other party. 3.73  If an admission is made in some formal fashion, in pleadings or otherwise, in legal proceedings a party may be bound by the admission. If the admission is a matter of fact, the court may be bound to give effect to that which has been admitted even if the court has doubt as to the correctness of the admission. It is otherwise with admissions of law or agreements between the parties on matters of law. A court is bound to determine a case before it in accordance with what it determines to be the law, and it is not bound by any admission of law or agreement of law between the parties made before it and may reject any such admission or agreement if satisfied that it is not correct. This last principle may have a wider implication for estoppel by representation. It appears probable that today an estoppel by representation may be based on a statement of law. Therefore, if a party makes a representation of law which is acted upon to its detriment by the representee, the court may be bound under the general law of estoppel by representation to proceed to determine the case before it on the footing that the law is as represented even though the court would itself conclude that the law was otherwise. It is perhaps problematical, at any rate as a matter of theory, to equate such a result with the established view that a court is not bound to accept admissions on the law when it does not accept that the admissions properly represent the correct law.192

(viii)  The Identity of the Representee 3.74  The general principle is that where a representation of fact is made to a specific representee or a number of specific representees, only that person or those persons can assert an estoppel founded on the representation. This fairly obvious general principle derives, if from nowhere else, from the essential element of an estoppel by representation that the representor intended the representation to be acted upon by the representee.193 It is difficult to see how generally a representor could intend a representation to be acted upon by someone

190 H Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694. 191 ibid, 703–04 (Salmon LJ). 192 The question of estoppel by representation extending to representations of law is discussed in para 3.18 et seq. A similar problem arises in theory as regards estoppel by convention where the estoppel may be founded on a shared assumption as to the state of the law, even it appears as to a general proposition of law, even though the court may consider that the law as truly stated is otherwise than that which was the subject of the shared assumption. The parties to a contract may agree by an express provision within the contract that the contract is to be governed by a stated proposition of law and it appears that in principle a court is bound to apply the law as so agreed. This effect is on occasions called a contractual estoppel and is a subject separately discussed in para 3.185 et seq. In some cases, a court may decline to enforce the subject of the shared assumption or of the express agreement on the ground that to do so would contradict some statutory provision, as in Keen v Holland [1984] 1 WLR 251, discussed in ch 5, para 5.12. 193 This is the second of the three essential elements of the estoppel and is examined in para 3.84 et seq.

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3.75  Estoppel by Representation to whom the representation was not made, or by someone whom the representation was not intended to reach. Leading decisions on the subject refer to one person having ‘misled another’194 or to inducing ‘a man to act upon a statement of yours’,195 or ‘Where one states a thing to another’.196 3.75  This general principle, and the usual operation of an estoppel by representation following a statement made directly by A to B, requires substantial qualification. There is no necessity that the statement is made in a direct face-to-face encounter if it is oral or in a letter or other document directed to a specific person if it is a representation in writing. A statement sufficient to found an estoppel may be made to a group of persons present at a meeting or to a group of persons likely to receive the representation, and so may be used by anyone in the group in support of an estoppel provided that the person so using it was a member of the group of persons intended to act upon the statement and, of course, if he in fact acted upon it to his prejudice.197 It follows that the representor need not know the identity of a person or persons who act in reliance on the representation made, provided that those persons are within the category of persons intended to act upon the representation. Equally, if a representation is made to A with the intention that it should be passed on to and acted upon by a specific person, B, or by any one of a group of persons of which B is a member, B would be entitled to set up the representation in support of an estoppel if he has in fact received the representation and has acted in reliance on it to his prejudice. 3.76  An illustration, or possibly an extension, of these principles arises when a certificate is issued by a company certifying that a person named in the certificate is the owner of shares in the company. The law, as established, is that the issue of the certificate by the company operates against the company as an estoppel which prevents the company from denying that the named person is the owner of the shares.198 Accordingly, when a company in error, and as a result of fraud by its secretary, issued a certificate stating that a person owned shares which were in fact owned by the chairman of the company, the company was estopped from denying that the person named in the certificate was the owner of the shares, and that person obtained damages from the company since the company could not give her the shares.199 3.77  The most extensive form of a representation is a representation made to the public with the intention that it shall be acted upon by any member of the public who becomes aware of it and decides to act upon it, the result being that the member of the public in

194 Jorden v Money (1854) 5 HLC 185, 212 (Lord Cranworth LC). 195 Bloomenthal v Ford [1897] AC 156, 165 (Lord Halsbury LC). The relevant passage is set out in para 3.1. 196 Knights v Wiffen (1870) LR 5 QB 660, 665 (Blackburn J). See, however, Neville v Wilkinson (1782) 1 Bro CC 543. The son of Lord Abergavenny, wishing to marry the daughter of a rich man, induced his agent to state his debts but to omit that a sum of £8,000 was due from him to the agent. When the agent later sued for the £8,000 Lord Thurlow rejected the claim since it involved going back on the representation which the agent had made not so much to the son of Lord Abergavenny but in effect to the father of the bride. See also Montefiori v Montefiori (1762) 1 Black W 363. 197 In Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890, 903, Lord Wilberforce, referring to the estoppel which can arise out of a failure to speak out where there is a duty to speak, said that the duty to speak might be owed to a particular person or to each person in a class of those persons of which the person prejudiced turned out to be one. 198 Dixon v Kennaway [1900] 1 Ch 823. 199 ibid.

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The Representation  3.79 question may assert against the representor that the representor cannot deny the truth of the representation.200 The practical effect of this situation may be limited in that a member of the public must have a cause of action against the representor, or must himself be sued by the representor under some cause of action, before an estoppel will be of any assistance to him. An estoppel by representation may assist in supporting a cause of action or in resisting a cause of action but cannot itself be used as a separate and independent cause of action.201 3.78  The law therefore is that in an appropriate case, and subject to all elements of the estoppel being satisfied, an estoppel by representation may in principle be asserted by a person to whom a representation was specifically and directly made, by a person to whom the representation was passed provided that that person was intended to act on the representation, by a member of a group provided that any member of the group was intended to act on the representation, and by a member of the public provided that any member of the public who became aware of the representation was intended by the representor to act on it. There is nonetheless a limit to this wide possible ambit of who may be a representee. The key is in the requirement that an estoppel can only arise from a representation if the person asserting the estoppel was intended to act in reliance on the representation. This limitation prevents an estoppel being asserted by just anyone who happens to learn of the existence of the representation. That person will not be able to assert the estoppel unless he was intended, or was a member of a class any one of whom was intended, to act in reliance on the representation. ‘It will not do if he [the representor] merely said something, supposing it to be quite right, and then that some stranger, having heard and acted upon it, should afterwards come to him to make it good’.202 It is apparent that the delimitation of the persons who as direct or indirect representees may assert an estoppel is closely connected to the second of the three main elements of the estoppel, which is that the representor must have intended any representee to act upon the representation made.

(ix)  Entire Agreement and No Oral Modification Clauses 3.79  Commercial contracts sometimes contain what are called ‘entire agreement clauses’ which state that the written contract sets out the entire agreement between the parties and supersedes all proposals and prior agreements, arrangements and understandings between the parties. Contracts also sometimes contain ‘no oral modification’ clauses, which may be combined with entire agreement clauses, stating that no modification or variation of the contract shall have effect unless made in writing. A reason for such provisions is to prevent

200 In Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890, 903, Lord Wilberforce referred as one possible situation to the duty to speak, and therefore the estoppel which could arise from a failure to speak, being owed to any member of the public. In Swan v North British Australasia Co Ltd (1863) 2 H & C 175, 182, Blackburn J spoke of neglect of a duty to speak owed to the general public as giving rise to an estoppel which could be raised by a particular member of the public. A recent example of a representation made to the public generally and being capable of creating an estoppel by representation by anyone who relied on it is Blomkvist v Zavarco Plc [2016] EWHC 1143 (Ch), [2016] All ER (D) 146, in which a question arose of whether certain shares in a company were fully paid up. The company had applied for a listing of its shares on the Frankfurt Stock Index where it was a requirement that all listed shares should be fully paid up. It was held that the application for listing amounted to a representation to the world that all the shares of the company were fully paid up. 201 This is the ‘sword or shield’ issue concerning estoppel which is considered generally in ch 2, part (B). 202 Jorden v Money (1854) 5 HLC 185, 212 (Lord Cranworth LC).

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3.80  Estoppel by Representation subsequent argument about what exactly constitutes the total contract between the parties and to prevent reliance on informal variations. 3.80  As regards entire agreement clauses, the parties may enter into some further or collateral agreement and the question then arises of whether the collateral agreement can operate or have effect despite the entire agreement clause. Obviously, much depends on the exact terms of the entire agreement clause. One possibility is that the effect of an entire agreement clause could be defeated by the operation of an estoppel by representation, for instance a representation that a collateral agreement was to be binding despite the clause with that agreement acted upon in some way by the representee. The general law on entire agreement clauses and collateral agreements has been stated by the Supreme Court to be that if the collateral agreement is capable of operating as an independent agreement, and is supported by its own consideration, then most standard forms of entire agreement clause would not prevent its enforcement; but that if a collateral agreement does not fall within this category, then the entire agreement clause will apply according to its terms, and effect will not be given to the collateral agreement.203 However, these rules may not prevent the operation of an estoppel as was stated by Lord Denning MR in Brikom Investments Ltd v Carr,204 a possibility which was left open by the Supreme Court when dealing with this subject.205 3.81 In MWB Business Exchange Centres Ltd v Rock Advertising Ltd the contract before the Supreme Court contained both an entire agreement clause and a no oral modification clause. The contract was a contractual licence to occupy office space for one year at a monthly fee. The licensee fell into arrears and there was an oral agreement which provided for the deferment of some payments and the spreading of the accumulated arrears of licence fee over a period. The owners purported to terminate the agreement by reason of the arrears and locked out the licensees. The licensees relied on the terms of the oral modification. The main question before the Court was whether the oral modification had effect. Perhaps not surprisingly the Supreme Court, overruling the Court of Appeal, held that it did not.206 3.82  It seems apparent that in some circumstances the ineffectiveness of an oral modification of a contract by reason of a no modification clause could cause some injustice, for example where a party had acted on a purported oral modification of an agreement and could not then enforce the modified terms. It was said in the Supreme Court that the safeguard against such injustice lay in the various doctrines of estoppel.207 Estoppel cannot be used as a general mechanism to defeat the operation of a no modification clause. It was said that for an estoppel to give validity to an oral modification of an agreement in the face of a no oral modification clause, the very least that was required was ‘(i) there would have to be some words or conduct unequivocally representing that the variation was valid notwithstanding

203 MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119, para 14; Business Environment Bow Lane Ltd v Deanwater Estates Ltd [2007] EWCA Civ 622, [2007] L & TR 26, para 43; North Eastern Properties Ltd v Coleman [2010] EWCA Civ 277, [2010] 1 WLR 2715, paras 57, 82–83. 204 Brikom Investments Ltd v Carr [1979] QB 467, 480. 205 MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119, para 14 (Lord Sumption). 206 [2019] AC 119. 207 ibid, para 16.

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The Representation  3.83 its informality; and (ii) something more would be required for this purpose than the informal promise itself ’.208 In the MWB case, there was no foundation for an estoppel since any actions taken by the licensee in reliance on the oral modification were minimal.

4.  The Burden of Proof 3.83  The basic rule of evidence in all civil proceedings is that the burden of proof on an issue of fact lies on the party who asserts the affirmative of that issue.209 There is no suggestion that anything other than this rule applies to the proof that a representation has been made. Nor is there any reason to think that anything except the ordinary standard of proof in civil proceedings, proof on the balance of probability, applies in such a case. In the case of representations made in writing, there will normally be little difficulty in proving that the representation has been made by the person producing the document since the document will speak for itself. A number of other questions may arise in connection with the making of the representation as the first of the three essential elements of an estoppel by representation, but these will generally be questions of law rather than of fact, and on questions of law there is no burden of proof, it being simply for the court to decide and apply what is the correct law on any particular subject. Issues which may arise wholly or mainly within this latter category are whether the representation made was sufficiently precise and unambiguous to support an estoppel, whether there was a duty to speak in particular circumstances such that a failure to observe that duty can give rise to an estoppel, and the effect of a second and subsequent representation which contradicts or alters the first representation. The burden of proof has also to be considered in connection with the second and third essential elements of estoppel by representation, or their components, which are an intention that the representation shall be acted upon and actions of the representee which are taken in reliance on the representation which prove injustice, and these matters are considered subsequently.210

208 ibid. Lord Sumption relied on what was said in Actionstrength Ltd v International Glass Engineering SpA [2003] 2 AC 541, para 9 (Lord Bingham), para 51 (Lord Walker). The Actionstrength decision is examined in ch 2, para 2.141, since it concerns the interrelationship between estoppel and a statutory restriction on the form of contract, there the requirement in s 4 of the Statute of Frauds 1677 that a contract of guarantee must be in writing. For the relation between an estoppel and a no oral modification clause, see also the decision of the Court of Appeal of New Zealand in Bay of Plenty Electricity Ltd v Natural Gas Corporation Energy Ltd [2002] 1 NZLR 173, a decision discussed in ch 2, para 2.265. 209 ‘Ei qui affirmat non ei qui negat incumbit probatio’: Constantine Line v Imperial Smelting Corporation [1942] AC 154, 174 (Lord Maugham). The burden of proving a fact is on the person who affirms that fact not on the person who denies it. The principle, being one of general application as well as of common sense, applies to estoppel generally although unfortunately its application to some components of some forms of estoppel is less than certain. The principal instance of this doubt is that in proprietary estoppel it is a necessary element that a claimant has acted to his detriment in relying on an assurance usually relating to land. The claimant must prove the actions but there is considerable authority for saying that the burden of disproving that the actions were carried out in reliance on the assurance is that of the person alleged to be estopped. This matter is examined in greater detail in ch 7, para 7.217 et seq. A possible similar doubt arises in relation to proof of reliance on a promise made under the principle of promissory estoppel. 210 See paras 3.168 and 3.146.

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3.84  Estoppel by Representation

(D)  The Intention of the Representor 1.  The Rule of Law 3.84  A person to whom a representation has been made, and who acts upon it and who wishes to hold the representor to what has been stated by virtue of an estoppel, must show that the representor intended that the representation should be acted upon. This rule of law, the second of the three elements of estoppel by representation, is established by abundant and uniform authority: It has been recognised since Freeman v Cooke211 that a statement made by a man with an intention that it should be acted upon, and which is acted upon accordingly, is binding upon him so that he is precluded from contesting its truth, although it was not fraudulently made, and this has been followed in numerous instances.212 There is a long series of cases, no one of which it is important to quote, because the proposition of law has never been doubted, so far as I am aware, that if you induce a man to act upon a statement of yours, meaning him to act upon it, and that statement is untrue, and he does act upon it because he believes it, it is not competent then for the person who has made the representation to say afterwards ‘I will show another state of facts than that which I represented, and you ought not to have believed it’.213

More recently, Lord Scarman has said that the essence of an estoppel by representation is a representation, whether express or implied, intended to induce the person to whom it was made to adopt a course of action which results in detriment or loss.214 3.85  A primary reason for this element of the law of estoppel by representation is to distinguish between representations seriously made and casual statements of fact which it would not be reasonable for a recipient of the statement to regard as the foundation or reason for some course of action by him. There may sometimes be a fine dividing line between that which is a casual remark and that which is meant to be taken seriously and to be relied on and acted upon. The nature and content of the statement, as well as the context in which it is made, are important for the distinction. The way in which the law articulates and applies the distinction is in the rule that the representor must have intended the statement to be acted upon by a person before that person can assert an estoppel based on the statement. The rule has a further justification and a further purpose. It would be unreasonable and contrary to the moral basis of estoppel as a doctrine if a person was to be held by law to a statement which was not intended to be so serious as to be acted upon. The rule here established is akin to the rule that an agreement cannot amount to an enforceable contract if it is of a purely domestic character or that for some other reason there is no intention to create legally binding obligations.215 The rule has the further purpose that it is central to 211 (1848) 2 Exch 654. 212 Low v Bouverie [1891] 3 Ch 82, 111 (Kay LJ). 213 The relevant passage is set out in para 3.1. See also the formulation of the principle of estoppel by representation by Blackburn J in Knights v Wiffen (1870) LR 5 QB 660, 665, cited above (n 2). 214 Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank [1986] AC 80, 110. 215 eg, the provision of free accommodation to friends (Heslop v Burns [1974] 1 WLR 1241) or the appointment of a minister to a church (President of the Methodist Conference v Parfitt [1984] QB 368) does not create a legally enforceable contract.

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The Intention of the Representor  3.87 ­ elineating who are the representees of a statement made where the statement is to be acted d upon by a number of persons within some group or category. The intention of the representor as to who is to act upon his statement may prevent some persons from asserting an estoppel based on the statement since they are outside the confines of those intended by the maker of the statement to act on it.216 There is a similar rule in promissory estoppel in that the person asserting the estoppel must show that the promisor intended the promise to be acted upon.217 Likewise, in proprietary estoppel it must be shown that the person giving an assurance intended that the person to whom the assurance was given should form an expectation of an entitlement to an interest or rights in land and should act on that expectation.218 The status of the intention of a person making some form of statement as one of the factors common to estoppel generally is discussed in chapter one.219 3.86  Whereas the fundamental rule of law, that the representor must intend the representation to be acted upon before there can be an estoppel, may be stated in simple terms, as with most rules concerning a mental state such as an intention, a number of ancillary questions remain. Important questions to be asked, which arise in other cases where an intention has to be proved, are whether the existence of the intention on the part of the representor is to be judged subjectively or objectively, what degree of likelihood of the representee acting on the representation has to be entertained by the representor before he can be said to have intended that there should be actions by the representee in reliance on the representation made, and what knowledge the representor must have at the time the representation is made. These questions are now examined. The mental state of the representee, such as reliance on the representation for any actions taken, is relevant to aspects of the third main element of the estoppel and is considered later.

2.  An Objective Test 3.87  A subjective intention means that a person actually and subjectively intends some event or result of his actions. An objective intention means that a person is taken to intend some event or result of his actions if a reasonable person knowing of those actions and the context in which they were carried out would conclude that such was the intention whether or not there was a subjective intention. It has been accepted from the earliest authorities, and has never been questioned, that the test for the purposes of estoppel by representation is an objective test. In Freeman v Cooke220 in 1848, Baron Parke, delivering the judgment of the Exchequer Chamber, and relying on earlier authority, said that whatever the real intention of the representor may be if ‘he so conducted himself that a reasonable person would take the representation to be true’, then the representation will subject to other matters bring about an estoppel. 216 See para 3.78. 217 See ch 6, para 6.139. 218 See ch 7, para 7.117; and see Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 5 (Lord Hoffmann). 219 See ch 1, para 1.51. 220 (1848) 2 Exch 654, 663. In London Joint Stock Bank v Macmillan and Arthur [1918] AC 777, 818, Viscount Haldane expressed the principle as being: ‘If [the representor] so conducts himself that a reasonable person would take the representation to be true, and believe that it was meant that he should act upon it, and did act upon it, as true, the party making the representation would be precluded from contesting its truth’.

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3.88  Estoppel by Representation 3.88  The application and the importance of an objective test can be seen from more modern authority. In Sidney Bolsom Investment Trust Ltd v E Karmios & Co (London) Ltd,221 tenants of business premises made a request for a new tenancy under the provisions of Part II of the Landlord and Tenant Act 1954. This step had the effect of bringing their ­existing tenancy to an end unless they applied to the court within a specified period for a new tenancy. The landlords replied to the request stating that it was not valid. The tenants failed to apply to the court. In proceedings by the landlords for possession, the tenants pleaded that the landlords were estopped from asserting that the request for a new tenancy was a valid request and so ended the tenancy because of their representation that it was invalid. An issue was whether the landlords had intended their statement to be acted on by the tenants. It was held that there was no such intention. Denning LJ accepted that a representation had been made by the landlords but added: But in order to work an estoppel, the representation must be clear and unequivocal, it must be intended to be acted upon, and in fact acted on. And when I say it must be ‘intended to be acted upon’, I would add that a man must be taken to intend what a reasonable person would understand him to intend.222

Obviously in deciding whether the maker of a statement intended that it should be acted upon, the statement must be looked at as a whole including a consideration of the whole of any document in which it is contained and any accompanying document.223 Sometimes statements issued contain some form of disclaimer, such as that the maker of the statement does not guarantee the accuracy of what is stated or does not accept liability for the accuracy of what is said. Such a disclaimer may show that there was no intention by the maker of the statement that a recipient of the statement should act upon it.224 3.89  The rule that an estoppel by representation requires the making of a statement intended to be acted upon is analogous to the rule developed in promissory estoppel that the promisor must intend his promise to be binding and this intention is judged by an objective test.225 The same objective test is applied to an assurance given which creates an expectation relating to an interest in property which may form the foundation of a proprietary estoppel.226 One would expect a similar rule to be applied to all three forms of estoppel.

221 [1956] 1 QB 529. 222 ibid, 540–41. It should be noted that the representation was about the legal effect of a document and so was a statement of law which on then understood principles would prevent the creation of an estoppel by representation which it was then considered had to be founded on a statement of fact. Denning LJ took the then heterodox view that a representation of law could found a common law estoppel. See para 3.18 et seq for a discussion of the probability that today a representation of law is sufficient to create an estoppel by representation. 223 The same principle applies to the interpretation of provisions in a contract: see, eg, Chamber Colliery Ltd v Twyerould [1915] 1 Ch 268, 272 (Lord Watson); Jumbo King Ltd v Faithful Properties Ltd (1999) 2 HKCFAR 279, 296 (Lord Hoffmann). 224 Hammersmith and Fulham LBC v Top Shop Centres Ltd [1990] Ch 237, 257. A disclaimer may also have the effect of rendering a statement less than precise and unambiguous. Qualifying expressions such as ‘subject to contract’ used in correspondence may also be relevant to whether there was an intention that a statement was intended to be acted on. Such qualifications certainly prevent an assurance creating that expectation of an entitlement to an interest in land which is a necessary component of proprietary estoppel: see ch 7, para 7.121 et seq. 225 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, 134 (Denning LJ); Baird Textile Holdings Ltd v Marks & Spencer Plc [2002] 1 All ER (Comm) 737, para 97 (Mance LJ). 226 In a leading modern decision on proprietary estoppel, Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 5, Lord Hoffmann said that the correct test was whether the language used by the maker of the assurance

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The Intention of the Representor  3.92 The application of an objective test is one of the factors applying to estoppel generally as discussed in chapter one.227 3.90  The application of an objective test requires it to be asked how a reasonable person would judge the intention of a representor. Although a reasonable person is an abstraction, ie, it is not the actual representee, it is important to have in mind that how a person assesses the seriousness of a statement made and assesses the intention of the maker of the statement may depend on the knowledge of that person. Statements are not normally made in a vacuum and facts known to the representee but not to others, for instance the past conduct of the representor or the interest of the representor in having his statement taken seriously and acted upon, may affect how a reasonable person in the position of the representee and with that knowledge will assess the representation. The hypothetical reasonable person is therefore taken to be aware of all relevant facts known to the actual representee at the time of the representation. The same general approach applies in judging the seriousness of a representation as applies in determining the meaning of the representation.228 3.91  Certain logical and practical consequences follow from the rule that a representor is taken to intend that his statement should be acted upon by the representee if a reasonable person in the position of and with the knowledge of the representee would conclude that that was the intention. In strict law, it is not relevant whether or not the actual representee subjectively understood the representor to have had that intention. Everything depends on what a reasonable person would have concluded was, or was not, the intention of the representor. In practice in legal proceedings one or both parties in giving evidence sometimes state their view on the question of intention, but any such evidence should properly be considered on the basis of law as just stated.

3.  Foreseeability and Probability of Reliance on the Representation 3.92  When it is asked whether a person intended some event to occur, such as that the recipient of a statement made by that person would act upon it, it is sometimes also asked whether the person making the statement knew that such action was likely to result. In Jorden v Money,229 Lord Cranworth said that if there is to be an estoppel, the person making a misleading statement must have ‘had reasonable ground for supposing that the person whom he was misleading was to act upon what he was saying’. Neuberger LJ in his recent broad-brush general formulation of the essential requirements of estoppel by representation and promissory estoppel, in Steria Ltd v Hutchison,230 made a similar observation in putting would reasonably have been understood by the recipient of the assurance as something which was intended to be taken seriously as an assurance which could be relied on, ie, an objective test. In that case, the Court of Appeal had erred in applying a subjective test. 227 See ch 1, para 1.53. 228 See para 3.48 et seq. There is a view that in ascertaining the meaning of a wholly oral contract, a party can give evidence of his own subjective understanding of that meaning, and it is possible that such a rule can extend to the meaning of an oral assurance or to the intention behind the assurance for the purposes of proprietary estoppel. See above (n 126). It is possible that this relaxation could extend to the ascertainment of the meaning of, and the intention behind, a representation alleged to found an estoppel by representation. 229 (1854) 5 HLC 185, 212. 230 [2006] EWCA Civ 1551, para 93. The relevant passage is set out in para 3.111.

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3.93  Estoppel by Representation as the first requirement ‘a clear representation or promise made by the defendant upon which it is reasonably foreseeable that the claimant will act’. 3.93  Reasonable foreseeability and probability are not of course the same. An event may be reasonably foreseeable albeit improbable. It may not be most helpful to say that the probability of a person acting on a statement made is itself an essential ingredient of an estoppel. The best analysis may be that the degree of foreseeability by the representor that the representee will act in some way in reliance on the representation has two functions to perform within the law of estoppel by representation. The first function is that as stated by Neuberger LJ: reasonable foreseeability that the representee will act in some way in reliance on the representation is an essential component of the element of the representation that the representor intends reliance on his statement. If there is no such reasonable foreseeability, then there cannot be the requisite intention and an assertion of the estoppel fails at this point. However, the fact that reliance is reasonably foreseeable may not necessarily in itself prove that in the circumstances the representor intended his statement to be relied on. Reasonable foreseeability is, so to speak, a threshold requirement of this element of the estoppel. The second function of the foreseeability of reliance criterion may be that the more likely it is that the representation will be acted upon, the easier it will be to prove that the representor intended it to be acted upon. Since the test of intention is objective, the question would be not whether the representor subjectively formed the view that action in reliance on the representation by the representee was reasonably foreseeable, or indeed likely, but whether a reasonable person in the position of the representee would have concluded that action on the representation was reasonably foreseeable by the representor. The position may be different in other areas of the law where a subjective intention has to be proved.231 The formulation of the requirements of an estoppel in the Steria decision was intended to apply equally to estoppel by representation and promissory estoppel, and a similar approach to foreseeability by the promisor of action by the promisee is suggested in relation to the latter form of estoppel.232 3.94  The question of whether the representor intended that the statement made should be acted upon at all by the representee in reliance on it is the basic question. It is a different question from that of whether the representor must have intended that the statement should be acted upon in some particular way. Clearly the second question cannot arise unless the first question is answered in the affirmative. The second question is discussed below.233 In summary, the law on the basic question may perhaps be most accurately stated as being (a) that an estoppel by representation cannot be established unless on an objective assessment the representor at the time of the representation reasonably foresaw that the representee would act in some way in reliance on the representation, and (b) that the more likely it appears that the representee would so act, the more likely it is that the representor will be taken on an objective assessment to have intended the representee so to act. 231 eg, in the crime of murder it is necessary to prove that the person charged actually intended that death or serious bodily harm should result from his actions. It has been said that in such a case a person cannot have intended to bring about death or serious bodily harm unless he appreciated that that result was likely to result from his actions. Consequently, in certain cases juries should be directed that they cannot infer the necessary intent on the part of the defendant unless they feel sure that the defendant appreciated that death or serious bodily harm was a virtual certainty as a result of his actions: see R v Nedrick [1986] 1 WLR 1025; R v Woollin [1999] 1 AC 82. 232 See ch 6, para 6.143 et seq. 233 See para 3.97 et seq.

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The Intention of the Representor  3.96

4.  Knowledge of Falsity of Statement 3.95  The question of knowledge of the falsity of a representation has a different significance as between a representor and a representee. Taking first the position of the representor, it has been explained that an estoppel can only arise where a representation made is untrue.234 The estoppel may be established by reason of a false statement whether or not the representor knew the untruth of what he stated. Dishonesty by the person estopped is therefore not a necessary ingredient of the estoppel.235 The fact that the representor knew of the untruth of the statement made may have other consequences in law such as enabling an action to be brought for damages for the tort of deceit against him. If a person who has made a dishonest statement later seeks to rely on the true facts, he may be met not only by the principle of estoppel but also by the principle that a person cannot rely on his own wrong.236 3.96  Turning to the position of the representee, it may of course occur that the representee is aware of the falsity of the statement made to him and this may be so whether or not the representor is aware of that falsity. If the representee is aware of the true facts then he can hardly be said to have acted in reliance on the truth of that which he knows to be untrue and for that reason no estoppel will arise.237 A representee may be dubious or suspicious about the correctness of a statement or may omit to carry out investigations which would have revealed the incorrectness of the statement. A representee is entitled to rely on the truth of what is stated to him with an intention that he should act on it and circumstances as just described or other similar circumstances, short of actual knowledge of the falsity of the statement, should not prevent the representee from asserting an estoppel. A person may be naive as to the subject matter of a representation made such as financial matters and entitlements.238 In the law of misrepresentation, a party to a contract induced by a misrepresentation may be entitled to relief such as rescission of the contract even though he did not take steps or use an opportunity to find out whether the representation was true.239 When there is an issue on whether the representee knew that a statement made to him was untrue, the question must be decided on the balance of probability; it would be wise for a representee in a case where his knowledge was in dispute to give oral evidence so that the court can form an assessment of his honesty.240 The present question is perhaps most

234 See para 3.15. 235 This is established by the leading cases on the subject. In Low v Bouverie [1891] 3 Ch 82, 111, Kay LJ, summarising the effect of the authorities, said that relief by way of an estoppel would be given in law and in equity ‘even though the representation was innocently made without fraud’. This proposition was said to have been recognised since the judgment of Parke B in Freeman v Cooke (1848) 2 Exch 654. See also Seton v Lafone (1887) 19 QBD 68, 70 (Lord Esher MR). It may have been the law at one time that knowledge by the representor of the falsity of a representation made was necessary if an estoppel was to be made out: Evans v Bicknell (1801) 6 Ves 174, and see above (n 6). 236 See Montefiori v Montefiori (1762) 1 W Bl 363 (Lord Mansfield). For the general principle see Alghussein Establishment v Eton College [1988] 1 WLR 587; New Zealand Shipping Co Ltd v Societe des Ateliers et Chantiers de France [1919] AC 1. 237 United Overseas Bank v Jiwani [1976] 1 WLR 964. 238 Gordon Derby v Scottish Equitable Plc [2001] EWCA Civ 369, [2001] 3 All ER 818, para 8. 239 Redgrave v Hurd (1881) 20 Ch D 1. 240 ibid. See also National Westminster Bank Plc v Somer International (UK) Ltd [2002] QB 1286 for a decision in which a person gave evidence, which was fully tested in cross-examination, that he believed the truth of a representation made to him and where his evidence was accepted as that of an honest person.

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3.97  Estoppel by Representation pertinent to, and is examined again under, the third of the main elements of the estoppel which is that of the injustice which will ensue if there is no estoppel and the rule that generally a representee cannot show injustice unless he can show that he acted on the representation made to him. A question may then arise of whether the representee can show that he was reasonable in acting on the facts as stated, and matters such as whether he investigated the truth of a statement may be significant at that point.241 Finally, a failure by a representee to carry out investigations of the truth of a statement made may be a factor to be weighed in the balance when the overall question of whether it would be unconscionable to allow the representor to go back on what was stated is considered.

5.  The Exact Intention and Knowledge of the Representor (i)  Type of Act Intended 3.97  The underlying rule that the representor must at the time of the representation intend that it should be acted upon by the representee gives rise to further ancillary questions on the exact state of mind of the representor and the exact knowledge of the representor which have to be proved. There is little guidance in the authorities on some of these questions. 3.98  One question is whether the representor must have intended the representee to have acted in a particular way, such that an estoppel can only arise if the representee has acted in that particular way. There is some support for the proposition that this degree of precision in the intention of the representor is necessary. In one case, a railway company informed the consignee of goods that three parcels of goods had been delivered to the company for carriage to the consignee. It later emerged that only two parcels had in fact been delivered. The representee sold on the parcels. He failed to show that the railway company were estopped from asserting that only two parcels had been delivered to them for carriage, one ground being that the only intention of the company that could be inferred was that the plaintiff would send for the goods not that he would sell the goods.242 A different ground of the decision was that the Plaintiff ’s employees would not have been misled if they had acted with reasonable care so that the actions of the Plaintiff could not reasonably have been carried out in reliance on the representation.243 It does not seem justifiable to derive from this decision a general requirement that the representor must have intended at the time of the representation that the representee should act upon the representation in the exact way that he did act. The question needs to be approached in a more general fashion. 3.99  It should be emphasised for the purposes of clarity that there are two separate questions to be asked as regards the state of mind of the representor at the time of the making of the representation. One question is whether the intention of the representor, judged objectively, was that the representee should act, that is act in any way, in reliance on the representation. The answer is that for there to be an estoppel there must have been such an 241 The question of whether a representee must show that he was reasonable in acting as he did in reliance on a statement made is examined in para 3.115 et seq. 242 Carr v London & North Western Rly Co (1875) LR 10 CP 307, 317. 243 See para 3.115 et seq for a discussion of the question of whether a representee has to have acted reasonably in reliance on a representation if he is to found an estoppel on that representation.

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The Intention of the Representor  3.101 intention. It has been suggested earlier that the degree of foreseeability and the probability that the representee will act in some way in reliance on what has been stated are factors which are relevant in deciding whether the representor had the requisite intention as just stated.244 The other question, and that raised in the last paragraph, is whether the representor, given that he intended that the representee should act in some way in reliance on his statement, must also have intended that the representor should act in some particular way in this reliance. The suggestion made in the next two paragraphs is that this second and more specific intention is not a requirement of the estoppel. 3.100  It would not be justifiable to require that the representor must intend that the representee should act in some precise and specific way so that there will be no estoppel unless that is the exact way in which the representee does act in reliance on the representation. For one thing, the representor may have no way of knowing exactly how the representee will or may act. Such a strict requirement of intention would unduly cut down the ambit and utility of estoppel by representation. On the other hand, the basic justification for this form of estoppel, the principle that a person should in certain circumstances be held to his word, does not require that an estoppel should operate in relation to activities and results outside the zone of that which could reasonably be contemplated as a result of the representation when it was made. A reasonable rule may therefore be that the representor at the time of the representation must intend the representee to act upon the representation but only in ways that are reasonably foreseeable as a result of the representation so that any actions by the representee outside that zone of reasonable foreseeability are not within the zone of intended actions and no estoppel can be founded on those actions.245 Where a representee acts in some unusual way in reliance on a representation, and that action was not reasonably foreseeable at the time of the making of the representation, a further question may arise of whether it is necessary for the representee to show that he acted reasonably in reliance on the representation. This latter question is discussed later in relation to reliance and its connection with the present problem is noted.246 3.101  It is well established that there can be no estoppel against a representor unless he intended that the representee should act (or, of course, should omit to act) in some way upon the representation but there is some suggestion that the intention must also be that the representee shall act to his detriment in reliance on the representation.247 It is difficult to support this view of the law in principle since it sets an unnecessarily high burden on the person raising the estoppel. A person might make an honest representation concerning a company, although it turns out later to be incorrect, with the intention of inducing a person

244 See para 3.92 et seq. 245 A similar question arises in connection with remoteness of damage in tort where the question is whether a person can be held liable for the consequences of his tortious acts when those consequences are not of the type that could reasonably be expected in the circumstances. See Clerk and Lindsell on Torts, 21st edn (Sweet & Maxwell, 2014) ch 2, section 5. 246 See para 3.115 et seq. 247 One of the requirements, or probanda, of estoppel by representation was described in Spencer Bower and Turner, Estoppel by Representation, 3rd edn (Butterworths, 1977) 27–28, as being ‘that such original representation was of a nature to induce, and was made with the intention (actual or presumed) and the result of inducing, the party raising the estoppel to alter his position on the faith thereof to his detriment’. In Re Exchange Securities & Commodities Ltd [1988] Ch 46 Harman J said that in his view this was an accurate statement of the doctrine of estoppel by representation. See now Spencer Bower: Reliance-Based Estoppel, 5th edn (Bloomsbury, 2017) ch 2.

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3.102  Estoppel by Representation to buy shares in a company and with every hope and expectation that the representee will not suffer detriment but will gain an advantage from the purchase. If a person acts to his detriment, such as by purchasing shares which fall in value, there seems no reason to refuse to apply an estoppel against the representor in the normal way simply because he intended no harm to ensue to the representee. A person making a statement is more likely to intend harm to ensue to persons who act on his statement if he is acting dishonestly and knows that his statement is untrue yet knowledge of the untruth of a statement made is not a requirement of an estoppel.248 3.102  It has been explained earlier that the requirement of intended action in reliance on a statement limits the persons who can as a representee assert an estoppel because of their reliance on the statement. The rule is not only that the representor must have intended his statement to be acted upon, but also that he must have intended that a particular person, or persons within a particular group (or in some cases any member of the public), should act upon the statement. A person who is outside the category of those intended to act upon the statement but who in fact acts in reliance on the statement cannot assert an estoppel based on that statement.249 3.103  The law on the matters discussed in the last few paragraphs is not entirely clear or established. It is clear that the representor must have intended that the representee should act in some way in reliance on the representation made. It seems unnecessary to take the requirements much beyond that point. (a) There should be no requirement that the representor must have intended that the representee should have acted in the exact way in which he did act (although there is something to be said for a rule that the actions of the representee should have been of a kind which were reasonably foreseeable as a consequence of the representation). (b) There should be no requirement that the representor intended that the representee would act to his detriment.

(ii)  Knowledge of Subsequent Acts 3.104  The rule of law is that the representor must at the time of the representation intend that the representee shall act in some way in reliance on the representation made. Intention is a state of mind and the existence of a particular state of mind must be judged as at a particular date. Obviously a state of mind, such as an intention, may change as time passes and in the light of unfolding events but that does not and cannot affect the state of a person’s mind as it was at a particular date. It should follow that if the representor had the requisite intention at the time he made a statement he cannot avoid the consequences of his statement and of his intention, and so cannot avoid the possibility that his statement will create an estoppel, simply because he later changes his mind and no longer intends his statement to be acted upon. What of course the representor may do is take steps to contradict or 248 See para 3.95. 249 See para 3.74 et seq. In earlier cases courts may not have seen the matter in quite this way. In Montefiori v Montefiori (1762) 1 Black W 363 one brother as part of a proposed marriage arrangement for another brother stated that he held a sum of money for his brother. The statement was intended to be acted on by the bride’s family. In subsequent proceedings between the two brothers, Lord Mansfield refused to allow the first brother to go back on his statement. See also Neville v Wilkinson (1782) 1 Bro CC 543 where a not dissimilar situation, relating to a proposed marriage and the financial position of the bridegroom, led to an estoppel.

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The Intention of the Representor  3.107 withdraw or alter his representation and this may prevent an estoppel founded on actions taken by anyone following the stated alteration but it cannot affect the assertion of an estoppel by someone who has acted on the representation before it was altered.250 It follows that if the representor intends his statement to be acted upon at the time when it was made, it is irrelevant for the purposes of an estoppel whether or not he later came to know whether or not his statement was actually acted on. 3.105  A further possible question relating to conduct by the representee after the making of the representation is what is the position in law if the representor did not intend the representation to be acted upon but a representee did in fact act upon it and the representor found out that this had happened. The question is whether in this situation the representor, if he knows from the outset, or subsequently ascertains, that his statement is incorrect, must inform the persons who so acted of the incorrectness of the statement, such that if he fails to do so he will be estopped from denying as against those persons the incorrect nature of the statement. Logic and principle suggest that a representor is under no such duty in the circumstances postulated. If it is an established essential ingredient of an estoppel by representation that the representor intended at the time of his statement that it should be acted upon, as it is, it is difficult to see how the existence or non-existence of that intention can be affected by some event after that time. A particular intention at a given time is a mental state and is a fact. The existence or otherwise of a particular fact at a given time cannot be changed by subsequent events. Time never runs backwards. 3.106  The only rational way in which an estoppel could be alleged to arise in the circumstances described would be if the subsequent knowledge by the representor that the representation was incorrect and that it had in fact been acted upon, created some moral duty on the representor to speak out correcting his statement. If the representor then remained silent and failed to observe that duty, there could be argued to be at that time a representation by silence which is a form of inferred representation capable of creating an estoppel. This subject has been explained earlier.251 If this analysis was plausible the estoppel would depend not on the initial statement but on the subsequent inferred representation arising from the failure to speak. Even then, the estoppel could arise only in respect of actions by the representee after (a) the representor had become aware of the incorrect nature of his statement (assuming that he was not aware of this when the statement was made), and (b) the representor had found out that, contrary to his intention, the representee had in fact acted in some way in reliance on the incorrect statement. 3.107  The same general reasoning applies if a representor intends his statement to be acted upon by certain persons only, and it is in fact acted upon by some other person such as a stranger who hears about the statement made. In principle, the stranger cannot set up an estoppel against the representor founded on the statement and his actions in reliance on it. This principle should not be altered by the fact that the representor finds out that the stranger has acted upon what has been stated.252

250 See para 3.65 et seq and see Gwyther v Boslymon Quarries Ltd [1950] 2 KB 59. 251 Representations by silence and an estoppel arising from a failure to carry out a moral duty to speak out or impart information are explained in para 3.50 et seq. 252 This conclusion is again subject to the possibility that in the circumstances a moral duty arises to inform the stranger of the incorrectness of the statement. See the previous paragraph.

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3.108  Estoppel by Representation

6.  The Burden of Proof 3.108  In accordance with the basic rule of evidence in civil proceedings, the burden of proof that at the time of the representation the representor intended that it should be acted upon in some way by the representee is on the person who asserts the affirmative of this issue, and so is on the representee who wishes to establish the estoppel.253 Therefore, what the representee has to prove is a mental state of the representor, the exact mental state being as explained in earlier paragraphs. Since the test of intention is objective, what the representee must show is that a reasonable person in his position and with his knowledge when he received the representation would have concluded that the representor had the requisite intention. In many cases the evidence as to the making of the representation and its content and circumstances will make it easy to conclude that it was a serious statement intended to be taken seriously and acted upon, as opposed to a casual remark made without any intention that it should be taken seriously and acted upon. As mentioned earlier, what has to be shown is that the representor intended the representation to be acted upon and not that it was intended to be acted upon in any particular way.254 The representee must also prove that the representation was intended by the representor to be acted upon by him or was intended to be acted upon by a member of a group of which the representee is one. The standard of proof, as generally in civil proceedings, is on the balance of probability. 3.109  The method of proof will therefore generally involve proof of how and when and in what circumstances the representation was made. These facts will themselves often establish the inference that the representation was made with the requisite intent, especially if the representation is in writing. In the unusual case where the representation is to be inferred from silence, including when it is to be inferred from the breach of a duty to speak, proof of the relevant circumstances, including those which demonstrate the existence of the duty to speak, will be required although generally a conclusion on the existence of a duty will be largely a matter of law.255 The representor can of course give evidence designed to show that he did not have the requisite intention. Since the test is objective, that evidence would often be of the circumstances from which it can reasonably be concluded that the representor had no intention that his statement should be acted upon rather than evidence of what he himself subjectively intended or did not intend.

(E)  Injustice or Unconscionability: Its Components of Reliance and Detriment 1. Introduction 3.110  The third of the three essential elements of estoppel by representation has been defined earlier in this chapter as injustice or unconscionability which is normally the 253 Constantine Line v Imperial Smelting Corporation [1942] AC 154, 174 (Lord Maugham) where the general proposition is stated, and see above (n 209). 254 See para 3.97 et seq. 255 See Matthews v Smallwood [1910] 1 Ch 777, 787 (Parker J), a decision on the doctrine of election. There is of course no burden of proof on questions of law.

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Injustice or Unconscionability: Its Components of Reliance and Detriment  3.111 c­onsequence of conduct by the representee in reliance on the representation with that conduct having the result that the representee will suffer detriment if the representor is allowed to deny the truth of the representation.256 This general statement of the principle suggests that there are two components of the third element which are reliance and detriment. The two components are logically separate since obviously a person may act in reliance on a representation and, albeit that the representation is untrue, he may benefit from his actions. The two components are therefore treated separately.257 A third matter which must be examined in the present context is the overriding requirement of injustice. By this is meant the injustice which will or may arise if a representor is allowed to go back on his representation. Injustice (or its synonyms, inequity or unconscionability)258 is regarded sometimes as a consequence which flows automatically from reliance and detriment, or sometimes as a separate and overriding requirement, such that in some circumstances an estoppel may be denied since despite the proof of reliance and detriment it will still not be unjust in the particular circumstances to allow the representor to deny the truth of his representation. Accordingly, in this account of the subject, injustice or unconscionability is treated separately and the two different approaches are considered. However, it is the second approach which most accurately states the law as it is seen today. 3.111  It is useful to preface this account with the leading modern judicial statement of the need for, and the test of, injustice or unconscionability and of its reliance and detriment components in some forms of estoppel. In Steria Ltd v Hutchison259 Neuberger LJ stated the law as follows: It seems to me very unlikely that a claimant would be able to satisfy the test of unconscionability unless he could also satisfy the three classic requirements. They are (a) a clear representation or promise made by the defendant upon which it is reasonably foreseeable that the claimant will act, (b) an act on the part of the claimant which was reasonably taken in reliance upon the representation or promise, and (c) after the act has been taken, the claimant being able to show that he will suffer detriment if the defendant is not held to the representation or promise. Even this formulation is relatively broad-brush, and it should be emphasised that there are many qualifications or refinements which can be made to it.260

256 See para 3.11. 257 Some of the older statements of the principle of estoppel by representation omit the requirement of detriment: see para 3.1 and above (n 2). A more recent statement of the nature of the estoppel is that of Lord Scarman in the Privy Council in Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank [1986] AC 80, 110, that the essence of an estoppel by representation is a representation, whether express or implied, intended to induce the person to whom it is made to adopt a course of conduct which results in detriment or loss. 258 Unconscionability has been described as something which would ‘shock the conscience of the court’: Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 92 (Lord Walker). It is important to distinguish between that which is unconscionable and that which is merely unreasonable. It has been said that something is unconscionable if it is in some way morally reprehensible: Multiservice Bookbinding v Marden [1979] Ch 84 (Browne-Wilkinson J). See also Knightsbridge Estates Trust Ltd v Byrne [1939] Ch 41. There is a general description of the place of unconscionability in the law of estoppel in ch 1, para 1.44 et seq. Unconscionability plays a particularly important part in proprietary estoppel and there may once have been a view that it alone was enough to bring about that form of estoppel. If such a view existed it has now been shown to be incorrect. There is in ch 7, para 7.95 et seq, a separate discussion of the rule of unconscionability in proprietary estoppel. 259 [2006] EWCA Civ 1551, para 93. 260 Three particular detailed items within the formulation require some further discussion, or elaboration, namely: (a) the proposition that it must be ‘reasonably foreseeable’ that the representee will act on what has been

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3.111  Estoppel by Representation This recent analysis of the law in this field forms a template for a consideration of the third main element of estoppel by representation which is the requirement of injustice which would ensue if no estoppel was applied by a court. The formulation of principle was made in a decision where a contributor to a pension scheme alleged an estoppel. The estoppel was put as an estoppel by convention or an estoppel by representation or a promissory estoppel. Neuberger LJ considered that an estoppel by convention was unlikely and that an estoppel by representation was the most likely contention. He directed the above statement of principle to estoppel by representation and to promissory estoppel. There are of course major differences between the two forms of estoppel, notably the rule that an estoppel by representation requires a statement of some existing matter whereas a promissory estoppel requires a promise of future conduct, and that in promissory estoppel the subject matter of the promise must be the non-enforcement of an existing legal right whereas in estoppel by representation the subject matter of the representation can be any matter. Nonetheless as regards injustice, reliance and detriment, there seems no reason why the relevant rules should materially differ between these two forms of estoppel, and the synthesis of these rules for the purposes of the two forms by Neuberger LJ is much to be welcomed and can perhaps be extended to other forms of estoppel.261 Reference can usefully be made to the questions here under discussion which are also discussed in the chapters on proprietary estoppel, promissory estoppel and estoppel by convention.262 In these circumstances, a logical method of providing a comprehensive explanation is to examine first the specific matters of reliance and causation and of detriment and then to continue by examining the status and role of the overriding element of injustice. While this sequence of explanation is here adopted, it should be made clear that the view expressed in this book is that there is an overriding and separate requirement to show injustice or unconscionability if the third element of estoppel by representation is to be established and that reliance and detriment are properly to be regarded as components of that overriding element of the estoppel. In the same way, injustice is properly to be regarded as an essential element of proprietary estoppel, of promissory estoppel and of estoppel by convention, and reliance and detriment are to be regarded as components of that element.263 stated; (b) the proposition that an action by the representee must have been ‘reasonably’ taken; and (c) the statement that the claimant must show that ‘he will suffer’ detriment. See paras 3.88 et seq, 3.111 et seq and 3.122 et seq for a discussion of these three items. 261 See ch 2, part (G), for a discussion of the general question of the unification of components of the various forms of estoppel. 262 Questions such as matters of causation and reasonableness of conduct arise out of Neuberger LJ’s formulation for both forms of estoppel and these questions are covered in ch 6 on promissory estoppel. Reference should be made to that discussion in ch 6, part (G), section 2, and the present explanation can be shorter on some matters than might otherwise be required in the light of that material. Similar questions arise in connection with estoppel by convention and these were considered by Neuberger J in PW & Co v Milton Gate Investments Ltd [2004] Ch 142, para 222. Reference can also be made to ch 5, part (F) which examines these aspects of estoppel by convention. Proprietary estoppel is also dependent on there being reliance, in that case on an assurance as to land (or possibly as to other rights), and on detriment and unconscionability. These matters are discussed for that form of estoppel in ch 7. By contrast, estoppel by deed contains no requirement of a detriment caused by reliance on a statement in a deed. 263 The language of Neuberger LJ in Steria Ltd v Hutchison as set out at the beginning of this paragraph suggests that unconscionability is to be regarded as a separate requirement of an estoppel by representation such that in exceptional cases that requirement may not be satisfied even though the components of reliance and detriment are present. In PW & Co v Milton Gate Investments Ltd [2004] Ch 142 the same Judge adopted this approach and analysis for the purposes of estoppel by convention (see ch 5, para 5.71) and there is no reason to apply any different analysis to these two forms of reliance-based estoppel.

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Injustice or Unconscionability: Its Components of Reliance and Detriment  3.112

2. Reliance (i)  The Rule of Law 3.112  It is established by abundant authority that an estoppel founded on a representation of fact can only arise if the representee has acted in some way in reliance on the representation. The matter was put in the Court of Appeal by Kay LJ in Low v Bouverie264 as follows: It has been recognised since Freeman v Cooke265 that a statement made by a man with the intention that it should be acted upon, and which is acted upon accordingly, is binding upon him, so that he is precluded from contesting its truth although it was not fraudulently made, and this has been followed in numerous instances.

In Jorden v Money,266 the leading nineteenth-century decision of the House of Lords which established the basis of estoppel by representation as depending on a statement of fact, Lord Cranworth LC said: And then it is said that upon a principle well known in the law, founded upon good faith and equity, a principle equally of law and equity, if a person makes a false representation to another and that other acts upon that false representation, the person who has made it shall not afterwards be allowed to set up that what was said was false, and to assert the real truth in place of the falsehood which has so misled the other.

Lord Cranworth described it as a principle of universal application. No particular form of action in reliance on the representation is required and action here includes a decision not to act in some way such as by not commencing legal proceedings or by not taking some other important step. One way of putting the role is to say that what is meant by a person acting on a statement is that he acts in some way which is different from the way in which he

264 [1891] 3 Ch 82, 111. 265 (1848) 2 Exch 654. 266 (1854) 5 HLC 185, 210. Reference among older authorities might also be made to Burkinshaw v Nicholls (1878) 3 App Cas 1004, 1026 (Lord Blackburn); Bloomenthal v Ford [1897] AC 156, 165 (Lord Halsbury LC) (see the citation in para 3.1). In Canada and Dominion Sugar Co Ltd v Canadian National (West Indies) Steamships Ltd [1947] AC 46, 56, Lord Wright described the first two essential elements of an estoppel by representation as a statement and ‘action on the face of it’. This last expression presumably meant that the action had to be in reliance on the statement. A more recent example of the requirement of actions in reliance on a representation is H Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694: see para 3.72. In more modern decisions Lord Denning, whose judgments have often advanced the law of estoppel, has always accepted that for an estoppel by representation or promissory estoppel to be asserted the representee or promisee must have acted in reliance on the representation or promise in question, although he did not accept that the actions in reliance had to be to the detriment of the representee or promisee and also differed from other decisions in his view of where the burden of proof lay in showing that actions taken were in reliance on the representation or promise. As a general approach Lord Denning was in favour of a more relaxed approach to estoppel by representation, promissory estoppel and proprietary estoppel in that (a) he considered that the burden of proving that actions taken were not in reliance on the representation or promise or assurance was on the party against whom the estoppel was alleged; and (b) he considered that detriment or the risk of detriment was not an essential component of the estoppels. These matters are discussed at appropriate points in the explanation of each of these forms of estoppel (as well as for estoppel by convention which is the fourth of the four reliance-based estoppels) but the general view which has emerged, and the view of the law as stated in the explanations here given, is that the relaxations proposed by Lord Denning do not correctly state the law as it is now understood.

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3.113  Estoppel by Representation would have acted if the statement had not been made.267 However, this formulation may not be fully accurate since it suggests a ‘but for’ test which, as will be explained, is not the law.268 3.113  In order to satisfy the requirement of acting in reliance on a representation, the person raising an estoppel must therefore show (a) that following the representation he acted (or omitted to act) in a certain way at a certain time, and (b) that his acts (or decision not to act) were in reliance on the representation. The first part of the requirement is usually a matter of recorded fact and rarely causes any difficulty. The second part of the requirement is a mental state and requires proof of that mental state as well as raising two questions of legal principle. The matter of proof is considered separately later but the two legal questions are (a) the exact nature of the causative link between the representation and the acts in question, and (b) whether the person who acts in reliance on the representation must show that in doing so he acted reasonably. These two legal questions are now examined.

(ii) Causation 3.114  Where a question is whether event A (here a representation) caused event B (here acts by the representee) there are many judicial statements of what is the nature of the link between the two events which renders one the cause of the other. The law sometimes takes a very general and pragmatic view of questions of this kind. ‘In the law causation is a tool, but no more than a tool, used by lawyers when attributing legal responsibility for a happening to a particular source’.269 Similar general observations are also used within the law of estoppel such as that the act or omission by the representee must be one ‘resulting from the representation’.270 In an estoppel case, it was said that the representation was enough to give rise to an estoppel if it was the ‘proximate’ cause of the actions of the representee which led to detriment or loss, and by this expression was meant the ‘direct and immediate cause’.271 One more precise test sometimes applied to causation questions is that event A only causes event B if it is shown that event B would not have happened unless event A had happened, an approach sometimes called the ‘but for’ test. The decision in Steria Ltd v Hutchison272 indicates that a somewhat rigid test of this last kind is not to be applied in the present context. The person asserting the estoppel does not have to show that he would not have acted as he did but for the representation made to him. All that the representee has to show is that the representation was a contributing factor to, or had some influence on, his decision to act or not to act in the way in which he did.273 Thus, a decision by the representee to act or not act 267 United Overseas Bank v Jiwani [1976] 1 WLR 964. 268 See para 3.114. 269 Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 2 AC 111, 138 (Lord Nicholls). It was held in that case by a majority in the Privy Council when construing a Hong Kong Ordinance that event A (a loss of profits) was ‘due to’ event B (entry onto land) even though event A happened before event B. The loss of profits was in fact due to the anticipated entry onto and acquisition of the land. 270 Greenwood v Martins Bank Ltd [1933] AC 51, 57 (Lord Tomlin). 271 Coventry, Sheppard & Co v The Great Eastern Railway Co (1883) 11 QBD 776, 780 (Brett MR). 272 [2006] EWCA Civ 1551, para 93. 273 ibid. See also, Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 104–05 (Robert Goff J, at first instance). The rule may be different where the question is whether a contract has been induced by a misrepresentation so as to allow to the representee a remedy such as rescission of the contract, and in this case a ‘but for’ test may be appropriate: Raiffeisen Zentralbank Osterreich AG v Royal Bank of Scotland Plc [2010] EWHC 1392 (Comm), [2011] 1 Lloyd’s Rep 123, paras 171–72.

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Injustice or Unconscionability: Its Components of Reliance and Detriment  3.116 in a particular way may be made by reason of some other source of information or for some other reason but may be strengthened by the representation in question, and this will be sufficient reliance on the representation for present purposes. It seems likely that the influence of the representation on the subsequent conduct of the representee must have been more than trivial or de minimis and one way of expressing the rule is to say that the representation must have had at least a significant influence on how the representee acted.274 The degree of influence which a representation had on the decision of a representee to act or not to act in a certain way may be a relevant consideration when it comes to deciding the overall question of whether it would be just that an estoppel should operate.275

(iii)  Reasonableness of Actions 3.115  The question is whether there is a rule that in order to succeed in asserting an estoppel the person who acts in reliance on a representation must show that in doing so he acted reasonably. The question has two aspects, one being whether it must be shown that it was reasonable to act at all on the representation and the second being whether the actual and particular actions of the representee were reasonable. If reasonableness is here an essential component of the estoppel it seems likely that the requirement of reasonableness should apply to both aspects of the question.276 3.116  The predominant view taken today is that reasonableness is necessary as regards both of the aspects mentioned in the last paragraph before an estoppel by representation can be established. In the statement of principle in the Steria decision,277 Neuberger LJ spoke of an act on the part of the representee or promisee ‘which was reasonably taken in reliance on the representation or promise’. The requirement so stated was to apply to promissory estoppel as well as to estoppel by representation and it does seem desirable to have uniform requirements as components of the two forms of estoppel where that is practicable.278 In addition, modern authority in the House of Lords establishes that the actions of a person following an assurance relating to an interest or rights in land must be reasonable if a

274 Substantiality is a factor which has a general relevance to aspects of the forms of estoppel. This factor and its areas of operation are commented on in ch 1, para 1.55 et seq. It has been said in relation to estoppel by convention, which depends on a shared assumption of fact or of law, that ‘The person alleging the estoppel must in fact have relied upon the common assumption, to a sufficient extent, rather than merely upon his own independent view of the matter’: Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174, para 52 (Briggs J). The whole of the relevant passage in the judgment is set out in ch 5, para 5.6. 275 Substantiality as a factor relevant to various components of estoppel by representation is discussed generally in para 3.133. 276 Reasonableness in this and other contexts is discussed in ch 1, para 1.52, as one of the general factors common to various types of estoppel. 277 See para 3.111 for the citation of the relevant passage from this decision. In Carr v London & North Western Rly Co (1875) LR 10 CP 307, 317, it was given as one ground for rejecting an estoppel that the representee or his employees would have not acted as they did if they had taken proper steps to investigate the accuracy of the representation, and this may indicate that the estoppel failed because the representee was not behaving reasonably when he acted as he did in reliance on what was stated. See para 3.98. 278 The general desideratum of a uniform statement of certain requirements for a number of forms of estoppel is discussed in ch 2, part (G). In the suggestion of such a uniform statement of requirements for the four reliancebased estoppels, of which estoppel by representation is one, the reasonableness of actions in reliance on a statement made is included as a requirement.

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3.117  Estoppel by Representation ­ roprietary estoppel is to be established.279 It would appear to be inherently unsatisfactory p that a person claiming an estoppel founded on his own actions could do so when the taking of those actions was unreasonable. 3.117  Before an estoppel by representation can operate, the representation must have been precise and unambiguous and it must have been apparent to the representee as a reasonable person from the nature of the statement and from its surrounding circumstances that the maker of the statement intended that it should be acted upon. Once these criteria are satisfied, it will usually be apparent that the representee was reasonable in acting upon the faith of the statement at any rate in some way. There may possibly be more scope for doubt over whether particular actions so carried out by the representee were reasonable actions. Questions which might arise relevant to reasonableness include whether the statement made by the representor was on its face likely to be true, what reasons there were to doubt its accuracy, the knowledge and expertise of the representee on the subject matter of the representation,280 whether the representee should have chosen a different and more cautious course of action in response to the statement, whether the representee should have waited before acting, whether the representee should have carried out his own investigations or sought more information before acting,281 and whether the representee should have obtained legal or other advice before acting. In one case,282 a hypothetical example given of unreasonable reliance involved a supposed statement made by a retailer that there was available for sale green cheese taken from the moon. It is difficult to believe that statements of this kind would ever be made with an intention that they should be acted upon, so that an absurd statement of this nature would in any event fail to bring about an estoppel for this further and separate reason. 3.118  Even so, a requirement of reasonableness of the actions of the representee may not be entirely free from doubt in the law of estoppel by representation. In a first instance decision, the point was considered as a matter of principle and it was held that if a recipient of a representation in fact relies on that representation, and the other elements of estoppel are satisfied, the estoppel cannot be defeated on the basis that the reliance was unreasonable.283 In Greenwood v Martins Bank Ltd,284 a leading decision on estoppel by representation, it was said that the Respondent bank could rely on a representation inferred from the silence

279 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 22 (Lord Rodger), para 29 (Lord Walker), para 78 (Lord Neuberger). 280 For instance, in Gordon Derby v Scottish Equitable Plc [2001] EWCA Civ 369, [2001] 3 All ER 818, para 8, the Judge took into account the naivety of a representee on pension matters when deciding whether he had been genuinely misled when he had acted on a mistaken statement made to him of how much was due to him under a pension policy. 281 It may, however, be noted that in the law of misrepresentation it is no answer to a representee who seeks a remedy by way of rescission of a contract or damages to say that the representee should have investigated the accuracy of the representation: Redgrave v Hurd (1881) 20 Ch D 1. 282 Trane (UK) Ltd v Provident Mutual Life Assurance [1995] 1 EGLR 33, 39b, a decision which supports the formulation of Neuberger LJ in the Steria case. 283 Downberry Construction Ltd v Secretary of State for Transport, Local Government and the Regions [2002] EWHC Admin 2, para 31 (Richards J). The decision concerned the status in planning law of an area of land and the decision of a planning inspector which was quashed by the High Court under s 288 of the Town and Country Planning Act 1990. Accordingly the decision raises the further question of the extent to which estoppel applies in areas of public law such as planning law which is discussed as a matter of general principle in ch 2, part (D). 284 [1933] AC 51, 59 (Lord Tomlin).

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Injustice or Unconscionability: Its Components of Reliance and Detriment  3.121 of the Appellant in relation to forged cheques notwithstanding the bank’s own negligence. It can be said that a person who acts negligently may not be acting reasonably. It may be more difficult to evaluate a requirement of reasonable reliance on a representation when the representation is inferred from silence such that there is no representation at all in the ordinary sense of an express statement or a statement inferred from positive conduct of some kind. 3.119  Even if reasonable conduct by the representee is not expressly itemised as a necessary component of an estoppel by representation it does not follow that reasonableness becomes wholly unimportant for the establishment of the estoppel as a whole. There is always the final requirement that the estoppel can only be established if it is unconscionable that the representee should be allowed to deny the truth of what has been stated. The reasonableness of the conduct of the representee made on the faith of the truth of the statement may sometimes be a factor to be taken into account at this final stage. Indeed, in a case in which the factors in favour of and against unconscionability are fairly evenly balanced, the fact that the representee was not wholly reasonable in acting on the faith of the representation or that his particular actions were themselves not wholly reasonable, may be a factor which tips the decision of the court against holding that it would be unconscionable to allow the representor to go back on the truth of the statement made. 3.120  Although the matter is not entirely free from doubt the predominant view, and the view which brings estoppel by representation in this respect into accord with other forms of estoppel, is that it is an essential component of the reliance element of the estoppel that the actions of the representee taken in reliance on the representation were reasonably taken such that if those actions were not reasonably taken the operation of the estoppel is ruled out at that stage.

3. Detriment (i)  The Rule of Law 3.121  In his definition of the three classic requirements in Steria,285 Neuberger LJ described the third requirement as being that the person asserting the estoppel must show that he will suffer detriment if the party making the representation is not kept to the representation. Detriment in this sense is one of the matters which must normally be shown if the overall requirement of injustice is to be established. This fundamental aspect of estoppel by representation has long been accepted as correct.286

285 Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93. The relevant passage is set out in para 3.111. Mummery LJ made the same point at paras 74–75. 286 M’Kenzie v British Linen Co(1882) 6 App Cas 82 109 (Lord Watson); Simm v Anglo American Telegraph Co (1879) 5 QBD 188, 211 (Brett LJ); Maclaine v Gatty [1921] 1 AC 376, 386 (Lord Birkenhead); Fung Kai Sun v Chan Fui Hing [1951] AC 489, 506 (Lord Reid). In George Whitechurch Ltd v Cavanagh [1902] AC 117, 135, Lord Robertson said: ‘My Lords the case for the respondent is one of estoppel, and it is an essential element in such cases (as is clearly expressed in the case of Carr v London and North Western Rly Co, cited by the Master of the Rolls) that the person to whom the representation was made has suffered loss by acting upon it; or, to put it in another way, has altered his position to his detriment by acting on the representation’. In Canada and Dominion Sugar Co Ltd v Canadian National (West Indies) Steamships Ltd [1947] AC 46, 56, Lord Wright described the essential elements

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3.122  Estoppel by Representation 3.122  Detriment is a requirement which has been firmly established in other forms of estoppel.287 The only dissident voice has been that of Lord Denning who has said, at any rate as regards promissory estoppel, that all that is required is that the promisee has acted in reliance on a promise and that there is no additional requirement of the promisee having acted to his detriment.288 There is no doubt that detriment is normally an essential element of estoppel by representation as of other reliance-based estoppels. Indeed, if that estoppel is not to be operated so as to avoid a potential detriment to the representee which would arise if the representor could go back on his previous statement, it is difficult to see the moral justification for the estoppel. 3.123  There is no limit to the type of detriment which may be suffered and detriment by its nature may take any form. In these circumstances, there is no purpose in multiplying examples of possible detriment and a few instances are sufficient to illustrate the matter. In De Tchitatchef v Salerni Coupling Ltd,289 a company issued a prospectus for the sale of shares in reliance on a representation made to them as to the effect of an agreement between them and another party. If the representor had been entitled to resile from the statement as to the effect of the agreement, the company would have incurred liability to those who had bought shares in reliance on its prospectus referring to the agreement. The detriment suffered was therefore in a commercial context and was an example of detriment caused by obligations incurred to third parties on the faith of the representation.290 A further example of detriment in a commercial contract is a New Zealand decision in which a person was not entitled to resile from his representation on the degree of difference between products designed for sale.291 It is of course always possible that a person acts to his benefit on a representation made to him, for instance by disposal of an asset on advantageous terms. Assuming that the representee has not incurred any liability to the purchaser of the asset, there would then be no reason to prevent the representor from denying the truth of the representation in future legal proceedings between the parties. A leading modern decision on proprietary estoppel is

of estoppel by representation as a statement, action on the face of it, and ‘detriment to the actor’. More recently in, Peyman v Lanjani [1985] Ch 457501, Slade LJ said: ‘For if A has acted to his detriment in reliance of an apparent election by B, he will in most cases be able to plead and rely on an estoppel by conduct in the alternative’ (emphasis in original). The background to this comment was that, unlike for estoppel by representation, the proponent of a common law election does not have to show action to his detriment in order to rely on the election. In Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank [1986] AC 80, 110, Lord Scarman said that the essence of an estoppel was ‘a representation (express or implied) intended to induce the person to whom it is made to adopt a course of a conduct which results in detriment or loss’. 287 For promissory estoppel, see Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93, (Neuberger LJ). The propositions set out by Neuberger LJ apply to promissory estoppel and estoppel by representation. As to estoppel by convention see PW & Co v Milton Gate Investments Ltd [2004] Ch 142, para 222 (Neuberger J). For proprietary estoppel, see Gillett v Holt [2001] Ch 210, 237 (Robert Walker LJ); Fisher v Brooker [2009] 1 WLR 1764, para 63 (Lord Neuberger); Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776. 288 WJ Alan & Co Ltd v El Nasr Export and Import Co [1972] 2 QB 189, 213. The views of Lord Denning are summarised above (n 266). 289 [1932] 1 Ch 330. 290 A possible difficulty as regards estoppel by representation in this case was that the representation was one as to the effect of an agreement and so would normally be classified as a representation of law which it was at that time thought could not found an estoppel by representation. It seems probable that today the law has altered so as to allow an estoppel by representation to be founded in a statement of law. This subject is discussed in para 3.18 et seq. 291 Waiwai Ltd v Grey and Menzies Ltd [1957] NZLR 70.

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Injustice or Unconscionability: Its Components of Reliance and Detriment  3.125 one in which reliance on the estoppel failed because the recipient of an assurance benefited rather than suffered detriment by reason of the assurance.292 3.124  Detriment can occur outside any commercial context. In Covell v Swetland,293 a husband following an estrangement agreed to pay a sum of money as maintenance to his wife. It was held as a matter of construction that the agreement operated only until a decree of divorce dissolved the marriage and on this basis no question of estoppel arose. Nonetheless, the Judge considered what the situation would have been if on its proper construction the agreement was to last for the whole of the life of the wife. The possibility considered was that, on the basis of a statement made to him, or at least inferred from silence on the part of his wife, the husband was lulled into a sense of security that his liability to make payments ended with the dissolution of the marriage. The detriment would then have been that he took no steps to vary the agreement or steps to protect himself and he failed to put aside money to pay the maintenance which would be due if the agreement continued. It was held that this was a form of detriment which would have prevented the wife asserting that the maintenance agreement was to endure for her whole life. A detriment can occur in the area of property law. A tenant served with a notice to quit may regard the service of the notice as an implied representation that the notice is valid even though it turns out later to be invalid. If he then enters into an agreement to take a tenancy of different property that may be a case of his acting to his detriment on the representation made to him as to the validity of the notice.294 A plain instance of detriment arises where the recipient of a sum of money paid to him in error accompanied by a representation that the money is due to him expends it or a part of it in some way in which he would not have done apart from the representation, and has no means of repaying the money.295 3.125  An attempt has been made to separate three possible types of reliance or detriment where the representee has spent money in reliance on a representation.296 There is consequential reliance, which simply means that the representee has expended money which he cannot recover. Next there is out of pocket reliance, which is the same as the first type except that the representee would not have expended the money apart from the representation. The third type, called real prejudice, is the same as the second type save that it brings into the calculation any benefit obtained by the representee from the expenditure of the money. The first type is clearly not sufficient for estoppel since it ignores any question of detriment. In so far as a choice has to be made for the purposes of estoppel between the three categories, it is the second category of reliance and detriment which will generally have to be established and which will generally be sufficient. If a person is paid a sum of money by mistake with a representation that the money is due to him and then he expends all of it on a holiday and would be in financial difficulties if he had to pay the sum back 292 Fisher v Brooker [2009] 1 WLR 1764. It may be that the use of money to pay off a debt is not an action to the detriment of the debtor since he obtains the benefit of the elimination or reduction of the debt: see Gordon Derby v Scottish Equitable Plc [2001] EWCA Civ 369, [2001] 3 All ER 818; and see para 3.166. However the universal application of this rule may be subject to some doubt as is discussed below (n 402). 293 Covell v Sweetland [1968] 1 WLR 1461. See also P v P [1957] NZLR 854. 294 Farrow v Orttewell [1943] Ch 480. 295 Deutsche Bank v Beriro & Co (1895) 73 LT 669. 296 J Beatson and W Bishop, ‘Mistaken Payments in the Law of Restitution’ (1986) 36 University of Toronto Law Review 149, 151–52.

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3.126  Estoppel by Representation to the payer, he could be said to have received the benefit of the enjoyment of the holiday but it would still not be just to deny to him the right to assert an estoppel. An exact classification of types of reliance and detriment is probably not necessary for present purposes and it is sufficient to ask in the circumstances of each case whether the representee would suffer significant detriment if the representor was allowed to resile from his representation. There are possible difficulties where a representee has expended only a part of a monetary payment to him and this is discussed in connection with the general effect of estoppel by representation.297

(ii)  The Time of the Detriment 3.126  The essential point to have in mind is that the test of detriment is normally not whether the person asserting the estoppel has suffered detriment as a result of the incorrect statement made to him, but whether he will suffer detriment if the maker of the statement is allowed to resile from the correctness of the false statement and to state the true position. The point is apparent from the formulation of principle by Neuberger LJ in Steria,298 where he spoke of the requirement that the claimant has to show that ‘he will suffer detriment’ if the representor is not held to his representation. Exactly the same rule applies to promissory estoppel where the person asserting the estoppel has to show that he will or may suffer detriment if the promisor is not kept to his promise not to enforce existing legal rights.299 The situation is therefore one of looking forward as to what will or may happen in the future. As a broad generality it can be said that at the time a question of estoppel by representation or promissory estoppel comes before a court in legal proceedings, the representation or promise and actions in reliance on that representation or promise must have happened in the past and the prospect of detriment occurring to the representee or promisee looks to what will happen in the future if no estoppel is operated. In other words, the purpose of the estoppel is usually to avoid potential detriment in the future. This proposition is not universally correct and it is possible that a representee has suffered detriment before a court makes any adjudication, and even to keep the representor to the truth of a statement made may not wholly reverse that detriment.300 It may be that if the only detriment suffered by

297 See para 3.147 et seq. The particular problem is whether the estoppel can operate partially or in a pro tanto fashion in the type of circumstances mentioned. 298 Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93. The relevant passage is set out in para 3.111. 299 See ch 6, para 6.196. 300 For instance, A may make a representation to B as to the meaning of a contract between them and B may dispose of assets to purchasers on the faith of this representation. One purchaser may recover damages from B by reason of the contract having a different meaning and other purchasers may then seek to do so. A part of the detriment has been suffered, and possibly irretrievably suffered by B but the remainder of the detriment, the claims by other purchasers, may be avoided by A being held to his representation by an estoppel. This example is based loosely on the facts of De Tchitatchef v Salerni Coupling Ltd [1932] 1 Ch 330 as stated in para 3.123. See also the example given in the next paragraph. A similar hypothetical example was used in para 3.67 to illustrate the effect of a withdrawal of a representation. The situation is rather different for proprietary estoppel where the detriment has normally occurred at the time where proceedings come before the court, for example unpaid care provided to an elderly relative at his or her property, and the role of the court is to fashion a remedy, such as vesting the property in the claimant at the death of the relative, in accordance with an assurance given to the claimant. The purpose and effect may be to counteract the detriment suffered by the order of the court in the sense that, in overall terms, when an interest in land is ordered to be vested in the claimant that is an adequate recompense for the detriment which has been suffered by the claimant.

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Injustice or Unconscionability: Its Components of Reliance and Detriment  3.128 the representee has already occurred by the date of the hearing, and no further detriment is anticipated, and if the operation of an estoppel would not reverse that previous detriment, then no estoppel by representation is to be allowed. This type of situation illustrates a difference between common law estoppel by representation, where normally the only way in which effect can be given to the estoppel is by preventing the representor from going back on the truth of what has been represented, and proprietary estoppel, and possibly promissory estoppel, which have origins in equity and where a court has a wider range of remedies to ‘satisfy the equity’ such as by ordering the payment of a sum of money by one party to another as recompense for past detriment. 3.127  Estoppel is a doctrine which is applied within legal proceedings. This is one of the reasons why it is sometimes described as a rule of evidence rather than of substantive law.301 It follows that the time at which it must be asked whether a party to the proceedings will suffer detriment if there is no estoppel, and consequently the representor is or is not allowed to go back on his statement, is the date of the hearing. The party asserting the estoppel may have suffered detriment in the past at any time following his taking action in reliance on the representation and at any time up to the date of the hearing, but the estoppel will normally only operate if at the time of the hearing the operation of the estoppel will avoid the prospect of detriment in the future.302 3.128  The rule as just stated may be illustrated by a hypothetical example.303 Suppose that a tenant of property is told by his landlord that consent to the erection of a warehouse on the land, as required under the terms of the lease, has been given by a previous landlord. The tenant commences but does not complete the construction of a warehouse for sub-letting. The landlord states at this point that his statement concerning consent having been given was incorrect and that the construction of the warehouse is a breach of covenant and the work done must be removed. At this time, the tenant has entered into a binding sub-lease for the building under construction. In legal proceedings regarding the legality of the warehouse, the tenant would readily be able to show that he will suffer detriment if the landlord is able to resile from his incorrect statement, since if the landlord can so resile the tenant will have the cost of the abortive building work and may be sued by the sub-tenant under the agreement for sub-lease. These expected detriments can be avoided by the operation of an estoppel which prevents the landlord from asserting that no consent had been given for the warehouse. It does not matter that the actions creating the prospective detriment, such as the expenditure of money on the partly completed warehouse, have occurred in the past. Indeed, it is necessary that the representee has acted in some way in reliance on the statement made so that the actions which give rise to the detriment will almost inevitably be in the past at the time when the question of an estoppel comes before a court. What is essential

301 See ch 2, part (C), for a discussion of this matter. 302 In National Westminster Bank Plc v Somer International (UK) Ltd [2002] QB 1286, paras 60–61, Clarke LJ said that detriment must be judged when the representor seeks to go back on the representation, referring to the way in which the matter had been put by Dixon J in Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641, 674. Presumably the date of the hearing is the time, or at least a time, at which the representor is seeking to go back on his representation. See para 3.168 for a discussion of the National Westminster Bank decision in connection with the way in which an estoppel by representation operates. See also the example given above (n 300). 303 A similar example is used in para 3.67 to illustrate the effect of a contradiction of a representation before and after it has been acted upon.

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3.129  Estoppel by Representation if an estoppel is to be established is that the future detriment, in this case potentially wasted expenditure and potential liability to a sub-tenant, can be avoided in whole or in part if the estoppel operates. The operation of this principle can be seen from an addition to the facts as just stated. If it emerged that the completion of the warehouse would be in breach of planning control and that the local planning authority could and would compel the removal of the building under planning enforcement powers, it could be argued that the representee would suffer no detriment from the landlord being able to assert that no consent had been given, the reason being that the building would have had to have been demolished whether or not an estoppel operated as between representor and representee, so that in these circumstances no detriment would flow from the tenant having acted in reliance on the landlord’s representation. Thus in summary, the general rule for estoppel by representation is that at the time the matter comes before court (a) action in reliance on the representation must have been taken by the representee, and (b) detriment to the representee will or may happen in the future unless the estoppel is allowed to operate.

(iii)  Risk of Detriment 3.129  The fact that any detriment will arise in the future and be contingent on the representor being able to resile from his statement of fact raises a further question. The question is how certain it is that the representee will suffer the detriment in question if the representor is allowed to resile from what he has stated. A similar question arises in connection with promissory estoppel where detriment is also an ingredient of the estoppel, and the question in that case is how certain it is that the promisee will suffer detriment if the promisor is allow to resile from his promise not to enforce some legal right available to him against the promisee.304 A similar question also arises in connection with proprietary estoppel.305 3.130  In some cases the occurrence of detriment to the representee if the representor can deny the truth of his statement is certain or virtually certain. In the example given earlier,306 the tenant as the representee would obviously and certainly suffer detriment if the representor landlord were allowed to go back on his statement that consent to the warehouse had been given, since the representee would then have to remove the part of the warehouse which he had at his cost erected because without the consent its construction would be a breach of covenant. In other cases, the risk of detriment may be less certain. It can scarcely be a coherent rule that the representee has in all cases to show a certainty or a virtual certainty of future detriment before he can establish an estoppel. The future is inherently uncertain,307

304 See ch 6, para 6.200 et seq, for a discussion of this question in relation to promissory estoppel. 305 See ch 7, para 7.234. 306 See para 3.128. 307 This proposition may be true as to naturally occurring future events as it is to events which depend on human actions. Uncertainty in nature is, according to the principles of quantum physics, an inherent attribute of nature. See, eg, R Feyman, QED (Penguin Books, 1990) 19, on the nature of physical reality. It cannot be said, contrary to the popular view, that identical initial circumstances will always result in an identical later result. For a decision in which the necessary detriment was a loss of a chance, see Greenwood v Martins Bank Ltd [1933] AC 51 where the chance depended at any rate in part on whether a person who committed suicide would have done so at an earlier time if the fact of a forgery had been made public earlier. The facts of this decision are stated in para 3.56. See the discussion of the Greenwood case by Lord Reid in the Privy Council in the Hong Kong appeal of Fung Kai Sun v Chan Fui Hing [1951] AC 489, 505.

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Injustice or Unconscionability: Its Components of Reliance and Detriment  3.131 and in some cases the future detriment which may flow from a resiling from a statement made is uncertain of occurrence. The problem which arises is as follows. As just stated, it would be a harsh rule that the person raising the estoppel has to show a certainty or near certainty of detriment to him if the representor can go back on his statement. Such a rule would rule out the prospect of an estoppel by representation when the representee is unable to show the requisite certainty, or at any rate a very high degree or probability, of some detriment to him. The law has long set itself against such a rigid rule. In Knights v Wiffen,308 A sold a quantity of barley held by him in a store to B who sold on a part of it to C. C paid B. Thereafter through the intermediation of a station master of a railway company A in effect stated to C that he held the barley for C and that C was entitled to possession of it. When he did not get the barley C brought an action against A to obtain possession of it. C in reliance on what A had stated took no action to recover from B the money which he had paid to B. B became bankrupt. It was held that A was bound by his representation that C was entitled to possession of the barley. The detriment suffered by C was his not taking action to recover from B the money which he had paid to B, but this was a loss of a chance of recovering the money and not a loss of a certainty of doing so. On the other hand, and at the other extreme, a situation may arise in which the chance of recovering money even if proceedings had been taken earlier was small. Here again it may be unsatisfactory if that all a representee needs to show is that there is some remote prospect of detriment occurring to him if the correctness of the representation can be denied by its maker. 3.131  The law often has to develop by providing a middle course between extremes. Such a middle course, and a sensible rule, can be created in the present situation if the rule is that a person who has acted on a representation made to him has at least a significant risk of detriment if the representor can resile from his representation. Some support for a rule of law along these lines appears from a decision of the Privy Council309 in which the detriment suffered from a representation by silence was the loss of a chance of recovering money from a forger of mortgages; it was said that the true test was that the chance of recovery must have been ‘substantially prejudiced’.310 Such a rule of law leaves the uncertainty of what is a ‘significant’ risk, but the resolution of such an inherent uncertainty is the essence of some rules of law and can be decided by courts on a case-by-case and fact-by-fact basis.311 Substantiality in matters such as the amount and the risk of detriment is a matter which arises generally for various forms of estoppel and there is much to be said for the use of a common description, such as that the risk of detriment must be significant, in this context.312

308 (1870) LR 5 QB 660. See above (n 2) for the statement of the principle of estoppel by representation given by Blackburn J in this case. For an examination of this decision in connection with the passing of title when goods are sold in bulk see Re Goldcorp Exchange Ltd [1995] 1 AC 74, 92–93 (Lord Mustill). See ch 2, part (I). 309 Fung Kai Sun v Chan Fui Hing [1951] AC 489. 310 ibid, 506 (Lord Reid). 311 The use of the word ‘real’ in a proposition of law relating to present matters can be seen in the proposition of law concerning estoppel by convention enunciated by Neuberger J in PW & Co v Milton Gate Investments Ltd [2004] Ch 142, para 222, cited in ch 5, para 5.71 in connection with that form of estoppel when the Judge said that the Claimant asserting an estoppel by convention had to show that he will suffer ‘real prejudice’. This echoes the expression ‘substantially prejudiced’ used by Lord Reid as just mentioned. 312 See ch 6, para 6.200 et seq, for promissory estoppel and ch 7, para 7.234 et seq, for proprietary estoppel; and see the last footnote for estoppel by convention. The general factor of the substantiality of various matters in the law of estoppel is discussed in ch 1, para 1.55 et seq.

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3.132  Estoppel by Representation 3.132  A different method of meeting the difficulty here under discussion is discussed later in this chapter. It is explained that there is an overriding requirement that injustice must be shown before a court will apply an estoppel by representation, just as there is such a requirement for certain other forms of reliance-based estoppel. If this is correct then it could be concluded in a particular case that although a representee had acted in reliance on a representation the risk of his suffering detriment if the untruth of the representation could be asserted was, though existent and even significant, so small that there would be no ­injustice in allowing the representor to go back on what he had stated.313

(iv)  Loss of a Chance and ‘Pro Tanto’ Effect 3.133  The question of whether a risk of detriment if a representor can go back on what he has stated is enough to found an estoppel has become entangled with the question of whether an estoppel by representation can operate to a partial extent only, what is sometimes called a pro tanto operation. A possible pro tanto operation arises when a representee will suffer a limited and quantified amount of monetary detriment if the representor is allowed to resile from the representation but will in overall terms make a gain if the representor is wholly held to the representation. For example, A may by a mistake represent to B that £10,000 is due from A to B and pay that sum to B and B may then incur expenditure of £4,000 which he would not otherwise have incurred and which he could otherwise ill afford. If A is kept to the truth of his representation B will indeed avoid the detriment of having to repay £4,000 but will also gain a benefit of £6,000. The attraction of a pro tanto operation is that it achieves overall justice if the representor can resile from the representation as regards £6,000 but not as regards £4,000. There is a possible doubt on whether an estoppel by representation can operate in this pro tanto or partial fashion and this issue is examined separately later in this chapter.314 3.134  The relevance of this issue to the matter of a risk of detriment is that since an estoppel can operate where there is only a risk of detriment, on one view it may also provide to the representee a benefit which exceeds the avoidance of detriment to him. What a representee may lose if there can be a resiling from a representation made is a chance, but not a certainty, of some advantage, for example the chance of succeeding in legal proceedings which apart from the representation he could and would have brought. If an estoppel can operate so as to turn that chance in legal proceedings into the equivalent of a certainty of succeeding in the proceedings, then the operation of the estoppel not only prevents detriment to the representee (the loss of the chance) but may also provide to him a benefit (the equivalent of certainty of succeeding in legal proceedings).315 There is no question of a pro tanto operation of 313 See para 3.133 for a further discussion of this matter and for the suggestion of a two-stage approach where substantiality is relevant to certain components of estoppel by representation. 314 This question is examined in para 3.147 et seq. 315 Loss of a chance of succeeding in legal proceedings involving estoppel has usually arisen in cases where there is an implied representation by silence when a person had a duty to provide information, and fails to comply with that duty, such as the duty of a customer to a bank to inform the bank if he has reason to believe that cheques purportedly issued by him have been forged but where he fails to do so: see Ogilvie v West Australian Mortgage and Agency Corporation Ltd [1896] AC 257; and Greenwood v Martins Bank Ltd [1933] AC 51. In such a case, the bank may lose the chance of recovering from the forger money paid out on the cheques which they would have had if information had been timeously sent to them by the customer.

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Injustice or Unconscionability: Its Components of Reliance and Detriment  3.135 an estoppel, ie, some reduction in its effect, because a possibility is in effect turned into a certainty, in cases where the detriment is a loss of a chance. The rule of law here is different from that applied in the context of the assessment of damages for a breach of contract or a tort since in such cases in the assessment of damages where the loss is a loss of a chance there would normally be a reduction in the amount of the damages to represent the risk that the chance might not happen or lead to success. For instance, if a person is prevented from bringing legal proceedings, perhaps because his advisers have forgotten about a limitation date, his damages for negligence would be assessed in an appropriate case not as the whole of the amount he would have obtained if he had been able to bring the proceedings and wholly succeeded in them, but as that sum discounted for the risk that the proceedings might not have succeeded or might have succeeded only in part.316 In the same way, when compensation is assessed for the compulsory acquisition of land and there is some uncertainty over some matter, such as the prospect of obtaining a planning permission, the value of the land may be discounted to take account of the risk involved.317 When the question of a possible pro tanto operation of estoppel by representation is examined later in this chapter it is suggested (a) that the loss of a chance cases have no real connection with the question of a pro tanto operation of the estoppel where there is a certain and quantified, but limited, monetary detriment to the representee, and (b) that in the case of such a limited detriment, a pro tanto operation of the estoppel should in an appropriate case, such as in the example in the preceding paragraph, be accepted and applied.318

(v)  The Amount of Detriment 3.135  A further question which raises the general matter of substantiality is how great the detriment or the expected detriment has to be if there is to be an estoppel by representation. There is some support for a rule that the detriment has to be at least significant and that some trivial detriment is not enough.319 Such a rule concerning substantiality can be uniformly applied to other forms of reliance-based estoppel (promissory and proprietary estoppel and estoppel by convention) where detriment is a necessary component of the estoppel.320 A further possibility, common to other questions of substantiality, is that the amount of the detriment is one of the factors to be weighed in the balance when the final question of whether it would be unconscionable that the representor can resile from what

316 Allied Maples Group v Simmons & Simmons [1995] 1 WLR 1602; Greenwood v Martins Bank Ltd [1932] 1 KB 371, 383–84 (Scrutton LJ). The relevant passage from the judgment of Scrutton LJ in the Court of Appeal is set out in para 3.155. This last case was affirmed by the House of Lords at [1933] AC 51. 317 Porter v Secretary of State for Transport [1996] 3 All ER 693; Transport for London v Spirerose Ltd [2009] UKHL 44, [2009] 1 WLR 1797, paras 42–44 (Lord Walker). In the case of statutory compensation, the principle as here stated may be modified by specific statutory provisions. 318 See para 3.147 et seq. 319 In MWB Business Exchange Centres v Rock Advertising Ltd [2019] AC 119 it was said in the Supreme Court that any suggestion of a promissory estoppel (a promise to allow further time for payment of money due) failed because of the minimal nature of any detriment suffered by the promisee: see per Lord Sumption at para 16. Substantiality as a factor relevant to various components of estoppel by representation is discussed generally in para 3.136 et seq. There may be some further support for this approach in the decision of the Privy Council in Fung Kai Sun v Chan Fui Hing [1951] AC 489. 320 PW & Co v Milton Gate Investments Ltd [2004] Ch 142, para 222 (Neuberger J).

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3.136  Estoppel by Representation has been stated is addressed. There is some suggestion in the authorities that once some element of detriment has been shown, a court will not require the person asserting the estoppel to show in exact terms the nature and extent of the detriment.321

4. Substantiality 3.136  Following a consideration of reliance and detriment as components of the third main element of estoppel by representation, injustice or unconscionability, it is useful to refer back to one theme which has been repeated when examining the two components. There have to be actions taken in reliance on the representation and there has to be detriment or the prospect of detriment to the representee if there is to be an estoppel. Questions which arises are how substantial as an influencing factor on the actions of the representee the representation has to be and how substantial the detriment or the risk of detriment has to be. An answer which has been given is that the representation must have had at least a significant influence on the actions in question and that the detriment and, where applicable, the risk of detriment in the absence of an estoppel must be at least significant.322 It seems to be good sense that there can be no estoppel if any of these components is so insubstantial that it cannot even be described as significant.323 3.137  A rule that the influence of the representation, the amount of detriment, and, where applicable, the risk of detriment must be at least significant can be regarded as a threshold test for the estoppel. If one or more of these requirements is not satisfied, then the possibility of an estoppel by representation ends at that stage. Even so, the importance of the substantiality of these matters does not necessarily end at that stage. Even if the threshold test is satisfied the substantiality of the matter may still be small, albeit it is significant. In such circumstances, it may be appropriate, when considering the overall question of whether there will be injustice or unconscionability, if the maker of a representation is allowed to depart from its content, to treat the fact that the influence of the representation on the actions of the representee or that the amount or likelihood of the detriment is small as a factor to be weighed in the balance, perhaps with other relevant factors. The substantiality of the matters here under consideration would then have to be taken into account at two stages, of which the first is whether the matter in question was at least significant, and the second is whether the small nature of the matter was such that in the end, when all relevant factors are considered, it is not unjust or unconscionable to allow a departure by the representor from what has been stated so that in the end no estoppel is upheld by the court. These matters are summed up here in relation to estoppel by representation which is the first of the four reliance-based estoppels considered in this book, but it is suggested that the same

321 See National Westminster Bank Plc v Somer International (UK) Ltd [2002] QB 1286, para 46, where Potter LJ suggested that this was the effect of Skyring v Greenwood (1825) 4 B&C 281 and Holt v Markham [1923] 1 KB 504. 322 See para 3.112 (reliance), para 3.135 (amount of the detriment), para 3.129 et seq (risk of detriment). A similar expression which has been used in these contexts is that the component in question must be real. There is a general principle of law that courts in applying rules of law will disregard matters which are ‘de minimis’. Something more is required in the present context than that the factor in question is merely greater than de minimis. 323 Substantiality as a matter relevant to aspects of all of the four reliance-based forms of estoppel is mentioned as one of the general factors relating to estoppel in ch 1, para 1.55 et seq.

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Injustice or Unconscionability: Its Components of Reliance and Detriment  3.138 principle applies to estoppel by convention and to promissory and proprietary estoppel. In chapter two, an attempt is made to suggest a common linguistic framework for the reliance, detriment and injustice requirements of the four estoppels, and within this formulation the requirement of the three matters here mentioned is stated by way of substantiality with the use of the adjective ‘significant’ in respect of each factor.324 The use of this uniform linguistic approach conduces to the possibility of unifying at least certain of the major elements or components of the four reliance-based estoppels. The same suggestion is taken forward when the three other reliance-based estoppels are considered in subsequent chapters.

5.  Injustice or Unconscionability (i)  The Requirement of Injustice 3.138  There is no doubt that most forms of estoppel, whether of legal or equitable origin, require that before the estoppel can be established it must be shown to be unjust that the person sought to be estopped should be able to go back on what he has promised or assumed or on an assurance he has given. Such injustice is a necessary ingredient of promissory estoppel,325 proprietary estoppel326 and estoppel by convention.327 Sometimes the words ‘inequitable’ or ‘unconscionable’ are used in place of the word ‘unjust’ but no difference of meaning seems discernible. No doubt different forms of estoppel have different essential elements and other different characteristics but it does seem desirable that where a soundly based requirement is so widely established, uniformity should if possible be achieved and there appears to be no sensible reason for denying that today in the area of estoppel by representation there is a requirement of potential injustice before the estoppel can be established.328 Such a requirement would be in accordance with the underlying moral basis of most forms of estoppel as a doctrine of law which is that courts will not allow a person to go back on a statement or promise or shared assumption or assurance where someone has acted upon what he has said such that it would be unjust that there can be a resiling from what he has said. In the present context, the word ‘unconscionable’ is properly used as an objective value judgement on the behaviour of a person and the judgement is made regardless

324 See ch 2, para 2.194. 325 In Hughes v Metropolitan Rly Co (1877) 2 App Cas 439, an origin of promissory estoppel, Lord Cairns referred to a person not being able to enforce rights which he had promised not to enforce where allowing him to do so ‘would be inequitable having regard to the dealings which had taken place between the parties’: see ch 6, part (G). 326 See ch 7, part (C). 327 See the definition of estoppel by convention given by Lord Steyn in Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878, 913, cited in ch 5, para 5.4. An exception is estoppel by deed where injustice is not an element of the estoppel. Nor does unconscionability play any part in estoppel per rem iudicatam which is justified by other considerations such as the need for finality in litigation, although injustice has been a driving factor in the establishment of the two exceptions to that form of estoppel: see ch 9, para 9.194. 328 This of course leads to the general question of whether it would be possible and desirable that there should be established some uniform principle of estoppel which subsumed all or most of its current forms, something discussed in ch 2, part (G). It is there suggested that the requirement of unconscionability and its components of reliance and detriment could be uniformly formulated for the four reliance-based forms of estoppel, estoppel by representation, estoppel by convention, and promissory and proprietary estoppel.

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3.139  Estoppel by Representation of the actual state of mind of the person in question.329 The question of unconscionability where it is relevant for forms of estoppel can therefore be phrased as being whether a reasonable person aware of all the relevant facts as they exist at the time of a decision of the court would regard it as unconscionable that the person who has made a statement of any form, including a representation, should be allowed to go back on that statement. 3.139  Some well-known statements of the elements of the principle of estoppel by representation do not in express terms indicate that there is any separate requirement of injustice or unconscionability.330 Despite this, there is substantial modern authority and support for the rule that injustice or unconscionability must be shown before the estoppel can be established. A leading authority and modern summary of basic principles is the judgment of Neuberger LJ in Steria Ltd v Hutchison,331 an extract from which has been cited earlier.332 The reasoning of the Lord Justice, who was considering estoppel by representation and promissory estoppel together, was that unconscionability was a factor which a claimant in an estoppel case had to establish in order to obtain some remedy from the court. He recognised that simply to state the requirement in these general terms, that is simply as a requirement of unconscionability with no further elaboration of the concept, would bring about considerable uncertainty and stated that the three classic requirements of (a) a representation or promise, (b) action in reliance on that representation or promise, and (c) the prospect of detriment, were matters which would normally have to be shown if the unconscionability or injustice requirement was to be satisfied. Further support for the same approach is found in judgments of Lord Goff.333

(ii)  The Purpose of the Requirement 3.140  The state of the law as explained by Neuberger LJ and as supported in other authority is a welcome clarification. Injustice, which would arise in the absence of the operation of an estoppel, is a necessary element of estoppel by representation as of a number of other forms of estoppel, but the necessary injustice will normally be satisfied by the establishment

329 Cobbe v Yeoman’s Row Management Ltd [2008] UKHC 55, [2008] 1 WLR 1752, para 92 (Lord Walker). This is yet a further example of the objective approach which is generally applied in estoppel: see ch 1, para 1.55. 330 See, eg, the statements of the principle of estoppel by representation by Lord Halsbury in Bloomenthal v Ford [1897] AC 156, 165, and by Blackburn J in Knights v Wiffen (1870) LR 5 QB 660, 665, cited in para 3.1. and (n 2). The more recent statement of the essence of an estoppel by representation by Lord Scarman in Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank [1986] AC 80, 110, also contains no express reference to injustice or unconscionability. 331 [2006] EWCA Civ 1551, para 93. 332 See para 3.111. 333 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 104 (Robert Goff J, relying on the review of authority by Oliver J in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n); Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548 where Lord Goff, comparing change of position as a defence in an action in restitution to the principles of estoppel, said: ‘First, estoppel normally depends upon the existence of a representation by one party, in reliance upon which the representee has so changed his position that it is inequitable for the representor to go back upon his representation’. A clear modern expression of the dependence of estoppel by representation on notions of justice and equity is the judgment of Potter LJ in National Westminster Bank Plc v Somer International (UK) Ltd [2002] QB 1286, para 43, where he stated: ‘It is clear that the doctrine of estoppel by representation stems from and is governed by consideration of justice and equity’. This decision is examined in para 3.168 in the context of the proposition that generally the estoppel has to operate in an all-or-nothing as opposed to a partial basis. See also above (n 8) for judicial observations on the estoppel resting on principles of equity.

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Injustice or Unconscionability: Its Components of Reliance and Detriment  3.142 of two of the stated classic requirements which are action in reliance on the representation and potential detriment to the representee if there is no estoppel. Nonetheless, injustice remains as a final and separate overall requirement. There are a number of reasons for this conclusion. First, it is generally to be welcomed that the necessary elements of different forms of estoppel should so far as possible be brought into conformity. Secondly, the injustice requirement fulfils the moral purpose which underlies most forms of estoppel. It is difficult to see what justification there is in refusing to allow a person who has made an erroneous statement to correct the error if no injustice could be involved by allowing the correction. Thirdly, the underlying and separate requirement of injustice allows the refusal of an estoppel where, although the normal components of action in reliance on a representation and potential detriment are established, there could still be an element of injustice in the operation of the estoppel. Such instances may be infrequent but are certainly not unforeseeable. In the case of estoppel by convention a reason for refusing the estoppel based on a consideration of injustice was that an estoppel operated in favour of one party to a pension scheme might have caused harm to other members of the scheme.334 Fourthly, it has been suggested earlier that an estoppel cannot be established unless items such as the amount of detriment and the risk of detriment are significant. Even if this threshold test is satisfied the degree of detriment and of the risk of detriment may still be relevant and can be taken into account as considerations to be weighed when the overall and final requirement of injustice is determined.335 3.141  A further and important reason for a separate requirement of injustice has arisen from modern authorities. It has been said in the Court of Appeal in Avon County Council v Howlett336 that in principle estoppel by representation cannot normally operate in a ‘pro tanto’ fashion, that is it cannot normally have effect so as to allow the estoppel to operate up to the limit of a monetary detriment suffered by a representee through having acted in reliance on the representation but no further. This decision has given rise to considerable criticism and unease and it may well be that, unless and until the decision is examined in the Supreme Court, a widely available method of avoiding injustice and reducing the impact of this decision is to reason that the estoppel can operate in a pro tanto or partial fashion where it would be unjust or inequitable that an all or nothing approach is applied. This matter is discussed separately in connection with the operation of the estoppel.337 3.142  The only reason for not applying an overriding requirement of injustice is the possibility that it might create uncertainty. It is correct that if the only requirement of an estoppel by representation was the making of a representation of an existing matter and an intention by the representor that the representation will be acted upon by the representee, then a super-added requirement of injustice without any further explanation or guidance could

334 Trustee Solutions Ltd v Dubery [2006] EWHC 1426 (Ch), [2007] 1 All ER 308, para 51(ii). See ch 5, para 5.83. 335 See para 3.136 for a general discussion on substantiality as regards certain components of estoppel by representation. 336 [1983] 1 WLR 605. 337 See para 3.147 et seq. As explained in these paragraphs where a statement, reliance on it, and some detriment are established, the primary justification for confining the operation of the estoppel to a partial or pro tanto effect appears to be that to allow the estoppel to have a total effect would be to contravene the necessary final and overall requirement of unconscionability.

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3.143  Estoppel by Representation indeed lead to uncertainty. In reality this point is wholly met by Neuberger LJ’s statement in the Steria case that normally injustice will be demonstrated by the fact that the representee has acted in reliance on the representation and by the further fact that the representee will suffer detriment if no estoppel is allowed. This approach therefore removes, or largely removes, any uncertainty element in an overriding injustice requirement and secures the benefits, mentioned above, which result from such a requirement.

(iii)  Two Further Questions 3.143  What is beyond doubt in the modern law is that a person asserting an estoppel by representation must normally demonstrate that he has acted in reliance on a representation of an existing matter made to him and has so acted that he will or may suffer detriment if an estoppel is not applied. These requirements are the normal indicia that it would be unjust unless an estoppel was applied. Consequently, the question of whether injustice has to be shown as a separate or overriding requirement makes it necessary to consider two further sub-questions which are (a) whether there are any circumstances in which an estoppel could be denied by a court even where the two normal requirements of reliance and detriment are shown, and (b) whether there are any circumstances in which an estoppel could be allowed even though one or other or both of these requirements are not satisfied. 3.144  The first sub-question has just been answered, and an instance has been given, namely potential harm to third parties, where it might be unjust to allow an estoppel despite action in reliance on the representation by the representee and possible detriment to him being shown. A possible further exception falling within this category, such as the risk of detriment being small when weighed with other relevant considerations, has been suggested. As to the second sub-question, it is certainly difficult to envisage circumstances in which it would be just to allow the estoppel even though no significant risk of detriment to the representee following his act in reliance on the representation had been shown as likely to occur if there is no estoppel, and the possibility of this occurring must be small especially in view of the statements in decided cases that detriment is an essential element of estoppel by representation.338 3.145  It may therefore be that in the final analysis the most accurate way of stating the third of the three main elements of estoppel by representation is to say that unconscionability is the third overall element but that (a) the essential element of unconscionability will normally be satisfied if it is shown that the representee acted in reliance on the representation and so acted to his actual or potential detriment, (b) in exceptional cases the element of unconscionability may still not be satisfied, so that no estoppel is operated, despite the presence of the components of reliance and detriment, and (c) there do not appear to be any instances in which the element of unconscionability has been established in the absence of the components of reliance and detriment.

338 The view expressed by Lord Denning was always that once a representation had been made with the intention that it should be acted upon and was in fact acted upon by the representee, the only remaining question was the general question of whether it would be unjust to allow the representor to go back on his statement and that no separate investigation of detriment was necessary. See para 3.118. That view does not express the law as understood today.

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The Effect of the Estoppel  3.147

6.  The Burden of Proof 3.146  It has been explained that the burden of proof on the first two of the three main elements of estoppel by representation, the making of a statement of an existing matter and the intention of the representor that the statement should be acted on by the representee,339 is on the person asserting the estoppel, and the same rule should apply to the third main element.340 The person who asserts the estoppel must show that it would be unjust to permit the representor to go back on his representation and in order to do this that person will normally have to establish, on the balance of probability, both that he acted reasonably in some way in reliance on the representation and that he would or might suffer detriment if the truth of the representation could be denied.341

(F)  The Effect of the Estoppel 1.  The Problem (i)  The Nature of the Problem 3.147  In most cases when an estoppel arises out of a representation of fact there can be no doubt over the effect of the estoppel. The representor has stated a matter which is untrue. The result of the estoppel is that he is held, and wholly held, to the correctness of what he has stated which therefore has to be taken to be wholly correct for the purposes of the legal proceedings in which the estoppel operates.342 Most of the illustrations of the operation of an estoppel by representation given so far in this chapter fall into this category. A court may have to exercise a degree of judgement in deciding whether unconscionability is established, but once the essential elements of the estoppel are established the court normally has little or no discretion on how the estoppel is to operate. A separate order as to the operation or effect of the estoppel will not normally be needed. The estoppel is applied so that one or other party is prevented from relying on some proposition of fact (or possibly of law) and

339 See para 3.83 (representation) and para 3.108 (intention). 340 See, eg, Lowe v Lombank Ltd [1966] 1 WLR 196, 207 (Diplock J, delivering the judgment of the Court of Appeal); Fung Kai Sun v Chan Fui Hing [1951] AC 489, 506 (Lord Reid, delivering the judgment of the Privy Council). 341 Avon County Council v Howlett [1983] 1 WLR 605, 609 (Cumming-Bruce LJ). Cumming-Bruce LJ contemplated that where a party against whom an estoppel was raised contended that it would be inequitable that the estoppel should operate and the representee pleaded facts in rebuttal of that contention, the evidential burden might shift at the trial. See United Overseas Bank v Jiwani [1976] 1 WLR 964 for a case in which the person asserting an estoppel failed to discharge the burden. 342 The estoppel may apply as between certain parties to legal proceedings but not as between others. A and B may be claimants in proceedings against C and may have the same or similar causes of action. C may be able to assert an estoppel against A which gives C a good defence against A because of a representation made by A to C. If B was not a participant in the representation no estoppel will arise between B and C. This type of situation must be distinguished from that in which A is estopped as against B from asserting some matter relating to A’s interest in land or A’s contractual rights against B, and A then transfers the interest or the rights to X. The question is then whether the estoppel binds X. This may be called the question of privity and is discussed in detail for estoppels generally in ch 2, part (I).

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3.148  Estoppel by Representation the dispute is then determined between the parties on this basis, often described as the establishment or otherwise of a cause of action, with an appropriate order made.343 With promissory and proprietary estoppel, the effect of the estoppel may be more complex, particularly with proprietary estoppel where a court has available a wide range of orders and remedies which may be employed to satisfy the equity created by the estoppel.344 The type of problem which may arise with the two forms of equitable estoppel is due to the inherent capacity of a court where these estoppels are established to formulate a remedy which best does justice in satisfying the equity. 3.148  The problem which arises and which may complicate this generally simple operation of estoppel by representation concerns money when the representation is of the entitlement of the representee to a monetary sum and the representee has acted to his detriment as regards a part but not the whole of the amount to which he has been stated to be entitled. The representation may or may not be accompanied by the actual payment to the representee of the sum in question.345 As will now be explained, it is because of a degree of conflict in the authorities over the last few decades that the discussion and explanation of this problem takes more space than the problem might otherwise deserve. The situation and the difficulty which arises in relation to the estoppel may best be explained by way of examples. A bank may inform one of its customers that a sum of £10,000 has been credited to his account. The customer in reliance on this statement books a cruise for himself and his wife at a cost of £11,000, something which he could not have afforded and would not have done apart from the representation. It subsequently emerges that due to a clerical error made by the bank the notification had been sent to the wrong person and the £10,000 had in fact been credited to the account of a different customer. The price of the cruise is non-refundable. It seems apparent from these facts that the classic requirements of an estoppel by representation have been satisfied. A representation has been made to the customer. A reasonable person would conclude that the customer was intended to act upon the representation and the customer has acted upon it to his detriment, since he would have great difficulty in paying back the money to the bank. On this basis, no money could be recovered by the bank on an action in restitution for money paid under a mistake since any attempt to do so would be met by the plea that the bank is estopped from denying that £10,000 is due to the customer. 3.149  However, the circumstances may be as just stated but with one important difference. The customer may have booked a more modest holiday at a cost of £2,000 and given £1,000 to a charity, retaining £7,000 of the sum to which he believed he was entitled in his account with the bank, before the error was discovered. The requirements of an estoppel again seem to be established save for one crucial matter. The detriment to the customer is now considerably less than under the previous facts, since the £7,000 can readily be

343 It is quite otherwise with proprietary estoppel where the estoppel may of itself constitute the cause of action and if the estoppel is established it will usually be necessary for the court to make an order stating how the estoppel is to be satisfied such as the vesting in the claimant of an interest in land or a direction that the claimant may occupy a residence free of charge for the rest of his or her life. 344 For an examination of the effect of a proprietary estoppel, see ch 7, part (I). 345 In some cases, the representee may not be able to incur expenditure unless he has actually been paid the sum said to be due, but in other cases the representee may incur financial obligations from which he cannot extricate himself merely in reliance on the statement that money is due to him. In principle an estoppel may arise in either situation.

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The Effect of the Estoppel  3.150 transferred back to the bank without detriment to the customer (save perhaps for an understandable disappointment) but there is still the detriment as regards the £3,000 which has been expended and cannot be recovered by the customer from the payees of it. In theory and general principle there are three possible solutions to the situation as described in this paragraph. (a) The estoppel may operate exactly as in the previous circumstances so that the bank is estopped from asserting that any of the money is not that of the customer to do with as he pleases. This solution seems unattractive since it leaves the customer in a position that is much more advantageous than is needed to avoid any detriment to him and so goes well beyond the purposes of an estoppel. (b) The estoppel may not operate at all because its operation in the way just stated, if that is the only way in which it could operate, would go beyond the purpose of the estoppel principle which is to avoid detriment to a representee. Few would find this to be an acceptable solution. It would penalise an innocent representee for his modesty of expenditure and his charitable deeds. (c) The third possible solution is that the estoppel does operate but only to the extent necessary to avoid the detriment to the customer. On this basis, the bank would be bound to accept that the account of the customer was properly credited but only by the sum of £3,000. The customer could be required to return the £7,000 balance to the bank. An estoppel operating in this way is said to operate ‘pro tanto’. Most people would say that this is what should happen and that a reasonable and flexible operation of the modern law of estoppel by representation should be capable of achieving this or a similar result.346 A further conceivable, though exceedingly artificial, way of resolving the difficulty would be to say that there were two representations, one as to £7,000 which creates no estoppel because there has been no acting to his detriment by the representee in reliance on it, and one as to £3,000 where there is an estoppel since the representee has acted to his detriment by his expenditure. The difficulty with this approach is that generally there is a single representation made and any notional division of the representation into two is artificial and depends on subsequent events.

(ii)  Three Preliminary Matters 3.150  Before coming to the authorities and the law as it stands today on the situation under discussion, there are certain preliminary matters to be mentioned. First, the law will usually disregard that which in its context is entirely insignificant or extremely trivial in accordance with the de minimis principle. If in the above example the only action which the customer had taken in reliance on the mistaken addition to his account was that he had spent a few pounds in buying himself a drink in celebration, this could easily be ignored so

346 It is possible that the situation here under discussion could apply to a mistaken conferring of a benefit accompanied by a representation where the benefit was not monetary but the authorities seem to be confined to monetary benefits. A possible, if perhaps fanciful, example might be that a person was told in error that he had won an asset, such as a caravan worth £20,000, in a competition where the person had then incurred £1,000 of expenditure in purchasing furniture for the caravan which had no use or value elsewhere. The question would be whether an estoppel operated such that the representee could keep the caravan as his own or whether some means could be found by qualifying the effect of the estoppel such that only the detriment of the £1,000 expenditure was avoided. In order to achieve the latter result some further flexibility in the operation of estoppel by representation would be needed. In such a case any estoppel might arise not in proceedings by the representor to recover the caravan, the ownership and possession of which might have remained with him, but in proceedings by the representee to obtain the ownership of the caravan.

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3.151  Estoppel by Representation that no estoppel would arise.347 A situation of this character could also result in there being no estoppel if, as suggested earlier, there is a rule that before an estoppel by representation can operate, the detriment has to be significant.348 A second matter is the possible operation of the third main element of estoppel by representation, which is that there will only be an estoppel when the court determines that it is unjust or unconscionable in the circumstances that the representor should be able to resile from the truth of his representation.349 Since injustice is a separate and overall requirement of the estoppel, then where the detriment to the representee which would ensue if the truth of the representation could be denied is small compared with the loss which the representor would suffer if he was held fully and strictly to the entirety of his representation, it would be arguable that it would not be unjust in the circumstances to allow the representor to go back on what he had stated. In that event there would be no estoppel.350 Another factor which might go to overall injustice in the type of example examined in the last paragraph is the purpose for which the representee had spent the money which he believed had become his. It is one thing to find detriment and injustice if a representee has given a substantial sum of money to charity and another thing to find detriment and injustice if the representee has put a large amount of money on an outsider in the Grand National (assuming, of course, that the outsider did not win). In this last type of situation, a further possibility is that the actions of the representee were unreasonable and an alleged estoppel might fail for this reason. Of course, the possibilities discussed in this paragraph are mainly significant if the effect of the estoppel has to be an all or nothing effect, since if a pro tanto operation is possible the same problems may not arise in the same way. 3.151  A third preliminary matter is to note that where a sum of money has been mistakenly paid to a person, two separate areas of law become relevant to the rights and obligations of the payer and the payee, the law of estoppel and the law of restitution or unjust enrichment. In principle a person who has paid money under a mistake of law or of fact is able to recover the amount paid under the law of restitution.351 However, there is a defence to a restitutionary claim which is that the recipient of the money has changed his position in good faith in reliance on the payment. It is therefore necessary to refer to restitution and the interrelationship between estoppel and restitution in order to provide a comprehensive answer to the problem here under consideration. The way in which the question of a possible pro tanto estoppel and questions within the law of restitution may arise in legal proceedings may depend on the type and mechanics of a mistaken payment. In the example given earlier, the bank could take steps to correct the error simply by debiting the account 347 The de minimis principle is not easily applied and in some cases what appears to be fairly trivial does not come within that principle. In Finch v Underwood (1876) 2 Ch D 310 an option to renew a lease was conditional on the tenant having complied with his covenants, including repairing covenants, in the existing lease. There was an item of repair which would have cost about £13 (more of course in today’s money) to make good but was held to be sufficient to prevent the exercise of the option even though the Court itself referred to the item of disrepair as trivial. 348 See para 3.135. 349 See para 3.138. 350 It will be explained later that the concept of unconscionability has been employed in recent cases so as to permit a pro tanto operation of estoppel by representation in appropriate circumstances: see para 3.164 et seq. 351 It was long thought that money paid under a mistake of fact could be recovered under the law of restitution (or the law of unjust enrichment or quasi-contract as it was sometimes called) whereas money paid under a mistake of law could not be so recovered. The law today is that money paid under either type of mistake may in principle be recovered under the law of restitution: Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349.

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The Effect of the Estoppel  3.153 of the customer with the sum which had been wrongly credited to that account. The way in which the customer could challenge this process would be by seeking a declaration against the bank that his account had been wrongly debited, at which time the law of estoppel and of restitution would become relevant. If the mistake had been by way of an actual payment, perhaps by an employer to an employee, the means of recovering the payment would be by proceedings by the payer with restitution as the cause of action. Again the same two areas of law would be relevant. The method of explanation used in this part of the chapter is to consider first whether under the law of estoppel there is a possibility of a pro tanto estoppel by representation and then to explore the impact of the law of restitution on that question and on the general rights of parties following a mistaken payment of a sum of money. This is followed by an attempt to state the law on the present subject as it is today by way of a number of propositions.

2.  The Authorities 3.152  There is only one thing less satisfactory than a bad rule of law and that is a situation in which on an important matter of principle the law is uncertain. For present purposes the fundamental question is whether in the type of circumstances considered earlier estoppel by representation can as a matter of principle operate pro tanto. If the answer is that there is a firm rule of law that an estoppel by representation cannot so operate then no further question arises. If the elements of the estoppel are made out on this basis the representor is held wholly and without qualification and condition to his representation. If the answer is that the estoppel can in principle operate pro tanto then there arises the further questions of when and how exactly a pro tanto effect is to be given to that principle. These fundamental questions can only be answered by an examination of the authorities, but unfortunately the authorities give no wholly clear and consistent answer. A leading decision is that of the Court of Appeal in Avon County Council v Howlett352 but what exactly is decided by that case is less than clear and the decision was preceded by a number of earlier decisions which are discussed in it and are said to lead to the conclusion reached in it. Later decisions can be seen as qualifying the Howlett decision, perhaps to the point at which on one analysis it now has no great practical application.

(i)  Decisions Prior to Howlett 3.153  The first decision in which the problem appears to have been considered in any detail is that of the Privy Council in Ogilvie v West Australian Mortgage and Agency Corporation Ltd.353 An employee of a bank in West Australia forged the name of a customer on cheques and diverted the proceeds to his benefit. When the customer sued the bank for the amount of the forged cheques which had been debited to his account, the bank pleaded by way of defence that by failing to inform the bank in good time of the forgeries the customer was



352 [1983] 353 [1896]

1 WLR 605. AC 257.

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3.154  Estoppel by Representation estopped from asserting that the cheques were forged. The Privy Council held that the plea of estoppel failed in view of the answers of the jury to certain questions which had been put to them. In these circumstances, anything said about the exact operation of an estoppel if it had been found to exist was obviously obiter. Nonetheless, there was a short discussion by Lord Watson of whether, if there had been an estoppel, it would have operated only as regards the detriment suffered by the bank which was the amount which they might have recovered from the forger if they had had information as to the forgery at an earlier point. Lord Watson said that any such limitation of the estoppel would have referred to the law as it ought to be rather than as it was and was contrary to all authority and practice.354 This observation obviously refers to a loss of a chance, the chance being that of recovering money from the forger. 3.154 The Ogilvie decision, and the statement of Lord Watson, were considered briefly by Lord Reid giving the judgment of the Privy Council in Fung Kai Sun v Chan Fui Hing355 where there was held to be an estoppel founded on a representation by silence when a person had for his own purposes delayed in drawing attention to forged mortgages to him. The discussion of what Lord Watson had said was in the context that on one interpretation his language might have suggested that an estoppel could arise even if there was no detriment or risk of detriment. The pro tanto issue was not discussed. In the subsequent Howlett decision Eveleigh LJ appears to treat the Privy Council decision in Fung Kai Sun as endorsing the rejection of the pro tanto operation of an estoppel356 but this may be attributing to Lord Reid more than he said. 3.155  Apart from the brief observation of Lord Watson in Ogilvie, the main source of support for rejecting in principle a pro tanto operation of an estoppel by representation was an equally brief observation by Scrutton LJ in the Court of Appeal in Greenwood v Martins Bank Ltd.357 This decision also concerned forged cheques, on this occasion by the wife of an account holder with a bank, and a failure by the account holder to inform the bank of the forgeries when he first found out about them. It was held that he was estopped against the bank from asserting that the cheques had been forged. One of the questions was what detriment had been suffered by the bank due to the omission to speak. The detriment claimed was that if there had been timeous disclosure of the forgeries by the account holder the bank would have been able to sue the wife in tort and that as the law then stood the husband would have been liable to the bank for the torts of his wife. The position was complicated by the fact that the wife committed suicide when the forgeries were revealed and this prevented any possibility of the husband being held liable in a claim for damages for her torts. It was possible that if the forgeries had been revealed earlier the wife would

354 ibid, 270. There was no discussion in the judgment of the authorities to which Lord Watson referred but it appears from the note of argument by Counsel that the authorities referred to were The Duchess of Kingston’s Case (1776) 2 Sm L C 9th edn, 945; Simm v Anglo-American Telegraph Co (1879) 5 QBD 188; and Seton v Lafone (1886) 18 QBD 139 (at first instance before Denman J). It does not appear that the question of principle was much discussed in these authorities. The Duchess of Kingston’s Case is concerned mainly with estoppel per rem iudicatam and is explained in ch 9 on estoppel by record. See ch 9, para 9.37. 355 [1951] AC 489, 505–06. 356 Avon County Council v Howlett [1983] 1 WLR 605, 611. 357 [1932] 1 KB 371, 383–84, affirmed by the House of Lords at [1933] AC 61. This decision is discussed in para 3.56 in connection with representation by silence where there is a duty to speak out.

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The Effect of the Estoppel  3.156 have committed suicide earlier with the same legal consequences but at an earlier date. The relevant passage from the judgment of Scrutton LJ is as follows: The customer would not be liable for his silence, if the Bank had not lost any right of action thereby. But if the silence of the customer has caused the Bank to lose its right of action, the customer is estopped from alleging the fact which he ought to have disclosed – namely, that the cheques were forged. If the claim of the Bank were for damages for failure to disclose, it might be that the improbabilities of recovering anything in the action might be taken into account; but the authorities show that in a question of estoppel, where the question is whether the customer is estopped from alleging that certain bills are forgeries, if the bank has lost something, the value of that something is not the measure of its claim, but, the customer being estopped from proving the bills forgeries, the bank gains by the amount of the bills.

What Scrutton LJ was saying was that if the bank had sued for damages for breach of contract by the account holder in not providing information to them in good time the amount lost by the bank, the sums paid out on the forged cheques, would have had to have been reduced when damages were assessed by the fact that the bank might not have been able to recover the amount of the forgeries as damages in proceedings in tort against the husband even if the information had been given to them in good time. What in effect was lost was a loss of a chance. In assessing damages for a breach of contract or a tort the damages will be reduced if there was a chance that even in the absence of the wrongful acts the loss would still have been incurred.358 A different, or all or nothing, rule was said to apply as regards estoppel. Neither of the other two members of the Court commented on this exact question and the issue was not discussed in the judgment of the House of Lords, affirming that of the Court of Appeal, delivered by Lord Tomlin. 3.156  Other decisions were referred to in the Howlett case359 which on one reading could be argued to support the view that a pro tanto operation of estoppel by representation was unacceptable. Two of the decisions, Skyring v Greenwood360 and Holt v Markham,361 concerned overpayments of sums due to persons employed in the armed services. It was held in both cases that there were representations that the amounts paid or credited were due and that the representees had acted on the statements but there was no enquiry as to whether their expenditure or other conduct was such that the detriment suffered equated to the whole of the overpayments. The present question of principle was not under discussion in these decisions and it is difficult to regard them as establishing as a precedent any exact answer to the question of principle which is here under discussion.362 There was no reference in the Howlett judgment to the then very recent decision of the Court of Appeal in Brikom Investments Ltd v Seaford363 in which landlords had obtained registration of a rent 358 See para 3.130. 359 Avon County Council v Howlett [1983] 1 WLR 605. 360 (1825) 4 B&C 281. See in particular the passage from the judgment of Abbott CJ (at 789) cited by Slade LJ in the Howlett decision (at 623). 361 [1923] 1 KB 504. 362 It is submitted that Eveleigh LJ was correct in the Howlett decision (at 611) in saying that the last two decisions did not decide the question of principle here under discussion. In National Westminster Bank Plc v Somer International (UK) Ltd [2002] QB 1286, para 46, Potter LJ observed that the two decisions did no more than establish that the court will generally think it appropriate to treat the matter broadly and will not require a party to demonstrate in detail the precise degree or value of the detriment which he has suffered. 363 [1981] 1 WLR 863.

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3.157  Estoppel by Representation under the Rent Acts on an incorrect representation that they had the liability to repair the property. They were subsequently allowed to contend that the repairing liability was on the tenant but only on condition that they took steps to have registered a lower rent which took account of the correct liability. This appears to be an instance of a flexible operation of the estoppel, albeit a different form of flexibility from that here under examination, and suggests that a similar flexibility should be allowed so that in an appropriate case the estoppel can have a pro tanto effect.

(ii) The Howlett Decision 3.157  It is possible to take the decision of the Court of Appeal in Avon County Council v Howlett364 as an authority, binding on all courts save the Supreme Court, that as a matter of principle the operation of an estoppel by representation is an all or nothing matter and that there cannot be a partial or pro tanto operation. However, on a closer examination such an analysis of the decision would not be accurate and the question is still to a considerable extent open to doubt before any court. It is necessary first to examine exactly what was said and decided in Howlett. 3.158  The Plaintiff was a teacher employed by the County Council. He was involved in an accident at the school where he worked and was unable to continue work. Under the terms of his employment, he was entitled to certain payments for a certain time. He was paid a sum of money by the Council pursuant to this entitlement and after an enquiry by him was told by the Council that the sum paid was correct. It later emerged that by reason of a computer error by the Council there had been an overpayment of £1,007. The Council sought to recover this sum as money paid under a mistake of fact.365 Prior to the correction, the Plaintiff had bought a second-hand car and a suit and had omitted to claim an amount of social security benefit. These three sums made a total sum of £546.61. He would not have acted in this way apart from the overpayment. Since there was a representation that the Plaintiff was entitled to £1,007, and given that he had acted to his detriment in reliance on the representation to the tune of £546.61, the issue was whether the resultant estoppel operated so as to compel the Council to accept that £1,007 was due to the Plaintiff or that the estoppel operated only as regards the £546.61 which was the extent to which the Plaintiff had acted to his detriment. The Court of Appeal, reversing the decision of the Judge, held that the estoppel operated in law in the former way and that the Plaintiff was entitled to retain the full £1,007. The leading judgment was given by Slade LJ after a review of the earlier authorities. Eveleigh LJ agreed with hesitation. Cumming-Bruce LJ for reasons which will be mentioned found the procedural position in the case unsatisfactory and, although offering certain comments, declined to decide the exact question as just mentioned since in his view it did not properly arise for decision.

364 [1983] 1 WLR 605. 365 At the time of the decision a sum of money paid by mistake was only recoverable under the law of restitution if the mistake was one of fact. Accordingly one of the issues in the decision was whether the mistake was one of fact as opposed to a mistake of law. Subsequently the House of Lords held in Kleinwort Benson Ltd v Norwich City Council [1999] 2 AC 349 that money paid under a mistake of law may be recoverable under the law of restitution.

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The Effect of the Estoppel  3.162 3.159  On an initial view it would appear that the decision of two Members of the Court, and thus the ratio of the decision for the purposes of a precedent, was that a pro tanto operation of estoppel by representation is not permissible. There are a number of reasons why such an analysis of the decision should be viewed with considerable caution. 3.160  First, the potential injustice in a rule of law such as appears to have been enunciated was recognised by the Court. Slade LJ said in terms that in some circumstances the disparity between the amount paid by a mistake and the amount of any detriment could be said to give rise to injustice if the estoppel operated so as to defeat in its entirety an action in restitution to recover money paid under a mistake. The solution suggested was that the estoppel would in some cases only be allowed if the person asserting the estoppel gave an undertaking to return to the payer any amount which was beyond the total of the detriment to him.366 The obvious difficulty in such a solution is to know when there is sufficient injustice, that is in effect sufficient disparity, to require the giving of an undertaking before an estoppel is allowed to operate. The only guidance given was that the size of the disparity between the amount sought to be recovered and the detriment avoided would have to be large before an undertaking was required. One therefore asks whether, if an approximately 50 per cent discrepancy, as on the facts of the Howlett decision, was not large enough, a 75 per cent discrepancy would have been sufficient. Indeed if the court could require an undertaking for repayment where there was a sufficient disparity it must follow that if a party was unwilling to offer the undertaking the court must have a power to refuse an estoppel altogether. That in turn suggests that in the last resort the court has a discretion over whether to order that an estoppel should operate in the case before it even though the elements of estoppel by representation are made out.367 This ultimate question appears to have been left open by Slade LJ.368 3.161  Secondly, there was no binding authority which required the Court of Appeal in Howlett to reject a pro tanto operation of estoppel by representation in an appropriate case. The only authorities directly on the point were the observations of Lord Watson in Ogilvie v West Australian Mortgage and Agency Corporation Ltd,369 and of Scrutton LJ in Greenwood v Martins Bank Ltd.370 The former decision was that of the Privy Council, the observation of Lord Watson was obiter, and for both reasons the observation was certainly not binding on the Court of Appeal, and both decisions concerned detriment caused by loss of a chance which, as suggested earlier,371 is radically different from a certain and quantified detriment. 3.162  Thirdly, the Howlett decision is procedurally curious in that it appears to have been decided on what both parties recognised were incorrect and hypothetical facts. It seems 366 Avon County Council v Howlett [1983] 1 WLR 605, 624–25. The suggestion of requiring an undertaking was based on what was said in a dissenting judgment by Viscount Cave LC in R E Jones Ltd v Waring and Gillow Ltd [1926] AC 670 and on a passage in Goff & Jones, The Law of Restitution, 2nd edn (Sweet & Maxwell, 1978) 556. 367 On the possible existence of such a discretion see Brikom Investments Ltd v Seaford [1981] 1 WLR 863, and see para 3.156. It is established that in the case of promissory estoppel the court does have such a power: see ch 6, para 6.210. 368 [1983] 1 WLR 605, 625. Cumming-Bruce LJ considered that whether the law recognised an equity which required that some credit should be given for the difference between the amount paid by mistake and the detriment suffered by the representee must await a case in which it was necessary to decide that question: ibid, 610. 369 [1896] AC 257. See para 3.153. 370 [1932] 1 KB 371, 383–84. See para 3.155. 371 See para 3.133.

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3.163  Estoppel by Representation that in truth Mr Howlett had expended not a part but the whole of the £1,007 paid to him in error. The reason that the detriment as pleaded was confined to a part of the expenditure was that both parties wished, or at least were content to obtain, a judgment as a form of test case so as to know whether in other similar cases estoppel could operate on a pro tanto basis.372 English courts decide cases on actual facts not on hypothetical facts.373 The status within the law of precedent of a decision given on avowedly hypothetical facts is perhaps open to doubt. 3.163  Fourthly, one of the reasons given for the Howlett decision was that estoppel by representation was a rule of evidence.374 The overall question of whether estoppel is properly regarded as a principle of substantive law or a rule of evidence is discussed in general terms elsewhere.375 It has been said that where there is a representation, the only substantial hurdle standing in the way of an appropriate equitable adjustment is the historical origin and technical status of estoppel by representation as a rule of evidence dictating an all or nothing solution to the effect of the estoppel.376 It seems quite unsatisfactory that courts today are bound by these historical remnants from enunciating a just and equitable rule of law as to the operation of estoppel by representation in appropriate circumstances. The correct approach is more likely to be that of Lord Wright who observed that estoppel is often described as a rule of evidence but the whole concept is more correctly viewed as a substantive rule of law.377 All that need be said at the present point is that it would be unfortunate if juridical classifications and niceties of this nature are allowed to dictate what is in certain circumstances a plainly unjust result.

(iii)  Decisions After Howlett 3.164 The Howlett decision has been commented on in later cases sometimes as showing that an estoppel by representation cannot operate in a pro tanto fashion. In a decision involving an alleged estoppel against a liquidator of a company, Harman J observed that the Howlett decision showed that there was no need to correlate the detriment suffered with the amount of the claim defeated by an estoppel.378 Lipkin Gorman v Karpnale Ltd379 is the leading decision of the House of Lords in which it was held that, settling considerable prior 372 The situation is explained in the judgment of Cumming-Bruce LJ. The facts were described in this judgment as fanciful or a fiction. The reason that both parties agreed to this fiction seems to have been because the trade union which backed Mr Howlett wished to obtain a decision on the point of law raised by the hypothetical facts for use in other cases. Whatever may be the status of a judgment in an action where both parties know that the facts as put before the court are wholly or partly fictional as a precedent, it seems that a judgment given in such circumstances cannot create an estoppel per rem iudicatam since it would be regarded for those purposes as collusive: see ch 9, para 9.40. 373 Adams v Naylor [1946] AC 543, 555 (Lord Uthwatt). 374 Avon County Council v Howlett [1983] 1 WLR 605, 622. 375 See ch 2, part (C). It is there explained that the predominant view today, and certainly the preferable view, is that all forms of estoppel are principles of substantive law and not merely rules of evidence. 376 National Westminster Bank Plc v Somer International (UK) Ltd [2002] QB 1286, para 35 (Potter LJ). 377 Canada and Dominion Sugar Co Ltd v Canadian National (West Indies) Steamships Ltd [1947] AC 46, 56. Lord Denning MR put it more trenchantly in Moorgate Mercantile Co Ltd v Twitchings [1976] QB 225, 241, stating that ‘Estoppel is not a rule of evidence’. An equally plain assertion that estoppel is a rule of substantive law is that of Lord Hoffmann in Berridge v Benjies Business Centre [1997] 1 WLR 53, 57, a citation from which is in ch 2, para 2.44. 378 Re Exchange Securities & Commodities Ltd [1988] Ch 46, 56. 379 [1991] 2 AC 548.

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The Effect of the Estoppel  3.166 dispute, a change of position by the recipient of a sum of money paid by mistake could in principle be a defence to a claim in restitution for the recovery of the money or a part of it. The decision is referred to later in connection with the relationship between restitution and estoppel by representation and in his judgment Lord Goff referred without questioning it to the Howlett decision as establishing that estoppel could not operate pro tanto.380 3.165 The Howlett decision soon came to be questioned. It was not accepted in other commonwealth jurisdictions and was described in the High Court as no longer apt.381 The next detailed examination of the pro tanto question was by the Court of Appeal in Gordon Derby v Scottish Equitable Plc.382 The Appellant held a pension policy with Scottish Equitable. In 1995 the company sent a printout to the Appellant stating that his policy had a value of £201,938 and shortly after sent him that amount of money. This was an error by the company since the correct value of the policy was £29,486 so that the overpayment was £172,452. The only actions taken in reliance on the representation by the Appellant were that he paid £41,671 off his mortgage and made modest improvements to his family lifestyle put at £9,662. Scottish Equitable did not seek the recovery of this last amount. The company therefore sought to recover the sum of £162,790 (£172,452 less £9,662) as money paid under a mistake. By the time of the decision in 2001, the House of Lords had held that change in position by the recipient of a sum of money paid to him in error could be a defence, including a partial defence, to such a claim.383 3.166  Scottish Equitable succeeded in their cause of action in restitution. The only acts asserted as a change in position were the payment of a part of the mortgage debt and the expenditure on the modest change in lifestyle. The payment of a sum due by the payee to a third party was held not to be a change in position for the purposes of restitution and the sum founded on the change of lifestyle had been removed from the claim. There remained the defence of estoppel. The Appellant had acted to his detriment to a modest extent by the increased expenditure on his family which was not something he could recover. The detriment was modest in comparison to the gain which the Appellant would make if Scottish Equitable were held strictly to the representation as to the amount due under the policy, but it was not de minimis or even trivial. The strict application of what appears to have been decided in Howlett would have led to the operation of the estoppel to its full extent and so would have led to the total failure of the claim in restitution. Robert Walker LJ pointed out that Howlett could not be overruled by the Court of Appeal, being itself a decision of that Court.384 One way of resolving the impasse might have been to apply the exception of an indefinite nature mentioned by Slade LJ in the Howlett decision, namely where the sums sought to be recovered in restitution were so large as to bear no relation to any detriment which the recipient could possibly have suffered. It was predicted that the development of the law on a case-by-case basis would have the effect of enlarging rather than narrowing that exception.385 This was the way in which the Judge at first instance had decided the case 380 ibid, 579. 381 Phillip Collins v Davis [2000] 3 All ER 808, 825–26 (Jonathan Parker J). For decisions in Canada and Australia see below (n 396). 382 [2001] EWCA Civ 369, [2001] 3 All ER 818. 383 Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548. 384 Gordon Derby v Scottish Equitable Plc [2001] EWCA Civ 369, [2001] 3 All ER 818, para 44. 385 ibid, para 48.

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3.167  Estoppel by Representation and the Court of Appeal considered that reliance on the exception was a justified approach on the facts. 3.167  A further way of dealing with the pro tanto difficulty was put before the Court and accepted as ‘not only ingenious but also compelling’.386 The argument depended on the change of position defence to a claim in restitution which had been authoritatively established after Howlett was decided and so was not examined in that case. An example will show what is involved. If a payment is made of, say, £10,000 caused by an error of the payer and with a statement that the erroneous sum is payable, the payee may act by spending, say, £3,000 on a cruise and put the rest in a bank. He may be financially embarrassed if he suddenly finds he has to find the £3,000 which has been spent in order for him to repay that part of the overpayment. If an action was brought to recover the full £10,000 the payee might have the defence of change of position as regards the £3,000. On the basis that he would not have to pay that amount back. Any estoppel defence as regards a claim in restitution for the payment of the balance of £7,000 would then fail because the payee could not in these circumstances show any detriment which would flow from the payer being allowed to resile to that extent from his representation that £10,000 was due. There seems no flaw in this argument or logic when the circumstances permit it to apply. It could have been applied to the assumed facts of the Howlett case as the law of restitution now stands. It allows a fair and rational reconciliation of the law of estoppel by representation and the law of restitution where the logic can be applied to the facts. Robert Walker LJ described what has just been stated as his view as being only a tentative observation on a point not fully argued before the court.387 It is an argument which itself would have justified the conclusion reached in the Scottish Equitable case. The argument is not without its critics and it will be necessary to return to this matter when restitution and estoppel are considered together later in this part of the chapter.388 It can be argued that having regard to the limitation in the amount of the restitutionary claim in the Scottish Equitable case, the representee had not acted to his detriment at all and so failed to establish one of the essential elements of estoppel by representation. Of the overpayment of £172,452 (a) the payment of a part of the mortgage was not in law a detriment, (b) the sum of £9,662 on lifestyle improvement was not reclaimed, and (c) there was no expenditure of the balance. It seems that in reality Mr Derby obtained a benefit from the payment and representation since he was able to improve his lifestyle by nearly £10,000 by the use of money to which he was not entitled and which he was not asked to repay. 3.168  The difficulty created by the all or nothing proposition as enunciated in Howlett emerged again in a stark form in National Westminster Bank Plc v Somer International (UK) Ltd.389 The Defendants were mistakenly informed by the Bank that a sum of US $176,708 had been received by the Bank to the credit of the Defendants from an African-based company which owed money to the Defendants for goods supplied to that company. The amount ought to have been credited to the account of a different customer with a similar name to the Defendants. In reliance on this representation, the Defendants despatched



386 ibid,

paras 45–49. para 49. 388 See para 3.173 et seq. 389 [2002] QB 1286. 387 ibid,

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The Effect of the Estoppel  3.170 further goods to the company in the value of $13,150. There was no prospect of this last sum being recovered from the company. The Bank sought to recover in restitution the entire payment of $176,708. The Defendants relied on the Howlett principle as a complete defence to the claim. The Court of Appeal held that the Bank were entitled to recover the whole of the overpayment less the $13,150 detriment which the Defendants had suffered. What is of importance is the reason of the Court for reaching this obviously satisfactory result. The Court did not feel able to regard the Howlett case as overruled.390 However, the Court laid emphasis on the fact that estoppel by representation, as with a number of other forms of estoppel, stemmed from and was governed by considerations of justice and equity. The Court justified its conclusion by referring to what Slade LJ had said in Howlett of there being an exception to the all or nothing principle on the ground of injustice where there was a considerable disparity between the amount mistakenly paid and the amount of the detriment. As it was put by Clarke LJ, there were exceptions to the strict rule that an estoppel by representation cannot operate pro tanto and these exceptions are or included cases where it would be unconscionable or wholly inequitable to permit the recipient of money to retain the whole of it.391 The question of where this approach today leaves the rejection in principle of the pro tanto effect of an estoppel by representation is discussed next.392

(iv)  Conclusion on the Authorities 3.169  It is fairly apparent from this review of the authorities that the current law on the pro tanto operation of an estoppel by representation is in a less than totally satisfactory state. The root difficulty is that the Howlett decision is widely regarded as unsatisfactory, but under the system of legal precedent the decision must be applied in all courts except the Supreme Court. An effort is made here to summarise the present situation at least as far as the authorities go. 3.170 The Howlett decision states, as a matter of general legal principle, that a pro tanto operation of estoppel by representation is incorrect in law. There are a number of problems attendant on that decision. (a) If applied consistently and without any exception the decision is likely in some cases to lead to injustice and to windfall gains to persons asserting an estoppel which go well beyond avoiding any detriment suffered due to a representation. This is widely recognised. (b) The decision is not in fact supported by the previous decisions on which it is said to be based.393 (c) The decision to an extent conflates together two largely separate questions of law, namely the question whether a person asserting an estoppel has to show a certainty of detriment as opposed to just a significant risk of detriment, and the

390 ibid, para 66 (Peter Gibson LJ). 391 ibid, para 60. See also para 48 (Potter LJ); and para 68 (Peter Gibson LJ). 392 See para 3.169 for a conclusion on the present state of the authorities on estoppel; and para 3.178 et seq for a more general review of the law on the present subject, including the application of the law of restitution, as the law stands today. 393 See the observations of Potter LJ in National Westminster Bank Plc v Somer International (UK) Ltd [2002] QB 1286, para 45 (on Ogilvie v West Australian Mortgage Agency Corporation Ltd [1896] AC 257; and Greenwood v Martins Bank Ltd [1932] 1 KB 371, affirmed in the House of Lords at [1933] AC 51), and para 46 (on Skyring v Greenwood (1825) 4 B&C 281 and Holt v Markham [1923] 1 KB 504), three of the main decisions said in the Howlett case to support the decision reached in that case.

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3.171  Estoppel by Representation question of whether a pro tanto operation of the estoppel is permissible in an appropriate case.394 (d) The decision suggests that there may be two exceptions to the rejection of the pro tanto operation of an estoppel, one being where there is a sufficient disparity between the result of an unfettered operation of the estoppel and the amount of detriment suffered or to be suffered, and the other being the possibility of a court requiring some sort of undertaking for partial repayment by the representee of money which he has received before he is entitled to assert the estoppel. It is not apparent whether these are two separate exceptions or that the requirement of an undertaking for repayment will only arise where there is a sufficient disparity. The ambit of the exceptions, the necessary quantum of any disparity, and the circumstances in which an undertaking will be required, were left uncertain. (e) The decision sits uneasily with the defence of change of position in the law of restitution when an action is brought for the return of money paid under a mistake as established by the House of Lords after the Howlett case. (f) The decision appears to have been decided on hypothetical facts.395 (g) The decision has been rejected in other jurisdictions.396 There appears to be no decided case following the Howlett decision in which the principle stated in that decision has been applied with full and strict rigour and without recourse to the disparity exception. 3.171  Two methods of avoiding the full rigour of the Howlett decision have been suggested in subsequent authorities given that the decision binds all courts save the Supreme Court. One method is to concentrate on or extend the exception stated by Slade LJ and to conclude that any disparity, or any significant disparity, between the sum of money paid by mistake and the amount of the detriment suffered by the representee brings about a degree of injustice or unconscionability if the estoppel is applied without qualification and so justifies in such circumstances a pro tanto approach. The other method is to reason that in restitution cases where there is a successful defence of change of position to a part of the claim, there will necessarily be no detriment and so no basis in law for an estoppel. The second method, although logically impeccable where available on the facts, has been commended but not definitely approved or applied in any decided case.397 3.172  The first method, the invocation of unconscionability as a criterion, appears to have emerged as the best solution to the pro tanto question. It is said that the application of what may be called the unconscionability test does not involve the exercise of a discretion but provides a principled approach to the problem.398 A question which arises is when it will not be unconscionable, in the case of monetary payments here under consideration, to apply an all or nothing rule rather than a pro tanto approach. It seems that in any case where

394 See para 3.133 et seq. 395 The Howlett decision was described as a ‘procedural oddity’ by Peter Gibson LJ in National Westminster Bank Plc v Somer International (UK) Ltd [2002] QB 1286, para 66. Of course, once facts are stated the principle of law derived from those facts can be stated whether the facts are true or are hypothetical. The tradition of English law is that decisions of the court are reached on actual and not hypothetical facts. 396 RBC Dominion Securities Inc v Dawson (1994) 111 DLR (4th) 230 in Newfoundland and Empire Life Insurance Co v Neufeld Estate (unreported) 24 April 1998 in British Columbia. The concept of the minimum equity, that is the minimum relief required to do equity, as stated for example by Brennan J in the High Court of Australia in Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394, is also inimical to an all-or-nothing operation of an estoppel. See ch 6, para 6.19, for an account of this decision. 397 See, however, the comment on this method referred to in para 3.166. 398 National Westminster Bank Plc v Somer International (UK) Ltd [2002] QB 1286, para 61 (Clarke LJ).

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The Effect of the Estoppel  3.174 the amount of the detriment is less than the mistaken payment, otherwise than by a trivial amount, justice will require a pro tanto approach to the effect of an estoppel. The second method, the operation of the change of position defence in restitutionary claims, appears to remove any detriment to the representee and so to remove any scope for the operation of an estoppel. One is therefore tempted to conclude on this last basis that in situations of the type here under discussion estoppel by representation may have little if any part to play in reaching a result in proceedings for the recovery of money paid under a mistake, since the decision can be reached on the application of the change of position defence to the claim.399 Possibly what is needed is not the formal removal of estoppel from an area of law by judicial decision, but the recognition that when a claim in restitution is made in the circumstances here discussed it is likely that any estoppel would be applied on a pro tanto basis and that so applied an estoppel would not lead to a result in any way different from the result which would be reached by the application of all aspects of the law of restitution.

3.  Estoppel and Restitution 3.173  Certain of the authorities on the possible pro tanto operation of estoppel concern the interrelationship between estoppel by representation and the principle of the law of restitution that money paid under a mistake is generally recoverable. The typical situation is that A by mistake pays a sum of money to B stating to B that it is due to him and B then expends the money or a part of it in such a way that what has been expended cannot be recovered by him. A seeks to recover the money but is met with the defences that by reason of the expenditure B has changed his position or that by reason of his statement A is estopped from asserting that the payment to B was not due. Changes in the law of restitution over the last few decades which have establishing that money paid under a mistake of law as well as under a mistake of fact may be recovered in restitution proceedings, and that a change of position by the recipient of a mistaken sum is in principle a good defence, have affected the possibility of conflict between estoppel and restitution as separate legal doctrines. The underlying problem is this. If, in the above situation, B has expended a part of the money and estoppel cannot work in a pro tanto fashion, then under the law of restitution C may have a defence of change of position but only as regards the amount that he has expended whereas under the law of estoppel A would be estopped from asserting that any of the money was not due to B. One possible conclusion is that in these circumstances the estoppel may trump or render purposeless the defence to the claim in restitution of change of position.400 3.174  Certain points may be made which indicate that in some cases there may be no conflict between estoppel and restitution. Not every payment of money by mistake is accompanied by a representation that the sum is properly due and payable to or has been credited to the payee. Without a precise and unambiguous representation that the sum is due there

399 This is the view put forward in A Burrows, The Law of Restitution, 3rd edn (Oxford University Press, 2010) 557. 400 The present issue is discussed in Goff & Jones, The Law of Unjust Enrichment, 9th edn, (Sweet & Maxwell, 2016) para 3.04 et seq.

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3.175  Estoppel by Representation can be no estoppel by representation.401 The mere payment of a sum of money to a recipient is not enough and there must be some accompanying express or implied representation that the money is due to the recipient. Sums of money are not usually paid without some explanation and a court may not find it difficult to find that a representation is implied, even if not expressly made. It may occur that the payee has expended the whole of the payment in a way which makes the money irrecoverable by him. In that event, the defences of change of position and of estoppel may combine to lead to the same result which is that none of the money paid is recoverable by the payer. The expenditure by the payee may not be a detriment to him. For example, he may have used some of the money paid to him to pay off a debt and the payment of a debt may not be a detriment.402 The purchase by the payee of an asset such as shares which are readily saleable will not be a detriment unless the asset has declined in value. There may be no estoppel because the representation that money was due to the payee may not have been something on which he relied in deciding to incur the expenditure.403 3.175  Unless the problem can be avoided for any of the reasons mentioned in the last paragraph, or for some other reason, there will be an inevitable tension between an all or nothing operation of an estoppel and a defence of change of position to a part of the claim in restitution for recovery of a sum of money paid under a mistake. The easiest resolution of the conflict would be for Howlett to be overruled. Unless or until this is done by the Supreme Court, the practical position is that in most cases the defence of change of position is likely to prevail and to dictate the end result of legal proceedings. There are two reasons for this conclusion. 3.176  First, it appears from decisions following Howlett that courts will readily apply an estoppel by representation in a pro tanto fashion where it is just and equitable to do so. This can be done in reliance on an exception stated in the Howlett decision to the general proposition that estoppel by representation cannot have a pro tanto operation. In cases where the detriment to the payee is significantly less than the amount of the mistaken payment to him, it will usually be just and equitable that an estoppel should have only a pro tanto effect. By this means a conflict between the principles of the law of restitution and the law of estoppel is avoided. The conflict is avoided by depriving the Howlett decision of much of its practical effect. The essential element of unconscionability in estoppel by representation can be utilised to bring about this result. 401 Transvaal & Delagoa Bay Investment Co Ltd v Atkinson [1944] 1 All ER 579, 585. In National Westminster Bank Plc v Somer International (UK) Ltd [2007] QB 1286 the Judge at first instance made no finding on the nature or content of any representation made by the Bank but the Court of Appeal said that the evidence showed that the payee had been told that the money had been received by the Bank and was held to the credit of an account of his with the Bank. 402 It is said that in general it is not a detriment to use money to pay off a debt which would have to have been paid off at some time in any event: Gordon Derby v Scottish Equitable Plc [2001] EWCA 369, [2001] 3 All ER 818, para 35 (Robert Walker LJ); RBC Dominion Securities Inc v Dawson (1994) 111 DLR (4th) 230. It is easy to imagine circumstances which would create an exception to such a rule, such as when the sum received was used to pay off a mortgage on a house and when the payee on being called on to repay the sum had no means of doing so and could not obtain a new mortgage or could only obtain a new mortgage on less advantageous terms. In such a case, the payee might have to sell his house in order to obtain the money to repay the sum mistakenly paid to him and this would surely be an instance of a detriment. 403 eg, a rich man may have been credited by mistake with a minor sum and subsequently decided to book a cruise but in circumstances where the receipt of the minor sum may have been of little financial significance to him and he would have booked the cruise in any event. Reliance on a representation is an essential requirement of an estoppel.

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The Effect of the Estoppel  3.178 3.177  Secondly, resort might be had to the line of reasoning described as ingenious and convincing by Robert Walker LJ in Gordon Derby v Scottish Equitable Plc.404 In summary, that reason is that where the payee is required under the law of restitution to pay back only a part of the sum received due to his reliance on a change of position defence, he suffers no detriment from the representation made to him so that there is no scope for the operation of an estoppel.405 This line of reasoning is not the subject of any binding decisions of the courts but it is a cogent line of reasoning which can be described as neatly side-stepping any conflict between estoppel and restitution where the facts support the reasoning.406

4.  The Present Law 3.178  Few would dispute that on one important matter, the possibility of an estoppel by representation operating in a pro tanto fashion in an appropriate case, the law is not in a wholly clear or satisfactory state. The decision of the Court of Appeal in Avon County Council v Howlett407 appears to establish, as a general rule, that the estoppel cannot operate in this fashion, and later decisions have accepted that Howlett is a decision which binds courts (apart of course from the Supreme Court) in subsequent cases. Despite this situation, more than one means has been found or suggested so as heavily to qualify the impact of the Howlett rule in appropriate cases. A particular difficulty which has been found is that of reconciling the Howlett decision with the subsequently established rule of the law of restitution that a change of position by the payee may constitute a defence to a claim in restitution for the return of money paid under a mistake. Following the above review of the problem and of the authorities, the most satisfactory way of describing the law as it now stands on the present aspect of the general operation and effect of estoppel by representation may be by summarising the situation in law under four propositions.

404 [2001]

EWCA 369, [2001] 3 All ER 868, paras 45–49. reasoning is described in more detail in para 3.167. This argument was commented on by Clarke LJ in National Westminster Bank Plc v Somer International (UK) Ltd [2002] QB 1286, para 61, where it is described as not markedly different from the argument discussed in para 3.176. 406 The reasoning is queried in Goff & Jones, The Law of Unjust Enrichment, 9th edn (Sweet & Maxwell, 2016) para 30.14 where it is said that rejection of an estoppel due to the absence of detriment in the circumstances described is conditional on the operation of the defence of change of position to a claim in restitution. The payee, it is said, may not plead that defence and may prefer to rely on estoppel as a single defence to a claim. Certainly a defendant to a claim in restitution for money mistakenly paid cannot be made to plead a particular defence if he does not wish to do so, but the point is that if he could plead the defence of change of position he would suffer no detriment. If a representee is able readily to avoid a detriment which would otherwise result from the representation but declines to do so he cannot credibly then allege that he would suffer the detriment if the representor was allowed to go back on his representation. For example, if a recipient of a sum of money mistakenly paid to him gave a half of it to charity and, on hearing of the mistake, the charity offered to pay the amount back to the recipient, the recipient could not say that he suffered detriment because he refused to accept that offer made to him. Another possibility is that a claimant may voluntarily limit the claim to an amount after deduction of any irrecoverable expenditure by the representee. It is difficult to see how the representee could show detriment in such a case. This last possibility is to some extent illustrated by the facts in Gordon Derby v Scottish Equitable Plc [2001] EWCA Civ 369, [2001] 3 All ER 818, as explained in para 3.165. 407 [1983] 1 WLR 605. 405 The

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3.179  Estoppel by Representation

(i)  The First Proposition: The General Effect of the Estoppel 3.179  In most cases, the effect of the estoppel is straightforward. The representation which founds the estoppel must be a precise and unambiguous statement of some matter. Consequently, the estoppel operates in legal proceedings involving the representor and the representee to prevent the maker of a statement from denying the truth or any part of the truth of the statement. The statement is taken for the purposes of the proceedings and these parties to be fully accurate in all respects. The person asserting the estoppel must establish that the representation was made and made to him, that it was intended to be acted on, and that he did reasonably act in reliance on it such that there is a significant risk that he will suffer significant detriment if the maker of the statement can go back on the content of the statement. The estoppel does not operate in other legal proceedings as between other parties.408 A person is not of course bound to assert an estoppel if he does not wish to do so. If A has made an untrue statement to B and the other ingredients of estoppel are present then B has a choice. He may if he wishes hold A to what A has stated in reliance on an estoppel so that for the purposes of the proceedings between A and B, that which A has stated is taken to be true although in fact it is known to be untrue. Alternatively, B may himself assert that what A has said is untrue and attempt to prove that it is untrue. Estoppel by representation should therefore be regarded as a right available to the representee, but not as a right which he is bound to assert and not as something which in any way binds the court unless the representee chooses to assert his right.

(ii)  The Second Proposition: Risk of Detriment 3.180  It has been explained earlier that a representee asserting an estoppel does not have to show that there is a certainty that he would suffer detriment if the representor could resile from his statement. It is enough that the representee shows that there is a significant risk of such detriment.409 The situation where there is a risk of detriment often arises where what the representee has lost as a result of the representation is a chance, for instance a chance of recovering money in legal proceedings which he would or might have initiated had there been no representation. A good example of this type of situation is Knights v Wiffen410 in which the purchaser of goods who had paid the vendor but had not obtained the goods abstained from demanding his money back because of a representation by a third party that that party held the goods to the order of the purchaser. It was not necessary to investigate what were the prospects of the representee getting the whole or a part of his money back if he had pursued the vendor and had not rested secure on the truth of the representation. Other cases involving the same principle have arisen from a failure to inform a bank that cheques had been forged, so creating a representation inferred from silence, where the detriment was that the bank was not able to bring proceedings in good time against the forger. It was not necessary to investigate in detail whether and to what extent an action against the forger brought in good time would have resulted in the recovery of money paid 408 The possible operation of the estoppel between successors in title of the representor and the representee is considered in ch 2, part (I). 409 See para 3.125 et seq. 410 (1870) LR 5 QB 660. See para 3.130.

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The Effect of the Estoppel  3.182 under the forged cheques.411 This general approach has led to statements in more recent cases that courts asked to apply an estoppel should not be too demanding in requiring exact proof or a precise quantification of the amount of any detriment which might be suffered by a representee in the absence of an estoppel.412 One way in which a person might act if told that he was being paid a substantial sum of money might be to alter his lifestyle and to increase his general expenditure. It might in some cases be unreasonable to require that person to itemise the exact amount and date of any individual purchases or other acts which brought about his increased expenditure.

(iii)  The Third Proposition: General Rejection of the ‘Pro Tanto’ Effect 3.181  The ratio of the decision of the Court of Appeal in Avon County Council v Howlett413 is that as a general rule estoppel by representation cannot operate pro tanto. The estoppel operates in an all or nothing way. Either the representor is held to the truth and the whole truth of what he has stated or there is no estoppel. This decision is binding on all courts except the Supreme Court. Such a rule has been considered in later cases to be unfortunate since it may in some instances lead to a patently unfair result. Nonetheless, it is a starting point and under the doctrine of precedent must be accepted as such.

(iv)  The Fourth Proposition: Return of a ‘Pro Tanto’ Effect 3.182 The Howlett decision is less clear-cut than it might at first appear. The Court left open the possibility that the unqualified all or nothing operation of the estoppel might lead to injustice in certain cases.414 The obvious example of such injustice would be where A paid a sum of money by mistake to B stating that the amount was due to B and B acted to his detriment by expending a part of the sum which he could not recover so that he would suffer financial difficulty if he had to repay that part to A. It is on the face of it unjust that B should be able to use an estoppel so as to retain the whole of the amount paid, yet an all or nothing operation of the estoppel dictates that result. Decisions following the Howlett decision show that where such a result is unconscionable or unjust, a court is entitled, relying on what has been called an exception to the Howlett principle, to order the operation of the estoppel on a pro tanto basis.415 In National Westminster Bank Plc v Somer I­ nternational (UK) Ltd416 Clarke LJ said that the exception could be formulated as that the estoppel should 411 Ogilvie v West Australian Mortgage and Agency Corporation Ltd [1896] AC 257; Greenwood v Martins Bank Ltd [1932] 1 KB 371, affirmed by the House of Lords at [1933] AC 51; Fung Kai Sun v Chan Fui Hing [1951] AC 489 (forged mortgages). 412 Avon County Council v Howlett [1983] 1 WLR 605, 621, 627 (Slade LJ); National Westminster Bank Plc v Somer International (UK) Ltd [2002] QB 1286, para 68 (Peter Gibson LJ). 413 [1983] 1 WLR 605. 414 ibid, 609–10 (Cumming-Bruce LJ), 611–12 (Eveleigh LJ). Slade LJ (at 624–25) thought that where it would be unjust that the payee should by reason of an estoppel be entitled to retain the whole of a sum paid to him by mistake, the court might be able to extract some form of undertaking from the payee to repay a part of the money paid by mistake before the estoppel was allowed to operate. This suggestion does not appear to have been taken forward in later cases. 415 See Gordon Derby v Scottish Equitable Plc [2001] EWCA Civ 369, [2001] 3 All ER 818; National Westminster Bank Plc v Somer International (UK) Ltd [2002] QB 1286. 416 [2002] QB 1286, para 58.

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3.183  Estoppel by Representation not ­operate in full when it would be clearly inequitable or unconscionable for the payee to retain a balance in his hands.417 3.183  In these circumstances, it is plainly incorrect today to say that estoppel by representation cannot as a matter of law ever operate in a pro tanto way. Like the equitable estoppels, promissory and proprietary estoppel, it can operate where necessary in a more flexible way. The true rule today is that in general estoppel by representation operates in full so that the representor is held fully to the letter of what he has stated but that where such an operation would be unjust or unconscionable the court is able to order a pro tanto operation. This rule does not mean that there will be some pro tanto operation where the detriment is a loss of a chance or there is some other detriment which cannot be readily quantified. However, where the detriment can be quantified with reasonable certainty and accuracy as a monetary sum, and an operation of the estoppel precisely in accordance with the statement of the representor would provide to the representee a monetary gain substantially greater than that needed to avoid that detriment, the estoppel will be operated in a pro tanto fashion so as to allow the representee to avoid the detriment but no further. The law as so stated is plainly more satisfactory than a rigid all or nothing operation of the estoppel in all circumstances. 3.184  The law as just stated avoids any conflict between the operation of an estoppel and the law of restitution and the now established change of position defence to a claim in restitution for the return of money paid by mistake. Thus, if A pays £10,000 to B by mistake telling B that that sum is due to B, and B spends £4,000 of it on some matter such as the cruise often given as an example which he could not recoup, there is likely, in proceedings in restitution to recover the £10,000, to be a defence of change of position in relation to the sum of £4,000 leaving only £6,000 recoverable from B. If B pleads an estoppel based on A’s statement that £10,000 was due to B, any estoppel will be confined on a pro tanto basis to £4,000 so avoiding any conflict with the principles of restitution. An alternative way of reaching the same result is to reason that given the change of position defence to £4,000 of the claim the representation has not caused any detriment to B so that no estoppel can be established.418 It is possible to argue that, as a result of later decisions and for the reasons just stated, the principle stated in Howlett has been elided away to virtual insignificance.

(G)  Contractual Estoppel 1.  The Meaning and Origin of the Expression 3.185  English law is replete with forms or types of estoppel.419 A question sometimes raised in English and Australian decisions is whether and to what extent these various forms 417 It is not clear why, if there is such a wide exception, it was not applied on the facts of the Howlett case such that Avon County Council would have been entitled to recover that part of the money paid in error to Mr Howlett which had not been expended by him to his detriment (£461, after the deduction of £546 which was the detriment from the sum of £1,007 mistakenly paid). 418 This reasoning, based on what was said by Robert Walker LJ in Gordon Derby v Scottish Equitable Plc [2001] EWCA Civ 369, [2001] 3 All ER 818, paras 45–49, is more fully explained in para 3.167. 419 An itemisation of the various descriptions given to estoppels and a brief description of the meaning of each of them are given in ch 1, para 1.6 et seq. As many as 23 descriptions are considered. Lord Denning in

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Contractual Estoppel  3.186 of estoppel, or some of them, can be brought within one general principle and this question is discussed separately in this book because of its general application to the doctrine of estoppel.420 Even if such an overall principle cannot be achieved, it appears desirable that similar elements of different forms of estoppel should at least have a uniform status and application when that is possible. For instance, a general requirement of injustice, and a general statement of the matters which must normally be shown if injustice is to be established, seem common to estoppel by representation, to promissory estoppel, to proprietary estoppel and to estoppel by convention.421 The oldest forms of estoppel, estoppel by record, estoppel by deed and estoppel by representation (derived from estoppel in pais), go back to the time of Coke and possibly to the time of Littleton in the fifteenth century who based his writings on the Year Books.422 The most modern development has been the recognition of estoppel by convention as a separate form of estoppel, mainly by decisions in the last few decades. Perhaps the last thing one should seek today is the emergence of yet a further and separate form of estoppel, especially if that can easily be avoided. It is in this general and historical context that the possible emergence of what is called contractual estoppel, or estoppel by contract, should be viewed. It is convenient to discuss contractual estoppel here in connection with estoppel by representation with which it is sometimes compared. The subject also has a connection with estoppel by convention.

(i)  The Freedom of Contract Principle 3.186  It is a fundamental principle of English law that if parties enter into a contract they may include within it such provisions as they wish and those provisions will be enforced against each of them by a court.423 There are obvious exceptions to this generality, such as contracts contrary to public policy, for instance a contract to commit a crime, or contracts which purport to contradict statutory provisions, which are not enforceable, but the fundamental principle remains. Consequently, it must in principle be possible for parties to a contract to agree by a term of their contract that a certain state of facts exists at the time of the contract whether that term does or does not state the true facts at that time. Such a term may also state that some event or state of facts occurred or existed in the past even if in truth it did not.424 The courts will in principle enforce such contractual provisions in the ordinary way. There is no reason why they should not be enforced. Such provisions may be of considerable practical or commercial utility and may avoid future disputes. An example in a commercial context would be a term of a contract that the nationality of a ship was British.

McIlkenny v Chief Constable of the West Midlands [1980] QB 283, 317, referred to a number of these forms and observed that estoppel as a whole could be regarded as a big house with each form of estoppel being one room within it. 420 See ch 2, part (G). The suggestion that the particular requirements and limitations of the various forms of estoppel can be ignored, and the matter approached as the application of one general and overarching doctrine, is far from being of only academic interest. It was, for example, a foundation of the unsuccessful plea of an estoppel advanced by the Claimants in Baird Textile Holdings Ltd v Marks & Spencer Plc [2001] EWCA Civ 274, [2002] 1 All ER (Comm) 237. 421 See para 3.138 for a discussion of this question in respect of estoppel by representation. 422 The Year Books are records, mainly of discussions on pleading, in medieval cases between 1270 and 1535. 423 Springwell Navigation Corporation v JP Morgan Chase Bank [2010] EWCA Civ 1221, para 143 (Aikens LJ). 424 ibid.

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3.187  Estoppel by Representation 3.187  A term of a contract of the present nature may extend to future facts which may become relevant to the operation of the contract as well as to present facts and past events. A frequent example of this is a rent review clause in a lease in which it is stated that for the purposes of assessing the reviewed rent at some future review date it shall be assumed that the tenant has at that date complied with his obligations under the lease and that the premises are in proper repair in accordance with those obligations (the purpose is, of course, to prevent the tenant securing a reduced rent by reason of his own breach of covenant). A further example is that where a property has to be valued in the future, for instance if an option to acquire it is exercised, the floor area is stated in the option agreement to be of a specified amount. This avoids the need for re-measurement of the floor area which will be taken to be as stated even if it can be proved that the area is in truth different. The parties may include, as a term of their contract, some assumption as to future events such as an assumption that planning permission will or will not be granted for a particular development where this is relevant to some valuation to be carried out or to some other matter and a court will give effect to this assumption. Plainly, an agreed provision of the nature stated in this and the preceding paragraph will usually be inserted into a contract because the parties believe it to be correct or because they are unsure whether it is correct or not and wish to resolve the matter and avoid future disputes. It seems that the courts will give effect to the agreed term even if both parties knew at the time that it was incorrect.425 There is no ground of public policy which prevents parties agreeing for the purposes of their contract that a fact is true when it is known to them to be untrue.426 3.188  Nor as the law has now developed does there seem any reason in principle why the parties to a contract should not agree that the law is to a certain effect even if in truth the law is to a different effect. The law of estoppel by convention may operate to bind parties to a common and shared assumed state of law, such as the meaning of a provision in a contract which they have previously made even if that meaning is incorrect on a true interpretation of the contract.427 The assumed incorrect view of the law may for these purposes extend to general propositions or principles of law, such as the circumstances in which a derivative interest in property automatically ends when the superior interest out of which it was derived ends.428 If the parties to a contract can be bound by an estoppel to a shared assumption that the law is to a certain effect when that assumption is not itself a contractual term, it should rationally follow that the parties to a contract can be bound by an express term of the contract which states that the law is to be taken for the purposes of their contract to be to a certain effect even if that stated proposition of law is wrong. 3.189  In this context, it should also be mentioned that recent decisions indicate that, contrary to the previous and traditional view, an estoppel by representation can be founded

425 ibid. Prime Sight Ltd v Lavarello [2013] UKPC 22, [2014] AC 436. See para 3.191. 426 Other principles of law, such as rectification, may come into play if one party who knows the stated fact to be untrue is aware of the error of the other party in its belief that the fact is true. The situation here being discussed where the agreement as to factual matters is in the contract between the parties is different from a situation in which, without there being any such contractual term, the parties to litigation ask the court to assume as true facts which they and the court know to be untrue. In the latter case the proceedings become hypothetical and the court may refuse to decide them: see Avon County Council v Howlett [1983] 1 WLR 605 discussed in para 3.158. 427 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84. 428 PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994 (Ch), [2004] Ch 142.

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Contractual Estoppel  3.191 on a statement of law with the result that a court may be bound to take as correct and to apply to the case before it a proposition of law which it knows is incorrect.429 If such a result can occur when one party has made an incorrect statement of law to another party, it seems rational that the two parties should be able to agree that their contract or other relationship shall be governed by an incorrect proposition of law so that effect has to be given to that incorrect proposition by a court.430 3.190  There are limits to the principle as here stated. The agreed state of facts or law operates only for the purposes stated in the contract or, if no specific purpose is stated, for the purposes of the contract generally. It will not bind or affect the parties to the contract in relation to any other matter.431 Also, the agreed statement only operates as between the parties who made it and cannot bind or benefit third parties. To take an example, a landlord may let premises to a tenant who sub-lets the premises to a sub-tenant at a high rent. The general law is that on the forfeiture of a headlease any sub-tenancy carved out of that headlease also determines.432 The landlord and the tenant may agree in the headlease that if the headlease is determined by forfeiture for breach of covenant then for the purposes of assessing damages against the tenant the law is that any sub-tenancy shall be taken to continue despite the rule of law that it ends on forfeiture. The landlord and the tenant will be bound by this stated effect of the law even though it is incorrect, but the sub-tenant will not be bound by it and cannot take advantage of it.433 Nor can a contractual term contradict a statutory provision or the purpose of a statutory provision. Equally, an estoppel of any form cannot have this effect whether it is called a contractual estoppel or anything else.434 3.191  The proposition that, subject to matters such as illegality and conflict with statute, parties to a contract are entitled to stipulate that any matter of fact, and possibly of law, is to be taken for the purposes of their contract to be correct has recently been endorsed by the

429 See para 3.18 et seq. 430 There are limits to such a possibility in the case of statutory provisions. A further issue to be borne in mind in cases of the sort here discussed is the ability of a court to refuse to accept some admitted or agreed proposition of law put before it, and instead to apply its own view of the law which may be different from that accepted by the parties. Courts are not bound to accept propositions of law agreed by the parties in proceedings before the court or accepted as true by one party against its own interest. An example, discussed in ch 9, is that in Johnson v Gore Wood & Co [2002] 2 AC 1, 60, Lord Millett seemed inclined not to accept a concession made that a person was a privy of a company which he controlled for the purposes of estoppel by record. 431 In the example given in para 3.187, the landlord and the tenant will be bound by the agreed statement that the property is in good repair for the purpose of assessing its rental value at the rent review valuation date, but will not be so bound if the landlord takes steps to enforce the tenant’s repairing covenant. See the citation in para 3.192 from Peekay Intermark Ltd, Harish Pawani v Australia and New Zealand Banking Group Ltd [2006] EWCA Civ 386, [2006] 2 Lloyd’s Rep 511, para 56, where Moore-Bick LJ referred to an agreement on a certain state of affairs binding the parties to a contract ‘at least so far as concerns those aspects of their relationship to which the agreement was directed’. 432 Great Western Railway v Smith (1876) 2 Ch D 235. A sub-tenant may apply for relief against forfeiture in these circumstances. 433 The sub-tenant may be happy at the early determination of his sub-lease if the rent under it is considerably higher than the prevailing rental value for such a property at the time of the forfeiture. It is possible that the landlord and the tenant and the sub-tenant enter into a contract, perhaps as part of a licence to sub-let, to the above effect. If so presumably on the forfeiture of the headlease the sub-tenancy will continue with the sub-tenant becoming the direct tenant of the landlord, and that this will occur even without a court granting relief against forfeiture to the sub-tenants. 434 Johnson v Moreton [1980] AC 37; Keen v Holland [1984] 1 WLR 251; Prime Sight Ltd v Lavarello [2013] UKPC 22, [2014] AC 436. This principle is discussed as a matter applicable to estoppel generally in ch 2, part (F).

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3.192  Estoppel by Representation Privy Council in a decision concerning estoppel by deed.435 A deed of assignment of a lease recorded that the purchase price had been paid when to the knowledge of the parties it had not at that time been paid and the issue was whether an estoppel by deed arose so preventing the Official Trustee, after the bankruptcy of the transferor, from presenting a petition for the winding up of the transferee company on the contention that the purchase price was unpaid and was due from the transferee.436 One aspect of this decision is that it confirmed the rule, as established in earlier authority,437 that a party to a deed was estopped from contradicting the terms of a statement of fact in the deed even though both parties knew at the time of the execution of the deed that the fact stated was incorrectly stated. The same rule applies to what is called estoppel by contract. A second aspect of the decision is that the Court considered the question of whether the giving effect by a court of some proposition of fact or of law agreed between parties could be regarded as subsumed within some wider principle of law which encompassed estoppel by deed, estoppel by representation and what is now sometimes called estoppel by contract. The Court declined to do this on the ground that it was a step too far and in particular might be incompatible with the operation of the doctrine of consideration as an essential component of the law of contract. This second aspect of the decision is discussed in more detail in chapter four on estoppel by deed where it is suggested that there are good reasons for not making the wide synthesis of forms of estoppel and principles of law as suggested.438

(ii)  The Rise of Contractual Estoppel 3.192  The law as so far stated is the ordinary application of the law of contract and of the basic principle that parties are, subject to certain limits, free to contract or not to contract as they wish. This basic principle, developed in the nineteenth century and before, remains today although of course it is subject to very large legislative inroads such as in the law of employment and the law against discrimination on certain grounds. As suggested above, the enforceability of a contractual provision which states the existence of a state of fact, and possibly of law, is an aspect of the basic principle of freedom of contract. Nonetheless, a practice has grown up of describing this situation, at any rate in certain contexts, as a contractual estoppel or as a contract giving rise to an estoppel. The use of this term and its meaning are explained most clearly in Peekay Intermark Ltd, Harish Pawani v Australia and New Zealand Banking Group Ltd.439 This case was a claim for damages for misrepresentation under section 2(1) of the Misrepresentation Act 1967 by the Claimant who had through the agency and assistance of the Defendants acquired short-term loans issued by the Russian Government. That Government in 1998 announced a moratorium on certain of its debt obligations with the result that the Claimant in the end obtained only a small fraction of

435 Prime Sight Ltd v Lavarello [2013] UKPC 22, [2014] AC 436. 436 See ch 4 for estoppel by deed. 437 Horton v Westminster Improvement Commissioners (1852) 7 Exch 780; Ashpitel v Bryan (1863) 3 B & S 474, (1864) 5 B & S 723. See also Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641, 676 (Dixon J in the High Court of Australia); and Ferrier v Stewart (1912) 15 CLR 32. See ch 4, para 4.34. 438 Ch 4, para 4.62. See ch 2, part (G) for a general discussion on the possible unification of forms of estoppel into one single and overall principle. 439 [2006] EWCA Civ 386, [2006] 2 Lloyd’s Rep 511.

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Contractual Estoppel  3.194 the amount invested. It was held that there was no representation by the Defendants which induced the Claimant to make the investment. The Defendants had a further argument which was that there could be no misrepresentation or inducement which could be asserted because of the terms of a document issued by the Defendants which the Claimant had read and which stated, inter alia, that the Claimant prior to each transaction had determined that the transaction was suitable. The effect of this contractual provision was said to be an agreement between the parties that as a matter of fact the Claimant had not been induced to make the investment by any representation made by or on behalf of the Defendants. It was held that the Defendants were also entitled to succeed on this ground. The law is succinctly stated in a paragraph of the judgment of Moore-Bick LJ: There is no reason in principle why parties to a contract should not agree that a certain state of affairs should form the basis for the transaction, whether it be the case or not. For example, it may be desirable to settle a disagreement as to an existing state of affairs in order to establish a clear basis for the contract itself and its subsequent performance. Where parties express an agreement of that kind in a contractual document neither can subsequently deny the existence of the facts and matters upon which they have agreed, at least so far as concerns those aspects of their relationship to which the agreement was directed. The contract itself gives rise to an estoppel: see Colchester Borough Council v Smith [1991] Ch 448, affirmed on appeal [1992] Ch 421.440

Chadwick LJ agreed that the document operated as a contractual estoppel which prevented the Claimant from asserting in litigation that the Claimant had not in fact read and understood the document.441 3.193  The decision of the Court of Appeal in Colchester Borough Council v Smith442 referred to in the last citation concerned a simple agreement to compromise a dispute. A Mr Tillson claimed that he had acquired a possessory title by 12 years’ adverse possession of land owned by the Council. This was disputed and the parties entered into a compromise agreement under which a lease was granted to Mr Tillson who as a term of the agreement acknowledged that he had no possessory title to the land. The Council succeeded in an action for possession against persons who claimed that they were in occupation by the permission of Mr Tillson and by virtue of his possessory title. The decision appears to be no more than an ordinary instance of a compromise of a dispute made in an ordinary enforceable agreement. Dillon LJ, however, said that Mr Tillson was estopped by the agreement which he had made from going back on it and that this might be labelled ‘estoppel by agreement or estoppel by convention’.443 3.194  Following the Peekay decision,444 the practice of describing provisions in contracts of the character here under discussion as creating a contractual estoppel has gained ­traction. The decisions, as with Peekay, often relate to a provision in a contract agreeing and ­acknowledging that a party had not been induced to enter into the contract by

440 ibid, para 56. 441 ibid, para 70. 442 [1992] Ch 421. 443 ibid, 435. Estoppel by convention is of course an established form of estoppel which does not depend on a contract for the enforcement of the assumed state of fact or of law which is the convention. Estoppel by convention is explained in ch 5 and such a convention is distinguished from a contract in ch 5, para 5.43. 444 [2006] EWCA Civ 386, [2006] 2 Lloyd’s Rep 511.

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3.195  Estoppel by Representation a ­representation. In one case,445 a distinction was made between ‘contractual estoppel’ and ‘evidential estoppel’ with the latter being a name for an estoppel by representation. In another case,446 a clause in a contract that the buyer had not relied on a representation made by the seller was said to create a contractual estoppel. Foodco UK Ltd v Henry Boot Developments Ltd447 was a decision in which tenants of commercial properties asserted that they were induced to enter into the leases by representations made by the landlords and one of the grounds for rejecting that claim was a provision in the agreements for lease which stated that the tenant acknowledged that it was entering into the agreement ‘not in reliance on any representation or warranty whatsoever’. Lewison J referred to the distinction between contractual estoppel and evidential estoppel and observed that the relevant difference between the two, for the purposes of the case before him, was that the party asserting a contractual estoppel did not have to prove that he believed the truth of what was stated in the contract.448

2.  ‘No Representation’ or ‘No Inducement’ Clauses 3.195  Most of the recent decisions on what is called contractual estoppel have centred on clauses in contracts which state that one party or both parties have not entered into the contract by reason of a representation made.449 A foundation of the law of misrepresentation is an untrue statement made to a person which has induced that person to enter into a contract with the maker of the statement. As a result, clauses of the above nature aim to prevent a party to a contract claiming rescission of the contract or claiming damages under the Misrepresentation Act 1967 by reason of a representation made to that party. Whatever exact language is used, the provision in question generally prescribes an agreed state of affairs, either that no representation has been made to a party, or that a party has not been induced to enter into a contract by any representation made to it, or both.450 Clauses of this type have engendered two aspects of the law which are relevant to the meaning and status of contractual estoppel. 3.196  The first aspect is that the enforcement in accordance with their terms of ‘no representation’ or ‘no inducement’ clauses is not a separate matter or a special matter, but is an illustration of the principle that parties to a contract may agree what they wish and that normally effect will be given to their agreed and stated wish by a court. As stated earlier, one of the matters which the parties may agree is that some particular factual situation did or

445 Trident Turboprop (Dublin) Ltd v First Flight Couriers Ltd [2008] 2 Lloyd’s Rep 581 (Aikens J). 446 Bottin International Investments v Venson [2006] EWHC 3112 (Ch) (Blackburn J). See also Raiffeisen Zentralbank Osterreich AG v Royal Bank of Scotland Plc [2010] EWHC 1392 (Comm), [2011] 1 Lloyd’s Rep 123 (Clarke J). 447 Foodco UK Ltd v Henry Boot Developments Ltd [2010] EWHC 358 (Ch). 448 ibid, para 170. A party asserting an ordinary (or evidential) estoppel by representation will not succeed if he is aware of the untruth of the representation since he will not in those circumstances be able to show an essential element of the estoppel which is that he acted in some way in reliance on its truth. 449 An exception is the decision which appears to have been one of those which initiated the description of clauses in a contract as creating an estoppel by contract, Colchester Borough Council v Smith [1992] Ch 421. See para 3.193. 450 It is not sufficient for this purpose to agree that a representation shall not take effect as a term of the contract since this does not prevent the representation taking effect as a representation which induced the representee to enter into the contract: BskyB Ltd v BHP Enterprise Services UK Ltd [2010] EWHC 86 (TCC).

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Contractual Estoppel  3.197 did not exist at the time of the contract or had or had not existed at some previous time, and for the purposes of their contract and its operation effect will be given to what is so agreed whether it is correct or not and, indeed, even if the parties knew that it was not correct.451 To take an extreme case, if the parties agree that for the purposes of their contract ­Auckland is nearer to London than is Paris, that untrue fact will be taken to be true as between the parties for the purposes of the contract. An agreed statement that no representation has been made, or that the contract has been entered into otherwise than in reliance on any representation, or both, is but an example of an agreed state of a present fact or a past event. There is no reason why the parties cannot agree this fact if they so wish and no reason why a court should not give effect to their agreement on the simple basis that what is being enforced is an agreed contractual term.452 3.197  The second aspect is something which is of importance for the status and meaning of contractual estoppel. The forms of reliance-based estoppel, estoppel by representation, promissory estoppel, proprietary estoppel and estoppel by convention, require as elements of the estoppel that the person raising the estoppel must show that he acted in reliance on a representation or promise or assurance made or on a common assumption held and that it would be unjust that the other party should be allowed to go back on what was stated or promised or assured or assumed. It is for this reason that they are called reliance-based estoppels. There is no such requirement in contractual estoppel. As to reliance, the point was reiterated by Lewison J in Foodco UK Ltd (The Muffin Break) v Henry Boot Developments Ltd.453 A person asserting a contractual estoppel does not have to show that he believed in the truth of that which in the clause of the contract is stated to be true, in the Foodco case that a party to the contract did not enter into it in reliance on any representation. As to injustice or unconscionability, it was made clear in Springwell Navigation Corporation v JP Morgan Chase Bank454 that a party who seeks to enforce that which is stated in the contract as being factually correct does not have to show that it would be unconscionable for the other party to be allowed to resile from what was so agreed. It is enough that it has been agreed within the boundaries of the contract. Put in its simplest terms, when there is a contractual estoppel all that the person asserting the estoppel has to show is the existence of the contractual provision that a certain state of affairs is taken to be true. He is not concerned as to whether that state of affairs was in fact true or whether he relied on it being true or acted upon it, or as to any questions of injustice or unconscionability. These latter considerations are central to the realm of estoppel in its ordinary sense and in most of its forms but are not relevant to what is called contractual estoppel. In other words, where there is a ‘contractual estoppel’, the enforcement of that which has been agreed depends on the statement being a term of

451 See para 3.191. The agreed factual state may apply or extend to any future time during the operation of the contract and it may be that an agreement as to a matter of law will be enforced in the same way. 452 This analysis is derived from what is explained with clarity and precision by Aikens LJ in Springwell Navigation Corporation v JP Morgan Chase Bank [2010] EWCA Civ 1221. 453 [2010] EWHC 358, (Ch) para 169. 454 [2010] EWCA Civ 1221; (Aikens LJ): ‘To my mind, once it is accepted that there is a separate doctrine of ‘contractual estoppel’ [ie, separate from estoppel by convention] then there is no room for a requirement that the party who wishes to rely on that estoppel must demonstrate that it would be unconscionable for the other party to resile from the conventional state of affairs that the parties have assumed. The reason why there is a requirement in the case of ‘estoppel by convention’ is precisely because there is no contract between the parties. Therefore some other mechanism has to come into play to make the non-contractual ‘convention’ enforceable’.

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3.198  Estoppel by Representation a contract and the rule of law that valid contracts are enforced, whereas the compelling of a person to adhere to the truth of a representation made which is not a contractual term depends on the law of estoppel by representation and on the satisfaction of what have been called the classic requirements of that estoppel.455

3.  The Status of Contractual Estoppel 3.198  It is apparent from the decided cases and from this summary of their effect that as a matter of general principle, parties to a contract are free to include in their contract a provision that some specific state of past or present or future fact (or possibly some state of the law) shall be taken to be correct for the purposes of their contract. The courts will give effect to such a contractual provision as they will to any other contractual provision. The result is that for the purposes of the contract, and as between the contracting parties, the specified state of fact is assumed to be correct even if it is in fact incorrect. A frequent application of this provision is to ‘no representation’ clauses in a contract, that is a clause stating in clear terms that the parties agree that the making of the contract was not induced by any representation. The result of this particular clause, in accordance with the general principle, is that, even if apart from the clause a party could rely on a misrepresentation made to him in a claim for damages for misrepresentation or for the rescission of the contract on the ground of misrepresentation, he will not be able to do so since the clause will prevent him asserting that a representation was made to him which induced him to enter into the contract. 3.199  In juridical terms, the reason why a clause of this nature in a contract is enforced is no more than the simple reason that it is a specific and valid term of the contract. No other justification is required. Nevertheless, as just explained, there has grown up a process of describing the situation as contractual estoppel or estoppel by contract. The reason for adopting this terminology is that the effect of contractual provisions of the present nature is to prevent a party from asserting in legal proceedings some matter of fact which that party could otherwise have asserted and proved in the ordinary way. In other words, for the purposes of the operation and enforcement of the contract a court, like the parties, is bound by a specified state of fact and cannot permit the correctness of that specified state of fact to be queried. Plainly, there are similarities between this situation and an estoppel by representation and an estoppel by convention since in those cases also the conduct of the parties or one of them is such that a certain stated or assumed state of fact has to be accepted as between the parties and by a court as correct whether it is in reality correct or not. It is presumably because of these similarities that the expression ‘contractual estoppel’ or similar expressions have gained favour. 3.200  Given that the legal analysis is tolerably clear, it could plausibly be asked what is the purpose in querying the terminology. It may matter little that the enforceability in the ordinary way of one type of contractual provision is dignified by the name of contractual estoppel: this may be no more than a matter of convenient terminology. To an extent, this 455 The ‘classic requirements’ of estoppel by representation are stated in the citation from the judgment of Neuberger LJ in Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93, [2007] 2 P & CR DG 8, set out in para 3.111.

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Contractual Estoppel  3.202 observation is correct but a function of law is to classify and separate different general principles of law and by doing so to clarify the law and to assist persons who come into contact with the law and its operation in the courts. Bearing in mind the aim of achieving clarity and a sound and defensible classification of separate principles of law, it is suggested that a desirable course would be not to include what is called contractual estoppel within the perhaps already overburdened categories of the overall doctrine of estoppel, but to leave it as an ordinary, though certainly specific, example of the normal and general enforcement of contracts. There are five main reasons in favour of such a course. 3.201  In the first place there are already numerous forms of estoppel with different origins which apply in different circumstances and ways.456 The status of some of these is already uncertain. The achievement of some overall statement of the doctrine of estoppel as a whole has been the aim, or perhaps the dream, of some persons but it would at least be generally accepted that if important elements of certain forms of estoppel could be brought into conformity there would be a gain in simplicity and clarity.457 Any progress in this direction can only be hampered by the introduction of yet a further form of what is called estoppel, but which on close examination is seen not to bear the primary characteristics of an estoppel. 3.202  The second reason, and perhaps the most important reason, is that what is called contractual estoppel does not share some of the most essential characteristics of most of the other main forms of estoppel and is not founded on the general justification for the operation of estoppels. Four of the most important, and most frequently applied, forms of estoppel are estoppel by representation, promissory estoppel, proprietary estoppel and estoppel by convention. These four estoppels are grounded on different initial events, namely a statement of some existing matter (estoppel by representation), a promise of future conduct (promissory estoppel), an express or implied assurance regarding property or property rights (proprietary estoppel), or a common assumption of fact or law (estoppel by convention). Thereafter, the four estoppels share the common characteristics or essential elements for their operation that (a) the person asserting the estoppel must show that it would be unjust if there was no estoppel, (b) the necessary injustice can normally only be shown if that person has acted in reliance on the relevant statement or promise or assurance or common assumption, and (c) the necessary injustice can normally only be shown if in addition that person would suffer detriment if there was no estoppel. None of these characteristics apply to what is termed contractual estoppel. A person who has agreed as a term of a contract that a certain state of fact is correct is entitled to have that state of fact treated as correct without any need to investigate, whether it would be unjust to him if he was not able to enforce what he had agreed and without any duty on him to show that he acted in reliance on the agreement or the facts as agreed and without any duty by him to show that he would suffer any detriment if he could not enforce what he had agreed.458 To introduce into the categories of estoppel some new form of estoppel where there is no connection with 456 See ch 1, para 1.6 et seq, for an attempt to classify and summarise the forms of estoppel as commonly applied. 457 The issue of combining together forms of estoppel or elements within different forms of estoppel is discussed in ch 2, part (G). For example, there is an opportunity to combine the need to show injustice, and the fulfilment of that need in most cases by demonstrating reliance and detriment, for the purposes of estoppel by representation, promissory estoppel, proprietary estoppel, and estoppel by convention. 458 See para 3.197.

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3.203  Estoppel by Representation the cardinal unifying characteristics of the main different forms of existing estoppel, may be to invite confusion. 3.203  The third reason is that the justification for contractual estoppel is quite different from the justification for the other major forms of estoppel itemised in the last paragraph. Wide doctrines of the civil law, such as the law of contract and the doctrine of estoppel, require a moral or practical justification for their underlying principles. The underlying justification for enforcing promises contained in a contract is the moral consideration that a person should be bound by a promise seriously made which is either a part of a reciprocal bargain involving consideration or is contained within the formal setting of a deed and the practical consideration that ordinary life and certainly commercial life would be seriously hampered within a community unless there was some central enforcement of contractual obligations. Estoppel as an overall doctrine has a different justification. It mainly enforces various forms of statements or promises which are acted upon and where as a result there would be prejudice to the recipient and injustice if the statement or promise was not enforced. It does so by preventing, in defined and limited circumstances, the proponent of the statement or promise from resiling from what has been said. The justification of estoppel is primarily a moral one. The result of calling the enforcement of a contractual term an estoppel risks confusing the two doctrines of contract and estoppel, and of disregarding their separate ultimate justifications as components of the civil law. 3.204  The fourth reason is the uncertainty and possible mental gymnastics which can be caused by describing and treating as an estoppel the ordinary enforcement of a contractual term. The difficulties can be seen in Foodco Ltd (Muffin Break) v Henry Boot Developments Ltd.459 The case was a claim by tenants of retail and catering units situated near the M20 motorway where the agreements for lease were said to have been induced by representations made by the landlords on matters such as the extent of motorway signage and the likely number of visitors to the site. The agreements for lease contained a clause in which the tenants acknowledged that they had not entered into the agreement in reliance on any representation or warranty whatsoever. A claim for damages or rescission founded on a misrepresentation depends on proof that the representee entered into the agreement in reliance on a representation. If the language of the agreement had been applied as an ordinary contractual provision, the claim founded on representation had to fail since it was agreed in the contract that there was no reliance by the tenants on any representation. One might have supposed that this would have been the end of the case and that no invocation of any form of the doctrine of estoppel was necessary or appropriate. The Judge in fact had to deal with the contention that either a contractual estoppel or an estoppel by representation (the latter described as an evidential estoppel) might arise depending on the exact nature of the clause before the Court. It was argued that an estoppel by contract arose when the relevant clause stated that no representation had been made, but that where the clause referred to whether a representation had or had not been relied on it was only an estoppel by representation which could arise. The Court rejected this reasoning on principle and on authority.460 All of this type of complexity and possible confusion can be avoided if



459 [2010] 460 ibid,

EWHC 358 (Ch). paras 170–71 (Lewison J).

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Estoppel by Negligence  3.207 c­ ontractual ­provisions of the present nature are simply enforced according to the ordinary meaning of their language and as a matter of the ordinary law of contract and without reference to the doctrine of estoppel and its various forms. 3.205  The fifth reason is the interrelationship between contractual estoppel and estoppel by deed as an established form of estoppel.461 One aspect of estoppel by deed is the principle that a party to a deed is estopped from disputing the truth of any fact or matter of mixed law and fact stated in the deed where the statement was made expressly and where it forms the basis on which the parties entered into the deed.462 There is no requirement in estoppel by deed to show that there would be injustice if the other party could depart from the truth of the statement or that the party asserting the estoppel has acted in reliance on the statement in the deed or that that party would suffer detriment if the other party could deny the correctness of the statement in the deed. The deed does not have to constitute a contract for an estoppel by deed to have effect. Contractual estoppel, as it is usually understood, seems to be to some extent an introduction of a similar principle into contracts contained otherwise than in a deed including, one supposes, oral contracts.463 The utility today of the above aspect of estoppel by deed as a separate form of estoppel may be queried despite its ancient origin,464 but there seems little justification for extending the principle wholly or partly into the modern law of contract. 3.206  In conclusion, the position appears to be that no reported case has been decided in a way different from that in which it would otherwise have been decided by the fairly recent designation as a form of estoppel of the ordinary process of the enforcement of certain contractual terms. It is certainly possible in these circumstances to query whether anything is gained by this separate form of an alleged estoppel. The dangers of uncertainty and possible complexities involved in the process have been mentioned above. For this reason the matter discussed may be one of more than purely terminological significance.

(H)  Estoppel by Negligence 1.  The Meaning of Estoppel by Negligence 3.207  It is sometimes suggested that there is a separate form of estoppel called estoppel by negligence. An alternative way of putting the point is to say that estoppel by negligence

461 Estoppel by deed is the subject of ch 4. It is the modern application of what Coke described as estoppel by writing. 462 Estoppel by deed has a second aspect, under which interests in land may be created as interests by estoppel. See ch 4, part (D). 463 A classic statement of estoppel by deed is that of Coltman J in Young v Raincock (1849) 7 CB 310, 338: ‘Where it can be collected from the deed, that the parties to it have agreed upon a certain admitted state of facts as the basis on which they contract, the statement of those facts, though but in the way of recital, shall estop the parties to aver the contrary’. If the word ‘deed’ was replaced by the word ‘contract’ this statement would describe what is today called estoppel by contract. 464 The second aspect of estoppel by deed, the creation of interests by estoppel, may be of greater utility.

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3.208  Estoppel by Representation is a separate variety of estoppel by representation.465 The difficulty is to know what exactly is encompassed by this suggested form of estoppel, and what differentiates it from estoppel by representation as a whole. 3.208  The incorrect statement of fact or of mixed law and fact (and probably today of law) which founds an estoppel by representation may be one of three types. The statement may be fraudulent in the sense that the maker of the statement knows at the time that the statement is made that it is untrue. A statement so made may, as well as founding an estoppel, create a liability on the maker in the tort of deceit.466 The statement may be negligent in the sense that if the maker had exercised proper care the statement would not have been made or would not have been made in the form in which it was made. In such a case, if a duty of care exists, the maker of the statement may be liable to the person to whom it was made in the tort of negligence.467 The statement may be wholly innocent in the sense that the maker of it believed it to be true and had no reason to think otherwise.468 All three varieties of statement may bring about an estoppel by representation provided that the other requirements of the estoppel, such as reliance and detriment, are present.469 In short, a representation of some existing matter may have various consequences in law apart from or in addition to any question of estoppel depending on into which of the three above categories it falls. However, there is the unifying factor that a representation of some existing matter within any of the categories may work an estoppel provided that the other elements of estoppel by representation are satisfied. 3.209  The usual connotation in law of the word ‘negligence’ is a breach of a duty of care. A duty of care may be a result of an express or implied contractual obligation. If a person employs an expert to give advice it is normally an implied term of the contract that the expert will carry out his duties with that degree of skill and care which can reasonably be expected of a person active in his field of expertise. In the law of torts, a person owes a duty of care irrespective of contract to others who are in a sufficient degree of proximity to him, and a breach of that duty of care, which may include the negligent making of a statement, results in the commission of the tort of negligence.470 These basic principles of the law of

465 eg, in Halsbury’s Laws, vol 47, 5th edn (LexisNexis, 2014) negligence is treated as a separate variety of estoppel by representation. This point is perhaps similar to the suggestion that estoppel by conduct is a separate form of estoppel whereas it is in fact a variety of estoppel by representation where the representation is derived by inference from the conduct of the representor rather than being contained in an express statement made by the representor. 466 See Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 38 (Lord Scott). In such a case the damages in tort would be limited to consequential loss to the representee and would not normally encompass any compensation for loss of an expectation created by the statement. 467 Damages may be awarded under s 2(1) of the Misrepresentation Act 1967 where a misrepresentation has induced a contract and the representor cannot prove that he had reasonable grounds to believe and did believe that up to the time the contract was made the facts represented were true. 468 Damages may be awarded under s 2(2) of the Misrepresentation Act 1967 in lieu of rescission where a misrepresentation has induced a contract even though the representation was neither fraudulent nor negligent. 469 The three possible types of representation were described by Lord Esher MR in Seton v Lafone (1887) 19 QBD 68. There are further references to ‘culpable negligence’ in the making of a representation but it does not appear that the estoppel which may ensue if a representation is made with negligence is in the end any different from the estoppel which may ensue if the representation is made otherwise than negligently. It must be remembered that observations made in 19th-century cases were made before the law of negligence as a tort had assumed its modern and comprehensive form. See also Swan v North British Australasian Co Ltd (1863) 2 H & C 175; and Coventry, Sheppard & Co v Great Eastern Rly Co (1883) 11 QBD 776. 470 See Clerk and Lindsell on Torts, 21st edn (Sweet & Maxwell, 2014) para 1.65.

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Estoppel by Negligence  3.210 contract and of torts have nothing to do with estoppel. Estoppel by negligence, if it exists, and is a separate form of estoppel, must have some meaning otherwise than a breach of a contractual or tortious duty of care.

2.  Instances of the Estoppel 3.210  There are certain judicial statements which support the existence of a separate form of estoppel called estoppel by negligence. In Bell v Marsh,471 a solicitor acted for the Plaintiff on the purchase of a property. The solicitor owned an adjoining property on which a greenhouse had been erected, a part of which projected onto the land being purchased. The solicitor carried out no measurements and did not point out the fact of the projecting area to the Plaintiff. Later, and after the death of the solicitor, a dispute arose and the Plaintiff brought proceedings for possession of the projecting part of the greenhouse. The then owner of the adjoining property claimed title by adverse possession to the projecting area and the Plaintiff asserted in response that by his silence on the point the solicitor had by inference represented that the Plaintiff had a good title to the whole of the land which he was buying, including the area in dispute. The Court of Appeal held that even if there was a representation, the plea of an estoppel failed because there was no evidence that the Plaintiff had acted in reliance on an inferred representation. On the question of whether there was an inferred or deemed representation made by the solicitor, Collins MR said: He is entitled to say that the representation was made, not merely by language used, but by conduct, and conduct may include negligence. A man may act so negligently that he must be deemed to have made a representation, which in fact he did not make, but because he is acting negligently he is deemed to have made it.472

That which was contemplated by the Master of the Rolls seems to have been a negligent silence on a matter where there was a duty to speak out which constituted an inferred representation. Silence cannot normally give rise to an inferred representation but exceptionally may do so where a party has a duty to impart some information and fails to comply with that duty. There was at the time of the decision in Bell v Marsh authority for this proposition and the proposition of law has been taken forward in later cases.473 It may therefore be that all that this decision establishes is that a representation may be inferred from conduct, and that where a person fails to provide information when he has a duty to do so, an inferred representation may arise sufficient to create an estoppel by representation. The failure may

471 [1903] 1 Ch 528. 472 ibid, 541. 473 See Gregg v Wells (1839) 10 Ad & El 90 where Lord Denman said that a party who negligently and culpably stood by and allowed someone else to contract on the faith of a fact which he could contradict could not afterwards dispute that fact in an action against the person whom he had himself assisted in deceiving. In Freeman v Cooke (1848) 2 Exch 654, 663, the idea of negligence giving rise to an estoppel in the context of a duty to speak appears again when Parke B said that ‘conduct, by negligence or omission, where there is a duty cast upon a person, by usage or trade or otherwise, to discuss the truth, may often have the same effect’ (ie, give rise to an estoppel). See also M’Kenzie v British Linen Co (1881) 6 App Cas 82, 101 (Lord Blackburn); Ogilvie v West Australian Mortgage and Agency Corporation [1896] AC 257, 268 (Lord Watson). Later decisions include Greenwood v Martin’s Bank Ltd [1933] AC 51; and Spiro v Lintern [1973] 1 WLR 1002.

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3.211  Estoppel by Representation be negligent depending on the nature of the duty but this does not create a separate form of estoppel or even any separate category of estoppel by representation. It is simply one of the circumstances which may give rise to an inferred representation. 3.211  The matter seems to have been dealt with in much the same way as just suggested by Greer LJ in the Court of Appeal in Greenwood v Martin’s Bank Ltd.474 In that case, it was held that a failure by a customer to inform his bank of facts relating to the forgery by his wife of his signature on cheques amounted to an inferred representation that the cheques were validly signed which bound him in a subsequent action by him to recover from the bank the amounts paid out on the forged cheques. Greer LJ said that if the Plaintiff had stated to the Bank that the signatures on the cheques were his, he would be bound by an estoppel arising from his express statement and added: ‘Estoppel by negligence is representation of fact by conduct, and if it is right to infer representation from conduct, it must have the same effect as representation by direct statement’.475 3.212  A further area in which it is suggested that estoppel by negligence may have a part to play is the situation in which a sum of money is paid by mistake to a person and the question arises of whether the payee can resist proceedings to recover the money on the argument that there has been a representation that the sum is due to him which creates an estoppel preventing the payer denying that fact. This situation is discussed earlier in this chapter where possible difficulties arise when the payee has acted to his detriment in reliance on the representation by expending only a part of the money. The questions which arise are then whether an estoppel by representation can operate only as regards the part of the money expended, ie, in a pro tanto fashion, and what is the relationship between estoppel by representation and the defence of change of position which is now established as available to a claim in restitution for the recovery of a sum of money paid by mistake.476 An estoppel can only arise if the payment of the money has been accompanied by an express or implied representation that the sum paid was due to the payee.477 The inference of such a representation from the fact of a payment may be easier to draw when the payer is under a duty to the payee to make calculations of what money is due and the mistake is due to the negligence by the payer in carrying out that duty, for example the calculation by an employer of the amount of sickness pay due to an employee.478 Nothing in this type of situation suggests that there is a separate form of estoppel to be categorised as estoppel by negligence. The position, and possibly the negligence, of the payer when the money is paid are simply facts which are relevant to the question of whether there is an inferred representation that the sum paid is due.

474 [1932] 1 KB 371. This decision is examined more fully in para 3.56. See [1933] AC 51 for this case in the House of Lords. 475 ibid, 388. It seems that the failure to provide information about the cheques was in this instance deliberate rather than negligent. 476 This matter is fully examined in para 3.173 et seq. 477 See para 3.174. 478 As in the leading case of Avon County Council v Howlett [1983] 1 WLR 605, the facts of which are stated in para 3.157 et seq.

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Estoppel by Negligence  3.214

3. Conclusion 3.213  It is suggested that the best conclusion is that there is no separate form of estoppel to be known as estoppel by negligence. There is substantial authority in support of this view.479 The representation which is the foundation of estoppel by representation can be express or can be inferred from the conduct of the representor. There are many types of conduct which can give rise to an inferred representation which are nothing to do with negligence.480 One of the situations which can create a representation by conduct is that in which a person is under a duty, which may not necessarily be a legal duty, to provide some information to another person and fails to do so. The estoppel created by the inferred representation generally operates to prevent the person who has failed in his duty from asserting that which would have become known to the other party if the duty had been carried out. Thus, if a customer of a bank fails in his duty to provide information to the bank which may show that his signature has been forged on cheques, he may be estopped from asserting that the cheques were forged.481 Sometimes the failure to provide the information or the correct information will be the result of negligence.482 No aspect of these established principles of law suggests that there is some separate form of estoppel involved. What is involved is one variety of estoppel by representation, an estoppel derived from an inferred representation as opposed to an express statement, and what is involved is one variety of inference, an inferred representation derived from a failure to provide information where there was a duty to provide it. All of this can be accommodated within established principles of the law of estoppel by representation without creating any new form or description of estoppel. The point was put, it is submitted with accuracy, by Lord Denning MR in the Court of Appeal: ‘The phrase “estoppel by negligence” is misleading. It is only one aspect of “estoppel by conduct”’.483 Estoppel by conduct is itself usually a variety of estoppel by representation. 3.214  One of the characteristics of the law of estoppel is the many different forms and descriptions of estoppel which exist.484 This plethora of descriptions leads to confusion and uncertainty. In pleadings and arguments, more than one form of estoppel is often advanced in the alternative because of uncertainty in the difference between the various forms of estoppel and on the essential elements which have to be proved to establish a particular form of estoppel. It is suggested elsewhere that what is desirable is some move towards

479 See Gallie v Lee [1971] AC 1004, 1038 (Lord Pearson): ‘Estoppel in the normal sense of the word does not arise from negligence; it arises from a representation made by words or conduct’. 480 For inferred representations generally see para 3.42 et seq. 481 See Greenwood v Martin’s Bank Ltd [1932] 1 KB 371, 383–84 (Scrutton LJ) in the Court of Appeal. See [1933] AC 51 for this case in the House of Lords. 482 This need not necessarily be the case. In Greenwood v Martin’s Bank Ltd the customer deliberately and at the persuasion of the forger failed to provide the necessary information on forgery to the bank. 483 Moorgate Mercantile Co Ltd v Twitchings [1976] QB 225, 239. For the case on appeal to the House of Lords see [1977] AC 890. 484 See ch 1, para 1.6 where over 20 such descriptions are listed.

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3.215  Estoppel by Representation a synthesis or uniformity at any rate in certain essential elements of the main forms of ­estoppel.485 To produce yet a further separate form of estoppel, called estoppel by negligence is, it is suggested, a move in the wrong direction when the result created by the facts leading to such an estoppel can be readily subsumed within another established form or forms within the overall doctrine of estoppel.

(I) Summary 3.215  As with other chapters on the separate forms of estoppel, this concluding part of the chapter is an attempt to be helpful by setting out in summary form the main rules which constitute and govern the principle of estoppel by representation as that principle stands today. It should be understood (a) that in some instances the general statement of a rule as set out will not refer to various refinements, details and sub-rules or even in some cases to limited qualifications or exceptions, and (b) that while a rule as stated seeks to state the best view of the law as it is today in the light of the authorities and other considerations, it is inevitably possible in some instances to argue in favour of a somewhat different view of a particular aspect of the law. In general, the sequence of this summary follows the sequence in which various aspects of the estoppel have been examined earlier in this chapter.

1. General 3.216  Estoppel by representation is a form of common law estoppel which dates from during or before the seventeenth century, and was developed by courts of equity and courts of common law from estoppel in pais as described by Coke in his Commentaries on Littleton’s Tenures. 3.217  The estoppel arises where A makes a statement of some existing matter to B intending that statement to be acted on by B and it would be unjust or unconscionable that A should be allowed to resile from the correctness of what he has stated. The necessary injustice will normally flow from the facts (a) that B has acted in some way in reliance on the statement, and (b) that if A is allowed to resile from the statement B is liable to suffer some detriment. 3.218  Accordingly, the three main elements which must be established by a person asserting the estoppel are (a) that an incorrect representation has been made to him, (b) an intention by the representor that the representation will be acted upon by him as a representee, and (c) that it would in all the circumstances be unjust or unconscionable that the representor should be allowed in legal proceedings to deny the correctness of the representation, an injustice which normally stems from the fact that the representee has acted in some way in reliance on the representation and would be liable to suffer detriment if the representor could resile from the correctness of what was represented.



485 See

ch 2, part (G).

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Summary  3.229 3.219  The burden of proof of establishing each of the elements or requirements of the estoppel is on the person who asserts the estoppel, and the standard of proof is on the balance of probability.

2.  The First Element: The Representation 3.220  The representation may be written or oral and must be one of some existing matter such as that some fact exists at the time of the representation or that some event has or has not occurred prior to that time. The representation may also be one of mixed law and fact. 3.221  It had long been considered that a statement of pure law could not be the foundation of an estoppel by representation. However, recent decisions indicate that the estoppel may today extend to representations of pure law. 3.222  An estoppel by representation cannot be founded on a statement of opinion or on a promise of future conduct. 3.223  The representation must be precise and unambiguous in its meaning. A representation will not fail for lack of clarity merely because some unlikely or fanciful meaning could be suggested as its meaning as opposed to its plain meaning, but a significant degree of genuine ambiguity in its meaning is likely to prevent its use as the foundation of an estoppel by representation. 3.224  The necessary representation, as well as being contained in an express written or oral statement, may be inferred from conduct in the context of the surrounding circumstances. The inference must be one which can precisely and unambiguously be made from the relevant facts and events. 3.225  Both the meaning of an express representation and the existence and meaning of an inferred representation must be judged objectively, that is by way of the conclusion on these matters which would be reached by a reasonable person in the position of, and with the knowledge of, the representee. 3.226  Normally, and in the absence of a duty to speak, a representation cannot be inferred from silence or inactivity since silence or inactivity are by their nature generally equivocal. Even so, there may be unusual, and not as yet clearly defined, circumstances in which a representation will be inferred from silence even in the absence of a duty to speak. 3.227  Where a person has a legal duty to speak or to impart information to another person and fails to comply with that duty, he will be estopped from asserting against that other person that which would have been known to or ascertained by that other person if the duty had been properly carried out. 3.228  An estoppel may also arise in similar circumstances from a breach of a moral duty to impart information. It is said that a moral duty to speak arises when a fair and reasonable person with knowledge of the relevant facts would have spoken out. It is unclear to what extent this type of duty operates between parties in legal disputes and particularly in litigation. 3.229  A person who has made a representation may subsequently contradict or alter it. If this occurs, it will not prevent an estoppel arising from actions by the representee carried 295

3.230  Estoppel by Representation out in reliance on the original representation prior to any alteration, but may prevent any estoppel arising from further actions by the representee once he has become aware of the alteration. 3.230  An estoppel may arise out of an admission, including an admission made by a party or his legal representatives in the course of legal proceedings. However, in the latter case there are procedural rules which govern the making and withdrawal of an admission including rules as to pleadings, and the effect of an admission and the possibility of its withdrawal must be determined in accordance with these rules where they apply to the admission in question. 3.231  An estoppel can be asserted only by a person who was intended to act upon the representation including a person who was a member of a group of persons intended so to act or in some cases was simply a member of the general public.

3.  The Second Element: The Intention of the Representor 3.232  An estoppel may arise whether or not the representor was aware at the time it was made of the falsity of the representation. 3.233  The representor must have intended at the time of the making of the representation that it will be acted upon by the representee. 3.234  The test of the requisite intention is an objective test in that what has to be determined is not whether the representor subjectively and actually intended that the representation should be acted on, but whether a reasonable person in the position of, and with the knowledge of, the representee would have concluded that the representor so intended. 3.235  It must have been reasonably foreseeable to the representor at the time of the representation that the representee would act in some way in reliance on the representation. 3.236  While it is necessary that the representor at the time of the representation intended that the representee would act in some way in reliance on the representation, it is not necessary that the representor intended either (a) that the representee should act in any precise or specific way, or (b) that the actions of the representee would or might lead to detriment to the representee. 3.237  Any knowledge acquired by the representor after the date of the representation that the representee did act in reliance on the representation or did so act to his detriment is irrelevant to the establishment of the necessary intention on the part of the representor, since that intention has to be shown to have existed at the time of the representation and cannot have been affected by later events.

4.  The Third Element: Injustice or Unconscionability. The Components of Reliance and Detriment 3.238  A person asserting an estoppel by representation must establish that it would be unjust or unconscionable that the representor should be allowed to resile from the correctness of the representation made. 296

Summary  3.246 3.239  The injustice in question can normally only be established if the representee can show both (a) that he acted (or failed to act) in some way in reliance on the representation, and (b) that he would suffer, or be significantly likely to suffer, significant detriment if the representor was allowed to resile from the correctness of the representation made by him. It is doubtful whether an estoppel by representation can ever be established unless both of these requirements are satisfied. There may, however, be exceptional cases in which unconscionability is not established so that the estoppel is denied even though the components of reliance and detriment are present. Possible illustrations of such an exceptional case are where the operation of the estoppel would adversely affect third parties or where any detriment, even though not insignificant, would be small. 3.240  In relation to reliance, the representee does not have to show that he would not have acted as he did but for the representation. It is sufficient if he shows that the representation was a significant consideration which led him to act as he did. 3.241  It is necessary to establish that the representee acted reasonably in acting in reliance on the representation and that his particular actions were a reasonable response to the representation. 3.242  Detriment is normally mainly a future matter and is sometimes an uncertain matter. The question is not whether the representee has suffered detriment from his reliance on the representation (although he may have done), but whether at the time when the question of an estoppel comes before a court the representee will or may suffer detriment or further detriment if the representor is allowed to resile from his representation. 3.243  Since future detriment is sometimes an uncertain matter, all that a person asserting an estoppel has to do is to show that there is at least a significant risk that he will suffer a significant detriment, or further detriment, if the representor is allowed to resile from what he has stated. 3.244  Certain of the matters which inevitably arise under the third main element of estoppel, such as (a) how important the representation has to be in the decision of a representee to act in a certain way, (b) how reasonable was a representee in acting in a certain way, (c) how likely it is that the representee will suffer detriment, and (d) what will be the amount of the detriment if there can be a resiling from the representation, may be a relevant consideration in the application of the overriding requirement of injustice.

5.  The Effect of the Estoppel 3.245  The general effect of an estoppel by representation is that the representor is held strictly and fully to the truth and the content of the representation which he has made. 3.246  A consequence of this rule is that generally a court will not reduce the effect of the estoppel because the detriment to the representee is a loss of a chance rather than a certain loss. A court will not normally carry out a precise quantification of the amount of the detriment. There is an exception to this general rule in circumstances where the representation is that a specific sum of money is due to the representee and this is summarised in the next few paragraphs.

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3.247  Estoppel by Representation 3.247  It has been held in the Court of Appeal in Avon County Council v Howlett486 that a pro tanto effect of the estoppel, ie, that the representor is held to the content of the representation which he has made but only in part or only up to a certain extent, is not generally permissible in law even when the mistaken representation is that a specific sum of money is due to a person and that person acts to his detriment by spending only a part of the sum. 3.248  This decision nonetheless appears to state that as an exception to the general rule a pro tanto operation would be permissible where it is necessary in order to avoid an inequitable or unconscionable result. Since the only reason for a partial or pro tanto operation of the estoppel would usually be that of avoiding injustice, this exception, which has been applied in subsequent cases, appears to deprive the general rule as stated in the last paragraph against a pro tanto operation of much of its impact in cases involving a representation that a specific sum of money is due to a person and that person acts to his detriment by spending only a part of the sum. 3.249  The usual situation in which a pro tanto operation of the estoppel is called for, and today would normally be applied, is where A has paid a sum of money to B under an error stating expressly or impliedly that the sum is due to B, and B then acts to his detriment by expending a part of the sum. The pro tanto operation of the estoppel which arises from A’s statement is that A is held to his statement but only to the monetary extent of the detriment which will be caused to B if A could resile from his statement. 3.250  When money is paid under a mistake of law or of fact, the payer can generally recover from the payee the sums paid under the law of restitution. It is a defence to such a claim or to a part of such a claim that the payee has changed his position in reliance on the payment. The law of restitution and the law of estoppel here combine in general principle to reach the same conclusion, which is that the payer can recover the sum paid less the sum expended by the payee, (a) since the payee can assert the change of position defence but only in relation to the sum expended, and (b) because the operation of an estoppel on a pro tanto basis is acceptable in such circumstances and so operates only as to the extent of the amount expended by the payee.

6.  Contractual Estoppel 3.251  In accordance with the general rule of freedom of contract, the parties to a contract may agree that, for the purposes of their contract or a part of it and as between themselves, some past, present or future fact is or will be true and probably that some proposition of law is correct. A court will normally give effect to such a term and will not then investigate whether the stated matter is true or not. Such provisions sometimes state that the making of the contract has not been induced by any representation, the purpose being to avoid any question of a subsequent attempt to rescind the contract or obtain damages by reason of a misrepresentation. Provisions of this latter type will also be enforced in the ordinary way. 3.252  The justification in law for enforcing provisions of the type just described is simply that contracts entered into for consideration or in a deed are enforced by the law.

486 [1983]

1 WLR 605.

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Summary  3.253 The practice has arisen of describing the enforcement of such provisions as ‘contractual estoppel’ or ‘estoppel by contract’. What is being enforced is not a true estoppel and does not have the characteristics which apply to the main forms of estoppel. Thus, though the point is largely terminological, there may be good reasons for avoiding the expression ‘contractual estoppel’ and for not adding yet a further form of estoppel to the already considerable list of estoppels which do exist.

7.  Estoppel by Negligence 3.253  The expression ‘estoppel by negligence’ is sometimes used to designate a separate form of estoppel. What is usually involved is a representation inferred from conduct where the relevant conduct of the representor is a failure, which is sometimes the result of negligence, to provide to some other person information which he is under a duty to provide. In such circumstances, a representation is inferred form the silence of the representor such that he becomes estopped from asserting that which would have been ascertained by the representee if the relevant facts had been stated. This principle, and result, can be accommodated within the established rules of estoppel by representation and no separate form of estoppel is required.

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4 Estoppel by Deed (A) Introduction 4.1  Estoppel by deed is an ancient principle which operates to bind a party to a statement in a deed which that party has executed.1 The principle is generally regarded as having two separate and not entirely similar aspects. The first aspect is that a party to a deed is estopped from disputing the truth of any statement of fact or mixed law and fact in the deed where that statement was made expressly and where it forms the basis on which the parties entered into the deed. This aspect of the principle is in some ways akin to estoppel by convention which arises where parties to a previously made transaction act on a common and shared assumption as to the meaning and effect of that transaction.2 Indeed, it has been suggested that estoppel by convention, which is a more modern principle, has arisen out of estoppel by deed.3 The relationship between the first aspect of estoppel by deed and other forms of estoppel is discussed later in this chapter.4 4.2  The second aspect of estoppel by deed operates when one party to a deed purports to grant to another party an interest in property in circumstances where the first party does not own the interest or is not entitled to grant the interest. As between themselves the parties are not entitled to deny the validity of the grant or of the interest purported to be granted. The estoppel does not of course bind the true owner of the land or the person in fact entitled to grant or create the interest purportedly granted. For example, if L purports to grant a lease of land to T when L is not the owner of the land there will come into existence between L and T a tenancy by estoppel. As between themselves, neither L nor T can deny that they stand in relation to each other as the landlord and the tenant of the land for the term 1 The principle goes back to Coke on Littleton, Co Lit 225b, in 1628 and is referred to in Blackstone’s ­Commentaries, 2 Bl Comm 295, in 1765–70. An example of the principle was mentioned in Rolle’s Abridgment published in 1668 where parties to a bond were described as husband and wife so that in an action to enforce the bond the obligor was not permitted to assert that he was not married: 1 Roll Abr 873, C25. Raysing’s Case (1560) 2 Dyer 208, mentioned in para 4.25, is an example of an early decision which might have been an example of an estoppel by deed but for a lack of certainty. The principle was described in Onward Building Society v Smithson [1893] 1 Ch 1, 14 (Bowen LJ), as being ‘as old as the hills’. The principle of estoppel by deed was developed long before the appearance of the modern law of estoppel by representation: First National Bank Plc v Thompson [1996] Ch 231, 236 (Millett LJ). The second aspect of the law of estoppel by deed, the creation of interests in land by estoppel, goes back to the 16th century: see James v Landon (1581) Cro Eliz 36. There is a valuable modern examination of aspects of the principle in PW & Co v Milton Gate Investments Ltd [2004] Ch 142, paras 148–56 (Neuberger J). A list of examples of the operation of the principle is given in para 4.23. 2 See ch 5 for estoppel by convention. 3 It was suggested in Spencer Bower & Turner: Estoppel by Representation, 3rd edn (1977) that estoppel by deed is merely a variety of estoppel by convention, a suggestion cited in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 159. 4 See para 4.49 et seq.

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Introduction  4.4 of years stated and on the terms stated in the deed. The true owner of the land who was not a party to the deed can dispute the title of T to the lease. The second aspect of the principle has a further component called feeding the estoppel. If the grantor of an interest who did not have a sufficient title to do so subsequently acquires a sufficient title, the interest of the grantee automatically and without any further grant becomes a full interest rather than an interest by estoppel. In these circumstances the estoppel is said to be ‘fed’. Both aspects of the principle are said to be exclusively the creation of the common law and not of equity.5 4.3  Certain general questions can arise in connection with estoppel by deed, as they do in connection with other forms of estoppel, such as the extent to which the principle may be used in support of a cause of action as opposed to a defence to a cause of action, whether the estoppel binds successors in title of the original parties to the deed, and whether the doctrine is best categorised as a rule of evidence or of substantive law. These questions are considered more generally elsewhere since the issues which arise extend well beyond the confines of estoppel by deed.6 4.4  The unifying factor of the two aspects of the principle is the existence of a deed to which the persons involved were parties.7 This factor also provided the historical and theoretical justification for the principle. A deed, by reason of its description, its nature and the formal requirements for its validity, has an enhanced formal status which is not shared by oral statements or by other forms of written document. The solemnity and formality involved in a deed are thought to make it appropriate that the persons who have entered into a deed should be required to adhere to what is stated in the deed in circumstances where that adherence would not be required for less formal statements made to each other.8 It can reasonably be assumed that persons will devote greater care to entering into and deciding the language of a deed than they would to some less formal document. It is possible to argue that this deference to the status and effect of a deed is unnecessary or even anomalous in a modern legal situation. It can certainly be said to be not obvious why parties should be subject to what is a fairly rigid form of estoppel arising because they have executed a deed, and irrespective of whether a deed was necessary to effect or record their transaction, when they might not be bound by a statement to the same effect which was made in some other formal document which is not technically a deed. The general question of the special status of statements contained in deeds and the justification for that special status leads to a further question of whether there is a further form of estoppel, estoppel by contract, which leads to the enforcement of statements made in and as the basis of contracts which are not a deed. This further question is discussed later in this chapter after the rules which govern estoppel by deed have been explained.9

5 First National Bank Plc v Thompson [1996] Ch 231, 237 (Millett LJ). 6 See ch 2, where the questions here mentioned, as well as other general aspects of the doctrine of estoppel, are examined. 7 In certain circumstances, the second aspect of the principle can operate even though there is no deed: see para 4.72. 8 In Goodtitle d Edwards v Bailey (1777) 2 Cowp 597, 600–01, Lord Mansfield stated the principle as being that ‘No man shall be allowed to dispute his own solemn deed’. 9 See para 4.52. The concept of estoppel by contract is discussed in detail in ch 3, part (F) where it is suggested that there is no need for such a separate form of estoppel.

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4.5  Estoppel by Deed 4.5  A further unusual characteristic of estoppel by deed is that it is not necessary for the party to the deed who asserts the estoppel to show that he acted in reliance on a statement in the deed, or that he would suffer some detriment if the other party were permitted to resile from what was stated in the deed such that for that reason it would be unjust to allow the other party to resile from the statement. The existence of a prospect of injustice or unconscionability, and of the potential detriment which underlies those concepts, is a fundamental element of other forms of estoppel and confers on the operation of other forms of estoppel a degree of flexibility which is generally to be welcomed. Estoppel by deed is not therefore a part of what has today sometimes been called reliance-based estoppel. The absence of such an element in estoppel by deed creates a rigidity in the operation of this form of estoppel which is less welcome. Thus, even when the fundamental elements of other forms of estoppel are satisfied, such as a promise not to enforce an existing legal right in promissory estoppel or a shared assumption of fact or law relating to an existing transaction in estoppel by convention, a court will not hold a party to what has been promised or assumed unless it would be unconscionable to allow that party to depart from the promise or assumption.10 Despite possible criticisms of the principle, estoppel by deed is well established in modern law and is likely to remain so unless there is some general synthesis of the various categories of estoppel or some codification of this area of the law.11 That having been said, it has been suggested that there is no reason for extending the principle, including its extension, to inferences drawn from deeds as opposed to clear express statements in deeds.12 4.6  The general rule is that only a party to a deed may sue on the covenants in that deed.13 By parity of reasoning a person who is not a party to a deed cannot assert an estoppel by reason of a statement in that deed.14 The question of whether a successor in title to a party to a deed may assert or be bound by a statement of a party is discussed elsewhere under the general question of the effect of estoppels on successors in title. The general rule is that successors in title to an interest in land created or affected by a deed take the benefit and the burden of an estoppel arising from the deed as privies of a party to the deed by virtue of one form of privity, which is privity of title or of estate.15 10 See para 4.45 et seq for a further discussion on the omission of injustice as an essential element of estoppel by deed. Injustice or unconscionability has been said to permeate the law of estoppel: see Gillett v Holt [2001] 1 Ch 210, 225 (Robert Walker LJ in a decision on proprietary estoppel), but has no place in estoppel by deed. 11 Modern decisions on the principle include Greer v Kettle [1938] AC 156; Wilson v Wilson [1969] 1 WLR 1470; Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries [1977] QB 580; First National Bank Plc v Thompson [1996] Ch 231; PW & Co v Milton Gate Investments Ltd [2004] Ch 142; Prime Sight Ltd v Lavarello [2013] UKPC 22, [2014] AC 436. These decisions are referred to later in this chapter as necessary. 12 Onward Building Society v Smithson [1893] 1 Ch 1, 14 (Bowen |LJ). See also General Finance, Mortgage and Discount Company v Liberator Permanent Benefit Building Society (1878) 10 Ch D 15, 25, where Jessel MR said that the principle should not be carried further than a judge was obliged to because it was no longer necessary or useful. 13 Chesterfield and Midland Silkstone Colliery Co v Hawkins (1865) 3 H&C 677. In Trinidad Asphalte Company v Coryat [1896] AC 587 a purchaser of land was not allowed to treat as indisputable by reason of estoppel a statement in a deed relating to the land to which he was not a party. 14 Co Litt 352a: ‘First, every estoppel ought to be reciprocal, that is, to bind both parties; and this is the reason, that regularly a stranger shall neither take advantage, nor be bound by the estoppel’. This statement of the law was cited and applied by Tindall CJ in Doe d Marchant v Errington (1839) 6 Bing (NC) 79, 83. In Greer v Kettle [1938] AC 156, 170 Lord Maugham stated that the principle of an estoppel in a deed would not avail persons who were not parties or privies to the deed. See also Mowatt v Castle Steel and Iron Works Co (1886) 34 Ch D 58 (subsequent debenture holders not estopped from denying that earlier debentures had been validly issued when they were not parties to the earlier issue); Cracknall v Janson (1879) 11 Ch D 1, 11 (Fry J). 15 See ch 2, part (I).

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Deeds  4.11 4.7  Since estoppel by deed is dependent on the existence of a valid deed it is appropriate to start an explanation of the principle with an outline explanation of the law relating to deeds, including their nature and purpose, and the requirements of their validity.

(B) Deeds 4.8  Both aspects of the doctrine of estoppel by deed generally depend on the existence of a valid deed.16 There is a good deal of ancient learning on the nature of a deed and the requirements which had to be satisfied before a deed was valid. The law was substantially simplified and modified by the Law of Property (Miscellaneous Provisions) Act 1989 and it is unnecessary in this account to go in any detail into the law as it stood before 31 July 1990 when that Act came into force.17 Even as regards the present law, only an outline is given here.18

1.  Formalities of a Deed 4.9  In order for a document to be a deed at common law it had to be written on paper or parchment, sealed and delivered. Delivery meant that the person executing the deed acknowledged by its words that he intended to be bound by the provisions of the deed. Signing was not originally required but by virtue of section 73 of the Law of Property Act 1925 where a deed was executed by an individual person it became necessary that he should sign it. 4.10  The present law, which applies to any deed executed on or after 31 July 1990, is contained in the Law of Property (Miscellaneous Provisions) Act 1989 which states that an instrument cannot be a deed unless it is intended to be a deed, an intention which can be expressed in the instrument or otherwise. In addition the instrument must be validly executed.19 4.11  It is often said that a deed requires to be signed, sealed and delivered for there to be a proper execution of it. The present law as contained in the Law of Property (Miscellaneous Provisions) Act 1989 on the execution of a deed is in summary as follows. (i) A deed executed by an individual person must be signed by him in the presence of a witness who attests the signature.20 (ii) A deed executed by an individual person need not be sealed.21

16 In certain circumstances the second aspect of the doctrine can operate even though there is no deed: see para 4.72. 17 The provisions of the Act are not retrospective: see Law of Property (Miscellaneous Provisions) Act 1989, s 1(11). 18 An account of the previous law and of the present law in more detail will be found in Halsbury’s Laws, vol 32, 5th edn (LexisNexis, 2014) para 201 et seq. 19 Law of property (Miscellaneous Provisions) Act 1989, s 1(2)(a), (b). 20 ibid, s 1(3)(a)(i). As an alternative, the instrument may be signed by someone else at the direction and in the presence of the maker of the instrument in which case the instrument must be so signed in the presence of two witnesses who each attest the signature: ibid, s 1(2)(a)(ii). 21 ibid, s 1(1)(b).

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4.12  Estoppel by Deed (iii) A deed executed by an individual person needs to be delivered. As mentioned, delivery is not a physical act but may be constituted by an acknowledgement in the language of the deed that the person executing it intends to be bound by its provisions.22 (iv) A deed executed by a corporate body requires to be sealed. The mode of sealing is governed by the constitution of the corporation. Companies formed under the Companies Acts often had common seals but for companies formed under the Companies Act 2006 no common seal is required to exist. Where such a company has a common seal, the requirement of sealing as a deed may be satisfied by the affixation of the common seal.23 However, whether such a company has a common seal or not there is a sufficient sealing of the instrument if it is signed by two directors of the company or by a director and the company secretary and is expressed to be executed by the company.24 (v) A deed executed by a company must be delivered in the sense just explained. There is a rebuttable presumption that a deed sealed by a company has been delivered.25

2.  The Nature of, and the Requirement for, a Deed 4.12  A deed is a written instrument expressing the intention or consent of some person to make, confirm, or concur in some assurance of some interest in property, or in some obligation, duty or agreement, or otherwise to affect the legal relations of some other person. In order for the instrument to constitute a valid deed it must be executed in the manner and in accordance with the rules just explained.26 Deeds are indentures or deeds poll. An indenture is a deed to which two or more persons, not expressing a common intention, are parties. Such a deed is so called because it was once the practice that the material on which the deed was written was indented or cut into. Since two or more parties were involved, two or more copies of the deed were prepared and divided by a jagged line so that one part could fit into the other.27 A deed of this type was often stated at its beginning to be an indenture. A deed poll is a deed made by one party only, or by two or more parties expressing a common intention. Such a deed is so called because it was the practice that the material on which the deed was written was shaved even, or ‘polled’, on the top.28 Nearly all deeds are indentures. The former practice of a jagged indent or a polling is not carried out today. 4.13  The common law rule was that every transaction which had to be in writing was required to be effected by a deed. Today by statute a deed is required in order to effect certain transactions.29 The most important provisions to this effect are in the Law of Property

22 ibid, s 1(3)(b): see para 4.9. 23 Companies Act 2006, s 44(1). 24 ibid, s 44(4)–(8). Where a deed states that it has been executed by the affixing to it of the seal of a named company there may arise an estoppel by deed which prevents a party to the deed from denying that the seal of that company was so affixed: OTV Birwelco Ltd v Technical & General Guarantee Co Ltd [2002] 4 All ER 668, para 45. 25 Longman v Viscount Chelsea [1989] 2 EGLR 242, (1989) 58 P & CR 189. 26 See para 4.11. 27 Any previous need in law for the indentation was removed by s 5 of the Real Property Act 1845 (now repeated in s 56(2) of the Law of Property Act 1925). 28 The role of deeds poll in estoppel by deed is discussed in para 4.15. 29 For a full list of the transactions which must be effected by deed see Halsbury’s Laws, vol 32, 5th edn (LexisNexis, 2014) para 210 et seq.

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Deeds  4.15 Act 1925 and include the conveyance or the creation of a legal estate in land,30 and a ­mortgage of property where it is intended that there be incorporated statutory powers such as that of sale.31 There are certain exceptions where a deed is not required in order to transfer or create a legal estate, such as assurances by personal representatives and leases which take effect in possession for a term not exceeding three years at the best rent which can reasonably be incurred without taking a fine.32 It is a general principle of the law of contract that a promise made in a contract is not enforceable unless it is made for valuable consideration which moves from the promisee. However, a promise made in a deed is enforceable without consideration. A deed may be used to effect a transaction even when it is not necessary that there is a deed. Indeed, the legal understanding of a deed as stated in the last paragraph is so wide that a deed can be used, if the parties so wish, to effect virtually any transaction which creates or affects legal rights and duties. A deed can be used to embody any contract. The doctrine of estoppel by deed applies to statements made in a deed whether a deed was or was not necessary to effect the transaction in question. 4.14  There is some doubt over whether an estoppel by deed can arise out of a statement in a deed poll. The question may not be of great practical importance. It is the nature of a deed poll that there is no party to the deed other than the party who made it. The deed is, so to speak, often directed to the whole world and not to some specific other party or parties. The suggestion that a party may invoke an estoppel based on a deed poll appears to run contrary to the principle that only a party to a deed may rely on such an estoppel and there is no party to a deed poll except the party who made it.33 It has been said in the Court of Appeal that this reasoning is correct.34 However, there are judicial observations which suggest that an estoppel by deed may arise from a deed poll.35 4.15  While the point is not free from doubt, the better view for three reasons is that an estoppel by deed cannot arise from the statement in a deed poll. First, to allow such an estoppel would contravene the settled principle that only a party to a deed may rely on an estoppel created by a statement in that deed. Secondly, in many cases it may be difficult to define which persons, not being parties to the deed, can assert the estoppel against the maker of the deed.36 Thirdly, estoppel by deed is an old, and perhaps an antiquated, doctrine 30 Law of Property Act 1925, s 52(1). At common law a lease of whatever term created other than by a deed took effect only as a tenancy at will. If the purported lease is in writing but not in a deed it may take effect in equity as a specifically enforceable agreement for lease under the doctrine in Walsh v Lonsdale (1882) 21 Ch D 9 provided that the requirement of a written agreement now contained in s 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 is satisfied. 31 ibid, s 101(1). 32 ibid, ss 52(2)(d), 54(2). 33 See para 4.12. There are circumstances in which a deed poll may be directed particularly to a specific person such as a life insurance policy which is issued by way of a deed poll: see Foster v Mentor Life Assurance Co (1854) 3 E & B 48; Sunderland Marine Insurance Co v Kearney (1851) 16 QB 925. Two or more persons may be parties to a deed poll where they make the deed together with a common intention. 34 Cropper v Smith (1884) 24 Ch D 700, 708–09 (Bowen LJ) in a claim concerning an estoppel alleged to arise from a statement in a deed used in an application for a patent. 35 Right d Jefferys v Bucknell (1831) 2 B & Ad 278, 280–02 (Lord Tenterden CJ): Cropper v Smith (1884) 24 Ch D 700, 705 (Cotton LJ). See also Foster v Mentor Life Assurance Co (1854) 3 E & B 48 (recital in a deed poll which created a life insurance policy for one year). In his description of estoppel, Coke stated that every estoppel should be reciprocal (see above (n 14)), and a deed poll does not appear to have this characteristic. 36 It is however said that a party may sue on a deed poll if he is sufficiently described in it even if his full name is not set out as such: Sunderland Marine Insurance Co v Kearney (1851) 16 QB 925, 938 (Lord Campbell CJ).

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4.16  Estoppel by Deed and is probably one which should not be extended in modern circumstances.37 However, if a clear statement of fact made in a deed poll is communicated to some person with the intention that that person shall act on it, and that person does act upon it to his detriment, such that the main elements of an estoppel by representation are satisfied, the statement in question should be able to operate as an ordinary estoppel by representation. The fact that the representation is contained in a deed, including a deed poll, should not matter.38

3.  Defects in or Relating to Deeds 4.16  An estoppel will not arise when a deed, although properly executed, is for some reason void. One cause of a deed being void is the application of the doctrine of ‘non est factum’.39 This doctrine renders a deed void where a person has executed a deed and there was a radical and fundamental difference between what that person signed and what he thought he was signing.40 The doctrine of non est factum is of ancient origin and may originally have been confined to instances where a person who executed a deed did not understand its content and purpose because that person was blind or illiterate.41 A person who has executed a deed and pleads non est factum must prove that he took proper care when doing so. Thus, a person may be precluded by his own negligence from relying on his mistake. The word ‘estoppel’ is often used in the context of this last rule (ie, a person may be said to be estopped from denying the validity of the deed, and from alleging that the deed did not express his true intention, by reason of his own negligence) but the rule of law involved may be better explained as attributable to the principle that a person cannot generally take advantage of his own wrong, a principle which has ramifications throughout the law.42 The reasoning is that if a person could raise a plea of non est factum when he has failed to give proper attention to the deed which he was executing, he would be relying on his own wrongful conduct which was a breach of his duty to take proper care. Apart from the non est factum rule at common law, no estoppel arose when a deed was void because it was in some way fraudulent or illegal.43 4.17  The general principles of rescission and rectification which apply to contracts also apply to deeds. In equity, a deed may be voidable and subject to a right of rescission for

37 See para 4.5. 38 An instance of this type of situation may be Re King’s Settlement [1931] 2 Ch 294 in which a settlor conveyed property to grantees who executed a deed poll declaring trusts in favour of the settlor and other beneficiaries. The grantees then created incumbrances over the land purporting to be absolute owners. It was held that in the circumstances the deed of grant was a representation that the grantees were absolute owners and that the ­incumbrancers could assert an estoppel against the settlor and the beneficiaries. This decision is discussed more fully in ch 3, para 3.44, where it is suggested that it is best analysed as the operation of an estoppel by representation. 39 Literally ‘it is not made’. 40 Saunders v Anglia Building Society [1971] AC 1004, 1017 (Lord Reid). This decision is sometimes cited as Gallie v Lee [1971] AC 1004. 41 cf Thoroughgood’s Case (1582) 2 Co Rep 9b. 42 Saunders v Anglia Building Society [1971] AC 1004, 1019 (Lord Hodgson), 1038 (Lord Pearson). 43 Greer v Kettle [1938] AC 156, 171 (Lord Maugham). If a deed is to be impugned as fraudulent or a sham or as contrary to public policy as a response to an estoppel alleged to be based on the deed, the grounds for the assertion must be properly identified so as to provide a proper opportunity to address them: Prime Sight Ltd v Lavarello [2013] UKPC 22, [2014] AC 436, para 51.

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Deeds  4.18 reasons such as that it was induced by a misrepresentation or that there was a failure to disclose a material fact where the contract was uberrimae fidei.44 An estoppel by deed cannot be asserted by a party to the deed when such a right of rescission has arisen and is exercised.45 It appears that as regards a deed which was made as a result of a common mistake there is no separate equitable doctrine of rescission and the effect of the mistake must be judged under the common law rules.46 As regards estoppel by deed, a distinction needs to be made between deeds which are void ab initio, such as under the rule of non est factum or as a result of certain types of mistake at common law, and deeds which are voidable in the sense that one party has a right to obtain rescission of the deed, such as in certain circumstances where the deed has been induced by a misrepresentation or executed as a result of economic duress. No estoppel by deed can ever arise out of a statement in a deed which is void ab initio. No estoppel can be asserted against a party to a deed who has the right that the deed should be rescinded and who exercises that right. It has recently been said that the qualifications to the enforcement of an estoppel arising from a statement in a deed are the same as the qualifications and exceptions which apply to the enforcement of a term in a contract, namely fraud, illegality, mistake, misrepresentation and public policy grounds.47 4.18  In equity an instrument, including a deed, may be rectified if the parties had entered into a prior agreement and the instrument failed to state that which had been agreed by reason of a common mistake. For example, a declaration of trust contained in a transfer of land may be struck out by rectification where that declaration did not represent the prior agreement and the true agreed intention of the parties.48 The mistake which founds a right to rectification must generally be a common mistake, but in certain circumstances a unilateral mistake made by one party alone may be sufficient. These circumstances are that a party to the deed knows that a mistake which is to its advantage is being made by the other party to the deed by reason of its language but stands by and does nothing to correct that mistake.49 Where a mistake of the appropriate character, whether a common or unilateral mistake, is proved the court may at its discretion order the rectification of a deed so as to bring

44 A contract which is uberrimae fidei is one in which the contract may be rescinded against a party who failed to disclose a relevant fact at the time of the formation of the contract. An example of such a contract is a contract of insurance. 45 Greer v Kettle [1938] AC 156, 171 (Lord Maugham). 46 The law is that there is no equitable jurisdiction to rescind a deed or contract by reason of a common mistake in circumstances which fall short of those which would render the deed or contract void at common law: Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2003] QB 679. In Brooke v Haynes (1868) LR 6 Eq 25 the headnote states: ‘A party to a deed is not estopped in equity from averring against or offering evidence to controvert a recital therein contrary to the fact, which has been introduced into the deed by mistake of fact, and not through fraud or description on his part’. It was said in Greer v Kettle [1938] AC 156, 172 (Lord Maugham), that this statement appears never to have been doubted. The accuracy of the statement may now be subject to doubt having regard to the decision of the Court of Appeal in Great Peace Shipping Ltd v Tsavliras Salvage (International) Ltd. For a general discussion on the effect of a mistake on a contract see Treitel, The Law of Contract, 14th edn (Sweet & Maxwell, 2015) ch 8. 47 Prime Sight Ltd v Lavarello [2013] UKPC 22, [2014] AC 436, para 47 (Lord Toulson). 48 Wilson v Wilson [1969] 1 WLR 1470. 49 Riverlate Properties Ltd v Paul [1975] Ch 133; Thomas Bates & Son Ltd v Wyndham’s (Lingerie) Ltd [1981] 1 WLR 505.

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4.19  Estoppel by Deed it into accordance with the true agreement and intention of the parties. The ­rectification ­operates retrospectively back to the date of the execution of the deed. The significance of the principles of rectification to estoppel by deed is that when rectification is available there can be no estoppel based on a statement in the deed which is capable of rectification.50 It appears that if a deed is subject to rectification a court may refuse to give effect to that which might otherwise be an estoppel arising from the unrectified language of the deed without the necessity for a formal decree or order for rectification.51 In principle once the deed has been rectified by an order of the court an estoppel by deed should be capable of arising from the language of the deed as so rectified.

(C)  The First Aspect of Estoppel by Deed: Its Essential Requirements 4.19  The principle of the first aspect of estoppel by deed is that a party who has executed a valid deed which contains a clear and express statement of fact or of mixed law and fact, that statement being the basis on which the parties entered into the deed, will be estopped from denying the correctness of what was so stated in any subsequent action on the deed.52 As mentioned earlier, it is fundamental to the nature of an estoppel by deed that only a party to the deed may claim the benefit of the estoppel. In the same way an estoppel by deed may only be raised against a party to the deed which contains the statement or fact relied on. The Privy Council has dismissed the imagination of a litigant that as a stranger to a deed he could treat as indisputable an erroneous recital in a deed as to the ownership of land.53 A party to a deed will only be estopped from denying the truth of a statement made in a deed if that statement is attributable to him either alone or together with another party or parties to the deed. The party asserting the estoppel does not have to prove that detriment will be caused to him if the other party is not held to the correctness of the statement in the deed. As with other forms of estoppel, it is possible to break down the first aspect of estoppel by deed into its five essential elements which are (a) a statement of fact contained in a deed, (b) which is clear and unambiguous, (c) which is a part of the agreed basis of the deed, (d) which is relevant to a claim made on the deed, and (e) which is a statement of the party alleged to be estopped. It is now proposed to examine each of these elements. The third and the fifth elements are very similar but are often stated separately. 50 Greer v Kettle [1938] AC 156, 171 (Lord Maugham). The possibility of rectification as an appropriate remedy when a statement in a deed is not of the nature which can create an estoppel by deed was mentioned in CP Holdings Ltd v Dugdale (1998) (unreported), cited by Neuberger J in PW & Co v Milton Gate Investments Ltd [2004] Ch 142, para 153. 51 In Wilson v Wilson [1969] 1 WLR 1470 Buckley J stated this as the law based on what Lord Maugham had said in Greer v Kettle. See also Pink v Lawrence (1978) 36 P & CR 98. 52 Therefore, the deed must have been validly executed, must not be void by reason of some principle such as non est factum or mistake at common law, must not be liable to rescission in equity for misrepresentation or other grounds at the suit of the party alleged to be estopped, and must not be open to rectification by that party in such a way as would remove or alter the statement in question. These rules have been examined earlier in this chapter. 53 Trinidad Asphalte Company v Coryat [1896] AC 587, 592 (Lord Hobhouse). A person may be bound by or may take the benefit of an estoppel by deed by reason of privity of estate or title when that person is a successor in title to an interest in land held by a party to a deed at the time of the execution of the deed. See para 4.6 and see ch 2, part (I) for the effect generally of estoppel on third parties.

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The First Aspect of Estoppel by Deed: Its Essential Requirements  4.21

1.  Statement of Fact 4.20  It is said that the statement in a deed which creates the estoppel must be one of fact or of mixed law and fact.54 Thus, it has been stated that a statement in a deed that a person has a valid option to renew a lease, a statement which contains elements of law and of fact, can give rise to an estoppel by deed.55 The requirement of ‘a clear and unambiguous express statement as to present fact’ has recently been applied so as to reject as creating an e­ stoppel by deed a provision in a lease which related to what may arise in the future as a matter of law.56 4.21  It appears therefore that a statement in a deed of pure law, an opinion or judgement recorded in a deed, and a promise made in a deed, will not found an estoppel by deed. An estoppel by convention which arises from a shared assumption between parties is in some ways akin to an estoppel by deed and an estoppel by convention can certainly be founded on an assumption of law.57 The exact distinction between a statement of fact, a statement of law, and a statement of mixed law and fact, is notoriously difficult to state and different principles have been expressed as to how the differentiation is to be carried out. It had long been thought that a statement which was capable of founding an estoppel by representation had to be a statement of fact or of mixed law and fact and that a statement of pure law was insufficient. That view has been repudiated in recent authorities and it is probable that today a statement of law can, subject to the other requirements of the estoppel, create an estoppel by representation. There has been no suggestion that an estoppel by deed can be founded on a statement of law in the deed. Even though an estoppel by representation can probably now be constituted by a statement of law, the distinction between statements of law and statements of fact is discussed in detail in chapter three on estoppel by representation.58 Faced with the weight of authority as cited in the last paragraph, it is difficult to see how the

54 Greer v Kettle [1938] AC 156, 166–67 (Lord Russell of Killowen). Lord Russell approved the statement of Coltman J in Young v Raincock (1849) 7 CB 310, 338, that ‘Where it can be collected from the deed, that the parties to it have agreed on a certain admitted state of facts as the basis on which they contract, the statement of those facts, though but in the way of recital, shall estop the parties to aver the contrary’. Lord Maugham (at 170), after pointing out that estoppel by deed can arise from a recital in a deed, added: ‘Subsequent cases laid down that the recital must relate to specific facts, must be certain clear and unambiguous, and would not avail persons who are not parties or privies to the deed’. In Baker v Dewey (1823) 1 B & C 704, 707, Bayley J commenced his judgment by saying that a person who executed a deed was estopped from saying that the facts stated in the deed were not truly stated. 55 In Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 159, Oliver J held that a statement in a deed of the existence of an option for the renewal of a lease created an estoppel by deed, citing in support the statement in Spencer Bower & Turner: Estoppel by Representation, 3rd edn (1977) 174, suggesting that estoppel by deed was a variety of estoppel by convention. A recital in a deed that a right of way was not released has been said to relate to present facts and to create an estoppel by deed: Poulton v Moore [1915] 1 KB 400. 56 PW & Co v Milton Gate Investments Ltd [2004] Ch 142, paras 152–53 (Neuberger J). The Judge relied on a statement in Halsbury’s Laws, vol 16, 4th edn, para 1992. The law is stated to the same effect in vol 47, 5th edn, para 317. 57 Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878, 913 (Lord Steyn); and see ch 5, para 5.54. An estoppel by convention can be based on a statement of the general law such as an aspect of the general law of landlord and tenant: PW & Co v Milton Gate Investments Ltd [2004] Ch 142. 58 See ch 3, para 3.18 et seq, for a discussion on the probable change in the law as regards estoppel by representation. The discussion on the distinction between matters of law and matters of fact and on the meaning of a matter of mixed law and fact is in ch 3, para 3.26 et seq.

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4.22  Estoppel by Deed estoppel could be extended to statements of law except by the Supreme Court.59 Statements of opinion or of judgement are unlikely to be found in deeds which generally recite facts or events and in their operative parts give effect to transactions such as the creation or transfer of an interest in property. 4.22  The exclusion of promises made in deeds from the ambit of estoppel by deed is more rational and readily defensible. A promise made in a contract is generally only enforceable if backed by valuable consideration which moves from the promisee. An exception to this general rule is that promises made in a deed are enforceable even in the absence of consideration. Estoppel by deed – holding a party to a deed to what he has stated in the deed – is otiose in the case of a promise made in a deed and intended to be binding. Such a promise is enforceable by the other party to the deed, the promisee, under the ordinary law of contract (subject of course to the other requirements of a valid contract such as certainty of meaning) without the need for recourse to any form of estoppel. A contract for the sale of other disposition of an interest in land must be in writing,60 and this requirement is necessarily satisfied if the contract is in a deed since a deed must itself be in writing. 4.23  There is no limit to the subject matter of the express statement which founds an estoppel by deed provided there is a statement in the deed of fact or of mixed law and fact. For example, in principle, a sufficiently clear statement in a deed could bind a party to the deed to a statement that shares in a company had been validly issued,61 or that a party owns a legal estate in land,62 or that a party holds the fee simple in possession in land with the right to vacant possession and so not subject to a lease,63 or that a person was the first and true inventor of an invention for which a patent had been obtained,64 or that the amount of rent payable under a lease was £140 and not £170 per year,65 or that the purchase price under an assignment of a lease has been paid,66 or that a quantity of paper of a certain value had been delivered to a party to a deed before its execution,67 or that the seal of a specified company has been affixed to the deed.68 In some of the decisions just mentioned there was held to be no estoppel to the effect that could in principle have existed since the statements alleged to give rise to the estoppel were not sufficiently clear and precise. A further example of an estoppel is a statement in a deed that a right of way had been released which was held to be sufficiently precise to prevent a party from asserting the contrary.69 4.24  There is no precise form to which a deed has to conform if it is to be valid. By practice and by long tradition, especially in older deeds, a deed contains four parts, the title or introduction, the recitals, the operative words and the testimonium. In principle any

59 In PW & Co v Milton Gate Investments Ltd [2004] Ch 142, paras 155–56, Neuberger J said as a reason for not extending estoppel by deed to anything beyond statements of fact that, unlike other estoppels, estoppel by deed operates without the need to show unconscionability. 60 Law of Property (Miscellaneous Provisions) Act 1989, s 2(1). 61 Greer v Kettle [1938] AC 156. 62 Onward Building Society v Smithson [1893] 1 Ch 1. 63 District Bank Ltd v Webb [1958] 1 WLR 148. 64 Bowman v Taylor (1834) 2 Ad & E1 278, discussed in Greer v Kettle [1938] AC 156. 65 Lainson v Tremere (1834) 1 Ad & E1 792. 66 Prime Sight Ltd v Lavarello [2013] UKPC 22, [2014] AC 436. 67 Wiles v Woodward (1850) 5 Exch 557. 68 OTV Birwelco Ltd v Technical & General Guarantee Co Ltd [2002] 4 All ER 668. 69 Poulton v Moore [1915] 1 KB 400.

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The First Aspect of Estoppel by Deed: Its Essential Requirements  4.25 statement in a deed which is sufficiently precise may give rise to an estoppel in whatever part of the deed it is contained. The introduction states the nature and purpose of the deed such that it is a lease or a conveyance or an indenture.70 The recitals are often introduced by the word ‘whereas’ and contain a statement or statements of the factual matters and events which explain the need for and purposes of the deed and its operative part. The existence of previous documents executed at certain dates such as wills and settlements, and trusts, is often explained in the recitals as are events such as the death of a testator or the appointment of trustees. Statements in recitals are a fecund source of estoppels by deed since the very purpose of recitals is to state relevant facts.71 A statement that an estoppel cannot arise from the recitals in a deed in Coke on Littleton72 which had prevailed for over 200 years has long been overruled.73 The operative part of the deed states that which in law is effected by the deed, such as that A grants land to B in fee simple subject to certain leases. The testimonium is the attestation of the deed.74 Obviously an estoppel is less likely to arise from these last two parts of the deed but in principle an estoppel may be created by language in the operative part of the deed.75 The date inserted in the deed may give rise to an estoppel. In one case, four leases were executed in May 1903 but without being dated until in 1904 a different date was inserted into each of the leases by the agreement of the parties. It was held that the lessor was estopped from denying that the leases operated from the dates inserted by the consent of the parties.76

2.  Clear and Unambiguous Statement (i)  The Rule of Law 4.25  It is said in various places throughout the law of estoppel that what is written or said by a person must be precise and unambiguous or clear and unequivocal if an estoppel is to be raised against that person by reason of his words.77 The same principle applies to statements in deeds alleged to found an estoppel. There are expressions of this requirement going back many years. As an example it has been said that the statement in the deed must

70 Indenture is a general name which describes deeds which have two or more parties with separate interests: see para 4.12. 71 It was said in Heath v Craddock (1874) 10 Ch App 72, 30 (Lord Cairns LC), that a recital in a deed that a person was seised of a particular property might have been an estoppel but the actual recital was not sufficiently precise or unambiguous to have effect as an estoppel. 72 Co Litt 352b. 73 Bowman v Taylor (1834) 2 Ad & El 278, 290 (Lord Denman CJ); Lainson v Tremere (1834) 1 Ad & El 792; Greer v Kettle [1938] AC 156, 168–69 (Lord Maugham). See also Prime Sight Ltd v Lavarello [2013] UKPC 22, [2014] AC 436. 74 For the requirements for the valid execution of a deed by an individual and by a company, see para 4.11. 75 In Taylor Fashions Ltd v Liverpool Trustees Victoria Co Ltd [1982] QB 133n, Oliver J said: ‘Normally, of course, an estoppel by deed arises from the recitals but that is not, as I read the authorities, an essential feature. It may be created by a clear and distinct statement in the operative part’. 76 Rudd v Bowles [1912] 2 Ch 60. 77 Low v Bouverie [1891] 3 Ch 82 (estoppel by representation); Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741 (promissory estoppel). An exception is proprietary estoppel where the requirement of a precise and unambiguous assurance as a foundation of the estoppel has been replaced by the more relaxed requirement that the assurance is ‘clear enough’. See ch 7, para 7.141.

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4.26  Estoppel by Deed be clear and precise,78 or definite and precise,79 or clear and distinct.80 The need for certainty was established in early cases and in one decision in 1560 an indenture in which a person was stated to be seised (ie, the owner) of certain property was said to be insufficient proof of that ownership since the county in which the property lay was not stated.81 As with other documents, a deed must be interpreted and applied by reference to the whole of its content so that contradictory or contrasting statements within the deed may prevent there being found that clear and unambiguous statements which is necessary to create an estoppel. A statement in a deed on which an estoppel is founded must be regarded as factually correct strictly in accordance with its terms. There is of course nothing to prevent a party to the deed adducing in evidence or relying on other facts which affect any conclusion which flows from the facts stated without contradicting those facts.82

(ii)  Implied Statements 4.26  An application of this strict rule might mean that an estoppel by deed must be founded on a clear and precise and unambiguous express statement in a deed and so cannot arise by way of an implication from what is so expressly stated however clear that ­implication may be. It has been said in a modern decision that an estoppel by deed cannot arise by ­implication,83 a principle which is backed by considerable authority. An illustration of the strictness of the principle is provided by Onward Building Society v Smithson,84 in which trustees of a will conveyed property although they were not the owner of the property. The trustees were sued by a subsequent mortgagee of the property on the covenants for title in the conveyance. It was contended by the mortgagee that the trustees were estopped from denying their title to the land. There was no express statement in the conveyance that the trustees as vendors held the legal estate purportedly conveyed, the omission of such a statement being probably accidental. The Court of Appeal held that the absence of the express statement resulted in there being no estoppel as alleged. As Bowen LJ put it: ‘It would be very dangerous to extract a proposition by inference from the statements in a deed, and hold the party estopped from denying it; estoppel can only arise from a clear, definite statement’.85 The application of the strict rule means that a person is not estopped from denying that he is or was the owner of 78 Onward Building Society v Smithson [1893] 1 Ch 1, 14 (Brett LJ). 79 In Re Holland, Gregg v Holland [1902] 2 Ch 360, 387 (Cozens-Hardy LJ). 80 Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 159 (Oliver J). 81 Raysing’s Case (1560) 2 Dyer 208. It was said that if the ownership was denied it could not be known from which visne (neighbourhood) the jury should come. See as a further example Right d Jefferys v Bucknell (1831) 2 B & Ad 278, 282 (Lord Tenterden CJ). A modern expression of the rule was the statement of Neuberger LJ in Herbert v Pegrum [2005] EWCA Civ 120, [2005] All ER (D) 307 (Jan), para 20, that an estoppel founded on a conveyance could only arise from clear words. See also Welford v Transport for London [2011] EWCA Civ 129, [2011] RVR 172, para 21, an appeal to the Court of Appeal from the Upper Tribunal in which it was said that so far as it was necessary to rely on an estoppel it was justified to do so since the estoppel gave plain effect to a deed of settlement. 82 Re Maddy’s Estate [1901] 2 Ch 820. 83 PW & Co v Milton Gate Investments Ltd [2004] Ch 142, para 150 (Neuberger J), citing in support Halsbury’s Laws, vol 16, para 1020 (see now Halsbury’s Laws, vol 47, 5th edn (LexisNexis, 2014) para 319). 84 [1893] 1 Ch 1. 85 ibid, 14. See also Re Distributors and Warehousing Ltd [1986] BCLC 129 in which an inference as to the transfer of the benefit of a guarantee of the tenant’s obligations under a lease drawn from the terms of deeds of variation was held to be insufficient to create an estoppel even though the inference was clear because there was no express statement of the transfer of the guarantee in the deeds.

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The First Aspect of Estoppel by Deed: Its Essential Requirements  4.28 land when he has purported to convey that land merely because he has given covenants for title in the conveyance or because the conveyance states that the vendor has power to convey the land. The reason is that there can be compliance with a covenant by a person ‘without his having a single atom of a legal estate’, since a power to convey may arise in circumstances where the vendor does not own the land, such as in some circumstances under a power in a will, and that there is said to be no case in which a covenant that a person has something has been taken as equivalent to a statement that he has it.86 4.27  It is possible that the strictness and rigidity of the exclusion of an inference drawn from the language of a deed as the foundation of estoppel may be becoming somewhat tempered. In Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd87 one issue was the enforceability of a landlord’s break clause in a lease. The lease referred to the tenants of other property exercising their option for a new lease. The existence of this option was relevant to the exercise of the break clause. Oliver J held that it was a necessary implication from this statement that the tenants of the other property did have at the date of the deed a valid option to renew so that an estoppel by deed to that effect arose. This observation was possibly obiter since the Judge had already held that the case in support of the validity of the option could be established by reliance on an estoppel by acquiescence or an estoppel by representation.88 Nonetheless, the reasoning in the case is forceful and today the true principle may be that an estoppel by deed can arise from an express unambiguous statement in a deed or from a necessary implication drawn from the express content of a deed. What appears to be meant by a necessary implication is some statement or proposition which, although not expressly stated, would mean that an express statement in the deed would be meaningless if the further statement or proposition was not correct.89 4.28  Some possible added support for an estoppel based on an implied term in a deed may be found in the recent examination of the nature of an implied term. It was at one time thought that the process of enforcing a contract could be carried out by (a) determining what were the express terms of the contract, (b) interpreting the meaning of those express terms, and (c) deciding whether and what further terms might be implied into the contract.90 A more recent method of approach is to say that there is only one question, that question being the determination of the scope and meaning of the contract by interpreting the words used and by implying terms into the contract.91 On the other hand, these judicial nuances concerning the task of interpreting and enforcing contracts may have little impact in extending the scope of estoppel by deed so as to include an estoppel based on an implied term within a deed. 86 General Finance, Mortgage and Discount Company v Liberator Permanent Benefit Building Society (1878) 10 Ch D 15, 23–24 (Jessel MR). 87 [1982] QB 133n, 159 (Oliver J). Oliver J referred to Onward Building Society v Smithson but observed that it was one thing to say that an estoppel cannot arise out of an implication but another to say that it cannot arise out of a necessary implication. 88 ibid, 158. Neuberger J in PW & Co v Milton Gate Investments Ltd [2004] Ch 142, para 150, when stating that an estoppel by deed cannot arise by implication, did not refer to the observation of Oliver J in the Taylor Fashions case which may have introduced an important qualification to the starkness of the rule. 89 A statement by necessary implication may be distinguished from the ‘very subtle implication’ rejected as the foundation of an estoppel by deed in PW & Co v Milton Gate Investments Ltd [2004] Ch 142, para 151. 90 Philips Electronique Grand Public SA v BskyB Ltd [1995] EMLR 472, 480 (Bingham MR). 91 A-G of Belize v Belize Telecom Ltd [2009] 1 WLR 1988, para 181 (Lord Hoffmann); Marks & Spencer Plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72, [2016] AC 742, para 76 (Lord Clarke).

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4.29  Estoppel by Deed

(iii)  Consequences of the Rule 4.29  The strict rule that an estoppel by deed must be supported by a clear and unambiguous express statement in the deed has two corollaries. One is that even a clear statement in a deed will not create an estoppel if it is contradicted by some other statement in that deed.92 In the event of two inconsistent statements in it the intention of the deed as a whole obviously cannot be clear. The second is that a statement will not create an estoppel when it is contained not in the relevant deed itself but in some other document referred to in the deed such as an earlier deed referred to in the recitals.93 4.30  Since the statement has to be clear and unambiguous it should follow that if there is any real dispute as to the correct meaning of a statement in a deed the ambiguity present will itself prevent the statement founding an estoppel. A general principle of law is that the interpretation of contractual provisions has to be by way of an objective examination; the provision has to be given the meaning which a reasonable person would attribute to it in the light of all surrounding facts known to the parties to the contract when it was made.94 This meaning is to be contrasted with the meaning which one of the parties might subjectively have intended the provision to bear. It has been said in connection with proprietary estoppel that the statement or assurance which creates the estoppel should be interpreted by an objective examination of its meaning.95 The meaning of a representation said to found an estoppel by representation and of a promise said to found a promissory estoppel has to be determined in the same way.96 The same principle should apply to ascertaining the meaning of statements in deeds relied on in support of an estoppel. 4.31  An objective approach to matters such as the interpretation of a statement of any sort which founds an estoppel is common to estoppel generally and should apply to the interpretation of statements in a deed said to found an estoppel by deed.97 There is however a further important rule in the general interpretation of contracts which is that normally a court will resolve ambiguities in contractual provisions and give effect to that meaning which is the most likely to reflect the objectively determined intention of the parties. This last ­principle cannot be directly applied in the interpretation of statements said to found estoppels where clarity and absence of ambiguity are essential elements of the statement which founds the estoppel. For such statements, an ambiguity is not something to be resolved by the court but is something which prevents the estoppel having effect.98 This last proposition applies to estoppel by deed in the same way as it applies to estoppel by representation, promissory estoppel and estoppel by convention. 92 Right d Jeffreys v Bucknell (1831) 2 B & Ad 278; Pargeter v Harris (1845) 7 QB 708. 93 Saunders v Merryweather (1865) 3 H & C 902. 94 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896. 95 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 5 (Lord Hoffmann). 96 See ch 3, para 3.87, for estoppel by representation; and ch 6, para 6.141, for promissory estoppel. 97 For an objective approach to many of the essential elements of estoppels as a general factor applicable to the doctrine of estoppel as a whole, see ch 1, para 1.53. 98 This matter, as something applicable to other forms of estoppel, is explained in more detail in connection with promissory estoppel in ch 6, para 6.107 et seq. While a genuine ambiguity in a statement in a deed prevents that statement giving rise to an estoppel by deed, a statement is not prevented from being the foundation of such an estoppel by reason only of some fanciful or implausible possible meaning being attributable to the statement. This proposition accords with the proposition applicable to estoppel by representation as stated by Bowen LJ in Low v Bouverie [1891] 3 Ch 82. See the citation from the judgment of Bowen LJ in ch 3, para 3.38.

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The First Aspect of Estoppel by Deed: Its Essential Requirements  4.34

3.  Statement as the Agreed Basis of the Deed 4.32  It is fundamental to an estoppel arising from a statement in a deed that the statement of fact was a part or the whole of the agreed basis of fact on which the parties executed the deed. It is only if both parties to the deed have agreed to a certain admitted state of facts as the basis on which they have executed the deed that the statement of those facts will give rise to an estoppel binding both of them. It follows that if a statement in a deed is made by only one party to the deed there may be an estoppel which binds that party but not other parties.99 The statement must be an acknowledgment of a fact by both parties if it is to operate as an estoppel binding on both parties. This rule is therefore akin to the rule that a party to a deed will only be estopped from denying the truth of a statement in a deed if the statement is his statement, and this latter rule is treated as the fifth of the essential elements of this aspect of estoppel by deed. 4.33  The rule does not prevent an estoppel from arising out of a fact stated and agreed in a deed by both parties even though they both knew the fact to be untrue, for example a statement in a deed of assignment of a lease that the purchase price had been paid when both parties knew it had not been paid.100 This third element of the first aspect of an estoppel by deed has given rise to a suggestion that this aspect of the principle might be assimilated with what has come to be called estoppel by contract. This possibility is discussed later in this chapter.101 4.34  A question which arises and to which these rules may be relevant is what is the effect of a statement made by both parties in a deed but known by only one of the parties to be incorrect. The question is whether the party who executes the deed containing the incorrect statement and with knowledge of its incorrect nature is nonetheless entitled to insist that the other party is estopped from asserting the true facts. In such a case in some instances reliance on the deed may be rendered impossible because the deed is void for mistake at common law or is voidable for misrepresentation or can be or has been avoided for some other reason.102 Since the rationale of the doctrine of estoppel by deed is that a statement is made in a deed which the parties agree is correct, if one party knows at the time of the execution of the deed that the statement is not correct there is no true agreement between the parties which forms the basis of the deed so that no estoppel should flow from that statement. There is some authority for this view. In one case, a share in a ship was owned by A on trust for other persons. A’s son obtained a loan for his own purposes and purported

99 See the statement of Patterson J in Stroughill v Buck (1850) 14 QB 781, 787 cited in para 4.42. 100 Prime Sight Ltd v Lavarello [2013] UKPC 22, [2014] AC 436. There is consistent earlier authority to the same effect. In Horton v Westminster Improvement Commissioners (1852) 7 Exch 780 it was held that a party who had issued a bond in which it was recited that the issuer had borrowed £5,000 from A, could not deny that this had done so even though the parties knew that the recital was false. In Ashpitel v Bryan (1863) 3 B & S 474 a bill of exchange was drawn in the name of A, indorsed to B and accepted by C. At the time A was dead, a fact known to B and C. It was held in the Exchequer Chamber that C was estopped from asserting that the bill had been improperly drawn and indorsed. See also the statement of Dixon J in the High Court of Australia in Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641, 676, that ‘parties may adopt as the conventional basis of a transaction between them an assumption which they know to be contrary to the actual state of affairs’. Dixon J relied on a statement of the law to a similar effect by Isaacs J in Ferrier v Stewart (1912) 15 CLR 32 relating to the terms of a promissory note. 101 See para 4.57. 102 See para 4.16 et seq.

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4.35  Estoppel by Deed to mortgage the share in the ship as security for the loan. He did so by way of presenting to the agent of the mortgagee a printed form of mortgage signed by A but with blanks left to be filled in by the mortgagee or his agent. It was held that the mortgage was invalid but one of the issues raised was whether the mortgagee could insist on an estoppel based on what was in the mortgage form. It was held at first instance, and approved by the Court of Appeal, that there could be no question of an estoppel in favour of the mortgagee because the ­mortgagee through his agent knew the truth of the circumstances which were that when the deed was signed by the trustee blanks in the form remained to be completed.103 4.35  The point under discussion may go further. A person may become a party to a statement in a deed not only when that person knows that the statement is incorrect but also when that person has no knowledge or means of knowledge of the correctness of the statement. There is some authority for saying that in these circumstances an estoppel cannot arise so as to bind the person involved to the correctness of the statement. In Bowman v Taylor,104 a licence to use an invention for which a patent had been obtained recorded that the Plaintiff was the inventor of the invention which had been patented. It was held that the recital created an estoppel that the statement was correct. The basis of the decision as the application of estoppel by deed (though not the correctness of the ultimate decision) was questioned in a later decision in the House of Lords where it was doubted ‘whether the recital could properly be taken to be a statement on behalf of the licensee who could have had little knowledge as to possible anticipations of the invention’.105 The possible limitations on the ambit of estoppel by deed discussed in this and the previous paragraph may be all the more important in view of the rule that as regards this category of estoppel a person who asserts the estoppel does not have to show that detriment would be caused to him if a different party to the deed were entitled to go back on what was stated in the deed. 4.36  Where only one party to a deed is in a position to know the true facts or the full facts relating to a statement contained in the deed, the same result may be reached by the application of the principle that an estoppel only arises against a party whose statement it is.106 The fact that one party to the deed is in a position to know the truth or otherwise of a statement in the deed when another party does not have the requisite knowledge is a factor in deciding that the statement in question is that of the first party alone so that only that first party can be estopped from asserting the incorrectness of the statement. 4.37  The law therefore is that a statement of fact in a deed can give rise to an estoppel against a party to the deed only if that party has agreed to the statement as the basis or a part of the basis on which the deed was executed. The requirement does not prevent the estoppel arising when both parties to the deed knew that the statement was incorrect since in such a case both parties clearly agreed that it was to be taken as correct. However, it may be that as a result of this requirement (a) the person who alleges the estoppel relying on a 103 Burgis v Constantine [1908] 2 KB 484, 494 (Sir Gorell Barnes P), approving the statement of the law at first instance by Bingham J. 104 (1834) 2 Ad & El 278. 105 Greer v Kettle [1938] AC 156, 169 (Lord Maugham). Lord Maugham said that the decision in Bowman v Taylor could be explained on the ground that the deed was entered into on the footing that the recital, whether true or not, must be taken during the continuance of the licence as true. It is not clear how this result differs from the result of an estoppel by deed. 106 See para 4.42.

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The First Aspect of Estoppel by Deed: Its Essential Requirements  4.39 statement in a deed which he has executed cannot do so when at the time of the execution of the deed he alone knew that the statement was incorrect, and (b) the estoppel cannot be asserted against a party to the deed who at the time of the execution of the deed had little or no knowledge of the facts which would have enabled him to know whether the statement was or was not correct.

4.  A Claim or an Action on the Deed 4.38  It has been explained that only a party to a deed may rely on a statement of fact contained in the deed as something which may create an estoppel in his favour.107 In addition, and even as between the parties to a deed, an estoppel by deed can only arise in an action brought on the deed and not in an action brought on some separate or collateral transaction or matter or cause of action. What this amounts to is that the action must concern the existence or enforcement of rights and duties which directly derive from the contents of the deed which contains the statement. A statement of fact contained in a deed may be relevant to such an action and an estoppel may be prayed in aid by either party to the deed in support of that party’s case. On the other hand, the content of the deed may be relevant to the rights and obligations of the parties to the deed where those rights and obligations are created not by the deed itself but by some separate instrument or transaction or under the general law such as the law of torts. In that case, no estoppel can arise from the statement in the deed in proceedings relating to the latter rights and obligations. An action resting on such latter rights and obligations is said to be collateral to the deed. For example, a deed conveying land might contain a restrictive covenant by the purchaser preventing the construction of new buildings on the land conveyed above the height of a building existing at the date of the conveyance with that height stated in the deed. In proceedings to enforce the covenant after the demolition of that building the parties will be estopped from asserting that the building in existence at the date of the conveyance was of a different height. On the other hand, other restrictive covenants might have been contained in a subsequent and separate deed between the same parties which contained no statement of height. In proceedings to enforce those later covenants where height might be relevant, the statement of height in the first deed could not be relied on as creating an estoppel, the reason being that the rights under the covenants did not in the circumstances here described derive from the deed containing the relevant statement of fact. Of course, the statement in the first deed could in these circumstances be relied on as evidence of the height of the building at the relevant time but this evidence could be contradicted by other evidence, such as photographs or plans, which indicated that the height stated in the first deed was incorrect.108 4.39  An estoppel, other than a proprietary estoppel, cannot itself constitute a cause of action although it may assist in establishing or resisting some separate cause of action.109 107 See para 4.19. The matter of an estoppel arising as between successors in title of the original parties to a deed is examined in ch 2, part (I). 108 The proposition that a statement in a deed does not operate as an estoppel in relation to some matter collateral to the deed but may still be of evidential value in that matter was explained by Martin B in South Eastern Railway Co v Warton (1861) 6 H & N 520, 527. 109 This rule is explained in ch 2, part (B).

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4.40  Estoppel by Deed Another way of putting the rule here under discussion may be to say that a statement in a deed may assist in establishing or resisting a cause of action which arises from the provisions of the deed but not in establishing or resisting a cause of action which arises from some other source or event. 4.40  An example of the operation of the present principle and a leading case on this subject is Carpenter v Buller110 in which a person brought an action for trespass contending that he was the owner of a piece of land against which the trespass had taken place. The Defendant relied on a recital in a deed made a few years earlier between the parties which related to the construction of an adit and in which it was stated that the Defendant was the owner of the land. It was held that the Defendant could not rely on an estoppel arising out of this statement since the action for trespass was not based on the rights and obligations created by the deed. The principle as stated by Baron Parke was that when a fact was stated in a deed a party to the deed was not estopped from disputing that fact in an action by the other party ‘not founded on the deed and wholly collateral to it’.111 This principle has been applied in subsequent cases, such as in a bankruptcy case where the issue was whether a party to a transaction was the purchaser of goods or the agent of the seller,112 and in a case relating to an equitable interest in land.113 4.41  An example of the operation of the principle which did permit reliance on an estoppel is a decision in which the parties by deed dissolved a partnership with a provision that a stock of paper used for the purposes of the partnership was to be received by the Defendant and with a recital that a quantity of paper already delivered of £898 in value was excluded from the transfer of assets to the Defendant. It was held in an action in trover (wrongfully depriving the owner of goods of the possession or use of goods, now usually described as conversion of goods) against the Defendant that the parties were estopped from d ­ enying that the stated amount of paper had been delivered prior to the date of the deed.114 This decision illustrates the distinction between an action on a deed and an action collateral to a deed. The action the subject of the decision was on a deed because it related to the rights and obligations created by the deed which contained the recital. As Baron Parke put it, the action was to enforce rights which arose out of the deed and so were not merely collateral to the deed.115 He therefore distinguished the position from that in his earlier decision in Carpenter v Buller, explained in the last paragraph, where the obligation not to trespass on land arose in an action which was collateral to the deed which contained a statement on the ownership of the land.

5.  Statement of the Party Alleged to be Estopped 4.42  Yet a further limitation on the operation of estoppel by deed is constituted by the rule that a party to a deed will only be estopped from denying the truth of a statement 110 Carpenter v Buller (1841) 8 M & W 209. 111 ibid, 212. 112 Ex Parte Morgan. In Re Simpson (1876) 2 Ch D 72, 88–89 (Mellish LJ). 113 Trinidad Asphalte Company v Coryat [1896] AC 587 in which the estoppel was held to be not available to a litigant for the additional reason that he was not a party to a deed which contained the relevant recital. 114 Wiles v Woodward (1850) 5 Exch 557. 115 ibid, 593.

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The First Aspect of Estoppel by Deed: Its Essential Requirements  4.44 contained in the deed if the statement is his statement. A statement in a deed may be that of all parties to the deed or of only one or more of the parties to the deed. The limitation as just stated was established in Stroughill v Buck116 in which A lent money to B and entered into a deed with C under which C assigned his interest in certain deeds to A as security for the loan. It was recited in the deed that C had advanced sums to B as a loan and that these sums had not been repaid and in the deed C covenanted that this was so. The fact so recited and covenanted was significant for the value to A of the security on the basis of which he had advanced his money to B. In an action by A against C for breach of the covenant, C contended that A was estopped from asserting that C had not made the loan by reason of the statement in the recital of the deed that C had done so. Patteson J117 said: When a recital is intended to be a statement which all the parties to the deed have mutually agreed to admit as true, it is an estoppel upon all. But, when it is intended to be the statement of one party only, the estoppel is confined to that party, and the intention is to be gathered from construing the instrument.

It was held that the statement as to the loan advanced was that of C alone so that A was not estopped from asserting that it was incorrect.118 4.43  The law as stated by Patteson J has been approved as correct by the House of Lords. In Greer v Kettle,119 a party entered into a deed guaranteeing the repayment of a loan on the basis that the loan was secured against an issue of shares in a company. It transpired that the shares had not been issued and the guarantor refused to pay under the guarantee, something which as a matter of contract he was entitled to do. The deed of guarantee recited that the shares had been issued and the party with the benefit of the guarantee contended that the guarantor was for that reason estopped from asserting that the shares had not been issued. The House of Lords approved the statement of the law by Patteson J in Stroughill v Buck and held that the statement that the shares had been issued was that of the party with the benefit of the guarantee only and not that of the guarantor, so that the guarantor could assert the true facts concerning the issue of the shares. 4.44  The principle of law is clear. A party to a deed will only be estopped from denying a statement in a deed if that statement can be regarded as the statement of that party, whether of him alone or of him and of another party or parties to the deed. The difficulty is of course to know in what circumstances a statement is that of one party to the deed as opposed to all parties to it. The answer is a matter of the construction of the deed as a whole in the circumstances known to the parties at the date on which the deed was executed. An obvious and potent factor relevant to the ascertainment of the answer to this question is likely to be the extent to which a particular party could be expected to know the truth of the statement as compared with other parties. If only one party is likely to have had the requisite information needed to ascertain the truth of the statement, then for that reason it becomes more likely that the statement will be held to be his and his alone and not that of the other party or parties to the deed. It is a general principle of law in the construction of contracts 116 (1850) 14 QB 781. 117 ibid, 787. 118 A further way of arriving at the same result might have been by adducing evidence that C when he entered into the deed knew that the recital relating to the loan was incorrect: see para 4.34. 119 [1938] AC 156.

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4.45  Estoppel by Deed that the negotiations of the parties prior to the contract cannot normally be used as an aid to the construction of the contract.120 It is likely that a similar rule prevails when it comes to the ascertainment of whether a particular statement in a deed is that of one party or of all parties.

6. Injustice 4.45  The moral underpinning of the law of estoppel as a general legal concept is that a person should not be entitled to go back on what he has stated to another person when that person has acted on the faith that the statement was true and there would be detriment to that other person and therefore injustice if the first person was allowed to do so.121 ­Consequently, the prospect of injustice if a person is allowed to go back on what he has stated or promised or on a shared assumption in which he has participated or on an assurance given by him is a requirement for the operation of most forms of estoppel, namely estoppel by representation, promissory estoppel, estoppel by convention and proprietary estoppel. Various forms of language are used such as that it would be unfair or unjust or inequitable or unconscionable to permit a person to go back on what that person has said or assumed or promised or assured but the underlying concept is the same. The concept and meaning of unconscionability are discussed in more detail in connection with estoppel generally,122 and more specifically with estoppel by representation, promissory estoppel, estoppel by convention and proprietary estoppel where the availability of the estoppel exists only where there would be injustice if there were no estoppel.123 In general for there to be injustice for the purposes of these estoppels a person who asserts the estoppel must have acted in reliance on the representation or the shared assumption or the promise or the assurance such that there would be real prejudice to that person if the correctness of what had been stated could be denied. 4.46  There is no such requirement of injustice or detriment in estoppel by deed. If the other requirements of the estoppel are satisfied, a party to a deed may assert an estoppel founded on a statement in the deed even though it cannot show that it acted in reliance on the statement in the deed or that any detriment would be caused to it if the statement could be contradicted or shown to be untrue. For example, it has been said: Estoppel by deed differs from estoppel by convention, not only by virtue of the relatively restricted circumstances in which it can arise … but also in that it requires no subsequent conduct or any other act of reliance by the party invoking the estoppel.124

The origins and the decided cases relating to estoppel by deed do not discuss the matter of reliance and detriment or suggest that reliance and detriment are required in order that the 120 Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 58, [2009] 1 AC 1101. 121 See ch 1, para 1.1. 122 See ch 1, para 1.44 et seq. 123 See ch 5, part (F), for estoppel by convention; and ch 6, part (G), for promissory estoppel. The same matter is also discussed in connection with estoppel by representation and proprietary estoppel: see ch 3, part (E); and ch 7, part (G). See Steria Ltd v Hutchison [2006] EWCA Civ 1551 in which the matter of unconscionability is discussed in identical terms in respect of estoppel by representation and promissory estoppel. 124 PW & Co v Milton Gate Investments Ltd [2004] Ch 142, para 149 (Neuberger J).

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The First Aspect of Estoppel by Deed: Its Essential Requirements  4.48 estoppel may be invoked.125 It follows that there is no element of discretion in the operation of the estoppel. The difference is particularly marked when estoppel by deed is compared with promissory estoppel which is a species of equitable estoppel where a court may impose terms when enforcing a promise by a party not to enforce its full legal rights, for example by allowing that party to resume the full assertion of its rights by giving reasonable notice that the period during which the rights are suspended will come to an end, and the same difference applies in a comparison with proprietary estoppel where a court has a wide discretion on the remedy or relief which it orders.126 By contrast, if the main elements of an estoppel by deed are made out a court is then bound to give effect to the estoppel. In this respect therefore estoppel by deed differs from most forms of estoppel and is an exception to the observation, made in connection with estoppel by convention, that ‘All estoppels must involve some statement or conduct by the party alleged to be estopped on which the alleged representor was entitled to rely and did rely’.127 A further aspect of these rules is that the person who asserts the estoppel based on a statement in a deed does not have to show that he relied on the statement as a reason for the execution of the deed by him. The only form of estoppel, apart from estoppel by deed, which has no requirement of reliance or detriment or unconscionability is estoppel by record as described in chapter nine where the justification for the estoppel is that of achieving finality in litigation and that of avoiding a person being troubled twice by litigation on the same matter. 4.47  A possible reason why there is no detriment or reliance requirement for estoppel by deed is the antiquity of the origin of the doctrine which arose before modern ideas of unconscionability and flexibility came to the fore. It may also have been thought that the fact that a person had entered into a serious and formal document, unlikely to have been prepared and executed without careful consideration, was itself sufficient to justify the estoppel particularly having regard to the strict requirements which limit the availability of the estoppel. Furthermore, in practice a party to a deed is unlikely to seek to raise an estoppel unless he perceives some detriment (or at least some absence of benefit) to him if another party to the deed is not held to a statement made in the deed. If a party to a deed thought it to be to his advantage that a statement in the deed could be contradicted he would be unlikely to assert an estoppel which prevented that contradiction. This last observation of course holds good for most estoppels where injustice and detriment are requirements. 4.48  The effect of the absence of a need to show injustice brought about by reliance and detriment is tempered if, as may be the case, it is the law that a person cannot prevent a statement in a deed being contradicted by reliance on estoppel when he was aware of the untruth of the statement when he entered into the deed but the other party was not aware of that untruth.128 Nonetheless, modern ideas of flexibility and justice, and the desideratum of a cohesive approach to the various forms of estoppel where that can be achieved, suggest that it may be unfortunate that a requirement of injustice and detriment is not an essential element of estoppel by deed as it is for other estoppels. 125 eg, in Goodtitle d Edwards v Bailey (1777) 2 Cowp 597, 600–01, neither Lord Mansfield CJ nor Aston J refer to any requirement beyond that which is stated in the deed. 126 See ch 6, para 6.99; and ch 7, part (I). 127 K Lokumal & Sons (London) Ltd v Lotte Shipping Co Pte Ltd (The August Leonhardt) [1985] 2 Lloyd’s Rep 28, 35 (Kerr LJ). 128 See para 4.1.

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4.49  Estoppel by Deed

7.  Estoppel by Deed and Other Estoppels 4.49  Since estoppel by deed was classified four centuries ago as one of the then existing three forms of estoppel129 the law of estoppel has substantially changed, both by the creation of new forms of estoppel and by the elaboration and statement of the essential elements of the different forms of estoppel. It is pertinent to ask whether there is any substantial justification today for retaining estoppel by deed as a separate form of estoppel or whether it should be subsumed with certain other estoppels into some general concept of estoppel by agreement or conventional estoppel. Estoppel by deed has no direct connection with common law estoppel by representation which depends on a representation of some existing matter acted upon to his detriment by the representee. Nor does it have any similarity to the two forms of equitable estoppel, promissory estoppel which depends on a promise not to assert legal rights and proprietary estoppel which depends on an assurance concerning an interest or rights over an identifiable area of land. These last three forms of estoppel have developed wholly separately from estoppel by deed and can trace their genesis to decisions at least as far back as the mid-nineteenth century. 4.50  There are two subsisting forms of estoppel or possible estoppel which have a connection to estoppel by deed. One such form is what has sometimes come to be called contractual estoppel or estoppel by contract. The other is estoppel by convention. Estoppel by contract has been described as an extension of estoppel by deed into contracts generally. Estoppel by convention has come to be recognised relatively recently as a form of estoppel in its own right with its own rules but is said possibly to have been derived from estoppel by deed. In order to discuss the question posed in the last paragraph it is necessary to compare estoppel by deed and its operation with these two further forms of estoppel. 4.51  The discussion at this point centres only on what is called in this chapter the first aspect of estoppel by deed. The second aspect, the creation of interests in land by estoppel or by a similar doctrine, indubitably remains as something which is governed by rules of law in its own right.

(i)  Estoppel by Contract 4.52  What is called estoppel by contract or contractual estoppel has been explained and discussed in chapter three on estoppel by representation since it has similarities with that form of estoppel and is often compared with estoppel by representation which is itself then sometimes called evidential estoppel to distinguish it from estoppel by contract.130 The essence of what is called estoppel by contract is that the parties to a contract state some proposition of fact, or possibly some proposition of law, as that which is to be taken as correct between them for the purposes of the operation of the contract. The proposition is so stated as a term of the contract. The parties are held to their statement whether it is correct or not. The reason that the parties are held to the proposition is that it is one of the agreed terms of their contract and by reason of the principle that, subject to matters such as 129 In Coke on Littleton (1628) the three forms of estoppel are described as estoppel in pais, estoppel by writing (which was Coke’s description of estoppel by deed), and estoppel by record. See ch 1, para 1.72. 130 See ch 3, part (F).

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The First Aspect of Estoppel by Deed: Its Essential Requirements  4.54 illegality or conflict with a statute, parties are entitled to agree whatever they wish. The crux of the matter is that the agreement is enforced between the parties not because of any rule of estoppel but by reason of the fundamental rule that the law does generally enforce contractual terms and provisions whatever they are. On the basis of this reasoning, it is submitted when the matter is considered in more detail in chapter three that to call this situation yet a further form of estoppel, adding to the various forms and descriptions of estoppel which already exist, is unnecessary and perhaps confusing. 4.53  As long as separate forms of estoppel exist it is undoubtedly the case that there will be some degree of overlap between certain of the forms of estoppel. It has recently been said in the Privy Council that estoppel by deed overlaps with estoppel by representation and estoppel by convention.131 Over recent decades, a major advance for the doctrine of estoppel is that there has been a clearer articulation of the essential elements of different forms of estoppel and this has led to a clearer demarcation of the boundaries between the various forms.132 4.54  There is certainly an overlap between what is described as estoppel by contract as just summarised and the first aspect of estoppel by deed as explained in this part of this chapter. Both principles have as their foundation some statement or proposition which two or more parties have agreed and recorded in a document which they have executed. Both principles have the effect that a party is prevented for the purposes of their relationship constituted by the document from denying the correctness of the proposition so recorded whether it is in fact correct or not. In both cases there is no requirement, as there normally is for other forms of estoppel, that a party who asserts the binding nature of the proposition recorded has acted in reliance on it or that it would be unconscionable that there should be a resiling from the correctness of the proposition. An illustration of the overlap may be given by reference to the recent decision of the Privy Council in Prime Sight Ltd v Lavarello.133 A lease was assigned by deed by A to a company of which his wife owned all but one of the shares. The recitals to the deed stated that the company had paid the purchase price of £499,950 whereas in fact, and as known to both parties, that sum had not been paid. On A becoming bankrupt the official trustee of A’s property claimed the sum against the company and the company resisted by pleading an estoppel by deed to the effect that the sum had been paid. The plea of estoppel succeeded. It might have occurred that what had been done was that a previous agreement had been executed, in writing but not as a deed, for the sale of the property which recorded the same statement as to the payment of the purchase price. It seems in those circumstances that the correctness of the agreed statement in the contract would have been enforced as an ordinary contractual term in the same way as an estoppel by deed was enforced. It may be asked why the agreed statement in the deed should not have been enforced between the parties in accordance with the general principle that the courts will enforce an agreed provision without recourse to the ancient principle of estoppel by deed.

131 Prime Sight Ltd v Lavarello [2013] UKPC 22, [2014] AC 436, para 29 (Lord Toulson). 132 eg, the main elements of proprietary estoppel are now established following Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776 (see ch 7, part (C)) and the ‘classic’ requirements of both estoppel by representation and ­promissory estoppel have been stated in largely identical terms in Steria Ltd v Hutchison [2006] EWCA Civ 1551 (see ch 6, para 6.176). The present situation is in contrast to a time when it was said, for example, to be unnecessary for the purposes of deciding a case to distinguish between promissory and proprietary estoppel: see Crabb v Arun District Council [1976] Ch 179, 193 (Scarman LJ). 133 [2013] UKPC 22, [2014] AC 436.

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4.55  Estoppel by Deed Indeed, this reasoning appears to have been accepted by the Privy Council since it was stated: ‘However, there is no logical reason to treat declaratory statements in a deed which are intended to be contractually binding as less effective than any other express or implied contractual convention’.134 4.55  An attractive approach may therefore be that of saying that where a provision is agreed between parties as the basis of a transaction or as the basis of a particular relationship between the parties, then provided that the agreement has the necessary characteristics of a contract the correctness of the proposition (whether it is in fact correct or not) will be enforced between the parties by the application of the ordinary law of contract. On this approach to the matter no estoppel need be involved and no reliance on the principle of estoppel by deed with its various historical technicalities is necessary. However, the Privy Council in Lavarello thought that this might be going too far.135 4.56  There are in truth substantial differences between the principle of estoppel by deed as it has been established and that aspect of the law of contract, whether or not called estoppel by contract, which enables the enforcement of the correctness of a statement in a contract because the parties to the contract have agreed that the statement is to be taken for the purposes of the contract to be correct. These differences are now outlined. (a) The first difference, and that which was identified by the Privy Council in Lavarello, is that consideration is a requirement of a contract which is not contained in a deed.136 No consideration is necessary to support an agreed statement in a deed. Consideration is necessary if a party is to rely on a contract as the foundation of a right to treat a statement as correct when it is not correct. (b) The underlying purpose of deeds and contracts is often different. The nature of a deed is to express the intention or consent of some person to make, confirm, or concur in, some assurance of an interest in property, or in some obligation, duty or agreement, or otherwise to affect the legal relations of some other person.137 The nature of a contract is to create obligations between the parties. Of course, any contract may take the form of a deed if the necessary formalities are observed but that does not affect the underlying and differing general purpose of the two forms of instrument. (c) The enforcement of the correctness of a statement because it is specified in a contract as correct must apply in principle to oral or partly oral contracts whereas a deed must be wholly in writing. (d) On one view of the matter, an estoppel by deed may arise from the terms of a deed poll, a deed to which there is only one party.138 A contract necessarily involves at least two parties.139 (e) There is long authority to the effect that an estoppel by deed must be based on a statement of fact.140 By contrast so-called estoppel by contract can probably apply, subject to certain limitations, to agreed statements of law. (f) Different rules apply to the interpretation of contracts and statements in a deed said to create an estoppel by deed. A statement in a deed can only create 134 ibid, para 46 (Lord Toulson, delivering the judgment of the Privy Council). 135 ibid, para 30. 136 ibid. 137 See para 4.12. 138 For this form of deed, see para 4.12. 139 There may be a ‘unilateral’ contract such as where A promises to pay to B £1,000 if B obtains a degree or abstains from strong drink for a period. The only obligation arising under the contract is a contingent obligation on A since B has no contractual obligation to do or not do anything, but there must still be at least two parties to the contract. 140 See para 4.20 et seq. A statement of mixed law and fact is sufficient.

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The First Aspect of Estoppel by Deed: Its Essential Requirements  4.58 an estoppel if it is precise and unambiguous.141 As against this, the interpretation of provisions in a contract is substantially more relaxed and, subject to extremities of uncertainty, a court will always strive to ascribe some meaning to that which the parties have stated.142 (g) An estoppel by deed may not generally be founded on an implied statement in a deed at any rate unless that statement can be said to arise by necessary implication.143 There is a much wider scope for the implication of terms, including terms that a statement is to be taken to be correct, into contracts. All of these differences would have to be examined and resolved if there was to be an abandonment of estoppel by deed as a separate category of estoppel and its amalgamation into some larger principle of the enforcement of agreed statements. It does seem that the Privy Council was on firm ground in considering that the abandonment of estoppel by deed as a separate category of estoppel in favour of some larger principle was a step too far.

(ii)  Estoppel by Convention 4.57  Unlike what is called estoppel by contract, estoppel by convention is a well-established and well-defined separate form of estoppel. It arises where two or more parties to an existing transaction form a shared assumption of fact or of law relating to that transaction with each party knowing that the assumption is held by the other party or parties. The result of the estoppel is that in any legal proceedings a party will not be entitled to deny the correctness of the shared assumption where it would be unjust or unconscionable to allow him to go back on the assumption.144 One suggestion may be that estoppel by deed, estoppel by contract and estoppel by convention, should be amalgamated into an overall form of estoppel since they are all grounded in some agreement or assumption stated or shared by the parties. For example, in Lavarello,145 there is reference to a suggestion made in the thirtieth edition of Chitty on Contracts146 that there is little point in preserving any separate category of estoppel by deed, since the basis of the estoppel appears to be covered by estoppel by representation or by convention. There are fundamental differences between estoppel by deed and estoppel by convention which would make difficult and problematical any amalgamation of the two forms of estoppel. 4.58  First, estoppel by deed is a part of an initial transaction. The statement of fact which brings about the estoppel is a component of the deed which is likely to have other purposes. It is frequently found as a recital of the deed which precedes the operative parts of the deed. An estoppel by convention is fundamentally different in that it operates by way of a shared assumption relating to a previous and existing transaction of some sort. That previous transaction may often be a contract but is not necessarily so.147 141 See para 4.25. 142 The different degrees of certainty required for some forms of estoppel as compared to provisions within a contract are examined in more detail in connection with estoppel by representation in ch 3, para 3.40. 143 See para 4.26 et seq. 144 See ch 5, para 5.1. 145 [2013] UKPC 22, [2014] AC 436, para 30 (Lord Toulmin). 146 Vol 1, para 1-112 (Sweet & Maxwell, 2008). The matter is referred to in para 1.140 of the current, 32nd edition of Chitty on Contracts. 147 See ch 5, para 5.22 and para 5.44 et seq; and see the explanation of Oliver LJ in Keen v Holland [1984] 1 WLR 251, as applied by Neuberger J in PW & Co v Milton Gate Investments Ltd [2004] Ch 142, paras 164–67.

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4.59  Estoppel by Deed 4.59  Secondly, it is an essential element of an estoppel by convention that the party who raises the estoppel must show that it would be unconscionable to allow the other party to resile from the shared assumption, something which is normally shown because the party raising the estoppel has acted in some way in reliance on the shared assumption such that it would suffer detriment if the assumption could be abandoned by the other party.148 There is no requirement of reliance and detriment giving rise to unconscionability in estoppel by deed. 4.60  Thirdly, estoppel by convention can operate as regards an assumption of law as well as an assumption of fact. Estoppel by deed is confined to statements in a deed of fact or of mixed law and fact.

(iii) Conclusion 4.61  Perhaps because of its antiquity, and perhaps because of its limited field of operation and utility as compared with other forms of estoppel, the first aspect of estoppel by deed has components which fit uneasily into the overall modern conception of the doctrine of estoppel. Estoppel by deed appears to be based on the enhanced status, even veneration, accorded to a deed. Originally a deed with its formality, including the affixation of a person’s seal, was required for any transaction or process which had to be in writing. Nowadays a deed is only required for limited purposes and the execution of a deed is substantially less formal.149 One anomaly is that unlike all the other forms of estoppel (save for estoppel by record) there is no requirement of reliance, detriment or unconscionability in estoppel by deed. Another point is that estoppel by deed is confined to express statements of fact or mixed law and fact, whereas there seems no logical reason why it should not extend to statements of law. It is considerations such as these which have led to the suggestions as noted above that the first aspect of estoppel by deed should be abandoned or at least subsumed within some wider form of estoppel where the underlying feature is that the estoppel rests on an agreement of some nature between the parties. 4.62  There have been numerous pleas and suggestions in decided cases and elsewhere in recent times for the amalgamation of forms of estoppel into a single wider principle or principles and this important topic is considered separately and generally in chapter two of this book.150 The particular form of limited amalgamation mentioned in the last paragraph faces formidable difficulties. As explained, there is a substantial underlying similarity between the first aspect of estoppel by deed and its elements and what has become called estoppel by contract, but there are also considerable differences. As also explained, estoppel by deed and estoppel by convention are fundamentally different in their elements and operation.

148 See the definition of estoppel by convention by Lord Steyn in Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878, 913, cited in ch 5, para 5.4. 149 See para 4.9 et seq for the present formality rules as contained in s 1 of the Law of Property (Miscellaneous Provisions) Act 1989. Other requirements of formality have varied. It was only after the Statute of Frauds 1677 that a contract for the sale of land became unenforceable unless in writing. A deed made by an individual person did not require to be signed until the Law of Property Act 1925 so provided. 150 See ch 2, part (G). A notable proponent of amalgamation is Professor Elizabeth Cooke who has argued that estoppel should cease to be treated as a collection of discrete types but should be regarded as a, not entirely seamless, whole: see E Cooke, The Modern Law of Estoppel (Oxford University Press, 1999) 170.

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The Second Aspect of Estoppel by Deed: Interests in Land Created by Estoppel  4.65 It seems both reasonable and practicable, as well as being backed by recent authority,151 to proceed on the assumption that (a) estoppel by deed, (b) the principle that parties to a contract may agree for the purposes of their contract any matter of fact or law that they wish as a part of the concept of freedom of contract, and (c) estoppel by convention, will remain as separate areas of law with their own rules and sphere of operation and that any synthesis or amalgamation depends on some wider process of organised law reform which is not at present envisaged.

(D)  The Second Aspect of Estoppel by Deed: Interests in Land Created by Estoppel 1. Introduction 4.63  The rules of law now to be explained have been called in this chapter the second aspect of the principle of estoppel by deed.152 In fact the rules here discussed, while they have an affinity to the first aspect of the law of estoppel by deed, are different in significant ways. A deed is often involved although it need not necessarily be so. The rules are not wholly dependent, as is the first aspect of estoppel by deed, on a clear and express statement of fact or of mixed law and fact contained in a deed. The justification for explaining the rules now to be covered as a second aspect of estoppel by deed is as much one of convenience as of strict accuracy. 4.64  A part of the title of this part of the chapter, interests in land created by estoppel, goes to the heart of the subject and differentiates it from the first aspect of estoppel by deed. The rules of law to be explained have two elements. One element is that where there is a purported transfer or creation of an interest in land between A and B, those parties are thereafter treated as though that interest was actually transferred or created between them even though A at the time of the purported transfer or creation did not have the necessary interest in land which entitled him to effect the transfer of that interest or the creation of it. The parties are treated as between themselves as if there had been a valid and effective transfer or creation of the interest. Put at its starkest if A, owning no interest of any sort in Blackacre, executed a 999-year lease of Blackacre to B which states that A is the freeholder of the land, A and B are thereafter to be treated as between them as the landlord and the tenant of Blackacre under a 999-year lease of that property. 4.65  Of course, the bringing into existence of the interest by estoppel, such as a tenancy by estoppel as between A and B, cannot defeat the rights and claims of C who may be the true owner of the land and who may assert those rights. If such a third party comes forward and successfully asserts his claim the tenancy by estoppel will end; however, the tenancy by estoppel will continue if for some reason the third party makes no adverse claim or is



151 Prime 152 See

Sight Ltd v Lavarello [2013] UKPC 22, [2014] AC 436. paras 4.1 and 4.2.

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4.66  Estoppel by Deed debarred from making such a claim.153 It appears that in a situation such as this the tenant by estoppel will not be liable on the covenants in the lease to the grantor during the period before the true owner established his claim and will be able to recover from the grantor any rent paid to him during that period.154 4.66  The second element of the rules to be discussed is what is termed ‘feeding the ­estoppel’. Where a person transfers or creates by deed an interest in land without having a title to the land which entitles him to do so he may subsequently acquire a title which is sufficient. In that event, the estoppel is said to be fed and at and from that time the grantee of the interest obtains not just a title by estoppel but a full title described as a title in interest. He obtains from that time the full title which would have been passed to him if the grantor had held at the time of the grant the interest which he subsequently acquires or an interest out of which the interest acquired could have been granted.155 This process occurs ­automatically by virtue of the feeding of the estoppel without the need for a fresh deed of grant. The rule has been described as being that where a grantor has purported to grant an interest in land which he did not at the time possess, but subsequently acquires, the benefit of his subsequent acquisition goes automatically to the earlier grantee or, as it is usually expressed, ‘feeds the estoppel’.156

An alternative expression sometimes used is that the acquisition by the grantor of the ­interest purportedly granted operates to ‘fill up’ the estoppel. In the example given at the end of the last but one paragraph, if A acquired the freehold after the purported grant of the lease, so entitling him to grant the lease, B’s lease would ripen from a tenancy by estoppel into a full tenancy in interest with as good a title against A and against the whole world as if A had had the freehold at the time of the grant of the purported lease.

2.  The Historical Basis of the Two Separate Doctrines 4.67  Modern authority establishes and explains that elements of the rules as just described arise from what are said to be two separate doctrines of law.157 The distinctions between the effect of the two separate doctrines derive from the historical development of this area of the law of estoppel such that, before coming to the two doctrines and the distinctions

153 Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries [1977] QB 580, 596–97 (Lord Denning MR); Wilson v Anderton (1830) 1 B & Ad 450, 457 (Littledale J); Newsome v Graham (1829) 10 B & C 234, 236 (Lord Tenterden CJ). See also the decision of the Irish Supreme Court in Levingston v Somers [1941] IR 183. The situation here considered is where the third party owns the land at the time of the grant of the lease. The effect of an interest created by estoppel on a third party who subsequently acquires an interest in the land affected is considered in para 4.83 where the effect of the two doctrines which constitute the second aspect of estoppel by deed is contrasted. 154 Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries [1977] QB 580, 596–97 (Lord Denning MR). 155 Webb v Austin (1844) 7 Man & G 701, 714 (Tindall CJ); Mackley v Nutting [1949] 2 KB 55, 63 (Cohen LJ). 156 Rajapakse v Fernando [1920] AC 892, 897 (Lord Moulton). See also Cuthbertson v Irving cited in para 4.68. As will be explained later, what is here described as the second aspect of estoppel by deed consists of two separate doctrines the second of which does not depend on a deed having been executed. It is also explained that under the second doctrine there is often nothing equivalent to feeding the estoppel. See paras 4.81 and 4.82. 157 First National Bank Plc v Thompson [1996] Ch 231.

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The Second Aspect of Estoppel by Deed: Interests in Land Created by Estoppel  4.69 between them and the questions of terminology which they may engender, it is helpful to look at the subject historically. There are important differences between the two doctrines including that under the second doctrine there is no generally applicable concept of feeding the estoppel. 4.68  The principles under discussion go back to at least the reign of Elizabeth I.158 They were applied by the Lord Chancellor in Vick v Edwards159 in 1735 in which it was held that a transfer of a contingent interest not vested in the transferor nonetheless passed an interest by estoppel to the transferee. Later in the eighteenth century the principles were applied by Lord Mansfield CJ. An owner of an estate in remainder expectant on the death of a life tenant granted his estate by way of a release, a form of conveyance not permitted to an owner of an estate which was not in possession. It was held that the release created an interest by estoppel in the grantee such that the grantor could not deny the validity of the estate of the grantee.160 The principle of the feeding of the estoppel is also of some age. In Cuthbertson v Irving,161 Martin B at first instance said that when a lessor without any legal estate or title purported to grant a lease of the land the parties were estopped from disputing the validity of the lease so that the tenant could not deny his landlord’s title and the landlord could not dispute the validity of the lease. He added, ‘Secondly, where a lessor by deed grants a lease without title and subsequently acquires one, the estoppel is said to be fed, and the lease and the reversion then take effect in interest and not by estoppel’. 4.69  The principles have been applied in modern authorities. For example, it has been said that the principles can in an appropriate case bring about a tenancy by estoppel for the purposes of the Rent Acts.162 It has also been said that a tenant at will and a tenant at sufferance are estopped from denying the title of the landlord.163 Where the interest by estoppel is a tenancy, the estoppel continues for some purposes after the expiry of the lease and after the tenant has gone out of possession so that the landlord can sue for damages for a failure by the tenant to keep and leave the premises in proper repair in accordance with the covenants.164 A consideration of the principles in a modern context, which analyses the nature of the estoppel, is found in Bruton v London & Quadrant Housing Trust165 in which a local authority granted to a housing trust a licence of a property to be used to accommodate homeless persons. The trust entered into an agreement with an occupier which

158 James v Landon (1581) Cro Eliz 36 in which the Defendant had let land for 21 years to the Plaintiff even though the Plaintiff was the owner of the land. It was said by Periam J that an estoppel arose for the term of the purported lease. See also Brampton v Scowles Cro Car 434; Blundell v Baugh (1633) Jones W 315 (where the report is in Norman French). 159 Vick v Edwards (1735) 3 Peere Wms 373 (Lord Talbot LC). 160 Goodtitle d Edwards v Bailey (1777) 2 Cowp 597, 600–01. See also Right d Jefferys v Bucknell (1831) 2 B & Ad 278; Webb v Austin (1844) 7 Man & G 701; London and North Western Railway v West (1867) LR 2 CP 553; Morton v Woods (1869) LR 4 QB 293. 161 Cuthbertson v Irving (1859) 4 H & N 742, 755. See also Hall v Butler (1839) 10 A & E 204. 162 Stratford v Syrett [1958] 1 QB 107, 115 (Romer LJ). 163 Doe d Bailey v Foster (1846) 3 CB 215, 229 (Cresswell J). 164 Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries [1977] QB 580, not following Harrison v Wells [1967] 1 QB 263. 165 Bruton v London & Quadrant Housing Trust [2000] 1 AC 406. See the commentary on what Lord Hoffmann said in this decision (at 415) by Lord Neuberger in Berrisford v Mexfield Housing Co-operative Ltd [2012] 1 AC 955, para 65.

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4.70  Estoppel by Deed granted exclusive possession to the occupier and had all the badges of a tenancy. The rule of law is that a grant of exclusive possession of property at a rent for a term certain or on a periodic basis creates a lease and not a licence unless there are special circumstances and even though the parties may describe their arrangement as a licence.166 The basis of the above decision was that a party, having entered into an agreement which created a lease or a tenancy, could not repudiate an incident or obligation of the tenancy such as an obligation to keep the premises in repair.167 It was said that, despite this, the arrangement did not create a tenancy by estoppel.168 Lord Hobhouse said that the case for the occupier depended on his establishing that his agreement with the housing trust had the legal effect of creating a relationship of landlord and tenant between them, and that this was the only relevant concept of estoppel.169 It is not easy to see why this effect of the concept of estoppel was not that of creating what is traditionally called a tenancy by estoppel.170 It was stated that the authorities showed that it was not the estoppel which created the tenancy but the tenancy which created the estoppel.171 4.70  A more straightforward modern illustration of the principles is Universal Permanent Building Society v Cooke172 in which a proposed purchaser of property created a weekly tenancy of the property before she had completed the purchase and before she was entitled to grant such a tenancy. She subsequently did complete the purchase and so obtained a sufficient title to grant the tenancy. It was held that a weekly tenancy was created as a tenancy by estoppel which became a full tenancy in interest on the completion of the purchase by the lessor.

3.  The Nature of the Two Separate Doctrines 4.71  It might have been thought from this survey of authority from the sixteenth century to fairly modern decisions that two simple principles of law had been established, namely (a) that when A transfers a property or grants a lease or creates a mortgage in favour of B but A has no sufficient interest or title to enable him to do so, there arises between A and B the relationship by estoppel of transferor and transferee or lessor and lessee or mortgagor and mortgagee of the property, and (b) that if A subsequently acquires a title which would have been sufficient to enable him to carry out the initial transaction the estoppel is fed and the interest of B is transferred from one merely resting on estoppel to one which is a full interest described as, for example, a lease in interest and not a lease by estoppel. These simple principles could ordinarily be described as an aspect of the law of estoppel and could loosely be

166 Street v Mountford [1985] AC 809. It had become a practice to describe arrangements as licences in an effort to exclude the operation of the Rent Acts which did not apply to licences. 167 Bruton v London & Quadrant Housing Trust [2000] 1 AC 406. 168 ibid, 416 (Lord Hoffmann). 169 ibid, 419. 170 See, Woodfall’s Law of Landlord and Tenant (Sweet & Maxwell) para 1.034. 171 Bruton v London & Quadrant Housing Trust [2000] 1 AC 406, 416 (Lord Hoffmann). The exact meaning and effect of this aspect of the judgment, which cuts across the traditional description of tenancies by estoppel, may await further elucidation. 172 Universal Permanent Building Society v Cooke [1952] Ch 95.

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The Second Aspect of Estoppel by Deed: Interests in Land Created by Estoppel  4.75 described as the second aspect of estoppel by deed since in many instances the basis of the estoppel would be a deed which purportedly effected the transaction. 4.72  In fact, and perhaps unfortunately, the law as developed and as recently explained is not as simple as this. For one thing the principles operate even when there is no deed. An example is the decision in Universal Permanent Building Society v Cooke as mentioned above where a weekly tenancy by estoppel arose out of a transaction which was not only not effected by deed but where there was not even a written instrument.173 Even when a deed was involved it was not necessary for the creation of an interest by estoppel that the deed contained the clear and unequivocal statement of fact as to the grantor owning a particular interest which is a requirement of the first aspect of estoppel by deed.174 It is therefore apparent that the principle of the creation of interests by estoppel goes beyond the ordinary boundaries of the first aspect of estoppel by deed, as of course does the rule concerning feeding the estoppel. 4.73  An exact analysis of the origins and current application of what has been loosely in this chapter called the second aspect of estoppel by deed has now been provided by the Court of Appeal and constitutes for that aspect a significantly more complicated set of rules than that postulated in the last but one paragraph. The analysis was carried out in First National Bank Plc v Thompson.175 The facts were that two persons purported to charge by way of legal mortgage to the bank a property of which they were not at the time the legal owner. Later in the same year, one of the mortgagors acquired the legal estate and obtained a registered title under the Land Registration Act 1925. It was held that the purported mortgage operated as a legal mortgage by estoppel as between the mortgagors and the bank and that the mortgage became one in interest as opposed to by estoppel when the estoppel was fed by the acquisition of the legal estate by one of the mortgagors.176 4.74  The decision in First National Bank Plc v Thompson177 therefore follows the principles applied in decisions going back for centuries. However, an analysis of the authorities and of the development of the law of estoppel showed that the possibility of the creation of an interest by estoppel and the possibility of a later feeding of that estoppel involve the consideration and possible application of two separate and in some ways distinct doctrines of law. The two doctrines have important differences, both in the requirements for their application and in their consequences. As will be explained, the differences in the operation of the two doctrines are such that the creation of an interest by estoppel and the feeding of the estoppel do not apply in all cases where the second doctrine operates.178 4.75  The first doctrine can be described as an application of, or an emanation from, the first aspect of estoppel by deed as that aspect has been described earlier in this chapter. 173 ibid. 174 See para 4.25. See Goodtitle d Edwards v Bailey (1777) 2 Cowp 597 where there was no statement in the deed that a party was entitled to an estate in possession such as would have entitled him to have executed a valid release. 175 [1996] Ch 231. 176 The bank became entitled to have a further mortgage executed in its favour when one of the mortgagors obtained a legal estate. It wished to assert the mortgage by estoppel and the feeding of that mortgage since shortly after the initial grant of the mortgage the bank had applied for registration at HM Land Registry and gained from the date of the application for registration priority for its interest as a mortgagee as against persons who might after that date acquire an interest in the property such as by a further legal mortgage. 177 [1996] Ch 231. 178 See para 4.79 et seq.

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4.76  Estoppel by Deed The application of the doctrine depends on a clear statement in a deed that the grantor holds the interest which he purports to transfer or out of which he purports to create some other interest such as a lease or a charge. As between themselves, the parties to the deed are estopped from denying that the grantor did hold the interest stated with the ­consequence that as a result of that statement there arises between them the relationship, such as that of landlord and tenant, which would have existed as a matter of interest rather than estoppel if the statement had been true. There is the additional rule that the estoppel can be fed in the sense explained. In order for this first doctrine to apply it is therefore necessary that there is a deed executed by the parties to the estoppel and that the deed contains a clear, albeit incorrect, statement of the title of the grantor.179 4.76  The second doctrine is said to be more widely based and not to be as inflexible and narrowly confined as the first doctrine. All that is required for its operation is that A purports to grant to B an interest when A has no sufficient title to do so. The interest so created will arise between the two parties rather as with the first doctrine, although third parties will not of course be affected. There are significant differences, explained below,180 as compared with the first doctrine. The second doctrine is said to be more widely based since its operation does not require the execution of a deed and thus does not depend on a clear statement in the deed of the supposed title of the grantor.181 The doctrine has therefore operated where there is a deed but no express statement in it of the title of the grantor182 or where an interest such as a weekly tenancy is granted without any deed or other document at all.183 The second doctrine is a product of the fundamental principle of the common law which precludes a grantor from disputing the validity and effect of his own grant.184 The same general principle applies in that the grantee cannot dispute the title of his ­grantor. This second doctrine may therefore not strictly be one of estoppel by deed since it does not depend on the existence of a deed and may in all strictness not even be an estoppel at all since it does not depend on an overt statement or representation.185 4.77  The possibility that the estoppel may be fed applies to the first doctrine but not generally to the second doctrine. This is explained below.186 Both doctrines can operate when the subject matter of the transaction is land with registered title.187 4.78  The exact legal bases of the two doctrines lead to possible difficulties of terminology which may cause confusion. Recent authority which explains the doctrines describes both 179 First National Bank Plc v Thompson [1996] Ch 231, 237 (Millett LJ), 243 (Staughton LJ). 180 See para 4.79 et seq. 181 First National Bank Plc v Thompson [1996] Ch 231, 237 (Millett LJ), 243 (Staughton LJ, describing the first doctrine as that which appears ‘to be somewhat inflexible and narrowly confined’). 182 Goodtitle d Edwards v Bailey (1777) 2 Cowp 597; First National Bank Plc v Thompson [1996] Ch 231. 183 Universal Permanent Building Society v Cooke [1952] Ch 95. A tenancy for a term not exceeding three years, including a periodic tenancy, may be granted orally or in writing without a deed: Law of Property Act 1925, ss 52(2)(d), 54(2). A periodic tenancy may also arise by implication of law when a person is allowed into exclusive ­possession of land and pays rent on a regular basis such as a weekly rent. 184 First National Bank Plc v Thompson [1996] Ch 231, 237 (Millett LJ). The principle is said to be the product of the relative character of title to land in English law. 185 See EH Lewis & Son Ltd v Morelli [1948] 2 All ER 1021, 1024–25 (Harman J). 186 See para 4.82. 187 First National Bank Plc v Thompson [1996] Ch 231. This decision was on the provisions of the Land Registration Act 1925. The same situation arises today under the Land Registration Act 2002. Under s 23 of that Act an owner of a registered estate may mortgage the property by executing a charge by deed by way of legal mortgage.

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The Second Aspect of Estoppel by Deed: Interests in Land Created by Estoppel  4.81 as kinds of estoppel which operate in a similar fashion.188 The first doctrine is an aspect of estoppel by deed with possible extended effects such as the feeding of the estoppel. It has been described as the application of the technical doctrine of estoppel.189 Somewhat confusingly, the second doctrine has been said to be appropriately called estoppel by deed.190 In a leading textbook on the law of real property the first doctrine is called estoppel by representation and the second doctrine is called estoppel by deed.191 The perhaps imperfect terminology adopted in this chapter is to describe both doctrines under the heading of the second aspect of estoppel by deed and to differentiate them by calling them the first and the second doctrine.

4.  The Differences between the Two Separate Doctrines 4.79  The differences between the two doctrines can be considered first by way of the requirements for their operation and then by way of the consequences of the operation of the doctrines. The differences between the requirements for the invocation of the doctrines have been explained when the doctrines themselves were explained. The first doctrine only operates where there has been a deed executed between parties which grants an interest in land with the grantor not having a sufficient title to grant that interest and where the deed contains a clear statement that the grantor has a particular interest or title in the property the subject of the grant. It appears that if these requirements are satisfied, it is the first doctrine which governs the relationship between the parties and which creates the precise consequences which flow from that doctrine. The second doctrine and its consequences will then not apply to the transaction. The second doctrine operates where there is a grant of an interest in land with the grantor not having a sufficient title to make the grant but where either the grant is not contained in a deed or, if it is contained in a deed, the deed does not contain a clear statement that the grantor has a particular interest or title to the property the subject of the grant. The unifying factor between the two doctrines is that they both operate when a person purports to grant an interest in property when he does not have a sufficient title to enable him to do so. The distinction between the requirements for the operation of the two doctrines is therefore the form in which the purported grant takes place. 4.80  It is possible from the explanation given in First National Bank Plc v Thompson192 and from earlier authorities to isolate three significant differences in the consequences of the operation of the two doctrines. 4.81  The first difference is that in the application of the first doctrine the estoppel operates so that the grantor is prevented as against the grantee from denying that he held the particular interest or title to the property the subject of the grant which he is stated in the deed to have. In the operation of the second doctrine, the grantor is not estopped from asserting that he did not have a particular title but is only prevented from asserting that he did not



188 First

National Bank Plc v Thompson [1996] Ch 231, 239 (Millett LJ). (Millett LJ). 190 ibid, 243 (Staughton LJ). 191 Megarry & Wade, The Law of Real Property, 9th edn (Sweet & Maxwell, 2019) paras 16-128–16-131. 192 [1996] Ch 231, 239 (Millett LJ). 189 ibid

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4.82  Estoppel by Deed have some form of legal title.193 An example may illustrate this technical difference. Suppose that A holds a lease of land and purports to transfer to B the freehold in the land by a deed which states that A owns the freehold. A and B as between themselves will be estopped from asserting that A did not own the freehold and as between themselves will stand by way of the estoppel in the relationship of grantor and grantee of the freehold. This is the essence and the effect of the first doctrine. On the other hand, if there was no clear statement in the deed that A owned the freehold then, notwithstanding the purported transfer of the freehold, the instrument will operate to transfer such legal estate in the land as A actually had, namely in this example the lease. There will then be an actual transfer of the lease to the grantee and no estoppel is necessary. The estate granted to B will be a lease in interest and not the freehold or a lease by estoppel. 4.82  The second difference relates to feeding the estoppel and flows from the first ­difference. For the purposes of the first doctrine, if the grantor subsequently acquires the estate in land which at the time of the deed he is stated to hold then the estoppel is fed and the estate granted becomes owned by the grantee in interest rather than merely by estoppel. The second doctrine operates in a similar way if the grantor held no legal estate in the land at the time of the grant.194 However, under the second doctrine, if the grantor held any legal estate in the land at the time of the grant it is that estate which passes and there is therefore no question of the feeding of the estoppel if the grantor subsequently acquires any other estate.195 This second difference in effect flows from the first difference. As explained in the last paragraph, if a grantor has a lesser interest in land and purports to transfer a greater interest then under the second doctrine the transfer operates there and then as a transfer of the lesser interest. In such a case there is nothing further to be fed. 4.83  The third difference concerns the effect of the estoppel on third parties. Under the first doctrine the ripening of the estate of the grantee from an estate by estoppel into an estate in interest by reason of the feeding of the estoppel is good against the whole world and binds even a purchaser for value of the estate without notice of the relevant events. This is not so where the second doctrine is in operation as is demonstrated by Right d Jefferys v Bucknell.196 In 1820 Jarvis, who had no legal estate in the land, mortgaged it to A. In 1824 Jarvis obtained

193 ibid. 194 See, however, General Finance, Mortgage and Discount Company v Liberator Permanent Benefit Building Society (1878) 10 Ch D 15 in which A who had no title to or interest in a piece of land purported, using forged title deeds, to mortgage the freehold estate to B. A did subsequently acquire the legal estate and mortgaged it to C. Jessel MR referred to any averment of the title of A which there may have been in the first mortgage and stated (at 24) that it did not appear to him to be at all clear that there was the precise averment of fact necessary ‘to support the doctrine that a subsequent conveyance of the legal estate will, so to say, fill up the estoppel previously created’. There was therefore no estoppel under the first doctrine as here described. The second mortgagee, C, had no notice of the previous mortgage so that the question of an estoppel arising in favour of B is bound up with the rule, explained next, that the second doctrine does not operate so as to bind a purchaser for value of the land without notice of the previous transaction. It was held that C was not bound to deliver up possession of the property and the title deeds to B. 195 First National Bank Plc v Thompson [1996] Ch 231, 239 (Millett LJ). In Universal Permanent Building Society v Cooke [1952] Ch 95, 102–03 Evershed MR said: ‘I accept, of course, the view that if the soi-disant lessor has any legal estate, though a legal estate less in extent than that purported to be granted, the doctrine of feeding the estoppel is excluded’. The facts of this decision are stated in para 4.72. 196 (1831) 2 B & Ad 278, 283 (Lord Tenterden CJ). See First National Bank Plc v Thompson [1996] Ch 231, 239 (Millett LJ).

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The Second Aspect of Estoppel by Deed: Interests in Land Created by Estoppel  4.85 the legal estate and mortgaged that estate to B who had no notice of the prior mortgage. The case fell within the second doctrine since the 1820 mortgage contained no sufficiently clear statement of the estate of Jarvis. It was held that B was not bound by the first mortgage to A whatever was the position as between Jarvis and A. The principle is that under the second doctrine an estoppel does not bind a bona fide purchaser for value (in the above case a mortgagee) from the grantor without notice of the earlier transaction. 4.84  The operation of the second doctrine may therefore differ from that of the first doctrine most often in circumstances where at the time of the purported grant the grantor held some legal estate in the property but not an interest sufficient to support the grant. For example, a person with a lease having 50 years unexpired of a property might purport to transfer the freehold of the property. The grant would operate there and then as a transfer of the residue of the lease. There would be no feeding of the estoppel. Even if the grantor subsequently acquired the freehold the estoppel would not be fed so as to create a transfer of the freehold.197

5.  Equitable Interests and Other Rights 4.85  Although both doctrines are the product of the common law and not of equity198 there seems no reason why the doctrines, including that of feeding the estoppel under the first doctrine, should not apply to a purported grant of an equitable interest in land when a person does not at the time of the grant hold that equitable interest but subsequently acquires it. There may be some support for the correctness of this proposition in Abbey National Building Society v Cann199 in which a contractual purchaser of land obtained a loan from the building society and the completion of the purchase and the completion of a charge to the society to secure the loan took place on the same day. The chargor’s mother claimed an equitable right by reason of an estoppel (a proprietary estoppel and thus a different form of estoppel to estoppel by deed) to occupy the property and claimed that she was in actual occupation at the completion date and asserted that her right to her interest was for that reason an overriding interest for the purposes of the Land Registration Act 1925. A part of her case was that on the completion date there was a scintilla temporis, or short notional period of time, during which the chargor held a legal estate free from the charge and before that charge was created and that this ‘fed’ the proprietary estoppel on which she based her right of occupation and made it a right binding on the legal estate. It was held that when a person relies on a loan to fund his purchase the transfer of the property to him and the creation of the charge are a single and indivisible transaction so that the purchaser never holds anything except an equity of redemption. Thus, the only possible ‘feeding’ of the right of occupation of the mother was to make that right binding on the equity of ­redemption when it arose in the hands of the chargor and not on the legal estate charged. To this extent, it may be correct that an equitable interest under a proprietary estoppel may 197 First National Bank Plc v Thompson [1996] Ch 231, 239 (Millett LJ); Universal Permanent Building Society v Cooke [1952] Ch 95, 102–03 (Evershed MR). 198 See paras 4.75 and 4.76. 199 Abbey National Building Society v Cann [1991] 1 AC 56, overruling Church of England Building Society v Piskor [1954] Ch 553.

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4.86  Estoppel by Deed come to bind an ­equitable interest acquired by the object of the proprietary estoppel after the events which have given rise to the proprietary estoppel. To this extent, and in unusual circumstances, there may be a feeding of the estoppel both to the benefit of an equitable interest (the inchoate rights under a proprietary estoppel) and against an equitable interest (the equity of redemption in the hands of a mortgagor). 4.86  A similar principle of estoppel to that which arises on a grant of an interest in land may arise between the bailor and the bailee of a chattel in that a person entrusted with the possession of a chattel is estopped from denying the title of the person from whom he received the chattel.200 There are a number of exceptions to this estoppel such as when a third party sets up a valid claim to ownership of the chattel. Therefore, when a person purported to distrain on goods on premises for non-payment of rent under a lease and then entrusted the goods to the Defendant to be sold on his behalf the Defendant was entitled to dispute the title of the bailor on the ground that the person against whom the distress had been levied was not a tenant of the bailor so that the distress was unlawful and the purported landlord obtained no ownership of the goods and no right to dispose of them.201 4.87  A licence to occupy land is to be distinguished from a lease or other proprietary interest. A licence is not a proprietary interest in that it is not in law binding on successors in title of the licensor.202 As regards estoppel and the rule against denial of title a lessee and a licensee stand on the same footing. There is no doubt that under English law there is no difference as regards this principle of estoppel between a tenant and a licensee. Each is estopped from denying the title of the person from whom he accepted the tenancy or licence as long as he remains in possession of the land. Consequently, if a person allows ­someone else into possession of land as a licensee but the first person has no title to the land the ­licensee cannot deny that the licensor has sufficient title.203 Of course, a third party who does own the land may assert his title against the licensee in the ordinary way.204

6. Conclusion 4.88  It might have been thought that the law on the creation of an interest in land by estoppel and on the feeding of the estoppel could have been stated as a generality in two propositions, namely (a) that when A purports to grant an interest in land to B but does not have sufficient title to do so, B acquires the interest purportedly granted by way of an estoppel binding on A and B but not binding on a person with a true title to the land, and (b) that the estoppel may be fed so as to bring about the creation of a full interest in

200 Cheesman v Exall (1851) 6 Exch 341, 346 (Martin J). 201 Biddle v Bond (1865) 6 B & S 225. It has been said that the reasoning adopted by the Court of Queen’s Bench in this case was applied because the court treated a case of bailor and bailee as the same as a case of landlord and tenant: see Industrial Properties (Barton Hill) Ltd v Associated Electrical Industries [1977] QB 580, 597 (Lord Denning MR). 202 Ashburn-Anstalt v Arnold [1989] Ch 1. 203 Government of Penang v Oon [1972] AC 425, 433 (Lord Cross); Terunnanse v Terunnanse [1968] AC 1086, 1092–93 (Lord Devlin). The principle goes back to Doe d Johnson v Baytup (1835) 3 Ad & El 158. 204 See para 4.64.

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Summary  4.92 B if and when A subsequently acquires a sufficient title to validate the grant. In fact, the general principles as so stated derive from two historically different lines of authority and from different underlying principles so that two doctrines are separate and are in some ways different in their application and in the way in which their consequences operate today. The origin of the two doctrines, their nature, the different factual circumstances which give rise to the application of one or the other doctrine, and the different consequences of the application of the two doctrines, have been explained in this part of the chapter. It is easy to state and to justify the two propositions as stated at the beginning of this paragraph. What is plainly less satisfactory is that these root propositions are wholly or partly put into effect by two separate doctrines with different legal origins, with different detailed rules of applicability and effect, and with distinctions between them which are not easy either to state or to justify. For instance, the second doctrine does not generally give rise to a feeding of the estoppel. The principles of the creation of an interest in land by estoppel and of feeding the estoppel can perhaps be described as something which is to many a somewhat arcane area of the law and any simplification and clarification of the law required in modern conditions is unlikely to be easily achieved.

(E) Summary 4.89  The essence of the principles of estoppel by deed may be summarised in the following way. In accordance with the nature of summaries the rules here described are broad-brush statements and do not purport to state every detail of the matters to which they relate. The order of this summary generally follows the order in which the subject is explained in this chapter.

1. General 4.90  Estoppel by deed is an ancient principle or set of principles going back to at least the sixteenth century which can be loosely described as having two aspects. 4.91  The first aspect is that a party to a validly executed deed is estopped from denying the truth of a statement contained in the deed. The second aspect is that in certain circumstances the grant of an interest in land by a person who does not have sufficient title to the land so as to enable him validly to make that grant may create an interest by estoppel in the grantee and, if the grantor subsequently obtains a sufficient title, that interest may ripen into a full interest vested in the grantee. The distinction between the two aspects is imprecise since the first aspect is said to be historically the progenitor of one of two doctrines within the second aspect, and the other doctrine within the second aspect is not necessarily dependent on the existence of a deed. 4.92  The second aspect of estoppel by deed is itself the product of two historically separate doctrines, the first of which like the first aspect depends on a clear statement in a deed and the second of which operates even when there is not such a clear statement and even when there is no deed. The first aspect of estoppel by deed can therefore be regarded as the origin of the first doctrine within the second aspect. 337

4.93  Estoppel by Deed

2.  The First Aspect 4.93  The first aspect of estoppel by deed arises when a deed contains a statement with the result that the parties to the deed are estopped from denying the truth of that statement. The rule is subject to a number of qualifications. (i) The statement must be one of fact or of mixed law and fact and cannot be a statement purely of law or an expression of opinion or a promise. The statement may be contained in any part of the deed. (ii) The statement must be clear and precise and unequivocal. An inference from a deed is not sufficient unless, possibly, it is a necessary inference from the express content of the deed. (iii) The statement must be a part of the agreed basis of the deed. Therefore, if one party was mistaken as to the correctness of the statement and the other parry knew of his mistake it is possible that there is no true agreement and the statement cannot create an estoppel. (iv) An estoppel will operate only in an action to enforce or resist the rights and obligations created by the deed and will not operate in proceedings concerning only collateral matters. (v) A statement in a deed will operate as an estoppel only against the party to the deed whose statement it is, whether the statement is of that party alone or is a statement of that party and of another party or of all parties to the deed. 4.94  Unlike in other forms of estoppel, the assertion of an estoppel by deed does not require that the person asserting the estoppel has acted in reliance on a statement in a deed and would suffer prejudice unless the other party is by reason of the estoppel kept to the terms of what was stated in the deed. The concept of unconscionability, said to permeate estoppel, has no place in this ancient form of estoppel. 4.95  The first aspect of estoppel by deed has been compared to so-called estoppel by contract, with which it has underlying similarities, and to estoppel by convention, but the law today is that estoppel by deed is to be regarded and operated as a separate form of estoppel with its own elements and rules.

3.  The Second Aspect (i) General 4.96  The second aspect of estoppel by deed operates when a party purports to grant an interest in land when he has no title sufficient to enable him validly to do so. The general effect of the second aspect at any rate as regards the first of the two doctrines of which it consists is (a) that as between the parties to the transaction an interest by estoppel in the terms of that purportedly granted arises in favour of the grantee, and (b) that if the g­ rantor later obtains a sufficient title to grant the interest the grantee automatically obtains the interest granted. The second part of the effect is known as ‘feeding the estoppel’.

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Summary  4.107 4.97  In legal and historical terms, the second aspect of estoppel by deed as just stated rests on two separate and distinct doctrines of the common law. The two doctrines differ both in the requirements for their application and in the legal consequences of their application. 4.98  The two doctrines which constitute the second aspect of estoppel by deed can probably and in principle operate to an extent on an equitable interest in land, on licences to occupy land which are not legal or equitable proprietary interests, and on bailments of chattels.

(ii)  The First Doctrine 4.99  The first doctrine is founded on the first aspect of estoppel by deed and comes into operation where there is a deed which contains a clear and unequivocal statement that the grantor holds the interest which enables him to grant the interest purportedly granted. 4.100  When the first doctrine operates the result is that the grantee obtains an interest by estoppel equivalent to that purportedly granted to him, such that the rights and obligations of the parties between each other are those which would have existed if the grantor had had the capacity to transfer or create the interest in question. 4.101  The estoppel does not bind or affect existing interests and rights of third parties and the true owner of the interest which was purportedly vested in the grantor may come forward and assert his rights and defeat any interests or rights which arise under the interest by estoppel. 4.102  In addition under the first doctrine if the grantor at a time subsequent to the grant obtains a title sufficient to enable him to grant the interest which he has purported to grant the estoppel is fed and the grantee, automatically and without further grant, obtains the full interest as purportedly granted to him.

(iii)  The Second Doctrine 4.103  The second doctrine operates when there is a proposed grant and when either there is no deed or there is a deed but it does not contain a clear and unequivocal statement that the grantor held the interest which would have enabled him to make a valid grant. 4.104  The operation of the second doctrine differs depending on whether at the time of the grant the grantor did or did not have a legal estate in the land. 4.105  If the grantor did not have a legal estate in the land the doctrine operates in much the same way as the first doctrine. The grantee takes an interest by estoppel according to the terms of the grant and that estoppel may be fed if the grantor subsequently obtains an interest sufficient to validate the grant. 4.106  However, if the grantor did have a legal estate in the land at the time of the grant the grant operates to transfer that estate, but only that estate, to the grantee and no estoppel or feeding of the estoppel is involved. 4.107  A further difference between the first and the second doctrines is that the effect of the second doctrine, unlike that of the first doctrine, does not bind a bona fide purchaser for value from the grantor without knowledge of the purported grant. 339

5 Estoppel by Convention (A)  The Nature and Basis of the Estoppel 5.1  An estoppel by convention arises when two or more parties to an existing transaction or relationship form a shared assumption of fact or of law relating to that transaction or relationship with each party knowing that the same assumption is held by the other party or parties. In any legal proceedings a party will not be entitled to deny the correctness of the shared assumption where it would be unjust to allow it to go back on the assumption. It would normally be unjust to allow a party to resile from the shared assumption if another party to it has acted to its detriment in reliance on the assumption. The method of explanation used in this chapter is to describe the modern development and establishment of estoppel by convention as a separate form of estoppel through three important decisions between 1982 and 1998 and then to state and examine the details of the three main elements which must be established if reliance is to be placed on the estoppel in legal proceedings. 5.2  This form of estoppel, now usually called estoppel by convention, exhibits the underlying characteristic of all estoppels which is that in certain circumstances a person who has written or spoken or acted in a certain way may not be permitted to go back on what that person has stated or done.1 In the case of most estoppels, the person who asserts and relies on the estoppel is not necessarily, and indeed not normally, himself involved in making the representation or the promise not to enforce legal rights or in creating the expectation of an interest in property which is the foundation of the particular estoppel. The foundation of an estoppel by convention is an assumption of fact or of law shared by two or more persons. Consequently, in the case of an estoppel by convention the person who asserts the estoppel must himself have participated in a more direct and equal fashion in the creation of the state of affairs or circumstances which form the foundation of the estoppel.2 It is for this reason that the word ‘convention’ is used in the description of the estoppel. On occasions, the state of mind of the parties involved is called an understanding or an assumption. In this context a shared assumption or convention or understanding have the same meaning. The convention is a common or shared understanding between the persons involved in the estoppel, that is the person or persons asserting the estoppel and the person or persons who are the object of the estoppel.3 1 See ch 1, para 1.2. 2 The same characteristic is shared by estoppel by deed which generally depends on the existence of a deed executed by two or more parties and out of which estoppel by convention may have developed: see para 5.8. See ch 4 for estoppel by deed. 3 Because of this, estoppel by convention may have the characteristic of ‘mutuality’ which Coke described as a feature of estoppel: see Co Litt 352a. Mutuality is most apparent in estoppel by record, and in the principles of cause

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The Nature and Basis of the Estoppel  5.6 5.3  Estoppel by convention shares the characteristic applicable to most estoppels that the party asserting the estoppel must have relied on the statements or acts of the party alleged to be estopped save that the estoppel is not established unless both parties are aware of the assumption which has been made by the other party and in this sense each party relies on the knowledge of the other party. It is this aspect of reliance that justifies the ‘crossing of the line’ rule which is the rule that each party knows, usually as a result of some form of communication, that the other party has made the same assumption as it has made.4 5.4  The nature of an estoppel by convention was stated by Lord Steyn in Republic of India v India Steamship Co Ltd (No 2) as follows: It is settled that an estoppel by convention may arise where parties to a transaction act on an assumed state of facts or law, the assumption being either shared by them both or made by one and acquiesced in by the other. The effect of an estoppel by convention is to preclude a party from denying the assumed facts or law if it would be unjust to allow him to go back on the assumption.5

5.5  It is apparent from this succinct statement of the principle that for an estoppel by convention to arise three essential elements must be shown to exist. First, the persons involved in some transaction must act on an assumed state of facts or of law. Secondly, that assumption must be held by both of them, ie, is a common assumption, or is made by one person and acquiesced in by the other. In order for the second element, the ‘sharing’ of the assumption, to be present it is not enough that the parties independently make and hold the same common assumption. The parties must also communicate the assumption to each other so that each is aware that the other party has made the same assumption as it has made. This requirement is within the second element where it is called ‘crossing the line’. It is examined separately below.6 There is a possibility of an estoppel by convention arising by acquiescence even in the absence of a shared assumption and this possibility is discussed later in this chapter.7 Thirdly, it must in all the circumstances be unjust for one party to the assumption to be allowed to go back on the assumption, that is to deny the correctness of the state of facts or of law which was the subject matter of the assumption. As always it must be borne in mind that a judicial statement of the nature and the essential elements of a form of estoppel is not an inflexible statutory provision or a part of a code and must be regarded as subject to elaboration and to some degree of flexibility in operation. An example of a further elaboration is the possible rule, discussed later, that the other party to the shared assumption must have intended that the party asserting the estoppel should have relied on the assumption.8 5.6  As so often, the three essential elements needed to create the estoppel have given rise to their own rules and elaborations created from the many factual circumstances which of action estoppel and issue estoppel, which are described in ch 9. In estoppel by record there must be two or more parties to a judgment who are bound by what is decided in the judgment. 4 See para 5.52 et seq. 5 Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878, 913. The same principle has been applied by the Court of Final Appeal in Hong Kong: Siegfried v Adelbert Unruh (FACV Nos 9 and 10 of 2006). 6 See para 5.52 et seq. 7 See para 5.60 et seq. 8 See para 5.65 et seq. It is explained in para 5.60 et seq that the reference by Lord Steyn to an assumption made by one party being acquiesced in by the other party may indicate that in the circumstances described an estoppel by convention may arise even though there is no convention in the sense of an assumption held and believed in by two or more parties in common.

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5.6  Estoppel by Convention come before courts. It will be necessary to examine these. Even the fundamental statement and elements of the principle can be expanded. For example, in a fairly recent case the main statements of the principle in various authorities were reviewed and the requirements or tests for the existence of an estoppel by convention were stated in five propositions to be: (i) It is not enough that the common assumption upon which the estoppel is based is merely understood by the parties in the same way. It must be expressly, or implicitly by words or conduct from which the necessary sharing can properly be conferred, shared between them. (ii) The expression of the common assumption by the party alleged to be estopped must be such that he may properly be said to have assumed some element of responsibility for it, in the sense of conveying to the other party an understanding that he expected the other party to rely upon it. (iii) The person alleging the estoppel must in fact have relied upon the common assumption, to a sufficient extent, rather than merely upon his own independent view of the matter. (iv) That reliance must have occurred in connection with some subsequent mutual dealing between the parties. (v) Some detriment must thereby have been suffered by the person alleging the estoppel, or benefit thereby have been conferred upon the person alleged to be estopped, sufficient to make it unjust or unconscionable for the latter to assert the true legal (or factual) position.9

The first two of these requirements can be regarded as elaborations of the second element as stated by Lord Steyn in the India Steamship case. The last three of the five requirements can be regarded as elaborations of the third of the elements as so stated by Lord Steyn.10

9 Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174, para 52 (Briggs J). Sub-paragraph (i) is printed as amended by Briggs J in Steam Line Ltd v Merchant Navy Ratings Pension Trustees Ltd [2010] EWHC 1805 (Ch) para 137. This statement has been considered by the Court of Appeal in a number of subsequent decisions such as Dixon v Blindley Heath Investments Ltd [2017] Ch 389, para 91; and Mitchell v Watkinson [2014] EWCA Civ 1472, para 49. While this analysis is undeniably of great usefulness, like all exact formations of the rules and components of an inevitably flexible and evolving principle such as estoppel by convention, it should be regarded as a broad-brush statement of the principle involved. For example, the components of assuming responsibility and conveying an expectation as stated in the second proposition do not appear in the judgment of Lord Steyn in the India Steamship case and may be open to discussion (see para 5.65 et seq) and the propositions do not deal in express terms with the requirement, stated in authorities such as Keen v Holland [1984] 1 WLR 251 and PW & Co v Milton Gate Investments Ltd [2004] Ch 142, that the shared assumption must relate to some pre-existing transaction or relationship between the parties and not to some proposed contract or other relationship (see para 5.44 et seq). Nor do the propositions expressly encompass the possibility stated by Lord Steyn that even in the absence of a common assumption there may be an estoppel by convention where one party has acquiesced in an erroneous assumption made by another party: see para 5.60 et seq. The five propositions are referred to again when relevant to some matter discussed subsequently in this chapter. It is suggested in Equity and Trusts in New Zealand, 2nd edn (Thompson Reuters, Wellington, 2009) para 19.4.2 that there are six requirements to be established before an estoppel by convention can be established in that jurisdiction, namely: (a) the parties have proceeded on the basis of an underlying assumption of fact, law, or both, of sufficient certainty to be enforceable; (b) each party has, to the knowledge of the other, expressly or by implication accepted the assumption as being true for the purposes of the transaction; (c) such acceptance was intended to affect their legal relations in the sense that it was intended to govern the legal position between them; (d) the proponent was entitled to act and has, as the other party knew or intended, acted in reliance on the assumption as being true and binding; (e) the p ­ roponent would suffer detriment if the other party were allowed to resile or depart from the assumption; and (f) in all the circumstances it would be unconscionable to allow the other party to resile or depart from the assumption. These requirements so stated appear to be generally similar to those stated in the Benchdollar decision. 10 In Crossco No 4 Unlimited v Jolan Ltd [2011] EWHC 803 (Ch) para 333, Morgan J summarised the essential principle of estoppel by convention as follows: ‘Estoppel by convention may arise where both parties to a transaction act on an assumed state of facts or law, the assumption being either shared by both or made by one and acquiesced in by the other. The parties are then precluded from denying the truth of the assumption, if it would be

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The Development of the Estoppel  5.8 The analysis by Briggs J in the Benchdollar decision, and particularly the third and fourth of the requirements, establishes estoppel by convention as one of the four reliance-based forms of estoppel, the other forms within this group being estoppel by representation and promissory and proprietary estoppel. The definition of Lord Steyn and its elaboration into further tests or components are examined in the remainder of this chapter. In accordance with the usual pattern of explanation used in this book, other more general questions relevant to estoppel by convention, but also relevant to other forms of estoppel, such as whether an estoppel can be used as a sword as well as a shield and the extent to which an estoppel can bind successors in title to land affected, are examined on a general basis elsewhere.11 5.7  One general matter which merits a brief reference in this chapter is that there has been recent discussion in a decision of the Privy Council12 on a possible synthesis of (a) estoppel by deed, (b) the principle that parties to a contract can agree as a term of the contract any factual, or possibly legal, proposition as correct (which is sometimes called estoppel by contract), and (c) estoppel by convention, into an overall principle of a single form of estoppel resting on what parties have agreed or assumed to be correct. The Court felt that this was going too far.13 It is difficult to see how estoppel by convention could be fully introduced into such a synthesis since, unlike both of the other two principles, a cardinal requirement of the estoppel is that injustice or unconscionability must be shown.14

(B)  The Development of the Estoppel 1. Introduction 5.8  The principle of estoppel by convention is not new. In 1982, Lord Denning MR described it as one of several forms of estoppel – the others were estoppel by representation, proprietary estoppel, promissory estoppel and what he called estoppel by acquiescence – which had evolved over 150 years by a series of separate developments.15 Lord Denning unjust or unconscionable to allow them (or one of them) to go back on it’. For this decision on appeal see [2011] EWCA Civ 1619. There is a further summary of the principles of estoppel by convention by Akenhead J in Mears Ltd v Shoreline Housing Partnership Ltd [2015] EWHC 1396 (TCC) para 51. These summaries are also referred to as necessary in this chapter. 11 See ch 2. In Mears Ltd v Shoreline Housing Partnership Ltd [2015] EWHC 1396 (TCC) para 49, the law on the ‘sword or shield’ question was examined. 12 Prime Sight Ltd v Lavarello [2013] UKPC 22, [2004] AC 436, para 46. See ch 4, para 4.62. 13 ibid. See also the view of Lord Denning on an overall principle mentioned in para 5.8. 14 The possible synthesis is discussed in ch 4, para 4.62, in connection with estoppel by deed. The concept of estoppel by contract is discussed in ch 3, part (G), in connection with estoppel by representation. The general question of whether there can be a practical unification of the forms of estoppel, or of certain of those forms, or of certain common elements within the various forms, is discussed in detail in ch 2, part (G). 15 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 122. It is possible to regard estoppel by convention as having arisen as a development from estoppel by deed in the sense that the shared assumption which is the foundation of the principle does not enjoy the formality of being contained in a deed: see Ashpitel v Bryan (1864) 5 B & S 723, 727 (Pollock CB), where in substance the modern concept of estoppel by convention is stated. In Carpenter v Buller (1841) 8 M & W 209, 212, Baron Parke, after stating the essence of estoppel by deed, said that a recital in instruments not under seal might be conclusive to the same extent as those in deeds. What this remark seems to presage is what is sometimes called estoppel by contract, ie, the rule that where parties to a contract provide in the contract that some fact is to be taken to be correct for the purposes

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5.8  Estoppel by Convention wished to amalgamate the separate categories into a single comprehensive principle of estoppel.16 Whatever this aspiration may hold for the future, it is beyond doubt that today estoppel by convention is a form of estoppel in its own right and with its own separate elements which have to be satisfied if the estoppel is to be invoked. The principle is wholly judge made and its establishment in the present law, as well as its main elements, are derived to a considerable extent from three decisions of the House of Lords or of the Court of Appeal over about the last quarter of a century.17 Before coming to a detailed consideration of the elements of the estoppel, it is useful to summarise the three decisions and the guidance to be gained from them. As would be expected the expressions of the principle go back to older authorities.18 In the third edition of Spencer Bower & Turner: Estoppel by Representation, published in 1977, estoppel by convention was described (at 157) in the following terms: This form of estoppel is founded, not on a representation of fact made by a representor and believed by a representee, but on an agreed statement of facts the truth of which has been assumed,

of their contract, a court will give effect to that provision as a matter of the ordinary enforcement of a contractual term. This has little to do with estoppel by convention as it has been developed in more modern decisions which is not dependent on a recital in a deed or other instrument. The so-called estoppel by contract is discussed in ch 3, part (G), and the fundamental differences between estoppel by deed, estoppel by contract, and estoppel by convention are explained in connection with estoppel by deed in ch 4, para 4.49 et seq. Proprietary estoppel and promissory estoppel, the two forms of equitable estoppel, indeed evolved from 18th- and 19th-century decisions, but common law estoppel by representation has an older origin and evolution, probably as far back as Littleton whose work on Tenures was published about 1481 drawing heavily on decisions in the Year Books. See para 5.21 for a suggestion that estoppel by convention is now to be regarded as an equitable estoppel. 16 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 122. The general principle shorn of limitations was stated by Lord Denning to be ‘when the parties to a transaction proceed on the basis of an underlying assumption – either of fact or of law – whether due to misrepresentation or mistake makes no difference – on which they have conducted the dealings between them – neither of them will be allowed to go back on that assumption when it would be unfair to allow him to do so’. In Johnson v Gore Wood & Co [2002] 2 AC 1 Lord Bingham, who wished to apply estoppel by convention on the facts of that case, seems to have approved this general statement of Lord Denning, observing that neither party had challenged its correctness. The question has been canvassed in Australian decisions some of which are discussed in ch 6 on promissory estoppel. The question of a possible amalgamation of forms of estoppel or the introduction of greater uniformity into certain of their components is discussed in ch 2, part (G). See also para. 5.7 where the possibility of a synthesis of estoppel by convention and other principles is mentioned. It has been suggested that in New Zealand estoppel by convention, whatever its origins, is now one manifestation of a single overreaching doctrine of estoppel based on the prevention of unconscionable conduct: see Equity and Trusts in New Zealand, 2nd edn (Thompson Reuters, Wellington, 2009) para 19.4.1. Despite this description of this form of estoppel the specific requirements which it is said at para 19.4.2 have to be shown to establish the estoppel in New Zealand seem very similar to those applicable in England. 17 The three decisions are Amalgamated Investment and property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84 (CA); Keen v Holland [1984] 1 WLR 251 (CA); Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878 (HL). It may be noted that although all of the cases included a discussion of the principle of estoppel by convention as a separate form of estoppel, in none of them was an estoppel operated to affect the result of the case. In the Texas Bank case the true meaning of a contract was held to be the same as the convention so that it was not necessary to rely on the estoppel to arrive at the result; in Keen v Holland the estoppel failed in part because its operation would have contravened the purpose of a statute; in the India Steamship case the requisite shared assumption was not made out as a matter of evidence and fact. 18 In Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 Latham CJ (at 657) and Dixon J (at 677) used the expression that the parties had adopted a ‘conventional basis’ in relation to their relations and were bound by that basis. Dixon J said that ‘the parties adopted a conventional basis for the transaction’ and that ‘By adopting … a common assumption as the basis of their working relations, the parties would each be precluded from denying it’. Dixon J and Latham CJ referred back to an earlier statement to the same general effect made by Dixon J in Thompson v Palmer (1933) 49 CLR 507, 547. In Knights v Wiffen (1870) LR 5 QB 660, 666, Mellor J said that there was a rule of estoppel of great equity: ‘For when parties have agreed to act upon an assumed state of facts, their rights

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The Development of the Estoppel  5.9 by the convention of the parties, as the basis of a transaction into which they are about to enter. When the parties have acted in their transaction upon the agreed assumption that a given state of facts is to be accepted between them as true, then as regards that transaction each will be estopped as against the other from questioning the truth of the statement of fact so assumed.

There are important differences between this statement and the law as it is now understood. For instance, it is considered today that the shared assumption must relate to a transaction or relationship into which the parties have already entered rather than a transaction or relationship into which they are about to enter. In addition, the statement does not refer to the injustice which ensues where a party to the shared assumption is allowed to go back on it which is an essential element of estoppel by convention. It is also well established today that the shared assumption may relate to matters of law as well as matters of fact.19 These differences illustrate the extent to which estoppel by convention has become clarified by the series of cases to be discussed next starting in 1982. Estoppel by convention is said to have been developed by the common law courts from estoppel by deed and to be a paradigm example of estoppel in pais.20

2.  Amalgamated Property Co v Texas Bank 5.9  The first of the decisions is that of the Court of Appeal in 1982 in Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd.21 The case concerned a contract of guarantee of a loan advanced by a bank. On one side were A, a property company registered in England, and B, its subsidiary company registered in the Bahamas. On the other side were C, a bank and also a company registered in England, and D, its subsidiary which was a Bahamian company. C agreed to make a loan to B with A to guarantee repayment of the loan by its subsidiary, B. In fact for exchange control reasons the money was passed by C to its subsidiary in the Bahamas, D, and was loaned by D to B. B defaulted on repayment of the loan and C sought to enforce the guarantee given by A. A’s defence was that it had guaranteed a loan to be made by C but that the loan was in fact made by D. The Court of Appeal held that as a matter of the construction of the guarantee the liability

between themselves are justly made to depend on the conventional state of facts and not on the truth’. See also Calgary Milling Co Ltd v The American Surety Co of New York (1919) 3 WWR 98 (an appeal to the Privy Council from Canada) in which a party to a building contract was held to a particular construction of the contract regarding the amount of stage payments in the light of the way in which payments had been made during the course of the contract and in the light of correspondence during the course of the contract on the meaning of the contract as to payments. This approach seems similar to an estoppel by convention. This decision was applied by Luxmoore J in De Tchihatchef v Salerni Coupling Ltd [1932] 1 Ch 330. 19 The principle of estoppel by convention is described in the current fifth edition of Spencer Bower: RelianceBased Estoppel (Bloomsbury, 2017) ch 8, largely by reference to the five propositions stated by Briggs J in Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174 as set out in para 5.6. The extension of estoppel by convention to matters of law has been used in recent decisions as one of the reasons for extending estoppel by representation to representations of law as well as of fact, a subject which is discussed in ch 3, para 3.18 et seq. See also para 5.29. 20 Dixon v Blindley Heath Investments Ltd [2017] Ch 389, para 79; Legione v Hateley (1983) 152 CLR 406, 430. For the meaning of estoppel in pais, see ch 1, para 1.13. 21 [1982] QB 84. This decision is also of importance in showing that an estoppel can be used in assisting the establishment of a cause of action as well as in resisting a cause of action (the ‘sword or shield’ question). See ch 2, part (B). The decision is sometimes referred to in this chapter as the Texas Bank case.

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5.10  Estoppel by Convention of A under it extended to the loan made by D. This was sufficient to decide the case but the Court went on to explain the application of the principle of estoppel by convention. An estoppel by convention would have been decisive for the result of the case if the question of the construction of the guarantee had been decided in a different way. 5.10  Lord Denning MR held that there was an estoppel by convention which bound A to accept that the guarantee extended to a loan to its subsidiary company made by D as well as by C. He explained the principle as follows: When the parties to a contract are both under a common mistake as to the meaning or effect of it – and thereafter embark on a course of dealing on the footing of that mistake – thereby replacing the original terms of the contract by a conventional basis on which they both conduct their affairs, then the original contract is replaced by the conventional basis. The parties are bound by the conventional basis. Either party can sue or be sued upon it just as if it had been expressly agreed between them.22

Brandon LJ regarded the case as a classic example of the kind of estoppel called ­estoppel by convention as described in the third edition of Spencer Bower & Turner: Estoppel by Representation.23 He stated the essential circumstances which gave rise to the estoppel by convention in the following way (in this citation the names of the companies involved have been replaced by the letters used above): Secondly, for the purposes of those transactions, both C and A assumed the truth of a certain state of affairs, namely that the guarantee given in relation to the Nassau loan effectively bound A to discharge any indebtedness of B to D. The transactions took place on the basis of that assumption, and their course was influenced by it in the sense that, if the assumption had not been made, the course of the transactions would without doubt have been different.24

5.11  The essential elements of an estoppel by convention are apparent from the two above main formulations of that principle.25 The parties to the arrangement, that is to the making of the loan with the existence of the guarantee of its repayment, acted on an assumed state of facts or law. The assumed state in that particular case was one of law in that it concerned the meaning and effect of the contract of guarantee. The assumed state of law was common to and shared by both parties. It was unjust that the guarantor should be allowed to resile from that shared assumption of the effect of the agreement. It should be noted that the common assumption related to the meaning and effect of an existing transaction between the parties, the contract of guarantee, and not to some new or proposed transaction.

3.  Keen v Holland 5.12  The second of the three cases is the decision of the Court of Appeal in 1984 in Keen v Holland.26 The case concerned a tenancy of agricultural land and the statutory protection 22 ibid, 121–22. 23 The relevant passage in Spencer Bower & Turner in this edition is quoted in para 5.8. 24 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 131. Eveleigh LJ (at 126) also spoke of the agreed assumption that A was liable for the Nassau loan and could not deny the truth of that assumption. 25 See para 5.5 for a statement of these elements. 26 [1984] 1 WLR 251.

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The Development of the Estoppel  5.15 given to agricultural tenants by the Agricultural Holdings Act 1948. The Act conferred the protection on tenants with leases for a term of a year or less and for a term of two years or more, but leases for a term of more than one year and less than two years were not protected. In order that the statutory protection should not apply, the parties agreed on a lease which they believed would fall within the gap where there was no statutory protection. Unfortunately, the parties were unaware that in law the term of a lease is measured from the date of the grant of the lease and not from some antecedent date stated within the lease as that from which the term is to run, so that by reason of this mistake the lease as granted did not fall within the gap in the legislation and so did attract the statutory protection on the part of the tenant.27 5.13  The landlord in Keen v Holland contended that the tenant was prevented by an estoppel by convention from asserting that the tenancy had the protection of the Agricultural Holdings Act 1948. It was argued that the parties entered into the grant of the lease on the common assumption that there would be no statutory protection and that it would be unjust to allow the tenant to resile from that assumption. The Court rejected this estoppel argument for two reasons, both of which are important for the development of estoppel by convention. 5.14  One reason was that the operation of an estoppel would have been repugnant to the provisions of, and purpose behind, the Agricultural Holdings Act 1948. It had been held by the House of Lords that an express agreement which provided that there should be no entitlement to the statutory protection conferred by the Act was unenforceable.28 It follows that an estoppel could not be used to achieve that which an express agreement could not achieve. This line of reasoning is of course important for other forms of estoppel as well as estoppel by convention.29 5.15  The second reason was that an estoppel by convention could arise where the parties had entered into a transaction and then regulated their subsequent affairs on the basis of a shared understanding of the legal effect of that transaction.30 The estoppel could not apply so as to confer a particular meaning on a contract simply because before and when entering into that contract the parties had a shared understanding as to what would be the effect in law of that contract.31 27 eg, a lease granted on 1 January 2016 for one year from and including 1 July 2015 is a lease for six months and covers the period from 1 January 2016 to 30 June 2016: see Roberts v Church Commissioners for England [1972] 1 QB 278. 28 Johnson v Moreton [1980] AC 37. 29 It has been recently reiterated in the Privy Council that ‘contractual estoppels’ (which for these purposes includes estoppel by convention) are subject to the same restrictions in regard to conflict with public policy as are contracts: Prime Sight Ltd v Lavarello [2014] AC 436, para 47, citing Welch v Nagy [1950] 1 KB 455 in which the Court of Appeal held that the operation of the Rent Acts on a tenancy could not be excluded by an estoppel when the parties by their convention described as furnished a tenancy which was unfurnished. The interrelationship between estoppel and statutory provisions is discussed more generally in ch 2, part (F). It is there explained that the fundamental principle is that an estoppel of any kind cannot operate so as to contradict a statutory provision or to contradict the purpose of that provision. Keen v Holland is an important decision in support of that principle. 30 The situation described is a shared assumption as to a matter of law. As mentioned earlier, an estoppel by convention can arise from a shared assumption of fact but the assumption, whether or fact or of law, must relate to an existing transaction or legal relationship. 31 Keen v Holland [1984] 1 WLR 251, 261–62 (Oliver LJ). A question which is in some ways similar arises where parties enter into an arrangement which they believe is a binding contract but which for some reason does not have that status. One party may subsequently act on the commonly held assumption that there is a binding contract and

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5.16  Estoppel by Convention 5.16  The two reasons for the decision in Keen v Holland therefore place limitations on the ambit of estoppels by convention. The first limitation, that an estoppel cannot operate in a way which is repugnant to provisions in or the purpose of a statute, is a limitation applicable to estoppels generally.32 The second limitation is particular to estoppels by convention. In expressing the second limitation Oliver LJ in Keen v Holland considered the Texas Bank case and added that there could not be drawn from that decision the proposition that where parties are shown to have had a common and shared view at the time of the formation of the contract about the legal effect of a contract into which they are entering, and it is established that one of them would not to the other’s knowledge have entered into it if it had appreciated its true legal effect, they are, without more, estopped from asserting that the effect is otherwise than they originally supposed.33 It can be noted that in the Texas Bank case the making of the relevant loan was at a time after the transaction constituted by the letter of guarantee had been made and the loan was made on the basis of a shared assumption of what was the effect of that guarantee. It is also correct that the conclusion of Lord Denning MR on the principle which he was applying referred to a course of dealing by the parties to a contract after the making of the contract carried out on a shared assumption as to the meaning of the contract.34 The principle so stated does not refer to a shared assumption on the meaning of a contract with that assumption made before or at the time when the contract was made. The statement of principle in the third edition of Spencer Bower & Turner: Estoppel by Representation, on which Brandon LJ relied, was perhaps less clear on this matter in that it referred to the parties having had an agreed assumption as to the meaning of a transaction into which they were about to enter and to the parties having ‘acted in their transaction upon the agreed assumption’.35 In any event, the law today is best regarded as standing with the second limitation on the ambit of estoppel by convention as stated by Oliver LJ in Keen v Holland. In brief terms, an assumption which founds an estoppel by convention cannot relate to a transaction into which those who hold the assumption are about to enter, or a transaction into which at the time of the assumption they are entering but must relate to a transaction or some legal relationship into which they have entered prior to the time at which the assumption is made. This rule, although not always emphasised, appears to be fundamental to estoppel by convention.36

the question which arises is whether the other party is bound to accept that the agreement is binding by reason of an estoppel by convention. This matter is discussed in para 5.44 et seq. 32 See ch 2, part (F). See Aristocrat Property Investments v Harounoff (1982) 2 HLR 102 and Welch v Nagy [1950] 1 KB 455 for decisions applying the same general principle to restrictions under the Rent Acts. 33 Keen v Holland [1984] 1 WLR 251, 262. The judgment given by Oliver LJ was the judgment of the Court. It therefore seems that this aspect of the judgment of the Court, if it is correctly here interpreted, is binding on all courts except the Supreme Court. 34 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 121–22. 35 The passage from this edition of Spencer Bower & Turner is set out in para 5.8. See the comment on the passage in that paragraph. For the treatment of this subject in the current 5th edn, see Spencer Bower: Reliance-Based ­Estoppel (Bloomsbury, 2017) 316 et seq. 36 See para 5.44 et seq where the limitation is discussed in greater detail. It is not a limitation which has been consistently applied as is explained in para 5.46. Nor does the limitation appear in the statements of principle made by Briggs J and Morgan J as cited earlier in para 5.7 and above (n 10).

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The Development of the Estoppel  5.18

4. The India Steamship Decision 5.17  The third decision is that of the House of Lords in 1998 in Republic of India v India Steamship Co Ltd (No 2)37 from which the definition of an estoppel by convention by Lord Steyn cited at the beginning of this chapter is taken.38 In this case, a ship carrying a cargo of munitions from Sweden to India experienced a fire as a result of which a small part of the cargo was jettisoned and a larger part of it was damaged. The cargo owners, the Indian Government, brought proceedings in India for damages in respect of the jettisoned cargo and obtained a small award. They subsequently brought proceedings in England claiming a larger sum in respect of the damaged cargo. It was held that the proceedings in England were precluded by reason of the provisions of section 34 of the Civil Jurisdiction and Judgments Act 1982 which prevents a party bringing proceedings in an English court when judgment has been given in its favour in a court in another country. The cargo owners had contended in the proceedings that the Defendants were prevented from relying on the statute by reason of an estoppel by convention which arose at the time of the proceedings in India. Having stated his definition of estoppel by convention, Lord Steyn held that no sufficient shared assumption had been established on the facts to justify an estoppel by convention. 5.18  Several facets of this decision may be noted in addition to the definition of an estoppel by convention given by Lord Steyn. It was accepted that if the elements of the estoppel had been made out, it could in principle have prevented a party from relying on a form of statutory protection. The reason was that when the case had previously been before the House of Lords it was held that section 34 of the Civil Jurisdiction and Judgments Act 1982 was not a provision which barred the jurisdiction of an English court when it applied but only provided a defence to proceedings in certain circumstances and so could in principle be the subject of an estoppel. Therefore, if an estoppel by convention could have been made out it would not have been defeated by the rule that parties cannot extend the jurisdiction of a court or tribunal by a contract or an estoppel.39 A further point is that on one possible reading of what had been said when the case was before the Court of Appeal, that Court had held that for there to be an estoppel by convention there had to be an enforceable agreement on the subject matter of the common assumption.40 It was held by the House of Lords that 37 [1998] AC 878. See also ING Bank NV v Ros Roca SA [2012] 1 WLR 472 in which Carnwath LJ in the Court of Appeal analysed and applied elements of the definition of Lord Steyn. 38 See para 5.4. 39 This rule is explained in ch 2, part (E), stating it as a rule which applies generally across the various forms of estoppel. The litigation which followed the fire in the ship engendered two decisions of the House of Lords which together established four principles important in the law of estoppel. In the first decision, Republic of India v India Steamship Co Ltd [1993] AC 410 it was held (a) that there was a sufficient similarity between the subject matter in the proceedings in India and the subsequent proceedings in England to enable the judgment in the former proceedings to be used as a cause of action estoppel and thus a res iudicata defence in the later English action; and (b) that in principle that defence could be met by an estoppel by convention in that s 34 of the Jurisdictions and Judgments Act 1982 created a defence rather than a limitation on the jurisdiction of a court. The second decision (a) contained an authoritative definition of estoppel by convention and its effects and (b) established that an Admiralty action in rem was in truth an action against the owners of the ship and not against the ship itself. The third holding is of central importance to this chapter. The first and fourth principles are a part of the law of estoppel by record and are discussed in detail in ch 9. 40 See [1998] AC 878, 891 (Staughton LJ). It was in fact held by the House of Lords that on a correct reading of the judgment of the Court of Appeal that Court had not fallen into this error. See para 5.20 for the law as to a separate contract which states the meaning of a provision in a previous contract.

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5.19  Estoppel by Convention there was no such requirement. Lastly, it was stated explicitly that the shared assumption needed to establish the estoppel could be one of fact or of law or of course of both. 5.19  This last rule may be contrasted with the rule applicable to estoppel by representation which it had long been thought had to be founded on a representation of fact, or of mixed law and fact, and not purely of law, and with the rule applicable to estoppel by deed that the statement in the deed which founds the estoppel has to be one of fact or of mixed law and fact. Recent authority suggests that an estoppel by representation may now be founded on a representation of law as well as one of fact, and the application of estoppel by convention to assumptions of law as well as of fact was given as one of the arguments for a similar extended rule in the law of estoppel by representation. Thus, the operation of estoppel by convention is untrammelled by the vexed question of the exact distinction between statements of fact and statements of law, and the question of exactly what is meant by statements of mixed law and fact, which may be relevant to other forms of estoppel.41 5.20  If there is an enforceable agreement on the subject matter of the convention, ie, the parties include in their contract a statement of the assumption as something agreed, then no estoppel by convention arises. The position is then altogether simpler in that there is a binding agreement between the parties that for the purposes of their contract a certain state of fact or of law exists and this contractual provision can be enforced in the same way as any other contractual provision. This situation is sometimes called estoppel by contract or contractual estoppel but it is preferable to regard the enforcement of an agreed state of matters as nothing more than the ordinary enforcement of a term in a binding contract.42 If the agreement is expressly entered into as a separate agreement after the formation of the original contract and so amounts to a variation of that contract, it will normally be necessary to show consideration for the agreement to be binding as a contract.43 In practice, if there is some doubt or ambiguity or need for clarification as to an aspect of an existing contract and the two parties to the contract expressly agree a meaning which will remove the lack of clarity, then each gives consideration by its agreement to what is also agreed by the other party. The nature, and the utility, of an estoppel by convention is that it does not require a new and separate contract backed by consideration which in formal terms varies the prior transaction or other relationship between the parties.

5.  The Status of the Estoppel 5.21  As noted earlier, estoppel by convention may be derived from an expansion of ­estoppel by deed although there are fundamental differences between the two principles, most notably the requirement in estoppel by convention that the court will only find that there is an estoppel if it would be unjust or unconscionable that a party should be allowed to depart from the shared assumption.44 There is no such requirement in estoppel by deed. Estoppel by deed goes back at least to the writing of Coke on Littleton in the



41 See

the discussion on these matters in ch 3, para 3.26 et seq, as regards estoppel by representation. subject of ‘estoppel by contract’ is discussed in ch 3, part (G). 43 See ch 6, para 6.41 et seq. 44 See part (F) of this chapter. 42 The

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The Main Elements of the Estoppel  5.22 early ­seventeenth century and was one of the three forms of common law estoppel there stated, along with estoppel in pais and estoppel by record, and it might be supposed that as a derivative of estoppel by deed estoppel by convention should also be regarded as a common law estoppel. As against this very recent authority in the Court of Appeal puts a different gloss on the question. It has been said that, especially since the Texas Bank45 decision, the principles of estoppel by convention have largely been explained in equitable terms and expanded as another variant of equitable estoppel.46 This categorisation runs contrary to what was said in the House of Lords in Thorner v Major47 where equitable estoppel was said to comprise two forms of estoppel, promissory and proprietary estoppel, both of which do have clearly equitable origins, the first being described in a leading case in its formation as ‘a first principle of equity’48 and the second deriving from decisions of the former Court of Chancery going back to the seventeenth century.49 In the end, taxonomy in law may not be of fundamental importance save that it is sometimes felt that an equitable estoppel permits a flexibility of operation and wider choice of remedies than that which would be available for a common law estoppel.50 So far as classification is important it seems best to regard estoppel by convention as a modern form of common law estoppel which probably derives from the more ancient estoppel by deed.

(C)  The Main Elements of the Estoppel 1.  The Three Main Elements 5.22  Having established the origins of estoppel by convention as a separate form of estoppel, and having set out the understanding of its content as stated in a series of modern decisions, it is now appropriate to examine the three main elements which have to be established in order for the estoppel to be relied on, namely (a) an assumed state of facts or law relating to a previous transaction, (b) a shared assumption that those facts or that view of

45 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84. 46 Dixon v Blindley Heath Investments Ltd [2017] Ch 389, para 72. As mentioned in para 5.8 estoppel by convention was described in the same decision as an estoppel in pais. 47 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 67 (Lord Walker). 48 Hughes v Metropolitan Railway Co (1877) 2 App Cas 439, 448, where Lord Cairns described the rule of law which he was applying, and which subsequently came to be known as promissory estoppel, as ‘the first principle on which Courts of Equity proceed’. 49 See ch 7, para 7.3 et seq. A tabular classification of common law and equitable estoppels is provided in ch 1, para 1.36. 50 In estoppel by representation modern cases discuss the question, perhaps not yet decisively resolved, of whether the estoppel can have a partial or pro tanto operation, that is it can operate so as to prevent a representor going back on a part of his representation but allowing him to go back on the remainder of it. It is unlikely that such a difficulty would arise in connection with equitable estoppels and their more flexible operation. On the other hand, injustice or unconscionability are essential elements of estoppel by representation, estoppel by convention, promissory estoppel, and proprietary estoppel, and there seems no reason of logic or history to believe that this essential element should not be operated in as flexible and wide a fashion as possible, taking account of all relevant circumstances including the conduct of the parties, which is relevant to the requirement. In this respect, all four of these estoppels, two of them common law and two of them equitable estoppels, may be approached in a way which is akin to that in which courts decide the question of whether to award an equitable discretionary remedy.

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5.23  Estoppel by Convention the law are correct, and (c) that it would be unjust or unconscionable to allow a party to the shared assumption to resile from it.51 It is these necessary characteristics of an estoppel by convention that distinguish this form of estoppel from other forms, although in some cases there may be some doubt over which form of estoppel is established by the facts.52 5.23  The necessary assumption is sometimes referred to as a shared assumption and sometimes as a common assumption and the two descriptions are in general usage and as often used are much the same in their meaning. It may be more accurate for present purposes to use the expression ‘shared assumption’ and that is usually done in the remainder of this chapter. The reason is that a common assumption may indicate no more than that the parties to the assumption hold the same assumption. This is not enough for an estoppel by convention. The assumption, as well as being the same assumption held by both parties, has also to be shared between the parties in the sense that both parties know that the same assumption is held by the other party as a result of it having been in some way communicated between them. That communication may be by express words or may be an inference

51 There is a further requirement that the shared assumption has ‘crossed the line’ between the parties, meaning that each party is made or becomes aware that the assumption is also being made by the other party. This requirement is not explicitly stated in all of the three decisions examined and is sometimes referred to as a separate element of an estoppel by convention. It is dealt with in this chapter as an aspect of the second element: see para 5.52 et seq. The requirement of crossing the line was not expressly stated in the formulation of the principle by Lord Steyn in Republic of India v India Steamship (No 2) [1998] AC 878 cited in para 5.4 but was subsequently referred to by him (at 913): see above (n 132). The main elements of the estoppel were reiterated by the Court of Appeal in Rivertrade Ltd v EMG Finance Ltd [2015] EWCA Civ 1295, [2016] 2 BCLC 226, para 51 (MooreBick LJ), described as a common underlying assumption, communicated between the parties, and acted upon by the party claiming the estoppel by continuing to lend money and funding legal proceedings against a Malaysian entity. This was described as being an entirely conventional way of approaching estoppel by convention. 52 See, eg, Eyestorm Ltd v Hoptonacre Homes Ltd [2007] EWCA Civ 1366, para 51 (Rimer LJ). In Lyle-Meller v A Lewis & Co Ltd [1956] 1 WLR 29, 35–36, Denning LJ referred to a ‘new estoppel’ which, in contrast to common law estoppel by a representation of fact, encompassed estoppel by convention and promissory estoppel. An attempt is made in para 5.26 to clarify the fundamental differences between estoppel by convention and promissory estoppel. As explained in ch 2, part (G), the preferable view is that no attempt is made to formulate and apply some comprehensive rule which purports to state all elements of all or most forms of estoppel. An illustration of the need to distinguish between estoppel by convention and other forms of estoppel, a need which is increased now that estoppel by representation can probably extend to statements of law as well as to statements of fact, is shown by the following illustration: (a) A and B are parties to a contract and A represents to B that a clause in the contract has a particular meaning, a representation of law. B acts in reliance on the representation such that it would suffer detriment if A was permitted to resile from the representation. Subject to other matters an estoppel by representation is likely to arise so that A is held to the truth of what was represented. (b) A and B are parties to a contract and each forms the same assumption as to the correct meaning of a clause in the contract. They communicate to each other their common understanding and assumption and B acts in reliance on the shared assumption such that it would suffer detriment if A was permitted to resile from that assumption. Subject to other matters, an estoppel by convention is likely to arise so that A is likely to be held to the correctness of the assumption made. (c) A and B are parties to a contract and a doubt arises as to the meaning of a clause in the contract. A and B reach a formal agreement that the clause has a particular meaning. The parties will be held to their formal and recorded agreement in accordance with the ordinary law of contract. The agreement will be enforced whether or not there is any action taken on it and irrespective of detriment or unconscionability. The first situation is an example of the operation of the principle of estoppel by convention. The third situation is an example of the operation of the general law of contract. It is correct that the factual circumstances which give rise to each of the legal results may be similar and may shade into each other. In the first two examples it may not much matter to B whether he succeeds by virtue of an estoppel by representation or an estoppel by convention. Nonetheless, it may be important to distinguish to which category each situation falls if only because in the first two situations, the two forms of estoppel, reliance and detriment are necessary elements of the estoppels, whereas a contract will be enforced according to its terms irrespective of these requirements. See para 5.25 for a further examination of the differences between estoppel by convention and estoppel by representation.

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The Main Elements of the Estoppel  5.25 from the conduct of the parties. This last requirement is encapsulated in the rule that the assumption must have ‘crossed the line’.53 5.24  Certain of the main forms of estoppel have as part of their definition and their essential elements a mental element on the part of the person sought to be estopped which has to be shown to exist before the estoppel can be successfully invoked. Thus, in estoppel by representation it has to be shown that the representor intended that the representation should be acted upon by the representee. Such a requirement raises ancillary questions such as whether the necessary intention has to be assessed subjectively or objectively.54 The leading authorities discussed earlier which establish the essentials of the estoppel, as discussed, do not suggest that there is any such exact equivalent mental element in estoppel by convention. It is enough that there is a shared assumption between the parties. There is a requirement that the shared assumption has ‘crossed the line’, ie, been communicated between the parties and held by both of them, which is dealt with later in this chapter. It is sometimes said that this requirement means that the party against whom an estoppel by convention is claimed must have assumed or accepted some responsibility for the assumption. If there is such a separate requirement it can best be regarded as a mental element of the estoppel and this matter is examined later in connection with the principle of crossing the line.55

2.  A Comparison with Other Forms of Estoppel 5.25  It is important that a party wishing to rely on an estoppel should decide the form of estoppel on which it relies or primarily relies. It is therefore useful to make a brief comparison between estoppel by convention and estoppel by representation and promissory estoppel. An estoppel by convention differs in its essential ingredients from an estoppel by representation in at least the following respects. (a) An estoppel by convention requires as its basis an assumption or convention shared between the parties, but there is no such requirement of a common assumption at the time of the making of the representation which is the basis of an estoppel by representation. (b) An estoppel by convention may relate to a matter of law as well as fact, whereas an estoppel by representation was long generally thought to be confined to representations of fact or of mixed law and fact. However, recent authority suggests that an estoppel by representation may today be founded on a representation of law as well as of fact.56 (c) An estoppel by convention must relate to a transaction or relationship between the parties which exists at the time of the making of the common 53 The requirement of ‘crossing the line’ is explained in para 5.52 et seq. In his classic definition of estoppel by convention in Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878, 913, Lord Steyn referred to a shared assumption: see para 5.4 where the passage is set out. 54 As an example, proprietary estoppel depends on an assurance relating to an interest or rights in property intended to be relied on. In a leading case on this form of estoppel, Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, the House of Lords held, overruling the apparent decision of the Court of Appeal, that the intention of the person sought to be estopped and giving the assurance had to be assessed objectively. See ch 7, para 7.148. 55 Crossing the line is examined generally in para 5.52 et seq and the question of an assumption of responsibility is examined in para 5.62 et seq as part of the principle of crossing the line. A requirement of an assumption of responsibility by the person against whom the estoppel is operated is stated in the second proposition of Briggs J in Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174 as set out in para 5.6. 56 This matter is discussed in ch 3, para 3.18 et seq. See also above (n 52) for a reference to the distinction between estoppel by convention and estoppel by representation.

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5.26  Estoppel by Convention assumption, whereas an estoppel by representation may relate to an existing transaction but does not have to do so. 5.26  Turning to promissory estoppel, both an estoppel by convention and an estoppel by representation must relate to some matter existing at the time of the events which give rise to the estoppel, that is at the time of the making of the shared assumption or the making of the representation, whereas a promissory estoppel must relate to a promise of what is to happen in the future, usually the future conduct of the promisor, and must be intended to be binding on the promisor. An estoppel by convention and a promissory estoppel have the common characteristic that they both relate to some existing transaction or relationship between the parties.57 Even so, there should be no difficulty in distinguishing between the two principles. (a) Estoppel by convention applies when there is an assumption about some existing fact or proposition of law whereas a promissory estoppel looks to the future and is founded on a promise that some right will not in the future be enforced. (b) An estoppel by convention requires the conduct of both parties, the making of a shared assumption, before it can operate, whereas that which initiates a promissory estoppel is an unilateral act, a promise not to enforce a right. 5.27  On the other hand, an estoppel by convention shares with an estoppel by representation and with a promissory and a proprietary estoppel the common characteristics, first, that the estoppel will only operate if it is shown that it would be unjust or unconscionable that a party should be allowed to resile from a statement or promise or assumption that it has made and, secondly, that for injustice or unconscionability to exist it must normally be shown that the party asserting the estoppel has acted in some way in reliance on the representation or promise or assumption with the result that that party would be likely to suffer significant detriment if the other party was not held to the representation or promise or assumption. Of course, if there is doubt on which form of estoppel is appropriate on the facts, or if the facts themselves are in doubt, a party may assert and plead more than one form of estoppel in the alternative.

(D)  The First Element: Assumed State of Fact or Law 1.  The Nature of the Assumption (i)  General Nature 5.28  The assumption needed to found the estoppel may be of fact or of law. In the leading case of Amalgamated Investment and Property Co Ltd v Texas Commerce 57 There is nonetheless a significant difference between the two forms of estoppel on this matter. A promissory estoppel must relate to an existing legal right with a promise not to enforce that right. An estoppel by convention must relate to an existing transaction or relationship but can probably relate to an existing transaction which does not itself create legally enforceable rights and obligations, for example, a subject to contract agreement. This last point is further discussed in para 5.49 et seq. A contract of guarantee is unenforceable in the absence of writing by reason of s 4 of the Statute of Frauds 1677. It was said by Lord Hoffmann in Actionstrength Ltd v International Glass Engineering SpA [2003] UKHL 17, [2003] 2 AC 541, that it was conceivable that an oral contract of guarantee, which therefore created no legally enforceable rights, was a transaction which could be rendered enforceable by some later events. Such events might be an estoppel, including an estoppel by convention.

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The First Element: Assumed State of Fact or Law  5.28 International Bank Ltd58 the assumption was as to the meaning of a contract of guarantee and the meaning of a document is normally taken to be a matter of law.59 In another case, the parties had entered into an agreement relating to the purchase of shares. It was held as a matter of construction that the agreement created an option rather than being a sale and purchase agreement. However, as the parties had proceeded on the assumption that the agreement was a sale and purchase agreement and one party had invested in a project to exploit a mineral licence in reliance on that assumption, it was held that an estoppel by convention arose and that the other party was not permitted to assert that the agreement was an option agreement.60 In this instance, the assumption was again one of law. The assumption of law may be as to the meaning of a document, such as a particular term in a contract, or may be as to some aspect of general legal principle.61 While the assumption may be one of fact, it does not seem that for the purposes of estoppel by convention it needs to be confined to an assumption regarding some existing fact or past event. It is said that the assumption or understanding may relate to the factual or legal basis on which a current transaction is proceeding even if that assumption includes reference to events in the future.62 There seems no reason in principle why the assumption should not be one of a judgment or opinion arising from the facts so that a party to the shared judgment could be prevented by estoppel from asserting the correctness of a different judgment. The type of assumption which cannot give rise to an estoppel by convention is an assumption as to what one party is or is not to do in the future engendered by a promise. In such a case, if there is a clear and unequivocal promise by a party to an existing transaction that the rights of that party will not be enforced, that promise may in certain circumstances create a promissory estoppel.63 Also, of course, a promise, if given for consideration, may become a part of a contract. 58 [1982] QB 84: see para 5.9. 59 See, eg, Holt v Markham [1923] 1 KB 504, 512 (Warrington LJ); Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741, 758 (Viscount Dilhorne). 60 Pathfinder Minerals Plc v Veloso [2012] EWHC 2856 (Com), [2012] All ER (D) 263. See also The Vistafjord [1988] 2 Lloyd’s Rep 343, 351–52 (Bingham LJ); Hamel-Smith v Pycroft & Jetsave Ltd (1987) (unreported); Hiscox v Outhwaite [1992] 1 AC 562 (in the Court of Appeal); Lyle-Meller v A Lewis & Co Ltd [1956] 1 WLR 29, 35–36, in which Denning LJ spoke of a ‘new estoppel’ (see above (n 52)); Hamed El Chiaty & Co v The Thomas Cook Group Ltd (The Nile Rhapsody) [1992] 2 Lloyd’s Rep 399. 61 PW & Co v Milton Gate Investments Ltd [2004] Ch 142, 186–87 (Neuberger J). The mistaken assumption in that case was that sub-tenancies would not automatically determine when the headlease out of which they were created was determined by the head tenant giving notice to operate a break clause. The assumption failed to create an estoppel by convention for a different reason: see para 5.45. In Kenneth Allison Ltd v AE Limehouse & Co [1992] 2 AC 105, 126–27, Lord Goff reached the conclusion that service of a writ which did not comply with the Rules of the Supreme Court was nonetheless to be taken to be valid between the parties by reason of an estoppel by convention. 62 ING Bank NV v Ros Roca SA [2012] 1 WLR 472, para 64. Such an approach may be apparent from Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84 where the Bahamian loan was made on the shared understanding that if it was not repaid it would come within the purview of the guarantee given by the Plaintiffs (see para 5.9). In Republic of India v India Steamship Co Ltd [1993] AC 410, it was held that in principle a shared assumption made before the courts of one set of proceedings that a judgment in those proceedings would not be a bar to the bringing of later separate proceedings based on the same general events could create an estoppel by convention. In the event it was held in Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878 that there was not sufficient proof of the necessary shared assumption. See para 5.18 and for a full discussion of these two decisions and see ch 9 on estoppel by record. 63 See ch 6 for promissory estoppel. The subject matter of the promise has to be that an existing legal right will not be enforced. In ING Bank NV v Ros Roca SA [2012] 1 WLR 472, para 85, Rix LJ thought that the estoppel which there arose could be categorised as a promissory estoppel.

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5.29  Estoppel by Convention 5.29  The established rule that an estoppel by convention can arise from a shared assumption of law, including an assumption as to a general principle of law, is one of the factors which has led to the holding in a number of decisions at first instance that an estoppel by representation can also now be founded on a representation of law. The traditional view has been that a common law estoppel by representation could only arise from a statement of fact or of mixed law and fact.64 The consequence of an estoppel by convention resulting from a shared assumption of law is that a court may be required to apply a principle of law which it considers to be incorrect. Indeed, this may be the inevitable consequence of such an estoppel. Where there is an issue of law between the parties the court will normally determine what is the correct law. If the shared assumption is in accordance with the correct law then no question of estoppel arises. It is only if the shared assumption is to the effect that the law is different from the correct law that the question of applying the principle of law as assumed, ex hypothesi incorrect, arises. This process may cause little difficulty when the assumption and the estoppel concern some matters specific to the parties such as the interpretation of a particular provision in a contract between them. If the estoppel can relate to general principles of law, as it has now been held that it can,65 the situation may become rather more problematical. A generally accepted view is that a court is not bound by what the parties before it admit or agree to be the law but may refuse to accept the admission and then decide the case before it on what it determines to be the correct law. The correct law, certainly as regards general principles of law, is a matter of public interest as well as of the interest of the parties before the court. If a court is bound to give effect to a shared but incorrect assumption of general law by reason of an estoppel, there may be some erosion of the approach usually adopted as just explained. There seems no limit to the generality of the legal principles which may be involved. An instance might be a representation or assumption that a periodic tenancy validly existed even though the landlord was not able to determine it by notice to quit, something which would be contrary to the nature of periodic tenancies as established for centuries.66 The same possible problem arises for estoppel by representation if this form of estoppel can now be founded on a representation of law.67 The difficulty may be reduced by the principle that where the shared assumption relates to a statutory provision, an estoppel may not be able to operate because of a conflict between the shared assumption and the terms of the statute.68 Another way of looking at the situation is to reason that what a court does when it upholds an estoppel by convention founded on an incorrect assumption of a principle of the general law is not to hold that the law is as assumed, but because of the estoppel deliberately to apply a rule of law which it knows and states is incorrect. However, the same reasoning would apply where a court is asked to apply an admission of law between the parties. The court can then refuse to apply the admitted

64 See ch 3, para 3.18. Other factors leading to this change in the law were recent decisions which introduced the rule under the law of restitution that money paid under a mistake could be recovered when the mistake was a mistake of law as well as when it was a mistake of fact and which established that a representation which could justify the rescission of a contract can be one of law as well as one of fact. 65 See the last paragraph and see PW & Co v Milton Gate Investments Ltd [2004] Ch 142, 186–87 (Neuberger J). 66 Prudential Assurance Co v London Residuary Body [1992] 2 AC 386. A further example given in ch 3 is a representation that an arrangement for the occupation of land constituted a lease even though no right to exclusive possession of the land was given to the occupier. 67 See ch 3, para 3.18 et seq. 68 Keen v Holland [1984] 1 WLR 251. See para 5.12.

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The First Element: Assumed State of Fact or Law  5.32 state of the law if it believes it to be incorrect even though it could do so with the caveat that in doing so it is not applying its view of the correct law.

(ii)  Assumption that an Agreement is Binding 5.30  A question which arises is whether a shared assumption can be the basis of an estoppel by convention when the assumption is that a previous transaction between the parties is a binding contract, where in law that transaction does not for some reason constitute a binding contract. It was said in one decision69 that where parties were in a relationship which did not constitute a binding contract, a subsequent shared assumption that there was a binding contract could not have the effect, by reason of an estoppel by convention, of requiring the parties to abide by the rights and obligations which would have existed between them if there had been a binding contract. However, whether a transaction or agreement amounts to a binding contract is generally a matter of law and there may be at first glance no obvious reason why in principle this particular type of assumption of law should never found an estoppel by convention. A reason suggested for a rule that an estoppel by convention cannot in principle turn a non-binding contract into a binding contract is that this result might subvert fundamental elements of the law of contract such as that consideration is needed to render enforceable a promise which is not made in a deed. Yet it is now well established that a promissory estoppel can, in certain limited circumstances, in effect render enforceable a promise not backed by consideration,70 and there seems no reason why within its limited field of operation an estoppel by convention should not in an appropriate case have a similar effect, despite the operation of the doctrine of consideration. 5.31  As well as being considered in general terms as in the last paragraph, the question of whether an estoppel by convention can apply so as to render enforceable an agreement which would not otherwise be enforceable can be considered more specifically in three types of circumstances, namely (a) where the agreement is subject to contract or subject to some other similar bar on its enforceability, (b) where the agreement is contrary to some aspect of public policy, and (c) where the agreement fails to comply with some statutorily imposed formality, such as being in writing, required for a contract of the type in question. These three types of case are now discussed. 5.32  A reason why an agreement which might otherwise be enforceable is not enforceable is that the parties have deliberately deprived the agreement of that status. The classic example of this process is an agreement which is expressed to be subject to contract. By long tradition, use of these words means that the agreement, although otherwise enforceable, cannot be enforced until either there is a further formal contractual document executed

69 Tesco Stores Ltd v Costain Construction Ltd [2003] EWHC 1487 (TCC), [2003] All ER (D) 394 (Jul). This proposition appears to be contradictory to what Lord Templeman said was possible, although unlikely, in Attorney General of Hong Kong v Humphreys Estate (Queen’s Gardens) Ltd [1987] AC 114, 127–28, as stated below (n 72). The proposition in its stark form also seems incompatible with the possibility of an unenforceable oral contract of guarantee being rendered enforceable by an estoppel as mentioned by Lord Hoffmann in Actionstrength Ltd v International Glass Engineering SpA [2003] UKHL 17, [2003] 2 AC 541: see para 5.34. 70 See ch 6, para 6.52, for an examination of promissory estoppel and its relationship with the doctrine of consideration.

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5.33  Estoppel by Convention or it is agreed that the agreement is no longer ‘subject to contract’.71 Clearly, the parties may expressly agree that their arrangement is no longer subject to contract and instead is (subject to other requirements of a valid contract such as certainty) enforceable as an ordinary contract. The present question is whether the subject to contract status of an agreement can be removed by an estoppel by convention, ie, a shared assumption that the agreement has become a fully enforceable agreement. This appears to be possible in principle but not to be a likely event.72 Certainly, there seems to be no absolute principle which prevents the parties ever entering into a binding shared assumption that their contract, previously unenforceable, has become an enforceable contract. The recognition of this possibility indicates that there is no overriding principle that an estoppel by convention cannot under any circumstances operate so as to turn an unenforceable agreement into an enforceable contract. It is a requirement of an estoppel by convention that the shared assumption relates to a pre-existing transaction:73 there is, however, no rule that the pre-existing transaction is a binding contract. That transaction may be something other than a contract. There is no reason why a subject to contract agreement may not be the previous transaction on which an estoppel by convention can operate.74 5.33  A contract may be void for reasons of public policy, for example a contract which purports to exclude from a tenancy some statutory protection given to certain categories of tenant. This may occur even in the absence of an express provision which prevents contracting out of the statutory protection. The decision in Keen v Holland75 shows that where there is a rule of public policy to this effect an estoppel by convention cannot operate so as to render enforceable that which could not be made enforceable by a contract. In situations of this kind, therefore, an estoppel cannot render enforceable as a contract a previous invalid arrangement which the parties assumed was a valid and enforceable contract. 5.34  On the third matter, compliance with form, in English law there are statutory formalities for the creation of certain contracts non-compliance with which renders the purported contract void or unenforceable. Among the most important provisions of this nature are the requirement that contracts for the sale or other disposition of an interest in

71 Rose & Frank Co v JR Crompton & Bros Ltd [1923] 2 KB 261. Other expressions may be used to a similar effect such as that an agreement is binding ‘in honour’ only. It is of course not possible for one party to a subject to contract arrangement unilaterally to ‘waive’ the subject to contract nature of the transaction. The non-enforceability of the transaction is for the benefit of both parties: Lloyd v Nowell [1885] 2 Ch 744. 72 Attorney General of Hong Kong v Humphreys Estate (Queen’s Gardens) Ltd [1987] AC 114, 127–28 (Lord Templeman): ‘It is possible but unlikely that in circumstances at present unforeseeable a party to negotiations expressed to be “subject to contract” would be able to satisfy the courts that the parties had subsequently agreed to convert the document into a contract or that some form of estoppel had arisen to prevent both parties from refusing to proceed with the transaction envisaged by the document’. One such form of estoppel might obviously be a shared assumption that the agreement was no longer subject to contract and was fully enforceable in accordance with its terms. 73 This requirement is explained in para 5.44 et seq. 74 An estoppel by convention may here be contrasted with a promissory estoppel which has to relate to existing legally enforceable rights (although not necessarily contractual rights): see ch 6, part (F). 75 [1984] 1 WLR 251. The facts are set out in para 5.12. A further reason why an estoppel by convention was not possible on the facts was that the assumption was made prior to the creation of the contract (the tenancy) and not subsequently and during the implementation of the contract.

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The First Element: Assumed State of Fact or Law  5.35 land must be in writing,76 and that a contract of guarantee is unenforceable unless evidenced in writing.77 The reasons for these requirements are public policy and the avoidance of fraud. Parties are sometimes unaware of the requirements and believe that they have entered into an enforceable contract when they have not done so. The situation as regards such contracts is not dissimilar to that as just mentioned in Kean v Holland78 in which it was held that since a contract to exclude the statutory protection given to tenants of agricultural holdings could not be enforced because of public policy, with the result that a shared but incorrect assumption that the statutory protection was removed, could not create an estoppel by convention. The logic of the situation must be that if a common subsequent assumption of validity cannot render valid and enforceable a contract which is invalid for reasons of public policy, even in the absence of a statutory provision on invalidity, then such an assumption cannot render valid and enforceable what would otherwise be a valid contract but which is made invalid or unenforceable by a specific statutory provision. It has been said in the House of Lords in relation to contracts of guarantee that an oral guarantee, coupled with a belief that it was binding and some reliance on it, is not sufficient to render the guarantee enforceable by reason of estoppel since that would in effect be to repeal section 4 of the Statute of Frauds 1677, but the possibility of an estoppel founded on further material or events sufficient to prevent reliance by the guarantor on the statute was not ruled out.79 It is not apparent what further material or conduct would be sufficient to create an estoppel. A possible conflict between estoppel and the requirement that a contract for the sale or other disposition of an interest in land must be in writing is most starkly relevant in connection with the operation of proprietary estoppel.80 5.35  The decision of the High Court of Australia in Waltons Stores (Interstate) Ltd v Maher81 concerned a situation in which the parties had entered into an agreement for lease of a property which was not legally binding because there had been no formal exchange of the agreements. The proposed landlords constructed a building on the property in reliance on the agreement. The proposed tenants resiled from the agreement. It was held that

76 By virtue of s 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 contracts for the sale or other disposition of an interest in land must be made in writing. There is an exception in that leases for a term of less than three years and sales at public auctions may be oral. In addition and under other provisions, bills of exchange and consumer credit agreements must be in writing. 77 See s 4 of the Statute of Frauds 1677. 78 [1984] 1 WLR 251. See para 5.12 et seq. See also Godden v Merthyr Tydfil Housing Association [1997] NPC 1 in respect of the requirement of writing in contracts for the sale or other disposition of land imposed by s 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989. Reliance on an estoppel by convention to overcome the restriction in s 2(1) was rejected as impossible by the Court of Appeal, a view with which Robert Walker LJ expressed his agreement in Yaxley v Gotts [2000] Ch 162, 174. The situation may be rather different as regards proprietary estoppel as discussed in ch 7, para 7.63 et seq. 79 Actionstrength Ltd v International Glass Engineering SpA [2003] UKHL 17, [2003] 2 AC 541. 80 See ch 7, part (B), section 5, where the subject is explained in greater depth. The general view there put forward is that if a contract relating to land would be valid and enforceable apart from the statutory requirement of writing but is declared invalid solely by reason of non-compliance with that statutory requirement, it cannot in effect be made valid and enforceable by an estoppel, whether a proprietary estoppel or any other form of estoppel including an estoppel by convention. This is a particular subject which awaits further authoritative decision as is explained in ch 7. 81 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387. This decision is more fully considered in connection with promissory estoppel in ch 6, para 6.18.

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5.36  Estoppel by Convention the parties were to be treated by virtue of a principle of estoppel as if there had been a binding agreement. The decision was founded on a promissory estoppel or a more widely formulated equitable estoppel.82 A possible alternative basis for the result is that there was a shared assumption that the arrangement operated as a binding agreement on which the proposed landlords had acted to their detriment so that the proposed tenants should have been held to the assumption, ie, an estoppel by convention. For reasons just explained, it seems unlikely that the law of estoppel in England can have a similar effect. 5.36  An examination of the present question is bound up with the more general question of whether and when an estoppel can in effect override or contradict some statutory requirement or restriction.83 On this question, the fundamental principle is that estoppels generally, including an estoppel by convention, cannot operate so as to contradict a statutory provision and so cannot have the effect of rendering enforceable an agreement which is made unenforceable by reason of non-compliance with some specific statutory provision or restriction. Nor can an estoppel render enforceable a contract which is illegal, for instance a contract to commit a crime. These are some of the most usual reasons why contracts, thought by the parties to be valid and enforceable, are in fact unenforceable. If that is the correct position, then the circumstances in which an estoppel by convention can enable a party to a contract to treat as enforceable an agreement which would otherwise be unenforceable will be very limited in extent.

(iii)  The Need for a Specific Assumption 5.37  In order that a party can assert an estoppel based on an assumption, it is necessary that the content of the assumption is something which the other party specifically wishes to deny or contradict in the proceedings. It follows that the assumption must normally be of a fairly specific nature rather than of a general nature if it is to be the foundation of an ­estoppel by convention. The need for a specific assumption is illustrated by the facts of Republic of India v India Steamship Co Ltd (No 2) which have been summarised earlier.84 On the facts of that case, the only matter mentioned between the parties during the proceedings in India was that there would be further proceedings in England. There was no suggestion, and certainly no specific assumption, that in the event of such proceedings being taken the Defendants would not be entitled to rely on the judgment in India as a bar to the new proceedings. On the other hand, there are limits to the degree of specificity which has to characterise the assumption. In the India Steamship case it seems that an assumption that there would be no defence to later proceedings in England by reason of the judgment given in India would have been enough to create an estoppel by convention to that effect even if the exact basis of such a defence, section 34 of the Civil Jurisdiction and Judgments Act 1982, had not been mentioned.85 The need for a specific assumption to found

82 ibid, para 35 (Mason CJ, Wilson J). 83 See ch 2, part (F). 84 [1998] AC 878: see para 5.17. 85 [1998] AC 878, 914–15 (Lord Steyn). Note however that where the assumption is one of law then as stated in para 5.28 the assumption may be of some general principle of law as well as of some more specific matter of law such as the correct meaning of a term in a contract between the parties.

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The First Element: Assumed State of Fact or Law  5.39 an estoppel by convention is analogous to the need in an estoppel by representation, or in a promissory estoppel that the representation or promise is plain and unambiguous or clear and unequivocal.86 The shared assumption will usually be derived from express language, written or oral, but in principle it may be derived as an inference from some other form of conduct.87

(iv)  The Reason for the Assumption 5.38  The most usual reason for the making of an assumption of fact or law which is incorrect, is a mistake. The mistake may be as to the meaning of a contract or other document or as to an existing fact or as to events in the future. However, there can be other reasons for the assumption such as that a state of affairs has been misappreciated or misremembered or simply forgotten. The erroneous assumption is sufficient to bring about an estoppel by convention whatever the reason for it. This proposition of law was recently stated in Dixon v Blindley Heath Investments Ltd,88 and the facts of that case illustrate its operation. A number of shareholders in a company agreed to sell their shares to a purchaser. The directors of the company refused to register the transfer on the ground that the existing shareholders had a right of pre-emption and the shares had not been first offered to existing shareholders. The parties, including the directors, had conducted the agreement to purchase on the shared assumption that there was no right of pre-emption, the reason for the assumption on the part of the directors being that they had at the time forgotten its existence. It was held that the directors were bound by an estoppel by convention and were required to register the purchaser as the owner of the shares. 5.39  An estoppel by deed may arise when the parties to a deed state in the deed that a fact is correct when they both know that it is incorrect. An instance is a statement in a deed assigning a lease that the purchase price has been paid when both parties to the deed knew that in fact the price had not been paid.89 It could occur that parties to an existing transaction agree to treat for the purposes of their transaction, and perhaps for the past as well as for the future, some matter as true which they both know to be untrue and the question could then arise of whether this shared assumption should thereafter bind them both by reason of an estoppel by convention. There is a conceptual difference between two parties to an existing transaction assuming that an incorrect state of fact or of law is correct because they both believe that it is correct and two parties to such a transaction agreeing to treat as correct a state of fact or of law which they both know or believe is incorrect. Estoppel by convention can certainly operate in the first type of situation, but seems ill-suited to the second type of situation. A preferable possible answer in this type of situation is that the agreement of the parties that some fact shall be taken for the purposes of their transaction to be true when known by both to be untrue constitutes a new and separate contract

86 See ch 3, para 3.38 (estoppel by representation) and ch 6, para 6.107 (promissory estoppel). By contrast the assurance which gives rise to a proprietary estoppel need only be ‘clear enough’: see ch 7, para 7.141. See also para 5.40 et seq, where the need for clarity is examined further. 87 See para 5.41 for proof of the assumption. 88 [2017] Ch 389, para 79. 89 Prime Sight Ltd v Lavarello [2013] UKPC 22, [2014] AC 436.

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5.40  Estoppel by Convention between the parties which can be enforced under the ordinary law of contract. There would be mutual consideration in that each party agrees to treat as true something which is untrue in consideration for the other party doing the same. Another way of looking at this situation would be to describe it as an estoppel by contract, although the view taken in this book is that a so-called estoppel by contract is no more than an ordinary contract in which the parties agree that some matter is taken to be true for certain purposes and are held to what they have so agreed in accordance with the general and ordinary principle that parties are free, subject to certain limitations such as illegality, to agree what they wish for the purposes of their contract and this freedom should extend to them being able to agree, and thereafter be contractually bound to accept, that some fact is true even though when they made their agreement it was known to them both to be untrue.90 One thing which is shown by discussions of the present nature is that the principles of estoppel by convention, estoppel by deed, and the so-called estoppel by contract, sometimes come close to merging together. Even so, the possibility of merging together these principles into some more general principle has recently been described by the Privy Council as going too far.91

2.  Proof of the Assumption (i)  The Clarity Required 5.40  In each case it is a question of fact whether a particular assumption existed and what was its content, with that question to be answered from the evidence. It is possible that there is no exact requirement that there has to be a clear and unequivocal statement or communication of the assumption equivalent to that which is required for the promise which founds a promissory estoppel, or for the statement of an existing matter which founds an estoppel by representation.92 Nonetheless, the shared assumption must exhibit a sufficient degree of certainty and clarity if it is to be the foundation of an estoppel by convention. It has been said that the clarity required will seldom ‘fall below what is unequivocal for the relevant purpose’.93 It seems therefore that in practice much the same degree of clarity is required for the shared assumption as is required for the representation or promise in the other two forms of estoppel. Furthermore, just as in a claim for rectification of a document it is said that compelling proof has to be adduced of the common intention that the document should be executed in a form different from that in which it was executed in order

90 For a discussion on estoppel by contract and its status, see ch 3, part (G). 91 Prime Sight Ltd v Lavarello [2013] UKPC 22, [2014] AC 436, para 46 (Lord Toulson). See ch 4, para 4.54, on estoppel by deed for a more detailed consideration of the Lavarello decision. 92 For this requirement in promissory estoppel, see Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741; and see ch 6, para 6.107. For the requirement in common law estoppel by representation, on which this aspect of promissory estoppel is based, see Low v Bouverie [1891] 3 Ch 82; and see ch 3, para 3.38. See also Queen’s Moat Houses Plc v Capita IRG Trustees Ltd [2004] EWHC 868 (Ch) para 35. 93 Troop v Gibson [1986] 1 EGLR 1. The way in which the test has been most recently put is that in Dixon v Blindley Heath Investments Ltd [2017] Ch 389, para 88, it was said that there has to be conduct ‘unambiguously giving rise to a clear assumption of fact or law’. In SmithKline Beecham Plc v Apotex Europe Ltd [2007] Ch 71, para 102, it was said in the Court of Appeal that for estoppel by representation and estoppel by convention the representation or common assumption must be unambiguous and unequivocal, which suggests that the same test applies to the two forms of estoppel (as it does also for promissory estoppel).

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The First Element: Assumed State of Fact or Law  5.41 to justify a rectification, so also it has been said that the same level of compelling proof is needed of the assumption needed to justify an estoppel by convention.94 It is also said that if there is a dispute the estoppel, as with all forms of estoppel, should be carefully pleaded.95 The rationale for the similarity of approach may be that in both rectification and estoppel by convention cases a party is usually saying that there is some common or shared intention or assumption which overrides or alters the language of a contract into which it has entered.96 The difference between the two principles is that in a claim for rectification the shared intention must have existed before and up to the date of the contract, whereas the nature of an estoppel by convention is that the shared assumption arose or at least was continued after the date of the contract or the other transaction affected by the assumption.97 The effect of a shared assumption arising after the formation of a contract may sometimes be that rather than altering the meaning of a contractual provision it fills some omission in the contractual provisions.

(ii)  Method of Proof 5.41  An assumption is a state of a person’s mind. It is not often that a person states in stark terms that he is proceeding on a certain stated assumption, and generally the existence of the assumption as a state of mind of a person at a particular time has to be inferred from that person’s actions at and about that time. The most obvious source of the inference is of course what a person has written or said, but an inference of a state of mind can be inferred by considering a person’s other actions and conduct.98 In the India Steamship (No 2) decision,99 Lord Steyn referred to the need to show that a party had ‘evinced by their conduct’ that they entertained a particular assumption. It seems unlikely, though probably not impossible, that an assumption will be inferred from complete silence or inactivity.100

94 T & N Ltd v Royal & Sun Alliance Plc [2003] EWHC 1016 (Ch), [2003] 2 All ER (Comm) 939, para 193, (Lawrence Collins J). In Trustee Solutions Ltd v Dubery [2006] EWHC 1426 (Ch), [2007] 1 All ER 308, para 57, Lewison J described the evidence as to an aspect of the operation of a pensions scheme as too exiguous to give rise to a binding estoppel by convention. 95 ING Bank NV v Ros Roca SA [2012] 1 WLR 472, para 77. 96 A claim for rectification of a document may also be sustained where there is no common mistake but only a unilateral mistake made by one party to the document with that mistake being known to the other party against whom rectification is sought: Thomas Bates & Son Ltd v Wyndham’s (Lingerie) Ltd [1981] 1 WLR 505; Wimpey (UK) Ltd v VI Construction Ltd [2005] EWCA Civ 77. 97 For this principle in estoppel by convention see para 5.43 et seq. 98 An example is Calgary Milling Co Ltd v The American Surety Co of New York (1919) 3 WWR 98 in which an assumption as to the contractual method stipulated for the making of stage payments under a contract was in part inferred from the actual method of calculating the payments used during the course of the contract. 99 [1998] AC 878, 914. 100 The authorities are not wholly consistent on this point. ‘Mere silence or inactivity or failure to take a point cannot be enough to found an estoppel by convention’: HIH Casualty Plc & General Insurance Ltd v AXA Corporate Solutions [2002] EWCA Civ 1253, [2002] 2 All ER (Comm) 1053, [33] (Tuckey LJ). See also K Lokumal & Sons (London) Ltd v Lotte Shipping Co Pte Ltd (The August Leonhardt) [1985] 2 Lloyd’s Rep 28. A similar rule applies to promissory estoppel where it seems unlikely that except in very exceptional circumstances the clear and unequivocal promise needed to support that form of estoppel can be inferred from silence: see ch 6, para 6.125 et seq. Equally an estoppel by representation cannot normally be inferred from total silence or inactivity on the part of the alleged representor, the usual reason given being that silence is of its nature equivocal and so cannot constitute the precise and unambiguous statement of an existing matter which is the foundation of this form of estoppel: see Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890, 903 (Lord Wilberforce); and see ch 3, para 3.50 et seq.

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5.42  Estoppel by Convention 5.42  Since an assumption, like an intention, is a state of a person’s mind, its existence is a question of fact.101 Since the existence of an assumption is a matter of fact it must, if disputed, be proved by evidence. A person can of course give evidence of what he did or did not assume at any relevant time, but the fact that a person held a particular assumption, as with other states of mind, may be inferred from his statements or other actions over the relevant period. The burden of proof in establishing the assumption is on the person who asserts the assumption as the basis of an estoppel, this being in accordance with the general rule in civil proceedings that the burden of proof on an issue lies on the person who asserts the affirmative of that issue.102 This principle holds good whether the estoppel is asserted by a claimant or a defendant or any other party in proceedings. The party who is asserting the estoppel must therefore prove (a) that he himself made the assumption, and (b) that the other party or parties made the same assumption. Any dispute of fact is likely to centre on the second of these items. There are of course other items which the party asserting the estoppel must prove, such as that the common assumption ‘crossed the line’ and that it would be unjust that the other party should be allowed to resile from the shared assumption and these matters are considered later in this chapter. The standard of proof, as generally in civil proceedings, is on the balance of probability.

(iii)  An Assumption Distinguished from a Contract and a Promise 5.43  It is not necessary that there is a concluded agreement between the parties for the court to be able to find an assumption which creates an estoppel by convention.103 There is of course no reason why the parties to a contract or other transaction should not make a subsequent binding agreement in which they agree that the contract or transaction shall have a particular meaning or be subject to certain rights. Such an agreement is conceptually and in law different from an estoppel by convention, and where there is such a binding agreement a party who wishes to hold the other party to the agreement will have no need to resort to any estoppel. Like any other contract, a new contract which binds the parties

There is established authority for saying that when there is a duty to speak or to impart information an inferred representation can arise from a failure to perform that duty, a subject which is explored in detail in ch 3, para 3.55 et seq. It does not seem likely that considerations of this nature will often give rise to an estoppel by convention, but see the observations of Rix LJ in ING Bank NV v Ros Roca SA [2012] 1 WLR 472, para 91 et seq. As against this it was stated in the Court of Appeal in Dixon v Blindley Heath Investments Ltd [2017] Ch 389, para 22 (Hildyard J), that an expression of accord to an assumption could be derived even from silence. For the purposes of proprietary estoppel silence or inactivity such as an absence of protest, usually there called acquiescence, can result in an inferred assurance that a person has or will have an interest in or rights over land and so can be the foundation of that form of estoppel: see ch 7, para 7.113 et seq. 101 The classic exposition of this principle is the statement of Bowen LJ in Edgington v Fitzmaurice (1885) 29 Ch D 459, 483, that ‘the state of a man’s mind is as much a fact as the state of his digestion’. It was said in Dixon v Blindley Heath Investments Ltd [2017] Ch 389, para 89, that the real difficulty concerning a party seeking to establish an assumption made by another party was not a legal but an evidential one. 102 ‘In general the rule which applies is ei qui affirmat non ei qui negat incumbit probatio’: Constantine Line v Imperial Smelting Corporation [1942] AC 154, 174 (Lord Maugham). 103 In Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878, 891, Staughton LJ said in the Court of Appeal that ‘it is essential that the assumption be agreed for there to be an estoppel’. Earlier he had referred to ‘an agreement or something very close to it’. It was held in the House of Lords that a concluded contract was not a requirement of an estoppel by convention: see 913 (Lord Steyn).

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The First Element: Assumed State of Fact or Law  5.44 to the meaning of an existing contract, or varies an existing contract in some way, must be supported by consideration unless contained in a deed.104 There may in some cases be no great differences between, on the one hand, a concluded agreement that an existing contract between the parties shall bear a particular meaning, and on the other hand, an assumption made by each of the parties that the contract shall bear that meaning with each party having it communicated to him by some means and thus being aware that the other party or parties have the same assumption. Nonetheless, as explained by Lord Steyn in the India Steamship case there is a distinction between a contract and an estoppel by convention and the doctrines of contract and estoppel must be kept separate.105 The possibility of merging together estoppel by convention and the so-called estoppel by contract (which is in fact a contract or contractual term as to the assumed correctness of some matter of fact or law) has been considered in recent authority but rejected as going too far.106 A common assumption as to the meaning of a contract or other transaction, which arises during the course of the implementation of the transaction and so may create an estoppel by convention, must be distinguished from a promise made by a party not to enforce rights under a transaction which may in certain circumstances create a promissory estoppel. Promissory estoppel is explained elsewhere.107

3.  Assumption Relating to an Existing Transaction (i)  The Rule and the Authorities 5.44  The decision of the Court of Appeal in Keen v Holland,108 discussed earlier, establishes the fundamental rule that the assumed state of fact or law which gives rise to an estoppel by convention must relate to an existing transaction between the parties as opposed to being an assumption about the meaning or effect of a proposed transaction.109 The result of this rule is that where parties enter into a transaction such as a contract, and have negotiated a term of the contract on some shared assumption as to the meaning and effect of that term, there can be no estoppel by convention founded only on that assumption which can bind the parties to that shared assumption. Some earlier wider statements of the principle of estoppel by convention do not exclude the possibility that an estoppel may arise from a shared assumption as to the meaning of a proposed term made during negotiations for the contract but nothing in subsequent cases in which the nature of the estoppel, and in

104 The general principles of law relating to the means of varying a contract are considered in ch 6, para 6.41 et seq. 105 See above (n 103). 106 Prime Sight Ltd v Lavarello [2013] UKPC 22, [2014] AC 436, para 46 (Lord Toulson). This decision is examined in detail in ch 4, para 4.54, on estoppel by deed since the suggestion advanced was that estoppel by deed should also be merged into the new composite form of estoppel. 107 See ch 6. 108 [1984] 1 WLR 251. See para 5.12. 109 The principle as explained by Oliver LJ has been followed in subsequent cases at first instance: see Hamed El Chiaty & Co v Thomas Cooke Group Ltd (The Nile Rhapsody) [1992] 2 Lloyds Rep 399, 407–08 (Hirst J); CP Holdings Ltd v Dugdale (1998) (unreported) (Park J); Wilson v Truelove [2003] WTLR 609, paras 22–23 (Simon Berry QC); PW & Co v Milton Gate Investments Ltd [2004] Ch 142 (Neuberger J) (discussed in the next paragraph).

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5.45  Estoppel by Convention particular this aspect of it, was in principle considered and discussed suggests that what Oliver LJ said in Keen v Holland on the present point was in principle incorrect or is not generally to be applied.110 5.45  The operation of this last rule is illustrated by PW & Co v Milton Gate Investments Ltd.111 An office building was let with a right for the tenants to determine the lease on notice. It was a term of the lease that if the tenants determined the lease they would pay a penalty to the landlords unless at least 75 per cent of the lettable area was subject to underleases at the date of the determination. The underleases which had been granted determined automatically at the date of the determination of the headlease by notice because of the principle of law that a derivative interest, such as an underlease, determines at the date of the determination of the interest out of which it was created. Neuberger J held that there was a shared assumption between the parties when the headlease was granted that the rule that an underlease created out of a headlease would end on the determination of the headlease would not apply when a notice of determination was given by a head lessee. The provision for payment of a penalty was negotiated and agreed on the basis of this assumption. However, the Judge applied the principle expounded in Keen v Holland and held that the assumption which existed at the time of the grant of the headlease, and during previous negotiations for that headlease, could not in law give rise to an estoppel by convention which affected the meaning and effect of that headlease. This decision is important because unlike other decisions, that which was unanimously held by the Court of Appeal in Keen v Holland was both examined and applied.112 5.46  Despite the rule as stated by the Court of Appeal in Keen v Holland, and despite its application in subsequent first instance decisions as just noted, it is necessary to point out that this limitation on the amplitude of the effect of estoppel by convention has not been universally applied in all decisions. An example is the later decision of the Court of Appeal

110 Such wider statements were mentioned, for example, in John v George (1996) 71 P & CR 375, where wide observations made by Lord Denning MR in Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84 and in the third edition (1977) of Spencer Bower and Turner, Estoppel by Representation, were referred to; see also The Vistafjord [1988] 2 Lloyds Rep 343. The relevant passage from the third edition of Spencer Bower is quoted in para 5.8. The same passage was relied on by Lord Goff in his decision in Kenneth Allison Ltd v AE Limehouse & Co [1992] 2 AC 105, 126–27, in support of his conclusion that the service of a writ which was not in accordance with the Rules of the Supreme Court then in force should nonetheless be regarded as valid by reason of an estoppel by convention since at the time of the transaction both parties assumed that the service was valid. This aspect of the reasoning may be open to some doubt today. The other Members of the Court reached their conclusion that the service was valid on the basis that despite the Rules the parties could agree on some different form of valid service if they so wished. The current fifth edition of Spencer Bower: RelianceBased Estoppel, sets out the requirements of estoppel by convention by reference to the formulation of Briggs J in Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174, para 52. The relevant passage is set out in para 5.6. This formulation does not state that the assumption must relate to a pre-existing transaction. 111 [2004] Ch 142. 112 ibid, paras 162–69. A further decision which may support the rule that the shared assumption must relate to an existing transaction or relationship is the decision of the Court of Appeal in Rivertrade Ltd v EMG Finance Ltd [2015] EWCA Civ 1295, [2016] All ER (D) 03, para 50, where it was held that the estoppel by convention (as to the meaning and effect of a security being given for a loan) was not to create an enforceable right where none previously existed, but could be relied on to bind the parties to an existing arrangement to an interpretation of the arrangement which would not otherwise be correct. This is exactly what the estoppel by convention in the Texas Bank case (see para 5.9) would have done if it had been necessary to give effect to an estoppel.

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The First Element: Assumed State of Fact or Law  5.49 in ING Bank NV v Ros Roca SA.113 The rule was clearly laid down and is part of the ratio decidendi in Keen v Holland, and it is sensible to regard the rule as an effective limitation on estoppel by convention unless and until it is altered by a superior court. 5.47  There is a further reason why the limitation on estoppel by convention as stated in Keen v Holland and applied in subsequent decisions should command support, the reason being the interface between estoppel and the law of rectification. Where two parties enter into a written contract with the language of the contract having on its proper construction one meaning, but with both parties to the knowledge of the other assuming that the language has a different meaning, then normally the requirements of a claim for rectification of the contract so as to bring it into conformity with the intended and assumed meaning will be satisfied.114 There would be no need in many circumstances of this character to resort to an estoppel. If the shared assumption does not come into existence until after the formation of the contract and only during its implementation, then there can be no rectification but, subject to any other requirements being satisfied, an estoppel by convention may operate. It may be desirable to keep distinct different doctrines of the law so that each can operate within its own separate requirements and rules. 5.48  An estoppel by convention probably cannot be based on a shared assumption as to the meaning of a proposed contract or other transaction made before the parties enter into the transaction. An estoppel can be based on such a shared assumption made after the entering into the transaction. It may of course occur that the parties make the shared assumption prior to entering into the transaction and then continue it and act upon it after entering into the transaction. There seems no reason of principle why an estoppel by convention should not arise in the circumstances as just described.

(ii)  Types of Pre-Existing Transactions 5.49  The pre-existing transaction to which a shared assumption applies may often be a binding contract but it need not be. For example, the transaction in Republic of India v India Steamship Co Ltd (No 2)115 to which an assumption could in principle have applied had it been established on the facts, was a contract for the carriage of cargo by sea and proceedings to obtain damages for breach of that contract in a court in India and the alleged assumption was that the obtaining of a judgment in those proceedings would not prevent the bringing or the continuation of later proceedings for further damages for breach of contract in England. In Johnson v Gore Wood & Co Ltd,116 Lord Bingham was prepared

113 [2012] 1 WLR 472. The decision in Keen v Holland was not cited to or examined by the court. It is therefore not easy to accept that, even if under the doctrine of precedent it was entitled to do so, the Court in the ING Bank decision deliberately departed from what Oliver LJ said in Keen v Holland. 114 See para 5.40 and above (n 96) for rectification. It could occur that one party to the proposed contract was under a mistaken assumption as to the meaning of a proposed term and the other party held no such mistaken assumption but was aware of the mistake of the first party but did not point it out. There can be an order for rectification in this situation. See para 5.61 for a possibly analogous situation arising after the execution of an agreement and the possibility of an estoppel by convention in such a situation. 115 [1998] AC 878. 116 [2002] 2 AC 1, 33–34. The case was decided by the House of Lords by holding that the further action was not an abuse of the process so that there was no need to have recourse to questions of estoppel.

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5.50  Estoppel by Convention to hold that an estoppel by convention could apply to a shared assumption that despite a transaction involving the settlement of an action certain further proceedings would not be an abuse of the process of the court under the rule in Henderson v Henderson.117 The pre-existing transaction might be a compulsory purchase of land and the subsequent shared assumption might be that the authority required to pay compensation could not rely on a defence under the Limitation Act 1980.118 There is no reason to think that the elements of estoppel by convention or the application of the principle are different in contractual and non-contractual circumstances.119 5.50  The rule that an estoppel by convention cannot arise wholly out of pre-transaction negotiations has at any rate on the surface an affinity with the rule that pre-contractual negotiations cannot generally be relied on as an aid to the construction of the contract which is the culmination of these negotiations.120 It was stated in a leading decision on the admissibility of pre-contractual negotiations that nonetheless such negotiations could in principle be admissible for purposes other than finding out what the contract meant and an example of such another purpose was the possibility of an estoppel.121 This is understandable since, although an estoppel by convention cannot be founded wholly on pre-transaction negotiations, when it comes to deciding as a matter of fact whether a subsequent posttransaction shared assumption came into being what was said prior to the transaction could have evidential relevance in deciding that question. The fact that parties shared an assumption about the meaning of a term proposed to be included in a contract between them during negotiations for a contract could strengthen the evidence that they continued to share the assumption and acted on the same assumption in their dealings under the contract in the period following its formation. Promissory estoppel has a similarity with estoppel by convention in that a promissory estoppel may be founded on a promise not to enforce binding rights under an existing transaction, such as a contract, but cannot be founded on a promise not to enforce rights under a contract which has not yet been entered into, such that at the time of the promise there are no subsisting enforceable legal rights.122 Estoppel by convention and promissory estoppel may apply to transactions other than contracts, but where they do apply to rights under contracts they have effect by reason of events after the making of the contract rather than events before the contract or at the time it was made.

117 (1843) 3 Hare 100. The principle is that it may be an abuse of process to commence later proceedings for a remedy which could and should have been sought in earlier proceedings. This principle, which has affinities to estoppel per rem iudicatam, is examined in ch 9 where it is treated as one of the three principles which together make up estoppel by record. 118 Hillingdon London Borough Council v ARC Ltd [2000] 3 EGLR 97 (in which it was held on the facts that there was no shared assumption which had crossed the line); Co-operative Wholesale Society Ltd v Chester-le-Street District Council [1998] 3 EGLR 11. 119 Mitchell v Watkinson [2014] EWCA Civ 1472, para 52. 120 Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101. 121 ibid, para 42 (Lord Hoffmann). As mentioned at the end of this paragraph an obvious example of an estoppel arising from pre-contract negotiations is an estoppel by representation arising from a representation made by one party to the negotiations. 122 See ch 6, para 6.161 et seq. Any reluctance to accept that both promissory estoppel and estoppel by convention arise out of promises or shared assumptions and must relate to an existing contract or other transaction may owe something to the suggestion, repeated more than once by Lord Denning, that estoppels should be combined or elided into one overall principle. This suggestion, which is examined in detail in ch 2, faces formidable difficulties and has received little judicial support.

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The Second Element: A Shared Assumption  5.52 Of course, pre-contract negotiations could be relevant to establishing some other form of estoppel such as an estoppel by representation. 5.51  A contract sometimes contains an ‘entire agreement’ clause to the effect that the express terms of the contract are the whole of what the parties have agreed and that the rights of the parties are not to be altered or affected by other matters such as representations which have been made. There is normally no inconsistency in principle between such a clause and an estoppel by convention which rests on a shared assumption about the meaning of the contract and its effect made after the formation of the contract. Even so, the existence of an entire agreement clause may make it more difficult to establish the existence as a matter of fact of a later common assumption which may alter or contradict what is said in the contract.123 An entire agreement clause in a contract usually means that nothing shall affect the content and meaning of a contract at the time of the formation of the contract unless it is set out in the express terms of the contract. Such a clause may therefore make it impossible or difficult for a party to the contract to contend that the express terms of the contract are to be supplemented by implied terms. A similar contractual provision sometimes encountered is a term stating that the making of the contract has not been induced by any representation made.124 Clauses of this nature do not usually relate to events after the formation of the contract such as may give rise to an estoppel by convention. However, it would presumably be possible for the parties to frame and include a term in their contract which expressly stated that the meaning and effect of their contract should not be altered or affected by any subsequent assumption as to its meaning and, if that were achieved by sufficiently clear language, there seems no reason why a court should not give effect to it so precluding reliance by either party on an estoppel by convention.

(E)  The Second Element: A Shared Assumption 1.  The Four Factual Situations: Crossing the Line 5.52  It is obviously inherent in the nature of an estoppel by convention that there is a convention in the sense that the assumption which underlies the estoppel is common to or shared between the parties involved. An assumption made by one party alone cannot be enough. It is said that the assumption, as well as being common to the parties, must

123 See Sere Holdings Ltd v Volkswagen Group United Kingdom Ltd [2004] EWHC 1551 (Ch); Lloyd v Sutcliffe Ltd [2007] EWCA Civ 153 (where it was held that an entire agreement clause did not prevent the creation of an estoppel since the clause referred only to pre-contractual representations and so did not prevent reliance on postcontractual representations as the foundation of a common assumption); Jet2.com Ltd v Blackpool Airport Ltd [2010] EWHC 3166 (Comm), [2010] All ER (D) 58 (Dec), para 40 (Beatson J, commenting on the Lloyd decision). In any event an estoppel by convention does not depend on a representation made by one party to another which induces that other party to entertain an assumption about the meaning of the contract; it is enough that the parties have the common assumption and that it is communicated between them however the assumption was created. A not dissimilar question arises in connection with estoppel by representation where it is associated with the question of whether provisions in contracts which record an agreed state of affairs on factual matters may create a further form of estoppel which is sometimes described as contractual estoppel: see ch 3, part (G). 124 Provisions in contracts of this type are also discussed in connection with what is called estoppel by contract in ch 3, part (G).

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5.53  Estoppel by Convention have ‘crossed the line’ between them.125 The underlying concept of an estoppel is that one person has stated or communicated some matter to another whether by way of a statement (estoppel by representation) or a promise (promissory estoppel) or an assurance (proprietary estoppel).126 It is useful to examine this corresponding ingredient of an estoppel by convention under four possible factual situations which may exist when the party asserting the estoppel acts in a particular way.127 5.53  The first situation is where one party alone makes the assumption on the matter in question. Plainly, and as just stated, in such a case there is no convention and no question of an estoppel by convention. Of course, the fact that a party has made an assumption may result in that party making a representation or promise to another party because of his assumption which in turn may engender some other form of estoppel such as an estoppel by representation or a promissory estoppel, but this has no bearing on an estoppel by convention.128 5.54  The second situation is where parties each hold an assumption and proceed under an assumption on the matter in question but there are material differences between the two assumptions. Again, in such a situation, the assumption cannot be said to be common and there is no true convention and no foundation for an estoppel by convention. 5.55  The third situation is where the parties make the same assumption but neither party is made aware that the other party has made the assumption in question. It is in this situation that the assumption can be said to be in a sense common, ie, it is the same assumption entertained by both parties, but does not ‘cross the line’. It is of course possible that both parties to an existing transaction make some assumption of fact or of law which relates to their existing rights under the transaction, but each is unaware that the other party has made the same assumption. An illustration of that situation is K Lokumal & Sons (London) Ltd v Lotte Shipping Co Pte Ltd (The August Leonhardt)129 which may be the origin of the expression ‘cross the line’. In that case, cargo owners of sugar contracted with shipowners for its passage from Hamburg to Nigeria. The cargo was damaged during the voyage and the cargo owners sought damages. The contract between the parties contained a contractual limitation period within which any claim must be brought. The cargo owners and the shipowners agreed to extend the date for bringing the claim subject to the consent of the charterers. No consent of the charterers was obtained but both parties assumed that that consent had been obtained. Neither party communicated its assumption to the other party. An assertion of an estoppel by convention failed since the assumption had not crossed the line. As Kerr LJ put it, thereafter ‘nothing crossed the line between them [the representatives of the parties]’ and ‘All estoppels must involve some statement or conduct by the party alleged to be estopped on which the alleged representee was entitled to rely and did rely’.130 125 The first two of the requirements or tests stated by Briggs J in Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174, para 52, set out in para 5.6, relate to crossing the line. 126 See also below (n 130). 127 A possible fifth situation is discussed in para 5.56. 128 Durham v EAI (Run Off) Ltd [2008] EWHC 2692 (QB), [2009] 2 All ER 26. 129 [1985] 2 Lloyd’s Rep 28. See also John v George (1996) 71 P & CR 375, 385 (Morritt LJ); The Vistafjord [1988] 2 Lloyd’s Rep 343, 351 (Bingham LJ); Crossco No. 4 v Jolan Ltd [2011] EWHC 803 (Ch) para 334 (Morgan J). For this last decision on appeal see [2011] EWCA Civ 1619. 130 ibid, 35. It is this necessary statement or conduct which is referred to in ch 1, para 1.40, as the first of the three main questions which arise in connection with all estoppels except estoppel by record. The necessary statement or

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The Second Element: A Shared Assumption  5.57 In these circumstances, the Court of Appeal held that there was no estoppel by convention and that the shipowners were entitled to assert that there was no extension of time because the charterers had not consented to the extension. As was stated in a subsequent decision, a common assumption is not on the authorities sufficient to establish an estoppel unless it is communicated.131 5.56  The fourth situation is where the parties make the same assumption and each party is made aware by some form of communication that the other party has made the same assumption as it has made. In such a case, the assumption is said to have crossed the line and, subject to other matters, an estoppel by convention may arise. One way of looking at the situation in linguistic terms is to say that where both parties hold the same assumption, the assumption is properly described as a common assumption, but that the parties must each know as a result of some form of communication that the other party holds the assumption before it can properly be described as a shared assumption. If this usage is correct, an assumption which is within the third situation as described in the last paragraph will be a common assumption in the sense that both parties hold it but it will only become a shared assumption, and thus something which can found an estoppel by convention, if it has crossed the line and so falls within the fourth situation as described in this paragraph. However, this may be to push linguistic accuracy too far and the more general usage is that the adjectives ‘common’ and ‘shared’ are employed more or less interchangeably in the present context. 5.57  The usual formulation of the crossing the line principle is to state that both parties to the estoppel must be aware that the other party has made the same common a­ ssumption.132 However, there could be circumstances in which the parties had each made the same assumption and one party was aware that the other party had also made the assumption but the other party was not aware that the first party had made the assumption. On the traditional formulation, an estoppel by convention would be precluded in such circumstances. It is possible to query the justice of this rule. If one takes the facts of the India Steamship (No 2) case,133 and assuming that there had been in that case a common assumption that the conduct is (a) the making of a representation of an existing matter (estoppel by representation), (b) the inclusion of a statement of fact in a deed (estoppel by deed), (c) the communication of a common assumption (estoppel by convention), (d) the making of a promise (promissory estoppel), and (e) the making of an assurance creating an expectation of an entitlement to an interest or rights in property (proprietary estoppel). The action in reliance on the statement or conduct referred to by Kera LJ is a requirement of all the forms of estoppel just enumerated save for estoppel by deed where the existence of the statement in the deed is, subject to other matters, enough to create the estoppel. The precise relevance of action carried out in reliance on a statement or conduct is that generally it is not possible for the person asserting an estoppel to succeed unless it would be unconscionable to allow the maker of the statement to go back on it and unconscionability cannot normally be established unless there has been action taken in reliance on a statement. The rule of unconscionability in estoppel by convention is examined later as the third of the three main elements of this form of estoppel. 131 Hillingdon London Borough Council v ARC Ltd [2000] 3 EGLR 97, 104 (Arden LJ). See also the first of the tests of Briggs J in Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174, para 52, set out in para 5.6. 132 See, eg, John v George (1996) 71 P & CR 375, 385 (Morritt LJ): ‘The assumption…must be shared in the sense that each is aware of the assumption of the other’; Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878, 913 (Lord Steyn): ‘It is not enough that each of the two parties acts on an assumption not communicated to the other’. See also Crabbe v Townsend [2016] EWHC 2450 (Ch) para 18 (Mr John Martin QC): ‘It is a prerequisite of the existence of an estoppel by convention that there should be a common assumption as to a state of affairs’. In this last case the estoppel was rejected on the ground, among others, that no such common assumption could be derived from the communications between the parties. 133 [1998] AC 878.

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5.58  Estoppel by Convention proceedings in India would not prevent further proceedings in England, it is possible that both parties held this assumption and that the Defendant shipowners knew that the Plaintiff cargo owners held the assumption, but that the cargo owners did not know that the shipowners held the assumption. The common assumption would then have partly crossed the line. It is at least arguably just that in such, probably unusual, circumstances the shipowners should be held to a common assumption held by both parties and known by them to be held by the cargo owners who had acted on it by obtaining judgment for the smaller claim in an Indian court. It is possible to analyse the factual situation as discussed in this paragraph as constituting a fifth possible permutation of circumstances beyond the four situations previously discussed under the present heading of this chapter.

2.  Rules as to Crossing the Line 5.58  The most obvious way in which the parties might make known to each other the existence of the common assumption is by expressly stating it to each other. It is in this way that the matters required to support an estoppel by convention may often come near to those which would give rise to a contract or a variation of a contract between the parties.134 In other cases, the knowledge by one party that its assumption is also made by the other party may readily be inferred from the conduct of the parties towards each other.135 The requirement of crossing the line was described in one case as being that some ‘course of dealing’ after the contract was entered into was necessary.136 5.59  Although the common assumption must have crossed the line between the parties it is not necessary that one party has induced the making of the assumption by the other party. In John v George,137 Morritt LJ said that while each party must have known of the assumption made by the other party, it would be inconsistent with previous authority to conclude that it was a necessary ingredient of the estoppel that one party had created or induced the making of the assumption by the other party. In much the same way in order to show that the commonly held assumption has crossed the line, and can be regarded as a shared assumption, it is not therefore necessary to show that one party has been led to hold the assumption by a representation made by the other party or that the other party is the source of the mistake.138 An instance of this last type of situation might be where a third party made some statement to the parties to a contract and those parties then both, and each to the knowledge of the other, for that reason and thereafter came to hold the assumption that

134 However, a concluded contract is not a requirement of an estoppel by convention: see above (n 66). On the question of whether an estoppel by convention can bind the parties to an assumption that there was a binding contract when no binding contract in fact existed, see para 5.43 et seq. 135 There does not need to be an express statement of accord. It is said that agreement to the assumption may be inferred from conduct or even silence: Dixon v Blindley Heath Investments Ltd [2017] Ch 389, para 92 (Hildyard J, delivering the judgment of the Court of Appeal). 136 PW & Co v Milton Gate Investments Ltd [2004] Ch 142, para 165 (Neuberger J). See para 5.45 for the facts of this decision. 137 (1996) 71 P & CR 375, 385. The previous authority referred to was Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84. 138 The Leila [1985] 2 Lloyd’s Rep 175, 179 (Mustill J).

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The Second Element: A Shared Assumption  5.61 the statement so made was correct. Although the person asserting the estoppel does not have to show that the other party induced the shared assumption, it is possible that he does have to show as a separate requirement of the estoppel that the other party who is alleged to be estopped in some way accepted some element of responsibility for the assumption.139

3. Acquiescence 5.60  The present analysis of estoppel by convention has been anchored to the statement of the principle made by Lord Steyn in the India Steamship (No 2) case.140 The principle is one of the common law and it is a characteristic of such principles as they become established and clarified by the authorities that the earlier authorities are combined into one overall statement of the principle which to an extent acquires the nature (though not the ­inflexibility) of a statutory provision. It remains to refer to one aspect of Lord Steyn’s statement not yet examined which is that the assumption must be shared by the parties with the additional words ‘or made by one and acquiesced in by the other’. The question is whether these last words operate as some alternative means of establishing the estoppel. It is notable that in his primary exposition of the ingredients of an estoppel by convention, Lord Steyn did not refer to the shared assumption having crossed the line. However, almost immediately later in the same paragraph of his judgment he stated that it is not enough that each of the two parties acted on an assumption not communicated to each other. This is in effect a statement of the common assumption having to cross the line if there is to be an estoppel by convention. One possibility is to regard the additional words cited above from the judgment of Lord Steyn as meaning no more than that the shared assumption must have crossed the line, that is that the assumption of each party must have been communicated to and known by the other party, if the shared assumption is to give rise to an estoppel. Lord Steyn did go on later to refer separately and briefly to estoppel by acquiescence, but as a separate form of estoppel from estoppel by convention.141 5.61  Probably a better explanation of the additional words of Lord Steyn referred to in the last paragraph is as follows. The primary means of establishing an estoppel by convention is that parties A and B to an existing transaction shared a common but mistaken assumption of fact or of law relating to that transaction with each party knowing of the assumption made by the other party. An alternative situation might be where party A made such a mistaken assumption and party B did not, but party B was aware of the mistake of party A and did nothing to dispel that mistake. In such circumstances, party B cannot be said to have shared in the erroneous assumption but might be said to have acquiesced in it. It may therefore be

139 This question is discussed in para 5.62 et seq. 140 [1998] AC 878. 141 ibid, 915. Estoppel by acquiescence appears to be a different concept from the acquiescence referred to in the passage discussed in this paragraph and set out in para 5.4. Estoppel by acquiescence is a description sometimes given to proprietary estoppel. It is probable that today proprietary estoppel can refer to rights other than rights in land. In this decision in the Court of Appeal estoppel by acquiescence was examined at [1998] AC 878, where reliance on this form of estoppel failed. The House of Lords upheld this conclusion.

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5.62  Estoppel by Convention that in these last circumstances party B may be bound by the assumption by reason of the acquiescence spoken of by Lord Steyn.142 If acquiescence is to be understood and applied in this sense, then there is of course no question of a common assumption crossing the line given that there is no common assumption. Therefore, if this is a current analysis of what Lord Steyn meant, there can in the circumstances postulated be an estoppel by convention even though there is no convention in the sense of a commonly held assumption.

4.  The Mental Element in Estoppel by Convention (i)  The Mental Element Generally 5.62  Most forms of estoppel have a physical and a mental component within the requirements for the establishment of the estoppel. By physical component is meant overt acts by one or other party, mainly the making of a statement or promise by one party and some action taken by the other party following the receipt of the statement or promise. A mental element is a particular state of mind of a party at a particular time. For example, with estoppel by representation the representor must be shown to have intended that his representation should be acted upon and the representee must show not only that he acted but that he acted in reliance on the representation.143 Intention and reliance are states of mind and are facts which must be proved by the person who asserts the estoppel in the same way as other essential elements of the principle.144 The question as regards estoppel by convention is whether there are similar mental elements which have to be proved to have existed. There is clearly a mental element on the part of a party claiming the estoppel within the concept of unconscionability in that for unconscionability to be established it must be shown that that party acted (or failed to act) in some way in reliance on the shared assumption. The question here considered is whether there is some mental element on the part of the person against whom the estoppel is asserted which has to be shown as one of the components of the estoppel.

142 Where prior to the entering into a transaction there is a shared but mistaken assumption by both parties as to the meaning or effect of an aspect of the proposed transaction, there arises the basis for an order for rectification made after the execution of the transaction to make it accord with the common intention of the parties as to its meaning and effect. There may also be an order for rectification where party A is under a mistake as to an aspect of the proposed agreement or transaction and party B is not under the same mistake but, being aware of the error of party A, allows the agreement to be executed without drawing attention to the true meaning of it: Thomas Bates & Son Ltd v Wyndham’s (Lingerie) Ltd [1981] 1 WLR 505. In a sense B acquiesces by his passive conduct in the mistake of A. This aspect of the law of rectification bears a similarity to the acquiescence referred to by Lord Steyn. 143 See ch 3, part (D) (intention of representor); and para 3.110 (reliance by representee). There are similar requirements for promissory estoppel and proprietary estoppel. 144 The incidence of the burden of proving components of the various forms of estoppel is dealt with as part of the explanation of each form of estoppel. In accordance with the general principle that a person who asserts a matter must prove that matter, and must prove each relevant fact unless it is admitted, the burden of proof on factual matters is borne by the person raising the estoppel. This is unfortunately one exception to this generality which is that on one view, which has the support of the Court of Appeal, when a proprietary estoppel is alleged the burden of showing that actions carried out by the recipient of the assurance were not in reliance on the assurance may be on the person who gave the assurance and against whom the estoppel is alleged. See ch 7, para 6.187 et seq. Lord Denning has suggested that the same rule applies to promissory estoppel but in this case there is substantial authority to the contrary: see ch 6.

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The Second Element: A Shared Assumption  5.65 5.63  One thesis advanced in this book is that, while the forms of estoppel cannot be ­practically merged together into one overall and comprehensively stated principle, there should as far as possible be a congruence between the same or similar components which are required to establish certain different forms of estoppel. This general matter is examined in chapter two. This consideration could argue in favour of including in estoppel by convention some mental element on the part of the person against whom the estoppel is alleged, equivalent to a requirement that a representation or promise or assurance should be intended to be acted upon which exists in estoppel by representation and in promissory and proprietary estoppel. 5.64  The description of estoppel by convention by Lord Steyn in Republic of India v India Steamship Co Ltd (No 2)145 does not state any specific required state of mind of the party against whom the estoppel is claimed. It must be borne in mind that a representation or a promise may often be created by a particular statement made at one specific time,146 whereas the shared assumption needed for an estoppel by convention may derive from a longer course of communications between the parties which may make it more difficult to prove a specific intention on the part of one or both parties to the assumption at any given moment.

(ii) Intention 5.65  The clearest reference to a necessary mental state of the party sought to be estopped by an estoppel by convention is found in the second of the five propositions which analyse estoppel by convention stated by Briggs J in Revenue and Customs Commissioners v ­Benchdollar Ltd.147 The proposition is that before the estoppel can be established, the person alleged to be estopped must properly be said to have assumed some element of responsibility for the shared assumption in the sense of conveying to the other party an understanding that he expected the other party to rely on it. This seems close to a requirement that the party alleged to be estopped must at the time of the shared assumption have intended that the other party or parties to the shared assumption should rely on the correctness of the assumption and should, if they so wished, act upon it.148 145 [1998] AC 878, 913. The relevant passage is set out in para 5.4. Nor is a requirement of any specific mental element stated in the other two decisions which are of seminal importance in the development of estoppel by convention, and which are discussed in paras 5.9–5.16, Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84; Keen v Holland [1984] 1 WLR 251. It may however be noted that in Baird Textile Holdings Ltd v Marks & Spencer Plc [2002] 1 All ER (Comm) 737, 764, Mance LJ said that it was, on authority, an established feature of both promissory and conventional estoppel that the parties should have had ‘the objective intention to make, effect or confirm a legal relationship’. 146 An assurance which founds a proprietary estoppel may be derived from a sequence of events comprising statements and other actions: see Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776: and see in particular Lord Hoffmann (at para 8) and see ch 7, para 7.111. 147 [2009] EWHC 1310 (Ch), [2010] 1 All ER 174, para 52. The relevant passage is set out in para 5.6. 148 A further statement of a requirement that responsibility must be accepted for what is assumed is found in the decision of the Court of Appeal in Dixon v Blindley Heath Investments Ltd [2017] Ch 389, para 89, where it was stated as part of the decision of the Court: ‘We consider that the real difficulty confronting a party seeking to establish an estoppel on the basis of an assumption contrary to, and in circumstances where the parties have forgotten, the true state of things is not a legal one but an evidential one: it is the problem of showing that something other than forgetfulness played a part in the adoption of the assumption and that the person sought to be estopped assumes some responsibility for it’.

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5.66  Estoppel by Convention 5.66  A possible way of stating the correct rule may be to say that a party asserting an estoppel by convention has to establish that the person estopped was not only a party to a shared assumption which had crossed the line, but also at the time of the assumption intended that it should be relied on and acted upon by the person alleged to be estopped. Such a rule would bring estoppel by convention into line with the other reliance-based estoppels. The burden of establishing this mental state on the part of the person estopped would be on the person asserting the estoppel. It is possible that in some instances there is an express statement that the assumption may be relied on and acted upon, but in many cases the requisite intention on the part of the relevant party may be readily inferred from the circumstances which brought about the assumption, from the communication of the assumption which establishes the crossing of the line, and from the nature of the existing transaction to which the assumption relates. It is a central and general characteristic of the law of estoppel that where a particular mental state of a party at some time, such as a particular intention, has to be established the test of the intention is an objective test. What matters is not whether a person subjectively intended a particular result, but whether a reasonable person cognisant of the relevant facts would have concluded that that result was intended. Whether the necessary state of mind of the person alleged to be estopped by an estoppel by convention is one of intending that the shared assumption shall be acted upon, or is one of acknowledging responsibility for that assumption, the test should be an objective one.149 While it does appear necessary that the party sought to be estopped must have intended the assumption to be relied on and acted upon it is not necessary that that party had induced the assumption; the assumption shared by the parties and communicated in some way between them may have derived from external events or from the actions of a third-party source.150 Perhaps in the light of what has been said in recent decisions the most accurate way of expressing the rule may be to state that where there is a shared assumption there will not normally be an estoppel by convention derived from that shared assumption unless (a) the party to the assumption alleged to be estopped intended the other party to rely on the assurance, and (b) that intention is either expressed to the other party or would be understood to exist by the other party as a reasonable person in the context of the general circumstances and of what was stated or done by the party alleged to be estopped.

(iii) Foreseeability 5.67  A further question relevant to the mental state of the person sought to be estopped is whether at the time of the shared assumption that person had to have reasonably foreseen that the other party would act in some particular way in reliance on the assumption. The very fact that the person sought to be estopped must have intended that the assumption should be acted upon, if this is a correct statement of the rule, makes it likely that that

149 An objective test as a general factor common to most forms of estoppel is discussed in ch 1, para 1.53. The best example may be the rule that the assurance which founds a proprietary estoppel must be something which is intended to be taken seriously and acted upon with that intention being judged by an objective test: see Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 5 (Lord Hoffmann). An objective test is also applied, inter alia, to the question of the intention of the representor or promisor in estoppel by representation and promissory ­estoppel: see ch 3, para 3.87; and ch 6, para 6.141. 150 See para 5.59.

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The Third Element: Injustice or Unconscionability  5.69 person foresaw that it would be acted upon. The answer suggested to a similar question which arises in estoppel by representation and promissory estoppel, is that the actions taken in reliance on the representation or promise must have been within the zone of reasonable contemplation of the representor or promisor.151 The same criterion could with advantage be applied to estoppel by convention with a requirement that the actions of the claimant to the estoppel taken in reliance on the shared assumption must have been of a character reasonably foreseeable by the other party to the assumption. However, it is probably not necessary that the person alleged to be bound by an estoppel by convention foresaw or should have foreseen the precise actions of the other party or the exact detriment which would accrue to the other party if a departure from the shared assumption was permitted, two rules which are again drawn by analogy with other forms of estoppel.152

(iv) Summary 5.68  The law of estoppel by convention may not be as detailed in its explanation of the necessary mental state of the person sought to be estopped at the time of the shared assumption as is the law of other reliance-based estoppels. On the basis of the judicial guidance which does exist, and by analogy with other forms of estoppel, it is suggested that a good working rule is (a) that the claimant for the estoppel has to show that the other party to the assumption intended that the shared assumption should be relied on and acted upon in some way by the claimant, (b) that the requisite intention was either expressly communicated to the claimant or that the claimant as a reasonable person would have concluded from the statements or other actions of the other party, that that party had the requisite intention, (c) that the actions of the claimant in reliance on the assumption were within the zone of what was a reasonably foreseeable response to the assumption, and (d) that it is not necessary that the other party intended or foresaw the precise actions of the claimant or the exact detriment which would be suffered by the claimant if there could be a departure from what was assumed.

(F)  The Third Element: Injustice or Unconscionability 1.  The Requirement of Injustice 5.69  In the India Steamship (No 2) decision, Lord Steyn referred to an estoppel by convention arising when it would be ‘unjust’ to allow a party to go back on a shared assumption.153 In other cases it has been said that the criterion is that it would be ‘unconscionable’ to allow

151 See ch 3, para 3.92 et seq, for estoppel by representation; and ch 6, para 6.143 for promissory estoppel. The suggested state of the law for these two forms of estoppel is derived in part from the formulation of the ­principle of the two forms of estoppel by Neuberger LJ in Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93. The full passage from the judgment is set out in ch 6, para 6.176. 152 See ch 3, para 3.92 et seq for estoppel by representation. 153 [1998] AC 878, 913. See also Credit Suisse v Allerdale Borough Council [1995] 1 Lloyd’s Rep 315, 367 (affirmed on other grounds [1997] QB 306).

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5.70  Estoppel by Convention a party to resile from the shared assumption.154 A further expression sometimes used in the context of estoppel generally is that it would be ‘inequitable’ to allow a party to go back on some representation or promise or assurance or shared assumption. It is unlikely that the use of one adjective rather than another is significant and the expressions are usually used interchangeably throughout the law of estoppel. The principle that a person will only be prevented from going back on what he has represented or promised or assured or assumed where it is unjust that he should be allowed to do so is founded on common morality and the conception of what is just depends on the causation of harm or potential harm to persons who have relied on what has been said or assumed.155 5.70  The requirement of injustice or unconscionability in estoppel by convention needs to be seen in the context of estoppel as an overall doctrine. With the exception of estoppel by record and estoppel by deed, injustice or unconscionability is a central element of and a justification for the main forms of estoppel. Estoppel by representation, promissory estoppel and proprietary estoppel are so founded. Together with estoppel by convention, these forms of estoppel can usefully be described as ‘reliance-based’ estoppels. It is appropriate that estoppel by convention as a relative newcomer to the catalogue of the forms of estoppel should have a similar foundation. Modern authority suggests that one element of estoppel by representation and promissory estoppel and proprietary estoppel is that it must be unjust not to operate the estoppel and that normally injustice is established only if (a) a person has acted in reliance on the representation or promise or assurance made, and (b) as a result of that reliance that person will or may suffer significant prejudice or detriment if the estoppel is not operated. These have been said to be among the ‘classic requirements’ of estoppel by representation and promissory estoppel, and are formulated in identical terms (save of course for the reference to a representation or a promise as the initiating event of the estoppel) for these two forms of estoppel.156 It seems eminently desirable that the same classic requirements should apply to estoppel by convention, and again modern authority suggests that the law can be stated in this way for this form of estoppel.157 These developments and formulations presage a movement towards a synthesis of certain of the basic elements of the four reliance-based estoppels and are much to be welcomed.158

154 PW & Co v Milton Gate Investments Ltd [2004] Ch 142, para 222 (Neuberger J). 155 See ch 1, para 1.1. 156 Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93 (Neuberger LJ). 157 PW & Co v Milton Gate Investments Ltd [2004] Ch 142, para 222 (Neuberger J). Detriment suffered by the person alleging the estoppel is a part of the fifth proposition stated in Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174: see para 5.6. It is there suggested that what may create the injustice or unconscionability is either detriment to the person asserting the estoppel or benefit to the person who is said to be estopped. In many cases of estoppel a detriment to one party may constitute a benefit to the other party or a detriment may be suffered by one party even though there is no corresponding benefit to the other party. The existence of a benefit to the person against whom the estoppel is alleged is mentioned again in para 5.79. See Crabbe v Townsend [2016] EWHC 2450 (Ch) where the fifth proposition in Benchdollar was recently applied. See also the formulation of the principle of estoppel by convention by Morgan J in Crossco No 4 Unlimited v Jolan Ltd [2011] EWHC 803 (Ch) para 333. For this decision on appeal see [2011] EWCA Civ 1619. In Rivertrade Ltd v EMG Finance Ltd [2015] EWCA Civ 1295, [2016] All ER (D) 03, para 51, the reliance and detriment based on a shared assumption as to the meaning of an agreement to give security for a loan were continuing to lend money and the financing of legal proceedings by the debtor against a Malaysian entity. 158 Such a synthesis is discussed in ch 2, para 2.194.

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The Third Element: Injustice or Unconscionability  5.71

2.  The Meaning of Injustice: The Three Relevant Matters (i)  The Three Components 5.71  As with many legal requirements, it is possible to break down the requirement of injustice into component parts. The essence of the injustice requirement is that one party to the assumption has conducted itself in relation to the shared assumption in such a way that it would be unjust to allow the other party to go back on what was assumed. Put more precisely, there are three matters to be considered which are (a) whether the party asserting the estoppel has acted, or omitted to act, in reliance on the shared assumption, (b) whether the conduct of that party has resulted or may result in significant prejudice to it if the other party is permitted to resile from the shared assumption, and (c) whether, notwithstanding the existence of reliance and prejudice, there are in any particular case other considerations which lead to the conclusion that it would not be unjust or unconscionable to allow a party to resile from the shared assumption. As a generality, reliance and significant prejudice as just stated must be established in order for a court to conclude that it would be unjust to allow a party to resile from a shared assumption and so to permit the other party to assert the necessary estoppel by convention. This analysis derives in part from the succinct exposition of the principle by Neuberger J in PW & Co v Milton Gate Investments Ltd: In other words, the court generally must be satisfied that (a) the claimant will suffer real prejudice, and (b) the prejudice arises from its reliance on the convention. It should be emphasised that, even if the claimant satisfies the criteria, there may be no estoppel, because there may be other, more powerful, factors pointing the other way.159

It follows from this analysis that the actions taken in reliance on the shared assumption which are an essential component of the estoppel must have occurred after the shared assumption has crossed the line, that is, as explained earlier, after the assumption has become held by both parties with each party being aware that the other party holds the same assumption. Broadly, the same analysis of (a) reliance on a form of statement, (b) actions taken in reliance on the form of statement, (c) actual or anticipated significant prejudice or detriment, and (d) an overall test of injustice or unconscionability applies to all four forms of reliance-based estoppel. Therefore, the explanation of these elements or components is similar when all these forms of estoppel are described in different chapters of this book.160

159 [2003] EWHC 1994 (Ch), [2004] Ch 142, para 222. See also the third and fifth of the tests of Briggs J in Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174, para 52, set out in para 5.6. 160 The same Judge, then Neuberger LJ, said much the same thing as in the above citation in connection with estoppel by representation and promissory estoppel in Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93, where he pointed out that for the representation or promise to create an estoppel against the representor or promisor (a) there had to be an act on the part of the representee or promisee which was reasonably taken in reliance on the representation or promise; and (b) following that act the representee or promisee is able to show that he will suffer detriment if the other party is not held to the representation or promise. The full passage from the Steria case is set out in ch 3, para 3.111. This formulation was described as being relatively broad brush. In Mears Ltd v Shoreline Housing Partnership Ltd [2015] EWHC 1396 (TCC) para 51, Akenhead J said that he was not convinced that ‘detrimental reliance’ was an exhaustive or limiting requirement of estoppel by convention. It is not easy to see how unconscionability could be satisfied as a test without reliance and detriment and there is no decided authority which illustrates how this could occur.

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5.72  Estoppel by Convention The main difference in the descriptions of these elements or components is the way in which they apply in detail to each form of estoppel and, to an extent, in the way in which they are classified in the descriptions of the different forms.

(ii)  The First Component: Reliance 5.72  Reliance on an assumption when acting in a certain way, like the assumption itself, is a state of mind and must be established by evidence. A person may give evidence that he relied on the assumption when deciding to act, or not act, in a particular way and in many cases reliance may be inferred from the nature of the assumption and from the particular conduct of the person alleging reliance on the assumption and asserting the estoppel. Plainly, a decision not to act in a particular way or not to take a particular step may be made in reliance on an assumption as much as may a positive act. For example, a failure to commence legal proceedings in good time or within a statutory or contractual time limit could be in reliance on an assumption that that limit had been extended or would not be enforced.161 As it was put in one decision, the party asserting an estoppel by convention must show that it ‘acted on the basis that the assumption was correct’.162 5.73  Given that reliance is an essential component of estoppel by convention, it is necessary to analyse a little more carefully what exactly is meant by a person acting in reliance on some matter, here the shared assumption. Consideration must be given to (a) whether the assumption has to be the sole or dominant cause of the action taken by the person a­ sserting the estoppel, (b) whether even a trivial degree of reliance is sufficient, and (c) whether the person asserting the estoppel has to show that he acted reasonably in taking the action he did. 5.74  One possible answer to the first question just stated is that it is necessary to show that the actions of the party asserting the estoppel would not have been carried out apart from the estoppel, the ‘but for’ test. A different answer is to say that it is enough if the common assumption was one of the factors which significantly influenced the conduct of the party in question. For the purposes of estoppel by representation and promissory estoppel, the second answer has been said to be correct163 and it seems reasonable that this answer should extend to estoppel by convention. As with other detailed components of the four reliance-based estoppels, it seems correct that a uniform approach should so far as possible be adopted. 5.75  Since the assumption need not be the only or even the predominant reason for the subsequent actions of the claimant, there is still the question of whether there is any

161 K Lokumal & Sons (London) Ltd v Lotte Shipping Co Pte Ltd (The August Leonhardt) [1985] 2 Lloyd’s Rep 28. In that case the commonly held assumption that the circumstances which allowed an extension of time to commence proceedings had occurred was held not sufficient to found an estoppel because that common assumption had not crossed the line: see para 5.55 for the facts on this decision. For a decision in which it was held that there was no evidence of a shared assumption that there was no scope for arbitration and no evidence that a party acted on an understanding that there was no such scope, see Tamil Nadu Electricity Board v ST-CMS Electricity Co Private Ltd [2007] 2 All ER (Comm) 701, para 125 (Cooke J). 162 Ease Faith Ltd v Leonis Marine Management [2006] 1 Lloyd’s Rep 673, para 171. 163 Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 117 (Neuberger LJ); Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 104 (Robert Goff J at first instance).

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The Third Element: Injustice or Unconscionability  5.77 minimum requirement for the influence of the assumption as the cause of those actions. The question is whether it is enough if the assumption had even a trivial influence in bringing about the actions. This is one aspect of the issue of substantiality164 and it arises again in connection with questions such as whether the prejudice suffered as a result of acting on the shared assumption has to be of any minimum amount in order for the estoppel to be established. The answer generally given for reliance-based estoppels is that there is a minimum level and that a matter such as prejudice has to be at least significant before there can be an estoppel.165 It is therefore likely that for the purposes of estoppel by convention the claimant must show that the influence of the shared assumption on his subsequent actions was at least a significant factor in bringing about those actions. 5.76  Turning to the third question, reasonableness, the issue here is whether the claimant must have been reasonable in acting on the shared assumption. The issue may have two aspects, one being whether in principle it was reasonable for the claimant to act on the assumption and the other being whether the particular actions of the claimant were a reasonable response to the assumption. For other forms of reliance-based estoppel, the answer generally given is that the claimant must have been reasonable in acting on the statement or promise or assurance made to him, and that his particular actions must have been reasonable before an estoppel can be established. In stating the classic requirements of estoppel by representation and promissory estoppel in Steria Ltd v Hutchison,166 Neuberger LJ stated that there must be ‘an act on the part of the claimant which was reasonably taken in reliance upon the representation or promise’. Equally, for proprietary estoppel, it is well established that the actions of a person following an assurance relating to an interest or rights in land must be reasonable if a proprietary estoppel is to be established.167 The matter of reasonableness in this context is discussed more fully in chapter three on estoppel by representation.168 It seems very likely that the same rule applies to estoppel by convention and that in order to be able to establish the estoppel the claimant must show that his actions taken in reliance on the shared assumption were reasonable in all the circumstances.

(iii)  The Second Component: Prejudice or Detriment 5.77  Prejudice or detriment is a requirement common to other forms of reliance-based estoppel. In descriptions of estoppel, prejudice and detriment have the same meaning. Detriment may take many forms, for instance the incurring of a legal liability to a third party. Prejudice and detriment are ordinary English words and it is not necessary to attempt to define them any further or to give further examples of how prejudice or detriment may

164 See ch 1, para 1.55, where substantiality is discussed as one of the general factors common to most forms of estoppel. 165 The adjective ‘real’ is sometimes used in the context of substantiality such as the reference to ‘real prejudice’ in the passage from PW & Co v Milton Gate Investments Ltd [2003] 1994, [2004] Ch 142, para 222, cited in para 5.71. The word ‘real’ may here be taken as a synonym for ‘significant’ and may be understood as excluding that which is trivial or very slight. 166 [2006] EWCA Civ 1551, para 93. The full passage is set out in ch 3, para 3.111. As with substantiality, reasonableness is one of the general matters discussed in ch 1, para 1.55 et seq, as applicable to most forms of estoppel. 167 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 22 (Lord Rodger), para 29 (Lord Walker), para 78 (Lord Neuberger). 168 See ch 3, para 3.115.

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5.78  Estoppel by Convention occur as a result of actions taken in reliance on a shared assumption. Detriment has been commented on more fully, including an examination of such matters as the time of the detriment, in the explanation of estoppel by representation and much of the material relevant to detriment in the context of that form of estoppel may also be relevant to detriment in connection with estoppel by representation.169 Two further allied questions on detriment arise which are (a) how substantial does the detriment or anticipated detriment have to be in order to support the estoppel? and (b) where there is a risk of detriment as a result of reliance on the shared assumption, how high that risk has to be before the estoppel can be established. These are also questions which arise in connection with estoppel by representation, promissory estoppel and proprietary estoppel and there is no reason to think that the correct approach to the answer to the questions is any different for estoppel by convention than it is for these other forms of reliance-based estoppel. 5.78  There must be ‘real prejudice’.170 The adjectives ‘real’ and ‘significant’ mean much the same thing in the present context and the desideratum of uniformity of description for the various forms of estoppel suggests that the rule is that for estoppel by convention, as for the other forms, the prejudice or detriment must be at least significant before the estoppel can be established. 5.79  As to the risk of prejudice, it is important to note that the prejudice which is relevant in the situation here under consideration will normally be future and contingent prejudice. It is a prejudice which will occur or is likely to occur to one party to the shared assumption if the other party is permitted to go back on the assumption. In the Milton Gate decision, Neuberger J put the test as being that ‘the claimant will suffer real prejudice’.171 The question which may arise is therefore how likely it is that the prejudice anticipated if there is a resiling from the shared assumption will actually occur. Expressions of the need for prejudice as a component of the estoppel sometimes suggest that if there is no estoppel prejudice will occur as a matter of certainty to a party.172 In many cases this approach is justified. For instance, in the Texas Bank case173 the company which procured that its subsidiary should make the Bahamas loan would obviously suffer prejudice if the guarantor bank was able to repudiate the assumption that the guarantee which that bank had given extended to that loan. Such certainty of prejudice may not be present in all cases. The correct answer to the point under discussion is likely to be that, as with prejudice or detriment in other forms of estoppel, there must be at least a significant risk of detriment which will occur if the person alleged to be estopped is allowed to resile from the shared assumption, with the risk and its significance being judged as at the date when the matter comes before a court.174 5.80  It has been suggested that it is enough to support an estoppel by convention if, as an alternative to showing detriment to the person alleging the estoppel, it can be shown

169 See ch 3, para 3.121 et seq. 170 PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994, [2004] Ch 142, para 232. The relevant passage is cited in para 5.71. 171 ibid. 172 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 104 (Robert Goff J at first instance). 173 ibid. 174 Substantiality in such matters as detriment and the risk of detriment is examined as a factor common to a number of forms of estoppel in ch 1, para 1.55 et seq.

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The Third Element: Injustice or Unconscionability  5.82 that some benefit has accrued to the party alleged to be estopped as a result of the shared ­assumption.175 It is not easy to envisage circumstances in which a benefit conferred on one party to a transaction by reason of that party acting on a shared assumption would justify an estoppel against that party in the absence of a detriment to the other party caused by it relying on the assumption. The possibility of a benefit being enough to support an estoppel against a party who gains that benefit does not appear in the usual elaboration of the other forms of estoppel.176 Furthermore, an underlying rationale of an estoppel is not to prevent a party from obtaining a benefit but to compensate a party who has acted to its detriment. Thus, if no detriment is or will be suffered by the party alleging the estoppel it is difficult to justify an estoppel in favour of that party simply because some benefit has accrued to the other party. 5.81  If the amount of the detriment or the risk of the detriment are small (even though significant enough so that the estoppel does not fail at that stage), the smallness of the amount or of the risk may still be of relevance. There will remain the overall question of whether it is unconscionable that a party should be allowed to depart from the shared assumption. If the amount of the detriment or the likelihood of detriment to the party alleging the estoppel is small that factor may be weighed, together with all other relevant factors, in deciding whether the overall unconscionability test has been satisfied.177

(iv)  The Third Component: The Overall Test of Unconscionability 5.82  The concept of unconscionability permeates estoppel178 and is as important in estoppel by convention as it is in most other kinds of estoppel. The concept is examined elsewhere in this book, both generally and as the fourth element in proprietary estoppel.179 The further elaboration there given is in general applicable to unconscionability in estoppel by convention. In summary, unconscionability means that which is in some way morally reprehensible180 or that which shocks the conscience of the court.181 It is doubtful whether there can ever be an estoppel by convention unless the party asserting the estoppel can show that it has acted and has acted to its detriment in reliance on the shared assumption. On the other hand, there could be circumstances in which, even if the other elements and 175 Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174, para 52 (Briggs J). See the Judge’s fifth proposition. The full passage is set out in para 5.6. 176 Thus, in proprietary estoppel the person who gives an assurance of an interest or a right in land which will accrue to some other person may himself receive a benefit if in reliance on the assurance that other person suffers a detriment by carrying out unpaid work for the maker of the assurance. However, the focus and the justification for the estoppel is the detriment. 177 The importance of considering detriment at this final stage of overall unconscionability is supported by Ease Faith Ltd v Leonis Marine Management [2006] 1 Lloyd’s Rep 373, para 171, where the Judge went so far as to suggest that there is no inflexible rule which requires that detriment is shown in all cases and that the issue of injustice or unconscionability should be judged on a wider examination of the relevant facts and circumstances. See also below (n 186). 178 Gillett v Holt [2001] Ch 210, 225 (Walker LJ), a decision on proprietary estoppel. 179 Unconscionability as a concept is considered generally in ch 1, para 1.44 et seq, and as the fourth element in proprietary estoppel in ch 7, part (G). 180 Multiservice Bookbinding v Marden [1979] Ch 84, 110. Browne-Wilkinson J distinguished between that which was unreasonable and that which was unconscionable in the context of a requirement for repayment of sums of principal and interest under a mortgage with the amounts linked to the value of the Swiss franc, an important provision in days of very high inflation in the United Kingdom. 181 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 92 (Lord Walker).

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5.83  Estoppel by Convention components of the estoppel, including reliance and detriment, are satisfied, it would still not be unconscionable to allow a party to depart from the shared assumption whether in asserting a cause of action or in defending a cause of action brought against that party. It is in this connection that the requirement of unconscionability becomes important in that it constitutes the final test which has to be satisfied before the court operates an estoppel by convention. There are general observations in some decisions182 which might on one reading suggest that a shared assumption which had crossed the line itself encompasses the requirement of unconscionability, but this seems contrary to principle and contrary to what was said unanimously by the House of Lords in the India Steamship (No 2) decision.183 Unconscionability also justifies and underpins other detailed rules within the principle of estoppel by convention. The requirement that the shared assumption has crossed the line is justified by the consideration that if a party has made an assumption it is not just that it should be bound by that assumption simply because another party to a transaction has made the same assumption, unless the first party is aware as a result of some express or implied communication that the other party has made that assumption. Nor is it fair that a party should be bound by a shared assumption when its relevant actions are separate actions which have occurred after the assumption has ceased to be common between the parties. Nonetheless, the critical and separate application of the test of unconscionability occurs at the end of the consideration of whether an estoppel by convention has been established. 5.83  It is not possible to itemise all the circumstances in which an estoppel by convention could be rejected because unconscionability is not established despite the existence of all of its other components. In principle any relevant matter can be taken into account in the application of the final and overall test of unconscionability. One instance of the operation of the unconscionability test might be where a number of people are subject to a consensual arrangement and the question arises of whether an estoppel by convention binds all of them. It seems reasonable in principle that if the essentials of the estoppel are established as between two or more of the parties involved but not as between others, the first two or more persons should be held to their shared assumption provided that the other person or persons involved are not adversely affected. Thus, if A enters into the same or similar rights and obligations towards B and C and the tests for an estoppel by convention are established regarding the exercise of the rights and obligations between A and B, it seems reasonable that B should be able to assert an estoppel against A provided that the result of the operation of the estoppel is that C is not adversely affected. Conversely,

182 See John v George (1996) 71 P & CR 375, 396 (Simon Brown LJ); K Lokumal & Sons (London) Ltd v Lotte ­Shipping Co Pte Ltd (The August Leonhardt) [1985] 2 Lloyd’s Rep 28, 34 (Kerr LJ); The Vistafjord [1988] 2 Lloyd’s Rep 343, 353 (Bingham LJ). It is open to discussion whether general observations made in these cases truly and on a fair reading reject injustice or unconscionability as a separate and independent requirement of an estoppel by convention which has to be established if the estoppel is to be successfully asserted and state, to the contrary, that injustice or unconscionability automatically arises where there is a common assumption which has crossed the line and from which one party to the assumption seeks to resile. Whichever is the true import of these decisions, it is clear today that injustice is a separate element of estoppel by convention and has to be separately and ­independently established. 183 [1998] AC 878, 913.

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The Third Element: Injustice or Unconscionability  5.84 if the enforcement of the estoppel between A and B would adversely affect C, for instance by making it less likely that A will perform his obligations to C, it seems equally reasonable that the estoppel should be denied even as between A and B. It can hardly be just and conscionable that C should be adversely affected by an erroneous assumption made by A and B to which C was not a participant. An illustration of this type of reasoning is a case which concerned an occupational pension scheme with many participants in the scheme. The question was whether a valid alteration to the scheme relating to retirement ages had been made. One contention put forward in support of the validity of the alteration was that there was an estoppel by convention binding various participants to the conclusion that the scheme had been validly altered. A reason given for rejecting an estoppel by convention was that an estoppel relating to retirement ages might, if allowed in relation to some but not all members of the scheme, result in unequal treatment of some members as compared with others.184 5.84  Other instances of a failure to establish unconscionability may not be difficult to envisage. A party asserting an estoppel by convention may have acted badly in some way in connection with the whole of the transaction affected, including the shared assumption and including the actions of that party in reliance on the shared assumption. Certainly in proprietary estoppel, unmeritorious conduct by the person claiming the estoppel is a factor to be taken into account in considering unconscionability185 and there seems no reason why there should be a different approach in estoppel by convention. An estoppel by convention, as much as the equitable promissory and proprietary estoppel, is in the last resort justified by the ability and desire of courts to avoid unconscionability and the same general approach should prevail. A party may also have acted unmeritoriously in some aspect of the attempt of that party to claim the estoppel and bring it before the court. A claimant may have delayed in claiming the estoppel or may have been less than frank in giving an account of the shared assumption or of his actions following it or of any other relevant matter. Other matters mentioned earlier are that the amount of the detriment, although significant, may be small and in some cases the risk of detriment, though significant may be small.186 These last two factors may have to be weighed against the disadvantage to the other party to the shared assumption against whom the estoppel is alleged if an estoppel is to be allowed so as to operate to bind that other party to the shared assumption.

184 Trustee Solutions Ltd v Dubery [2006] EWHC 1426 (Ch), [2007] 1 All ER 308, para 5(ii) (Lewison J). 185 See ch 7, para 7.294. The same is true of promissory estoppel. In D & C Builders v Rees Ltd [1996] 2 QB 617 Lord Denning gave as a reason for refusing a promissory estoppel the threatening and unmeritorious conduct of the promisee: see ch 6, para 6.16. 186 See para 5.81. It is suggested in this book that as regards reliance-based estoppels, a two-stage test is justified when it comes to the matter of the substantiality of prejudice or the risk of prejudice. The first, or threshold, stage is that an estoppel is ruled out at the outset if the prejudice or risk of prejudice is so small that it cannot be categorised as at least significant. If in any case the person asserting the estoppel can succeed at the threshold stage then the second stage is that the amount of the prejudice or of the risk of prejudice are matters to be put into the balance when the final and overall component of the estoppel, unconscionability, is assessed so that a small prejudice or a small risk of prejudice, albeit significant, may when balanced with other factors, lead to the conclusion that unconscionability is not established with the result that the estoppel is not established. If this is a sound analysis there seems every reason to apply it equally to estoppel by convention.

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5.85  Estoppel by Convention

(G)  The Effect of the Estoppel 1.  The General Effect of the Estoppel (i) Parties 5.85  Since the foundation of estoppel by convention is an assumption shared between two or more parties, the assumption should in its primary operation have an effect on and bind only those parties. Estoppel by convention is said to have grown out of estoppel by deed and it is a rule of estoppel by deed that it is only a party to the deed who may claim the benefit of the estoppel.187 The question of the assertion of an estoppel by or against successors in title of the original parties is one of general importance to the various forms of estoppel and is considered separately in chapter two.188 This consideration extends to estoppel by convention although little specific guidance on this form of estoppel can be garnered from the authorities.

(ii)  Partial Effect 5.86  The obvious general effect of an estoppel by convention is to bind a party to the correctness, as a matter of law or as a matter of fact, of the shared assumption if another party to the assumption has so acted on the accuracy of the assumption that the other party would suffer detriment if the first party could resile from what was assumed. It is in this way that the element of injustice is, at any rate normally, established. A question which could arise is whether the estoppel has to have a total effect as regards the accuracy of the shared assumption or can in an appropriate case have only a partial effect. Put differently, the question is whether in principle the estoppel has to have an all or nothing effect. The duration of the estoppel, and its cessation as regards actions taken after there has ceased to be a shared assumption, is examined following the question of a partial effect.189 5.87  It is apparent that with the other main forms of estoppel an absolute or all or nothing approach to the effect of the estoppel is not favoured. The most notable example of this is proprietary estoppel. This form of estoppel depends on an assurance given leading to an expectation of an entitlement to an interest in or rights over property and acted upon by the recipient of the assurance. The obvious way to give effect to such an estoppel would be to order the grant of the interest assured. In fact, though this may be in some cases the result, the courts have set themselves against such an effect of the estoppel where the detriment suffered by the recipient of the assurance is out of all proportion to the benefit which that recipient would obtain if an order was made for a grant to him of the whole of the interest in land promised and in these circumstances some other order may be made to satisfy the estoppel. One reason which can underlie this course is the concept of the minimum equity, which is that the role of equity is to do the minimum necessary to avoid



187 See

ch 4, para 4.1. ch 2, part (I). 189 See para 5.89 et seq. 188 See

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The Effect of the Estoppel  5.88 detriment and i­njustice.190 As regards promissory estoppel, a promise not to enforce strict legal rights, which is the foundation of this form of estoppel, may be enforced not in absolute and permanent terms but only for a limited period or such that the effect of the promise ends when reasonable notice has been given to the promisee that full legal rights are to be resumed.191 Again, the concept of the minimum equity is relevant in this situation. Proprietary and promissory estoppel are the two forms of equitable estoppel and the flexibility in their operation and effect may be attributable to the flexible and discretionary nature of equitable remedies. There has been more doubt in the context of common law estoppel by representation where the traditional operation of the estoppel has been that the maker of the representation, provided that other requirements of the estoppel are satisfied, is prevented from going back in any way on the terms of the representation in any legal proceedings. This absolute effect has been attributed in part to the origins of this form of estoppel as a rule of evidence and no more. Despite this, in a series of modern cases it has been said that where justice so requires an estoppel by representation can have a partial or pro tanto effect. The meaning is that effect is given to the estoppel to prevent a resiling from the representation but only as to a limited extent of the total content of the representation. The reasoning is that on occasions the avoidance of detriment is secured by allowing the estoppel to operate as to only a part of the representation made. This matter has been the subject of considerable recent authority and is examined in detail in chapter three on estoppel by representation.192 5.88  It is not difficult to imagine a scenario in which by virtue of an estoppel by convention a shared assumption should be given only partial effect, or effect for one purpose but not for another. Such a scenario may appear complicated but it does illustrate the type of problem which might arise where a partial operation of an estoppel by convention is in issue. Suppose that a lease was granted on 1 January 2015 for a term of five years from 1 July 2014 (a not unusual event if the tenants had been in occupation prior to the date of the grant) with a rent review stated to operate on the last day of the fifth year of the lease. It is arguable whether as a matter of construction the rent review date is five years from 1 January 2015, the date on which the lease was granted, and so is 31 December 2019, or is five years from 1 July 2014, the date from which the term is measured, and so is 30 June 2019. It might be provided, as is not unusual in clauses of this nature, that the rent review will only take place if a triggering notice is served by the landlord in the three months prior to the rent review date. Time could be made of the essence in relation to this notice so that if it is not served in the stipulated period there can be no rent review. Depending on which of the two above interpretations is correct, the landlord must serve his notice either (a) in the period 1 October to 31 December 2019, if the first interpretation is correct, or (b) in the period 1 April to 30 June 2019, if the second interpretation is correct. In early 2019, the parties might again meet, as often occurs, aided by valuers to try to agree a figure for the forthcoming rent review and they may do so on the assumption shared by both of them, fully

190 See ch 7, para 7.273 for a full discussion on this subject in connection with proprietary estoppel. 191 See ch 6, part (D). For a recent discussion in promissory estoppel of allowing only a minimum effect to the promise, ie, operating the minimum equity concept as opposed to giving full effect to the promise, see the decision of the Court of Appeal of New Zealand in Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567. 192 See ch 3, para 3.147 et seq.

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5.89  Estoppel by Convention communicated to each other, that the first interpretation is correct. On this basis, and in reliance on this assumption, the landlord serves a formal notice in October 2019 t­ riggering the review. At the beginning of 2020, agreement not having been reached, and lawyers having been consulted, the tenant asserts the view that the second interpretation is correct, so that the rent review date is 30 June 2019 and that no notice was served in the period 1 April to 30 June 2019 with the result that the landlord has lost his opportunity for a rent review to cover the final five years of the lease. In these circumstances, the landlord might plausibly assert that by reason of the common and communicated assumption of law he acted to his detriment in not serving a notice at a sufficiently early time, and that the tenants should be held to the shared assumption of the rent review date so that the notice is valid on the assumption that the rent review date was 31 December 2019. On general principles of estoppel by convention such an assertion might well succeed, even if it was held that on a correct construction of the language of the lease the correct review date was 30 June 3019. However, there is then the question of the date of the rent review. The assertion of the tenant, based on the same shared assumption, could be that the rent review date also has to be taken as being 31 December 2019 and not 30 June 2019 with the result that the payment of the new, and presumably increased, rent will be postponed for a further period of six months to the advantage of the tenant and the detriment of the landlord. Yet the tenant has not suffered any detriment from having the rent review date in the lease applied, as a matter of the date for payment of the new rent, as was stipulated on a correct interpretation of the lease. It seems both reasonable and in accordance with the principles of justice in these circumstances that the assumption should not be applied so as to compel both parties to accept that the rent review date was 31 December 2009 instead of the true date of 30 June 2019. If this is correct, then the shared assumption would be applied by reason of an estoppel by convention to some extent or for one purpose, to preserve the validity of the triggering notice and the rent review, but not for another purpose, namely the date by reference to which the new rent is to be fixed and the date from which it is to become payable. It is suggested that there is every reason why in circumstances of this sort an estoppel by convention should be applied flexibly and in a partial fashion when circumstances require that that should be done in order to fulfil the basic purpose of the principle which is to avoid injustice or unconscionability.

2.  The Duration of the Estoppel 5.89  It is perhaps no more than a proposition of common sense to say that since an estoppel by convention depends on actions taken on the faith of a shared assumption, the estoppel will operate to prevent a party from resiling from that assumption only in respect of actions which occurred during the period of the shared holding of the assumption. As regards actions after the assumption has ceased to be held, there is no reason of fairness which prevents a party asserting that the assumption was incorrect. In this situation an assumption that is commonly held and known to be so ceases to be so held when either both parties cease to hold the assumption, or a party who has acted in reliance on the assumption and who asserts the estoppel ceases to hold the assumption, or the other party ceases to hold the assumption and that becomes known to the party asserting the estoppel. Once a shared 388

The Effect of the Estoppel  5.91 assumption is revealed to be erroneous, the estoppel will not apply to future dealings.193 In one case, the issue was the jurisdiction of the High Court over an interim arbitration award where the jurisdiction of the Court may have been ousted if the award had been ‘made’ in Paris. It was held by the Court of Appeal that the award was made in Paris but that an estoppel by convention prevented one party from asserting that the High Court had no jurisdiction. It was said that the estoppel applied to the interim arbitration award which was the subject of the shared assumption but would not operate as regards any future award after the assumption had ended.194 What is important in the context of this rule is not when legal proceedings were started or when a dispute arose, but when actions or events occurred, usually actions in reliance on the shared assumption. If the relevant actions occurred during the period when there was a shared assumption, that may be sufficient to found an estoppel by convention. 5.90  An illustration of the operation of the rule as just stated is Revenue and Customs Commissioners v Benchdollar Ltd195 in which for a period of time there was a shared but inaccurate assumption that an acknowledgement of sums due to the Commissioners as employers’ national insurance payments had been made under section 29(5) of the Limitation Act 1980 so as to start anew the running of the six-year limitation period under the Act. An estoppel by convention arose by reason of that assumption. However, the operation of the estoppel ended when the assumption ended. A similar rule applies to estoppel by representation. If a representation is made and the representee acts in reliance on it he may be able to set up an estoppel which prevents the representor from denying the truth of the representation but if the representor subsequently contradicts or alters the representation and the representee carries out further actions he may not be able to prevent the representor from denying the truth of what was originally said when it comes to the validity or lawfulness or effect of those further actions.196 Another way of putting the rule may be to say that the assumption should not go beyond the transaction in which it arose.197 5.91  While the general rule is as just stated, a word of caution is necessary on its application. A person may have carried out actions during the period of the shared assumption and in reliance on that assumption. The shared assumption may then have ended because that party ceases to hold it or because to his knowledge the other party ceases to hold it.

193 Hiscox v Outhwaite [1992] 1 AC 562, 575; Troop v Gibson [1986] 1 EGLR 1; Hamel-Smith v Pycroft & Jetsave Ltd (1987) (unreported); The Vistafjord [1988] 2 Lloyd’s Rep 343, 352. 194 Hiscox v Outhwaite [1992] 1 AC 562, 577 (Lord Donaldson MR in the Court of Appeal [1991] 2 WLR 1321). The decision of the Court of Appeal was upheld on a different point in the House of Lords. The House did not think it necessary to deal with the question of estoppel. See also Gloyne v Richardson [2001] EWCA Civ 716, [2001] All ER (D) 239. 195 [2009] EWHC 1310 (Ch), [2010] 1 All ER 174. See para 5.6 where the essential requirements of an estoppel by convention as stated by Briggs J in this decision are set out. 196 Gwyther v Boslymon Quarries Ltd [1950] 2 KB 59. See ch 3, para 3.69. It may be that the decision in this case is better regarded as an instance of estoppel by convention especially since the representation seems to have been one of law rather than of fact and estoppel by representation was at the time of the decision usually thought to be confined to representations of fact but not statements of law. The erroneous representation or assumption which lasted only for a certain period was that under revenue law provisions tax on sums due as royalties for minerals extracted was properly deductible by the payer when making payments of the royalties. 197 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 126 (Eveleigh LJ), cited in ING Bank NV v Ros Roca SA [2012] 1 WLR 472, para 64(iv).

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5.92  Estoppel by Convention The actions carried out may have continuing consequences. An example would be that a landowner started to erect a building for a particular use in breach of a restrictive covenant but during the period of an assumption held by him and the owner of the benefit of the covenant that no breach of the covenant was involved by reason of the work. Then during the course of the building the assumption ceases to be shared since the person with the benefit of the covenant departs from the assumption and asserts that the building and its use are and will be in breach of covenant. Obviously, an estoppel by convention might operate to prevent the assertion that the work done prior to the departure was a breach of covenant. It would seem to be right that the landowner should also be able to complete the building and use it even though those actions and activities would occur after the cessation of the shared assumption. It may therefore be that when acts are carried out in reliance on a shared assumption, and the assumption ceases to be shared, the application of the estoppel extends to both what was done during the period of the shared assumption and in reliance on it and to the completion, and to the reasonable and natural consequences of those acts in the future, but does not apply to subsequent new and separate acts. In the example just given, if the landowner after the cessation of the shared assumption started to erect a wholly different building, the person with the benefit of the restrictive covenant might be able to prevent those acts in reliance on the covenant and would not be subject to any estoppel in relation to those acts. The same problem as to the continuation of a course of conduct arises under the law of estoppel by representation when a representation of fact is made and is subsequently withdrawn.198 5.92  A further note of caution, or perhaps a further application of the same reasoning, arises from the rule that the effect of a party becoming aware of the untruth of the shared assumption is not necessarily to kill the estoppel stone dead at that moment. A party may be given a limited further period, during which the estoppel may continue to operate, in which to act to protect itself from the consequences of the true legal or factual position.199

(H) Summary 5.93  As with other summaries of the forms of estoppel in this book this summary is a broad-brush statement of the nature and the essential elements of estoppel by convention. The rules as set out may be subject to exceptions or even to a degree of uncertainty or dispute, and inevitably and by the nature of a brief summary many details are omitted.

1.  The Nature of the Estoppel 5.94  An estoppel by convention is a form of estoppel which may arise (a) where parties to a previous transaction or relationship hold a common assumption or law or of fact relating to that transaction or relationship, and (b) each party is aware that the other party has made 198 See ch 3, para 3.67 et seq. 199 Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174, para 60; London Borough of Hillingdon v ARC Ltd [2000] EWCA Civ 191, para 64.

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Summary  5.103 the assumption (ie, the estoppel has ‘crossed the line’ and so has become a shared assumption), and (c) it would be unjust or unconscionable that one party should be allowed to resile from the assumption. In these circumstances, a party will be estopped from asserting that what has been assumed is incorrect. 5.95  An estoppel by convention can also arise, even in the absence of a shared assumption, where an assumption is made by one party and acquiesced in by the other party.

2.  The Assumption 5.96  The assumption may be of law or of fact, including a general principle of law, or of mixed law and fact. 5.97  The necessary assumption may arise from express words or may be inferred from the conduct of the parties. It is usually necessary that the assumption is unambiguous in its meaning. 5.98  The assumption must relate to some previous transaction or relationship between the parties. That transaction may be, but is not necessarily, an existing contract. The previous transaction or relationship need not be one which creates legally binding rights and obligations.

3.  Common or Shared Assumption 5.99  The same, or substantially the same, assumption must have been made by the two or more parties involved. There must be in this sense a common assumption. 5.100  The assumption must have crossed the line in the sense that each party was aware that the other party or parties had made the same assumption. There must be some communication between them, which may be express or which may be an inference from conduct, which brings this about. Once the common assumption has crossed the line it becomes the shared assumption which is necessary for the existence of an estoppel by convention. 5.101  The person alleged to be estopped must have intended at the time of the assumption that the party alleging the estoppel should act in some way in reliance on the assumption.

4.  Injustice or Unconscionability 5.102  There will only be an estoppel if it is unjust or unconscionable in all the circumstances to allow a person to resile from the shared assumption. 5.103  In order for it to be unjust or unconscionable that a person should be able to resile from the shared assumption, the person who asserts the assumption must generally show (a) that he has acted reasonably in reliance on the assumption, (b) that he would or might suffer significant prejudice if the other person is allowed to resile from the assumption, and (c) that there are no other special factors which mean that it is not unconscionable to permit a person to resile from a shared assumption. 391

5.104  Estoppel by Convention

5.  The Effect of the Estoppel 5.104  The general effect of the estoppel is that a party to legal proceedings is not permitted in those proceedings to deny the correctness of the shared assumption. 5.105  There will be no estoppel relating to actions which occurred after the assumption ceased to be a shared assumption, at any rate if those actions are not the completion or the natural consequences of actions began or carried out during the period of the shared assumption. 5.106  It is probable that a shared assumption can operate to create an estoppel as to only a part of its content or for some purposes but not others.

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6 Promissory Estoppel (A)  The Principle and its Development 1.  The Principle 6.1  The substance of the principle of promissory estoppel can be stated in a single, although fairly long, sentence. If B owes a binding legal obligation to A under a contract or other ­transaction and A clearly and equivocally promises to B that A will not enforce or will not fully enforce that obligation then, if B acts in reliance on the promise such that it would suffer significant detriment if A could resile from the promise, A will be held to the promise as to the enforcement of the obligation where it would be inequitable or unconscionable to allow A to resile from the promise. Plainly, the operation of the principle involves a number of separate elements which have to be satisfied and these will be analysed later in this c­ hapter.1 The principle as stated is sometimes called equitable estoppel or a branch of equitable ­estoppel and is also sometimes called estoppel by forbearance or equitable forbearance.2 6.2  It is worth pausing to consider an initial question. As its name suggests, promissory estoppel is founded on a promise, a statement by a person that that person will act or not act in some way in the future. In this promissory estoppel stands apart from most other forms of estoppel which are based on representations of an existing matter (estoppel by representation) or statements of present fact or of mixed law and fact in a deed (estoppel by deed) or shared assumptions about an existing state of fact or law (estoppel by convention).3 In general terms, English law requires a person to carry out a promise made by him in defined circumstances, notably when the promise is made in return for consideration given by the promisee and so forms a term of a contract or when the promise, whether backed by 1 Two of the clearest general expressions of the principle as it stands today are those of Robert Goff J in BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783, 810, and of Peter Gibson LJ in Emery v UCB Corporate Services Ltd [2001] EWCA Civ 675, para 38. See para 6.24 for a classification of the essential elements which have to be established if the estoppel is to operate. The expressions ‘inequitable’ and ‘unconscionable’ mean much the same thing and it has become more usual to refer to the latter expression in statements concerning estoppel. It has been said that the concept of unconscionability permeates estoppel: Gillett v Holt [2001] Ch 210, 225 (Robert Walker LJ). 2 There is some discussion on whether the principle should correctly be categorised as a form of estoppel: see para 6.27 et seq. 3 A further type of estoppel, also founded on the principles of equity, is proprietary estoppel which may be brought into effect by an expectation in B, encouraged by A by an assurance made to B, that B has or shall in the future have a certain interest in land: see, for example, the formulation of the doctrine of proprietary estoppel by Oliver J in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 144. See ch 7 for proprietary estoppel where an attempt is made to define it more fully and carefully.

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6.3  Promissory Estoppel consideration or not, is contained in a deed. Apart from in such defined circumstances, a promise does not create an obligation enforceable in law. If a person as an act of generosity and for no consideration promises to mow his neighbour’s lawn while his neighbour is away and fails to do, so he cannot be made liable for damages for the failure to fulfil the promise. A promise made in such informal circumstances may also be unenforceable because the parties did not intend to create legally enforceable rights and obligations between them. 6.3  The requirement for consideration, save where the promise is contained in a deed, is old and well established in English law.4 It is sometimes said that English law enforces bargains not promises. The initial question which therefore arises is why, in the limited circumstances in which promissory estoppel operates, the law in effect enforces a particular type of promise which is not backed by consideration given by the promisee and which is not a part of a bargain. Like most forms of estoppel, promissory estoppel is founded on a perception that in certain circumstances it would be unjust to allow a person to go back on what he has said so that the justification for the estoppel is a perception of morality. Yet the view that a promise, intended to have a legal effect, whether backed by consideration or not, should generally be enforced by reason of morality has been rejected as a part of the law.5 If B undertakes to perform regular services for A over a period of two years in return for a monthly payment of £x and, during the two-year period and without any variation of the services to be provided, A promises that he will for the next six months pay B £2x per month, then on a strict view of the doctrine of consideration B cannot enforce the payment of the additional amount since the promise to pay it is not backed by any consideration.6 This will be so even if B has acted in some way in reliance on the promise such as by purchasing new equipment so that as a result he will or may suffer detriment if A is allowed to go back on his promise. Yet if in the same circumstances A promises that for the next six months he will pay the full £x per month but will allow B to perform only a part of the contractual services, the operation of promissory estoppel is such that if B has acted on the promise, for example by taking on other work, A will be kept to his promise and will not be able to enforce the full carrying out of the contractual services. The reason is that this last situation as just described comes within the principle of promissory estoppel as stated at the beginning of this chapter. It is of course always open to the parties to a contract to enter into a further contract which varies the obligations in the existing contract in any way that they wish but the new contract and the variation effected by it must be backed by consideration in the ordinary way.7 4 Rann v Hughes (1778) 7 Term Rep 350n; Eastwood v Kenyon (1840) 11 Ad & El 438. 5 The view of Lord Mansfield, expressed in Hawkes v Saunders (1782) 1 Cowp 289, 290, that the ties of conscience upon an upright mind were a sufficient consideration to make a promise enforceable did not gain acceptance. 6 This result is an application of the principle in Stilk v Myrick (1809) 2 Camp 317, namely that the performance of an obligation which a person is already bound in law to perform is not good consideration for a further promise made to that person, and seems to be unaffected in principle by the qualification to that principle stated by Glidewell LJ in Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1. The latter decision was said to refine or limit the principle in Stilk v Myrick rather than to contradict it. A fuller discussion of the relationship between the principle of promissory estoppel and the doctrine of consideration is contained in para 6.52 et seq; and the principle in Stilk v Myrick is further discussed in para 6.55 et seq. 7 The first of the two hypothetical circumstances here postulated illustrates two fundamental aspects of promissory estoppel, namely that the estoppel can be used to resist, or in some cases to support, a cause of action but cannot of itself constitute a cause of action and that the estoppel cannot be used as a widespread and general substitute for consideration as an essential component of a contract. Both of these aspects are illustrated by the

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The Principle and its Development  6.6 6.4  The ultimate question is therefore why the law, applying a particular form of the overall doctrine of estoppel, in limited and carefully defined circumstances in effect enforces a promise which is not made in return for consideration, whereas under the general law of contract consideration is necessary if a promise not contained in a deed is to be enforced. There is no ultimate logical answer to this question except to say that for a century and a half, and particularly in more recent times, a stream of equitable principle has led to the rules of promissory estoppel which within the limited ambit of the operation of those rules bring about the result just stated. 6.5  Like other forms of estoppel, promissory estoppel is a principle of law created by decisions of the courts and is not directly affected by statutory intervention. The method of explanation adopted in this chapter is first to trace the origins of the principle, which go back at least to the mid-nineteenth century, and its development in subsequent decisions into a coherent doctrine,8 then to discuss the place of promissory estoppel within the general corpus of the law including the law of contract and the law of estoppel generally, and after that to isolate and explain the main elements which have to be established if reliance is to be placed on a promissory estoppel. Finally, there is a consideration how, and by what type of relief, a court may give effect to the estoppel.

2.  A Principle of Equity 6.6  It is often considered that the principle of promissory estoppel is a principle of equity and stands in contradistinction to estoppel by representation which depends on a representation of an existing matter as developed and applied by the common law courts and the Chancery courts. Coke described estoppel as of three kinds, estoppel by record, estoppel by deed and estoppel in pais.9 Estoppel in pais operated at first only within a very restricted sphere but was later expanded to accommodate what is today the principle of common law estoppel by representation. The usual description of the development of this area of the law is to say that by the middle and latter part of the nineteenth century common law estoppel was confined to representations of fact and did not operate on promises, whereas a separate equitable principle had developed which in limited circumstances allowed an estoppel to arise out of a promise.10 Such a limited doctrine was applied in 1877 and was described as the first principle upon which courts of equity proceeded.11 This description of the separate development of two separate principles at common law and in equity was to some extent

decision in Combe v Combe [1951] 2 KB 215 which is discussed in para 6.15. The rule that an estoppel, other than proprietary estoppel, cannot be used as in itself constituting a cause of action is explained in detail in ch 2, part (B). 8 The first recorded use in this country of the expression ‘promissory estoppel’ was made in the third edition of Halsbury’s Laws, vol 15, 175, n (f), in City and Westminster Properties (1954) Ltd v Mudd [1959] Ch 129, 137, in the argument of counsel. The third edition of Halsbury’s Laws commenced publication in 1952. The expression is said to be American in origin: E Cooke, The Modern Law of Estoppel (Oxford University Press, 1999) 35. See below (n 150) in which there is reference to an American decision in 1927 in which the expression ‘promissory estoppel’ is used. 9 Co Litt 352a. 10 First National Bank Plc v Thompson [1996] Ch 231, 236 (Millett LJ). 11 Hughes v Metropolitan Rly Co (1877) 2 App Cas 439, 448 (Lord Cairns).

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6.7  Promissory Estoppel espoused by Denning J in Central London Property Trust Ltd v High Trees House Ltd in 194712 where he attributed the general operation of promissory estoppel in all courts to the natural result of the fusion of law and equity.13 6.7  In fact, the position may not be as clear cut as it appears. Courts of equity would enforce estoppels founded on representations of fact as would common law courts.14 The leading decision of Jorden v Money15 in the House of Lords confirmed that an estoppel was confined to a representation of fact and did not extend to a promise not to enforce a bond given for the repayment of a sum of money. Although the decision of the House of Lords to this effect was on an appeal from the Master of the Rolls and the Court of Appeal in Chancery, there was no suggestion that the common law principle might in an appropriate case be qualified by a principle of equity which could result in a person who had promised not to enforce rights being held by estoppel to that promise. In one of the nineteenth-century cases which established promissory estoppel as a principle applied by a court of equity, it was suggested that the principle may have been recognised by common law courts as well as by those courts which administered equity.16 It may therefore be an historical inaccuracy, or at least an oversimplification, to state that estoppels based on representations of fact were enforced only in common law courts and that promissory estoppel was wholly a development of the Chancery courts designed to qualify the more rigorous requirements of the common law doctrines of estoppel by representation and estoppel by deed. Nonetheless, the view adopted in this book, and often expressed elsewhere, is that there are today two forms of equitable estoppel which are promissory estoppel and proprietary estoppel.17

3.  The Victorian Origins 6.8  The origin of promissory estoppel as it is today understood can be traced to the decision of the House of Lords in Hughes v Metropolitan Rly Co18 and to a statement in that case by the Lord Chancellor, Lord Cairns, which explains the principle behind the conclusion which he reached. The decision concerned a lease of four houses which the tenants

12 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. 13 ibid, 134. It was provided by s 75(11) of Judicature Act 1873 that where there was a conflict between the rules of law and the rules of equity the latter rules were to prevail. See today s 49(1) of the Senior Courts Act 1981. 14 Neville v Wilkinson (1782) 1 Bro CC 543 (Lord Thurlow); Vauxhall Bridge Company v Earl of Spencer (1821) Jac 64 (Lord Eldon). In Citizens’ Bank of Louisiana v First National Bank of New Orleans (1873) LR 6 HL 352, 360, Lord Selborne LC described the estoppel which arose from statements of existing fact, ie, what today would usually be called common law estoppel by representation, as ‘the doctrine of equitable estoppel by representation’. In Jorden v Money (1854) 5 HLC 185, the leading 19th-century decision of the House of Lords on the nature of estoppel by representation, the Lord Chancellor, (at 210) described estoppel by representation as a principle equally of law and equity. See also below (n 17). 15 (1854) 5 HLC 185. 16 Birmingham and District Land Company v London and North Western Rly Co (1889) 40 Ch D 268, 286 (Bowen LJ). 17 This view is supported by high modern authority: see Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 61 (Lord Walker). The other form of equitable estoppel, proprietary estoppel, was clearly a development by the former Court of Chancery where it was sometimes used to override the result that would have been reached purely by the application of common law principles: see, eg, Stiles v Cowper (1748) 3 Atk 692; and see ch 7, para 7.3 et seq on the early development of proprietary estoppel. 18 (1877) 2 App Cas 439.

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The Principle and its Development  6.9 covenanted to repair. The landlord was entitled to give notice requiring repairs to be carried out and was entitled to forfeit the lease if the repairs were not carried out within six months of the notice. Notice to repair was given by the landlord requiring repairs within six months and there then ensued about six weeks of an unsuccessful negotiation for the purchase of the freehold by the tenants. The landlord agreed in writing to the deferment of the works during the negotiations. The landlord then purported to terminate the lease when the repairs had not been carried out within six months from the date of the notice. The landlord brought proceedings for possession and succeeded at first instance but that decision was reversed by the Court of Appeal. The House of Lords upheld the decision of the Court of Appeal. It was held that the tenants were to have a period of six months within which to carry out the repairs calculated by omitting the period of the negotiations (it appears that the repairs were carried out within this extended period). 6.9  The exact basis of the decision is not entirely clear. Lord Blackburn, adopting the words of Mellish LJ in the Court of Appeal, regarded the case as one of relief from forfeiture,19 whereas Lord Cairns said that it was not the practice of the Court to give relief against forfeiture in cases of the present kind.20 Lord Cairns explained and justified his decision using the following words: [I]t is the first principle upon which all Courts of Equity proceed, that if parties who have entered into definite and distinct terms involving certain legal results – certain penalties or legal forfeiture – afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties.21

No authorities were cited in support of this first principle of equity.22 It is from this principle of equity, considered by the Lord Chancellor in 1877 to be established, that the modern law of promissory estoppel has been developed, extended and refined. Certain points important for the subsequent development of the principle of promissory estoppel may be noted. First, the equitable principle requires that there is some subsisting legal relationship such as a lease or a contract between the parties. Secondly, the principle was applied to a right to forfeit or determine a lease but it does not appear that it was to be confined to such cases. Thirdly, a party must be led to suppose or believe that the strict legal rights against him will not be enforced but that belief may be a reasonable inference from conduct or communications between the parties, in that particular case the negotiations to purchase the freehold, and is not necessarily a belief induced by a clear and express statement that the strict rights

19 ibid, 452. 20 ibid, 448. 21 ibid, 448. 22 Nor was any line of decided authority relied on in the decision of the Court of Appeal (see (1876) 1 CPD 120) which the House of Lords upheld. James LJ (at 134) observed that it was against equity and good conscience that the landlord should be able to take advantage of the forfeiture and that a court of equity had jurisdiction to relieve against it. A series of decisions in the 18th century and the first part of the 19th century in Chancery courts had established and applied aspects of what has today become known as proprietary estoppel: see ch 7, para 7.3 et seq, but these decisions do not relate, or certainly do not directly relate, to the principle as described by Lord Cairns.

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6.10  Promissory Estoppel will not be enforced (although the express agreement of the landlord in this case to the deferment of the works may be close to an express promise that a delay in completing the works due to an omission to do works during the period of the deferment would not be relied on as something which might constitute a ground of forfeiture). Fourthly, it seems that the enforceability of the strict rights may be suspended for a time, as on the facts of the case, or may be wholly lost.23 Fifthly, it must be inequitable that the strict rights should be enforced. Many of the elements of the modern law of promissory estoppel were presaged in this initial statement and application of the principle of equity. 6.10  A decade later the same principle was applied by the Court of Appeal in Birmingham and District Land Company v London and North Western Rly Co.24 A company was in occupation of land under a 10-year building agreement due to end in 1885 with the right to acquire long leases of the land if the building work was carried out within the agreed period. In 1880, the landlord told the occupiers to suspend building work until the result of a railway scheme then being promoted which would affect the land was known. The work was suspended and in 1883 a railway Act was enacted. The railway company with rights under the Act acquired the landlord’s interest and used compulsory powers to enter into possession in 1886 on the footing that the occupiers had no interest in the land since the building agreement had expired. It was held that the building agreement continued to subsist in 1886. The Court applied the principle of equity explained by Lord Cairns in the Hughes case.25 Bowen LJ stated that the principle was not confined to cases of forfeiture and reformulated the general principle to be applied as being that if persons who have contractual rights against others induce by their conduct those against whom they have such rights to believe that such rights will either not be enforced, or will be kept in suspense or abeyance for some particular time, those persons will not be allowed by a Court of Equity to enforce the rights until such time has elapsed, without at all events placing the parties in the same position as they were before.26

It may be noted that as a result of this formulation, and as in the earlier formulation of the principle by Lord Cairns, the belief induced may be one which arises from conduct, and not necessarily from a clear and express statement, and that the enforceability of the rights in question may be lost permanently or may be suspended for a period depending on the facts of the case and the nature of the belief induced. The question of whether under the principle of promissory estoppel the enforcement of a right may be permanently abrogated as opposed to being merely suspended or postponed is examined later in general terms.27 23 As mentioned in para 6.80, it is partly a matter of semantics to decide whether in cases of the present sort a particular right has been abrogated or suspended. 24 (1889) 40 Ch D 268. 25 ibid, 277 (Cotton LJ), 281 (Lindley LJ), 286 (Bowen LJ). 26 ibid, 286. 27 See para 6.72 et seq. The principle to be derived from the Hughes and Birmingham Land Company cases is said in Snell’s Equity, 33rd edn (Sweet and Maxwell, 2015) para 12-020 to be a distinct and separate principle to that developed in later cases and is described as capable of applying: ‘Where A claims to have acquired a right (such as, for example, a power to forfeit a lease or to terminate a contract) as a result of a particular action or inaction by B’. Given this factual situation the principle is said to be: ‘If B’s conduct was influenced by a belief, encouraged by A, that if B so acted or failed to act, A would not acquire or enforce the right in question, A is then prevented from acquiring, or exercising the benefit of, that right’. As will be explained (see para 6.36 et seq) whatever the precise ambit of the principle of equity derived from the two above cases the principle of promissory estoppel should be formulated today in wider terms.

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The Principle and its Development  6.12 It is also of interest to note that the statement made bound not only the landowners but also the railway company which was a successor in title of the landlord who made the statement. The general question of whether the benefit and the burden of estoppels can pass to the successors in title in land of the parties to whom and by whom the statement or promise or assurance which creates the estoppel was made is discussed in general in chapter two.28 6.11  Little attention appears to have been paid to the formulation of principle by Lord Cairns or the reformulation of the principle by Bowen LJ from the time of the above decisions until after the end of the Second World War. There were no decisions in this period in which the principle was clearly applied. In one decision the facts came within the statement of Bowen LJ in Birmingham and District Land Company v London and North Western Rly Co, but the estoppel aspect of the decision was in the end rested on the view that what had been stated as an intention was in truth a statement of fact.29 In another case, a tenant under a periodic tenancy orally agreed to surrender his tenancy at a date earlier than he could have ended it by a notice to quit with the result that the landlord sold the property with vacant possession being available to the purchaser at the earlier date. The agreement for surrender was unenforceable because it was not in writing. Nonetheless, the conduct of the tenant was said to raise ‘an ordinary estoppel’ which obliged the tenant to give up possession at the earlier date. There was no reference to the statement of principle as stated in the Victorian cases but it is possible that the estoppel could have been brought within the principle there stated.30 In a further decision, a director of a company induced the directors to resolve that no directors’ fees would be paid after a certain date. It was held that the director could not thereafter claim fees due to him after the date stated since the company had ordered its business in reliance on the fact that no fees would be paid after that date.31 This decision might have been founded on the principle of equity as stated by Lord Cairns and Bowen LJ but the Judge preferred to base his decision on earlier Scottish authority.32 Until the High Trees decision in 1947, explained in the next paragraph, and subsequent cases the view generally taken was that an estoppel could not be founded on anything except a statement of fact.33

4. The High Trees Decision 6.12  The principle of equity was revived by Denning J in Central London Property Trust Ltd v High Trees House Ltd,34 an unreserved decision which can be said to be the origin 28 See ch 2, part (I). 29 Salisbury (Marquess) v Gilmore [1942] 2 KB 38, 51–52. 30 Fenner v Blake [1900] 1 QB 426. The statement of the tenant could be analysed as a promise by him not fully to enforce his right to remain in the property for the full period of a notice to quit. 31 Re William Porter & Co Ltd [1937] 2 All ER 361. 32 ibid, 363 (Simonds J). The earlier decision was Cairncross v Lorimer (1860) 3 LT 130, a Scottish appeal to the House of Lords. The conduct of the director could be analysed as a promise not to enforce payment of fees to him after the date stated. 33 The first edition of Spencer Bower on Estoppel by Representation published in 1923 expressed this view. The ‘so-called’ equitable estoppel and other rules such as election were considered to be applications or corollaries of the ‘central doctrine of estoppel by representation’. 34 [1947] KB 130. In Société Italo-Belge pour Le Commerce et L’Industrie SA (Antwerp) v Palm and Vegetable Oils (Malaysia) Sdn Bhd (The Post Chaser) [1982] 1 All ER 19, 27 (Robert Goff J), it was suggested that in the High Trees decision Denning J ‘breathed new life’ into the principle of promissory estoppel.

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6.13  Promissory Estoppel of the modern body of jurisprudence which has now established promissory estoppel as a principle of law. Indeed, the principle has been sometimes described as ‘the High Trees doctrine’. In the High Trees case, the landlords under a 99-year lease of a block of flats in 1940, when due to war conditions many of the flats were empty, wrote to the tenants stating that the rent would be halved. The Judge considered the difficulties under various legal rules of holding the lessors to their promise to accept a reduced rent. The promise could not be a part of a contract or a variation of a contract since there was no consideration for it. The promise could not found a common law estoppel since it was not a statement of fact.35 It was held that the landlords were estopped from claiming the full rent but only for the duration of the war since the promise was intended to apply only to the conditions prevailing in 1940 and as long as those conditions continued to prevail.36 The result might have been justified by applying the principle of equity as stated in the Hughes and the Birmingham Land Company decisions, which were referred to in the judgment of Denning J, but the Judge preferred to enunciate a considerably wider principle. That principle had two parts. In the first place it was said that the cases37 showed that a promise had to be honoured if it was made with the intention to create legal relations and was a promise which, to the knowledge of the promisor, was going to be acted upon by the promisee and which was in fact so acted upon.38 A principle described in these wide terms would have allowed the promisee to sue on the promise as the only foundation of his cause of action even though there was no consideration for the promise. Denning J then qualified the first principle by stating as a second principle that such a promise could not of itself create a cause of action, but rather raised an estoppel which prevented the promisor acting inconsistently with the promise.39 6.13  The principle or principles as formulated by Denning J are clearly wide and go beyond the limited statements of principle found in the Victorian cases. There is no reference in the principles as formulated by Denning J to the requirement that there is an existing contractual or other legal relationship between the parties so that the promise relates to the enforcement of rights under that relationship although such a factor was present in the Hughes and the Birmingham Land Company decisions.40 An existing relationship, the long lease, was also of course present in the High Trees case. There is no reference to the p ­ romisee having to have acted in such a way that he would suffer detriment if the promisor was

35 Jorden v Money (1854) 5 HLC 185. 36 The landlords in fact sought to recover the full rent only for the period after the end of the war when the promise to accept only a half of the rent had on its true construction expired. Consequently, on a strict view of the matter the observations of Denning J on the operation of the estoppel during the period of the war could be categorised as obiter dicta. In Collier v P & MJ Wright (Holdings) Ltd [2008] 1 WLR 643, para 42, Arden LJ described what was said by Denning J as a ‘brilliant obiter dictum’. It cannot be often that a whole field of legal principle has been initiated, or at any rate resuscitated, by an unreserved obiter dictum of a Judge sitting at first instance. A further, and almost contemporaneous, example of an unreserved judgment which gave its name to an underlying principle in the law of compensation for compulsory purposes, the well-known and often discussed Pointe Gourde principle, is the short and unreserved judgment of Lord MacDermott in the Privy Council in Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendant of Crown Lands [1947] AC 565. 37 See the cases cited in para 6.11 which were among those referred to by Denning J. 38 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, 134. 39 ibid. 40 See paras 6.8–6.10 for these decisions.

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The Principle and its Development  6.14 permitted to resile from his promise.41 Denning J regarded his decision as a frontal attack on the principle that a promise to accept a smaller sum as the discharge of a duty to pay a larger sum is not enforceable, ie, the principle in Pinnel’s Case42 in 1602, approved by the House of Lords in Foakes v Beer.43 He regarded his attack as justified by the principle of equity applied, or perhaps created, by the Victorian cases and by the fusion of law and equity.44 It is possible that promissory estoppel would not have reached the established status which it did reach in subsequent years and today had it not been for its revival in the context of an examination of fundamental principles of law in the High Trees decision, but it became apparent that the principle or principles as stated in that decision would require, as they have indeed received, substantial qualification and elaboration.

5.  A Line of Subsequent Decisions (i)  The Main Decisions and the Development of the Principle 6.14  Subsequent decisions did apply and refine the promissory estoppel principle. In Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd45 the licensees of a patent agreed that they would pay a sum calculated in a certain way if they manufactured more than a specified number of articles which used the patent. The licensors agreed not to enforce the payment of the sum for a period until a new agreement was made. It was held that the licensors were bound by their promise for the period until they gave notice ending the suspension of the payments. The House of Lords referred to the formulations of the principle by Lord Cairns in Hughes v Metropolitan Rly Co and by Bowen LJ in Birmingham and District Land Company v London and North Western Rly Co. In Robertson v Minister of Pensions,46 Denning J cited his decision in the High Trees case in support of a refusal to allow the War Office to go back on a previous assurance that the disability of an officer was attributable to military service. The officer in reliance on this statement had not obtained an independent medical opinion. The case was said to fall within the principle that if a man gives a promise or assurance which he intends to be binding on him, and to be acted on by the person to whom it was

41 Denning J, writing extrajudicially, accepted that detriment was not an essential element of the principle which he was applying: see (1952) 15 MLR 1. There appears to have been no obvious acting to their detriment by the tenants in the High Trees case. This aspect of the decision is discussed more fully in para 6.174 et seq where the requirements of potential injustice and detriment as components of the principle of promissory estoppel are examined more fully. 42 Pinnel’s Case (1602) 5 Co Rep 117a. This rule is considered further in para 6.47 et seq. 43 Foakes v Beer (1884) 9 App Cas 605. See para 6.48. 44 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, 135. 45 Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd [1955] 1 WLR 761. 46 Robertson v Minister of Pensions [1949] 1 KB 227. This decision is also relevant to the question of whether an estoppel of any form can be invoked against a public body carrying out public functions: see ch 2, part (D). It should be noted that in this case the representation or promise was made to the Plaintiff by the War Office, whereas the claim for a pension was against the Ministry of Pensions. Denning J (at 232) explained that all departments of central government acted as agents of the Crown so that a promise by one department bound another department. See further ch 2, part (D) on the application of estoppel to bodies, including the Crown, carrying out public functions. There may now be difficulties in asserting an estoppel against the Crown or a minister exercising public functions following what was said in R (Reprotech (Pebsham) Ltd) v East Sussex County Council [2002] UKHL 8, [2003] 1 WLR 348 as explained in ch 2, para 2.89.

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6.15  Promissory Estoppel given, then, once it is acted upon, he is bound by it.47 The assurance given as to the cause of the disability seems to have been more a statement of fact than a promise. Charles Rickards Ltd v Oppenheim48 was a case in which a contract for the sale of goods contained a date for delivery as to which time was made of the essence such that a failure to deliver the goods in time allowed the buyer to treat the contract as at an end. The goods were not delivered on time but the buyer continued to press for later delivery. It was held, with Denning LJ delivering the first judgment of the Court of Appeal, that the conduct of the buyer was in effect a promise that he would not enforce his legal right to treat the contract as at an end such that he was prevented from insisting on his legal right in accordance with the doctrine stated in the High Trees case.49 In Dean v Bruce,50 Denning LJ distinguished the form of estoppel which he had applied in the High Trees case, which he called a promissory or equitable estoppel, from an estoppel by a representation of fact. 6.15  The influence of Lord Denning can be seen not only in decisions which apply the principle in the High Trees case, but also in decisions which establish and clarify the limitations of the operation of that principle. An important decision is Combe v Combe,51 which concerned divorce proceedings during the course of which a husband promised to pay to the wife a sum of £100 per year free of tax. The wife did not apply to the Court for maintenance. The wife failed in a subsequent action to recover the sums promised. Since the wife’s omission to apply for maintenance was not at the express or implied request of the husband there was no consideration for the promise to pay the £100 per year. An attempt was made in argument to invoke the High Trees principle in support of the enforcement of the promise to pay the money. The High Trees principle was held not to provide the support alleged for two connected reasons. First, the principle never stood alone in itself as giving a cause of action. This reason harkens back to the proposition that an estoppel cannot itself constitute a cause of action although it may provide the necessary support for the establishment of facts which when established do create a cause of action.52 Secondly, the principle can never

47 ibid, 231. 48 Charles Rickards Ltd v Oppenheim [1950] 1 KB 616. 49 ibid, 623. This decision may more appropriately be considered as an application of the doctrine of election. For common law election, see ch 8. See also Panoutsos v Raymond Hadley Corporation of New York [1917] 2 KB 473 (the operation of what would presumably today be categorised as an estoppel by convention, although it was described by Lord Reading CJ as based on the proposition that it is open to a party to a contract to waive a condition which is wholly for his benefit, a proposition that at least as to the enforceability of the waiver is of doubtful general application as is explained in ch 2, part (H)); Hartley v Hymans [1920] 3 KB 475, 495 (McCardie J) (a decision which may be referable to the doctrine of election); Ledingham and Others v Bermejo Estancia Co Ltd [1947] 1 All ER 749 (although in this case the Court decided that there was consideration for a promise to waive the payment of interest for a time); Perrot (JF) & Co Ltd v Cohen [1951] 2 KB 705, 710 (Denning J). 50 Dean v Bruce [1952] 1 KB 11, 14. This appears to be the first authority which used the now familiar description of promissory estoppel which was applied in the High Trees case. 51 [1951] 2 KB 215. See also Lyle-Meller v A Lewis & Co Ltd [1956] 1 WLR 29, 36, where Denning LJ said that what he described as a ‘new estoppel’, which seems to include a promissory estoppel, did not give rise to a cause of action in itself but did prevent the party who had made the promise from setting up a defence which would otherwise be available to him. See further, Eyestorm Ltd v Hoptonacre Homes Ltd [2007] EWCA Civ 1366, para 51 (Rimer LJ), although it was considered in that case that any estoppel which arose was probably better categorised as an estoppel by convention. 52 Combe v Combe [1951] 2 KB 215, 220. This proposition is related to the statement sometimes made that an estoppel can be used as a shield but not a sword, a proposition considered generally in ch 2, part (B). An exception to the proposition that an estoppel cannot itself constitute a cause of action is the operation of proprietary estoppel as explained in ch 2, part (B) and in ch 7.

402

The Principle and its Development  6.16 do away with the necessity for consideration when that is an essential part of a cause of action.53 If it were otherwise, a promise intended to create a legal obligation could always be sued upon even in the absence of consideration given by the promisee. Birkett LJ observed that the High Trees case did not decide the stark proposition that in all circumstances a promisee could sue on a promise. He considered that what that case did decide was: [T]hat when a promise is given which (1) is intended to create legal relations, (2) is intended to be acted upon by the promisee, and (3) is in fact so acted upon, the promisor cannot bring an action against the promisee which involves the repudiation of his promise or is inconsistent with it.54

This formulation of the principle does not expressly refer to the promise having to relate to the enforcement of rights under an existing transaction. Nor does it refer to a requirement that it would be inequitable to permit the promisor to resile from his promise, ie, the element of unconscionability. As will be explained, these two requirements are essential elements of the principle of promissory estoppel as applied today. 6.16  An important question of general law is the relationship between promissory estoppel and the rule in Pinnel’s Case,55 partly because it illustrates the operation and limits of the estoppel, and this subject is examined separately and in more detail later in this chapter.56 That rule is that where B owes to A a quantified sum of money and A promises to accept a lesser sum as the discharge of the whole amount due, the promise is not binding on A who may thereafter sue for the whole sum or for that part of the sum which has not been paid. The reason is that there is no consideration for the promise to accept the smaller sum as a good discharge of the whole debt. In D & C Builders Ltd v Rees57 a firm of builders were owed £482 by the Defendant for work done. The firm agreed to accept £300 in full settlement, that decision being taken because of the difficult financial circumstances in which they then found themselves and because of the threat of the Defendant that otherwise they would not in effect get anything. The builders later sued for the balance of £182 and recovered it. The majority of the Court of Appeal simply applied the rule in Pinnel’s Case. Lord Denning MR considered the effect of promissory estoppel on that rule stating that the broad equitable principle in Hughes v Metropolitan Rly Co58 had relieved the harshness of the common law rule.59 It appears that he would have disagreed with the conclusion of the majority of the Court apart from one factor. Lord Denning referred to the requirement of promissory estoppel that for the estoppel to arise it had to be inequitable to allow the promisor to resile from his promise. It was not inequitable to allow the builders to resile from their promise to accept only £300 in full satisfaction of the larger sum due since that promise was induced by intimidation or economic duress.60 The significance of the ­reasoning of

53 ibid, 220. The relationship between promissory estoppel and the doctrine of consideration is discussed in para 6.52 et seq. 54 ibid, 225. 55 (1602) 5 Co Rep 117a. 56 See para 6.47 et seq. 57 D & C Builders Ltd v Rees [1966] 2 QB 617. 58 (1877) 2 App Cas 439, 448. 59 D & C Builders Ltd v Rees [1966] 2 QB 617, 624–25. 60 ibid, 625, citing the then recent decisions on the tort of intimidation in Rookes v Barnard [1964] AC 1129 and Stratford (JT) & Son Ltd v Lindley [1965] AC 269. It is today accepted that economic pressure may amount to duress which may render a contract voidable provided that the economic pressure may be characterised as illegitimate

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6.17  Promissory Estoppel Lord Denning MR for promissory estoppel is that it emphasises that even where the other elements of the estoppel are present, the promise of a person not to insist on his full legal rights will only be enforced against him where it would be inequitable to permit him to resile from his promise. Unconscionability therefore here emerges as an essential element of the principle of proprietary estoppel. 6.17  As well as being considered by the House of Lords,61 promissory estoppel was scrutinised as a principle by the Privy Council in an appeal from Nigeria in Ajayi v Briscoe (Nigeria) Ltd.62 This decision concerned hire purchase payments due to the Plaintiffs in respect of lorries. The Plaintiffs indicated to the Defendant that payments would be suspended for certain lorries as long as the lorries were withdrawn from active service. The Plaintiffs sued for the unpaid payments relating to these lorries and the Defendant pleaded the indication given as a promissory estoppel which gave him a defence to the claim. Lord Hodson said that when one party to a contract in the absence of fresh consideration agreed not to enforce his rights he would be held to his promise provided the following conditions were fulfilled: (1) that the other party had altered his position, (2) that the promisor could resile from his promise on giving reasonable notice, which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position, and (3) that the promise only became final and irrevocable if the promisee could not resume his position.63 It was held that the Defendant could not rely on a promissory estoppel since he had not proved that he had altered his position. The decision is therefore of significance for the development of the law of promissory estoppel in two respects. A promisee who relies on the principle must prove that he has altered his position as a result of the promise made to him. In addition, although the loss of the right to enforce strict legal rights may often be suspensory, it may become permanent and final and irrevocable if it is impossible for the promisee to ‘resume his position’. Presumably this last situation will most often occur where the promisee has acted in reliance on the promise in such a way that he cannot prevent the continuation of what he has done or cannot alter the legal consequences of what he has done. The fact that a court may impose conditions on a promisor such that he must serve notice before he can resume the enforcement of his legal rights illustrates the flexibility of the principle of promissory estoppel, something which may be attributable to its origin as a principle of equity.

(ii)  Australian Decisions 6.18  Promissory estoppel, as well as other forms of estoppel, has been vigorously developed in other jurisdictions including Australia. Two well-known decisions of the High Court of Australia which are sometimes mentioned in subsequent English cases have examined promissory estoppel within that jurisdiction and have possibly extended its

and has constituted a significant cause inducing a party to enter into the contract: The Evia Luck [1992] 2 AC 152, 165 (Lord Goff); Pao On v Lau Yiu Long [1980] AC 614. The effect of the doctrine of economic duress on the rule in Stilk v Myrick (1809) 2 Camp 317 is examined in para 6.58. 61 In Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd [1955] 1 WLR 761; see para 6.14. 62 Ajayi v Briscoe (Nigeria) Ltd [1964] 1 WLR 1326. See also Harnam Singh v Jamal Pirbhai [1951] AC 688 in which the Privy Council on an appeal from Kenya held that a statement by a tenant that he would remain in ­occupation of a property as a statutory tenant created an estoppel between the parties as to the status of the tenant. 63 Ajayi v Briscoe (Nigeria) Ltd [1964] 1 WLR 1326, 1330.

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The Principle and its Development  6.19 boundaries beyond those thought acceptable in England.64 In Waltons Stores (Interstate) Ltd v Maher,65 an owner of property arranged to grant a lease of it but the agreement was not legally binding because there had not been an exchange of agreements in writing such as was necessary to create a legally binding agreement for a lease. The provision in section 54(1) of the Conveyancing Act of New South Wales was very similar to that stated in section 4 of the Statute of Frauds 1677. In England, this provision in the Statute of Frauds has been replaced by section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989. The 1989 Act is mainly relevant to proprietary estoppel and its effect on that form of estoppel is discussed in detail in chapter seven. The landowner carried out building works on the property on the footing that exchange was no more than a formality and would be carried out. The prospective tenants stood by and let this happen. The prospective tenants then resiled from the agreement claiming that they were not bound by the arrangement. It was held that the prospective tenants were estopped from denying that a binding agreement existed. The four separate judgments of the court contain much discussion of various types of estoppel and their history with extensive examination of English authorities and some discussion of whether a unified principle could be distilled from the authorities at any rate as regards proprietary and promissory estoppel and with discussion as to the distinction between statements of fact and statements of future intention as the foundation of estoppels.66 6.19 In Commonwealth v Verwayen (Voyager Case),67 a sailor was injured when two ships of the Royal Australian Navy collided. He sought damages against the Commonwealth for breach of a duty of care towards him. His action was commenced after the end of the relevant limitation period but the Commonwealth did not plead a limitation defence and stated in respect of this claim, both before and after it was commenced, and in respect of other similar claims, that a limitation defence would not be relied on. Subsequently, the Commonwealth changed its position and sought to amend its pleadings to assert that the claim by the sailor was statute barred. The High Court of Australia upheld the decision of the court below that the Commonwealth could not raise a limitation defence. There was no general agreement in the seven reasoned judgments given on the issue of estoppel, and Mason CJ considered that no waiver or estoppel had arisen. Two members of the Court based their decision on an estoppel and two others based their decision on a waiver in the sense of an election. The decision is of substantial interest on the question of how a court may give effect to a promissory estoppel and for the observations of the Judges on a possible unifying doctrine which brings together various forms of estoppel, notably proprietary estoppel and promissory estoppel and estoppels created by a statement of fact as well as by a statement of future intention. Some observations of the Judges in the High Court of Australia in this and in the Waltons Stores case discussed in the last paragraph are relevant to elements of p ­ romissory 64 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394. See also Legione v Hateley (1983) 152 CLR 406. Reference should also be made to Giumelli v Giumelli (1999) 196 CLR 101 which was a case of proprietary estoppel in which in a family context a promise was made to provide land to the Plaintiff. The order made to satisfy the equity was for the payment to the Plaintiff of a sum of money equal to the value of his claim to the land. For an earlier decision of the Court on estoppel, referred to in subsequent English and Australian cases, see Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641. 65 (1988) 164 CLR 387. 66 See in particular ibid, 450–51 (Deane J). 67 (1990) 170 CLR 394.

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6.20  Promissory Estoppel estoppel as understood in this country and to possible limits on the estoppel and these are referred to as appropriate later in this chapter.68 It is sometimes said that in New Zealand there has been a movement towards the application of a ‘modern form of equitable estoppel’ which embraces promissory estoppel, proprietary estoppel and estoppel by representation and which may remove for promissory estoppel a need for strict observance of what are regarded in this country as essential elements of this form of estoppel. Reference is made to certain significant New Zealand decisions when some of the elements are explained in detail in this chapter.

6.  General Acceptance of the Principle 6.20  A flow of decisions following the High Trees decision in 1947, in a number of which Lord Denning was involved, therefore established the limitations or boundaries of the equitable principle which started in Hughes v Metropolitan Rly Co,69 namely (a) that the principle cannot be used by itself as a cause of action, (b) that the principle does not abrogate the fundamental rule that consideration is necessary for the formation of an enforceable contract unless the contract is in a deed (though it may create a significant qualification to that rule), (c) that the promise must relate to the assertion or enforcement of legal rights available to the promisor, (d) that the promise may be made expressly or may be an inference from what has been said or done, (e) that a promise that a person will not insist on that person’s full legal rights will only be enforced where it would be inequitable or unconscionable to allow the promisor to go back on the promise, and (f) that the effect of the doctrine is often, though not necessarily, a suspension of strict legal rights and not the permanent removal of those rights. 6.21  Following its origin as a principle of equity in mid-Victorian times, its resuscitation by Denning J in the High Trees decision in 1947, and its consideration and qualification in a series of subsequent cases as a developing and expanding doctrine, the principle of promissory estoppel received the further imprimatur of the House of Lords in Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd in 1972.70 The decision stated that by analogy with estoppel by representation,71 the promise which founded a promissory

68 The question of such a unified doctrine is considered in ch 2, part (G). An example of a matter central to the decision in the Waltons Stores case is the question of whether an estoppel can operate so as to render enforceable a contract which is void or unenforceable by reason of some statutory provision such as the rule in England that a contract for the sale or other disposition of an interest in land must be in writing: see s 2 of the Law of Property (Miscellaneous Provisions) Act 1989. This question is examined in greater detail where it is most obviously relevant which is in connection with proprietary estoppel under which a court can order the creation or transfer of an interest in land: see ch 7, para 7.281. The general question of the relationship between statutory provisions and the operation of estoppels is discussed in ch 2, part (F). 69 (1877) 2 App Cas 439. 70 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741. The principle as derived from the Victorian cases had been applied by the House of Lords in Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd [1955] 1 WLR 761 in 1955 but without consideration of the formulation by Denning J in the High Trees decision: see para 6.14 for the Tool Metal decision. 71 See, eg, Low v Bouverie [1891] 3 Ch 82. The requirement of clarity of the representation in the law of estoppel by representation is considered in ch 3, para 3.38.

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The Principle and its Development  6.23 estoppel had to be clear and unambiguous, a test by reference to which the actual promise in that case failed. Lord Hailsham LC concluded his judgment with the following passage: I desire to add that the time may soon come when the whole sequence of cases based on promissory estoppel since the war, beginning with Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, may need to be reviewed and reduced to a coherent body of doctrine by the courts. I do not mean to say that any are to be regarded with suspicion. But as is common with an expanding doctrine they do raise problems of coherent exposition which have never been systematically explored.72

Today more than four decades after the cautionary observation of Lord Hailsham, a coherent body of rules embodying the principle of promissory estoppel does exist and an attempt is made later in this chapter to set out the matters which have to be proved to establish reliance on the estoppel and to summarise the main rules which govern the operation of the estoppel. It seems indisputable that, whether or not the rules had been systematically explored or stated, the main rules were in place by 1972. 6.22  Having traced the origins and development and acceptance of the principle of promissory estoppel it is appropriate to follow the advice of Lord Hailsham and to seek to state the principle and to isolate and examine the various elements which have to be shown by a party to litigation that wishes to rely on the principle.73 As may be apparent from what has so far been explained, one of the problems with the principle of promissory estoppel is its relationship to other fundamental doctrines of law, including the doctrine of consideration which underlies the law of contract in England. It is therefore useful to attempt to set promissory estoppel in its place within a wider corpus of contractual and other law before analysing in detail the essential elements which have to be shown if the principle is to be relied on. An important general question applicable to promissory estoppel is whether in any particular case it has the effect of permanently abrogating legal rights or has the more limited effect of suspending the enforcement of those rights for a limited period. This question is also addressed as a matter of general principle before the essential elements of the estoppel are examined in detail. 6.23  As with other forms of estoppel, certain general questions arise in connection with promissory estoppel. These include whether the estoppel can be subsumed within some wider and general principle governing estoppels generally, whether and to what extent the estoppel binds or benefits successors in title to land affected by it, and the extent to which the estoppel can be used in support of a cause of action as well as in resistance to a cause of action in court proceedings. These and other general questions are considered generally elsewhere where their impact on the different forms of estoppel can be examined together.74 It is therefore not necessary to discuss these questions in any detail in this chapter.

72 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741, 788. 73 A general statement of the principle is given in para 6.1 and a more detailed statement, with an enumeration of the essential elements which have to be established if reliance is to be placed on the principle, is found in para 6.24. 74 See ch 2. The answer to a few of these questions is not entirely clear, a notable instance being that extent to which a promissory estoppel can bind or be taken advantage of by persons other than the original promisor and promisee: see ch 2, part (I).

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6.24  Promissory Estoppel

(B)  The Essential Elements of the Estoppel 6.24  There are three essential elements which must be established by a person who asserts a promissory estoppel, namely (a) that a clear and unequivocal promise intended to be acted upon has been made to him, (b) that the promise is that the promisor will not enforce or fully enforce the legal rights of the promisor under an existing transaction, and (c) that as the person asserting the estoppel he has acted in reliance on the promise in circumstances which would make it unjust or unconscionable, when all relevant matters are taken into consideration, that the maker of the promise should be allowed to resile or wholly to resile from the promise. There is more than one statement of the essential elements of promissory estoppel, but perhaps the clearest and most succinct statement is that of Robert Goff J in BP Exploration Co (Libya) Ltd v Hunt (No 2)75 where he said that the doctrine required, (1)  a legal relationship between the parties, (2) a representation, express or implied, by one party that he will not enforce his strict rights against the other, and (3) reliance by the representee (whether by action or by omission to act) on the representation, which makes it inequitable, in all the circumstances, for the representor to enforce his strict rights, or at least to do so until the representee is restored to his former position.

A further and more recent broad-brush summary of the classic requirements of the estoppel has been given by Neuberger LJ in Steria Ltd v Hutchison76 where the requirement of unconscionability is stated normally to involve reliance on the promise by a promisee who acts in some way to his detriment by reason of that reliance. Subsequently, in this

75 [1979] 1 WLR 783, 810. An equally clear exposition of the basic requirements of promissory estoppel was given by Peter Gibson LJ in Emery v UCB Corporate Services Ltd [2001] EWCA Civ 675, para 28, as follows: ‘A promissory estoppel, in my judgment, arises where (1) there is a clear and unequivocal promise that strict legal rights will not be insisted upon (2) the promisee has acted in reliance on the promise, and (3) it would be inequitable for the promisor to go back on the promise’. In Crossco No 4 Unlimited v Jolan Ltd [2011] EWHC 803 (Ch), para 332, Morgan J stated that the essential principle of promissory estoppel could be summarised as follows: ‘where by his words or conduct one party to a transaction (“D”) freely makes to the other (“C”) a clear and unequivocal promise or assurance which is intended to affect the legal relations between them (whether contractual or otherwise) or was reasonably understood by C to have that effect, and, before it is withdrawn, C acts upon it, altering his position so that it would be inequitable to permit D to withdraw the promise or assurance, D will not be permitted to act inconsistently with it. C must also show that the promise or assurance was intended to be binding in the sense that (judged on an objective basis) it was intended to affect the legal relationship between the parties and that D either knew or could have reasonably foreseen that C would act on it. C’s conduct need not derive its origin solely from D’s promise or assurance’. For this decision on appeal see [2011] EWCA Civ 1619. Differences in various statements of the principle appear to derive mainly from the order in which the essential elements of the estoppel are stated. A somewhat more succinct statement of the broad principle has recently been given by Kitchen LJ in the Court of Appeal in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2017] QB 604, para 61, as follows: ‘If one party to a contract makes a promise to the other that his legal rights under the contract will not be enforced or will be suspended and the other party in some way relies on that promise, whether by altering his position or in any other way, then the party who might otherwise have enforced those rights will not be permitted to do so where it would be inequitable having regard to all the circumstances’. The principle of course applies to rights arising in transactions and relationships other than those which are contractual. No promissory estoppel was held to arise in this case since any detriment to the promisee was minimal. The decision of the Court of Appeal was reversed by the Supreme Court at [2019] AC 119 on a different point with only a brief reference approving what the Court of Appeal had said on promissory estoppel. 76 Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93. The relevant passage is set out in para 6.176. The formulation of Neuberger LJ is particularly useful in that it applies the same statement of the essential requirements (save for the nature of the statement which initiates the estoppel) to promissory estoppel and estoppel by representation.

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The Essential Elements of the Estoppel  6.25 chapter reliance and detriment are treated separately as components of the overall element of unconscionability.77 6.25  To some extent the division into elements of what has to be proved in order to establish a promissory estoppel is arbitrary and different divisions or sub-divisions are possible. For example, the requirement that a promisor intended his promise to be acted on is here taken as a part of the requirement for a clear promise, the first element, but could be categorised as a separate element in its own right.78 The separate elements as here identified sometimes lend themselves into components and sub-components as is explained when each element is examined in detail. A possible, and rather more elaborate, method of stating the essential requirements of promissory estoppel would be to say that a person who asserts the estoppel must establish (a) that a clear and unequivocal promise has been made to him, (b) that the promise relates to the enforcement of existing legal rights against him, (c) that the promisor intends that the promise should be taken seriously and acted upon, (d) that he did act (or fail to act) in some way in reliance on the promise, (e) that he would suffer significant detriment or a significant risk of detriment if the promisor was allowed wholly to resile from the promise, and (f) that after weighing up the above matters it is concluded that it would be inequitable or unconscionable that the promisor should be allowed wholly to resile from the promise. It is thought most useful in this chapter to explain promissory estoppel in detail by reference to the three essential elements as identified at the beginning of the last paragraph, and the further components of the principle as just stated are considered within the element to which they relate.79 77 See part (G) of this chapter. A further recent statement of the elements required to establish a promissory estoppel is that of the Court of Appeal of New Zealand in Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567, para 44, where it was said that it must be shown that (a) a belief or expectation by the promisee must have been created or encouraged by the promisor; (b) to the extent that an express representation is relied upon, it is clearly and unequivocally expressed; (c) the promisee reasonably relied to its detriment on the representation; and (d) it would be unconscionable for the promisor to depart from the belief or expectation. It would be difficult to dispute this formulation as equally summarising the law in this country save that it would be more usual to refer to a promise rather than a representation. It seems that in Australia and New Zealand no clear demarcation is drawn between a promissory and a proprietary estoppel as is now the case in England. There are suggestions that in New Zealand, and perhaps to a lesser extent in Australia, there has been a relaxation in the strictness of the requirements for a promissory estoppel in favour of a more general ‘modern form of equitable estoppel’ extending to promissory and other forms of estoppel: see Equity and Trusts in New Zealand, 2nd edn (Wellington, Thompson Reuters, 2009) ch 19. This most recent decision of the Court of Appeal of New Zealand in 2014 as mentioned above does not appear to support this view. 78 Similarly for the purposes of the description of proprietary estoppel in ch 7 the necessary intention is treated as a component of the assurance which is the first main element of that form of estoppel. When a similar division into essential elements is made for the purposes of estoppel by representation in ch 3, the intention of the representor that the representation shall be acted upon is treated as a separate element of this form of estoppel. A further difference in the method of stating essential elements in forms of estoppel is to treat reliance and detriment as components of the essential element of unconscionability as is done in this chapter, or to treat reliance and detriment as themselves essential elements and then to include unconscionability as a further essential element of an overall nature which may bring into consideration matters going beyond reliance and detriment such as the possible unfair effect of an estoppel on third parties. A further and recent contribution to the list of judicial definitions of the elements of promissory estoppel is that of the Court of Appeal of New Zealand in Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567, para 44, where it was said that it was not disputed that the elements required to establish a promissory estoppel as pleaded were (1) a belief or expectation by the Claimant of the estoppel had been created by words or conduct of the Defendant; (2) to the extent an express promise is relied upon it is clearly and unequivocally expressed; (3) the Claimant reasonably relied to its detriment on the representation; and (4) it would be unconscionable for the Defendant to depart from the belief or expectation. 79 A similar approach is adopted in ch 7 when discussing the other form of equitable estoppel, proprietary ­estoppel, where there is a division of the estoppel into four main elements but with a suggestion that a more ­elaborate classification into 11 components is also possible. See ch 7, para 7.48 et seq.

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6.26  Promissory Estoppel

(C)  The Place of Promissory Estoppel in the Law 6.26  A feature of promissory estoppel is its interaction with other principles of law and particularly with other forms of estoppel and with the doctrine of consideration which is a cornerstone of the law of contract. Consequently, while promissory estoppel is a selfcontained principle its application to specific factual circumstances will sometimes involve a reference to other areas of law. It has already been seen that following the revival of the equitable principle in the High Trees decision, the Judge who brought about that revival, Denning J, was at pains to point out in a subsequent judgment that the principle which he had applied in the High Trees decision did not seek to remove the doctrine of consideration from our law.80

1.  Status as an Estoppel 6.27  The principle of equity, which arose from the statement by Lord Cairns in Hughes v Metropolitan Rly Co,81 and which has since been developed and applied in many d ­ ecisions, is not always regarded as an estoppel. It is sometimes described by other titles such as ­‘equitable forbearance’.82 Estoppel as a generic description of various similar principles of law goes back at least to the writings of Coke in the early part of the seventeenth century when it was confined to estoppel by deed, estoppel by record and estoppel in pais.83 In the genesis of the principle of promissory estoppel as stated in the Victorian cases, it is described as a principle of equity but these decisions do not suggest that it is a form of estoppel.84 In the High Trees decision, Denning J firmly ranked the principle as an estoppel, saying: The courts have not gone so far as to give a cause of action in damages for the breach of such a promise, but they have refused to allow the party making it to act inconsistently with it. It is in that sense, and in that sense only, that such a promise gives rise to an estoppel.85

The description of the equitable principle as promissory estoppel, and as one of the established forms of estoppel as a general concept, has subsequently found acceptance in the highest courts.86 In Cobbe v Yeoman’s Row Management Co, Lord Scott referred to 80 Combe v Combe [1951] 2 KB 215, 230. See para 6.15. 81 (1877) 2 App Cas 439. 82 See, eg, Treitel, The Law of Contract, 14th edn (Sweet & Maxwell, 2015) para 3-112. See para 6.7 for the terminology used in this book on the present matter and for the high judicial support for that terminology. 83 See ch 1, para 1.72. The application in the courts of the underlying concept of estoppel goes back to the 15th century as mentioned in Littleton’s Tenures published in about 1481 which relies on decisions reported in the Year Books. 84 Hughes v Metropolitan Railway Co (1877) 2 App Cas 439; Birmingham and District Land Company v London and North Western Rly Co (1889) 40 Ch D 268. 85 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, 134. See also Lyle-Meller v A Lewis & Co Ltd [1956] 1 WLR 29, 36, in which Denning LJ described promissory estoppel as part of a ‘new estoppel’ and explained the sense in which it operated as an estoppel. 86 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741, 788 (Lord Hailsham LC); Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 14 (Lord Scott). However in the Woodhouse case Lord Pearson (at 762) observed that the principle sometimes known as promissory estoppel was far removed from the familiar kind of estoppel by representation of fact. He described the principle as more like a waiver of contractual rights. On the other hand, Lord Cross (at 767) described the principle as ‘a ­promissory

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The Place of Promissory Estoppel in the Law  6.29 proprietary estoppel as a sub-species of a promissory estoppel.87 Later in Thorner v Major,88 Lord Walker said that he had some difficulty with this classification. He preferred to regard promissory and proprietary estoppel as two separate forms of equitable estoppel. Leading textbooks on the law of equity and the law of contract sometimes describe the principle as promissory estoppel.89 6.28  Discussions of exact terminology are not always of great use but may sometimes illustrate the essential legal nature of a principle under discussion. The essence of estoppel as a legal concept and as a generic description of various principles of law is that a person who makes some form of statement is, in limited and carefully defined circumstances, not permitted to resile from the content of the statement in subsequent legal proceedings. The application of any of the principles within the overall concept may enable a party to establish a cause of action when he would not otherwise be able to do so or to resist a cause of action when he would not otherwise be able to do so. The distinction between the various principles which together make up the overall legal concept of estoppel depends in considerable part on the type of statement which has been made. Thus, a statement of fact or of mixed law and fact, and probably today a statement of law, may found an estoppel by representation, a statement of fact or of mixed law and fact in a deed may found an estoppel by deed, communication of a common assumption of fact or of law may found an estoppel by convention, and the giving of some form of assurance, including an inferred assurance derived from passive acquiescence, may bring about a proprietary estoppel. Where the statement is one of an intention by the maker of it to act in some way in the future, with the further intention that the maker binds himself so to act, that statement is usually called a promise. Promissory estoppel, again in carefully limited and defined circumstances, operates as a principle to prevent the maker of this last kind of statement, or promisor, from going back on the content of his statement or promise when apart from the principle he would have been able to do so. It seems reasonable to say that as a matter of legal analysis this last principle falls reasonably squarely within the overall legal concept of an estoppel. 6.29  The main reason for not describing the principle of equity under discussion as falling within the categories of estoppel is historical. The principle, insofar as it may have existed before the Victorian cases which explain it, and as it was explained in those cases, was not described as an estoppel. The principle does not share the characteristic of some other forms of estoppel as originally applied that the statement which gives rise to the estoppel is one of existing fact (although proprietary estoppel, which has its origins in eighteenth and

estoppel founded on the principle of equity illustrated by Hughes v Metropolitan Railway Co (1877) 2 App Cas 439’. In Ajayi v Briscoe (Nigeria) Ltd [1964] 1 WLR 1326, 1330, Lord Hodson said that the principle was most aptly described as promissory estoppel, a term which he preferred to ‘quasi-estoppel’. The term ‘quasi-estoppel’ was applied to what is now recognised as promissory estoppel by Lord Diplock in Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, 883. It is not a description which has found general favour. 87 [2008] UKHL 55, [2008] 1 WLR 1752, para 14. 88 [2009] UKHL 18, [2009] 1 WLR 776, para 67. 89 Snell’s Equity, 33rd edn (Sweet & Maxwell, 2015) 308; Treitel, The Law of Contract, 14th edn (Sweet & Maxwell, 2015) para 3-112. Snell suggests that promissory estoppel as it is applied today originates in two separate legal doctrines, as is more fully explained in para 6.36 et seq, of this chapter. Treitel, at para 3-077, observes that the principle is ‘somewhat misleadingly’ referred to as equitable or promissory estoppel. It is not apparent what is thought to be misleading in the description of the principle of law as promissory estoppel. The principle does rest on a promise and shares the essential nature of estoppel as a generic doctrine of law as suggested in the next paragraph.

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6.30  Promissory Estoppel nineteenth century decisions, depends on an assurance or promise that an interest in land exists or will be created). It is probably this factor which has resulted in statements such as that promissory estoppel is not an estoppel strictly so called or an estoppel ‘in the strict sense’.90 These historical facts should not prevent the acceptance today that the principle of promissory estoppel is one of the categories of principles which share the common characteristic explained in the last paragraph and so forms a part of the overall concept of estoppel within English law.91 6.30  The view adopted and applied in this book is that equitable estoppel comprises two separate and distinct forms of estoppel, which are promissory estoppel and proprietary estoppel. The two estoppels are described as equitable, not so much because of their characteristics as because of their origin in principles of equity and, certainly in the case of proprietary estoppel, in the jurisprudence developed by the former Court of Chancery. The expression ‘equitable estoppel’ was used in the nineteenth century,92 but promissory estoppel did not come into general use as a description until the second half of the twentieth century.93

2.  Relationship to Other Forms of Estoppel and to Election (i)  The Common Law Estoppels 6.31  As mentioned, the primary difference between promissory estoppel as a principle of equity and the common law estoppels of estoppel by representation, estoppel by deed and estoppel by convention is that promissory estoppel is based on a promise or ­statement of future intent whereas the three common law estoppels are based on a statement of an existing matter or, in the case of estoppel by convention, on an assumption of existing fact or law.94 If an estoppel is to be prayed in aid in legal proceedings to prevent a party

90 See Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, 134 (Denning J). What is probably meant in this context by an estoppel in the strict sense is an estoppel which rests on a statement of fact or of mixed law and fact such as was required if there is to be an estoppel by representation or an estoppel by deed, two of the three forms of estoppel mentioned in Coke on Littleton (estoppel by representation grew out of the limited ambit of what Coke designated as estoppel in pais). It is explained in ch 3, para 3.18 et seq, that as a result of recent decisions estoppel by representation can probably today be founded on a representation of law. 91 Proprietary estoppel, the other of the two forms of equitable estoppel, found equal if not greater difficulty in becoming recognised as a form of estoppel. Even in the 1960s the principle was treated in major textbooks on the law of real property not as a form of estoppel but as an aspect of the law of licences. 92 It was used by Lord Selborne LJ in Citizens’ Bank of Louisiana v First National Bank of New Orleans (1873) LR 6 HL 352, 360. The first edition of Spencer Bower on Estoppel by Representation, was published in 1923 and described equitable estoppel as a meaningless expression. The use of the expression by Lord Selborne was castigated in that edition: see Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 67 (Lord Walker). In Kammins ­Ballrooms Co v Zenith Investments (Torquay) Ltd [1971] AC 850, 883, Lord Diplock described promissory estoppel as a ‘quasi-estoppel’, an expression which has not subsequently prevailed. 93 See above (n 8). It must however be recognised that even today terminology and taxonomy are far from wholly uniform: Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 67 (Lord Walker). 94 ‘That [statement] is a representation as to future conduct which can raise only an equitable estoppel’: Roebuck v Mungovin [1994] 1 All ER 568, 575 (Lord Browne-Wilkinson). In estoppel by representation and estoppel by deed the permissible content of the statement was usually taken to extend to what are called statements of mixed law and fact. As explained in ch 3 estoppel by representation is today probably applicable to statements of law.

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The Place of Promissory Estoppel in the Law  6.32 relying on a particular assertion, it is essential to determine which form of estoppel is being asserted. The nature and consequences of promissory estoppel, and thus its utility in legal proceedings, are substantially different from those of the common law estoppels. A promissory estoppel has the limited effect of preventing a person asserting his full contractual or other legal rights under an existing transaction or relationship and cannot have any other effect, whereas the common law estoppels do not directly affect a person’s rights as such but prevent a person against whom the estoppel is being employed relying on some proposition of fact or law so as to assist the person who relies on the estoppel either in asserting a cause of action or rights, or in resisting a cause of action or rights asserted against him. A promissory estoppel is often, though not necessarily, suspensory in effect in the sense that a person may be prevented from asserting his full legal rights but only for a limited period.95 On the other hand, the statement or assumption which is the basis of the three common law forms of estoppel will generally, subject to its exact terms, have permanent effect. Even so, the effect of a common law estoppel can be brought to an end by some event after the initial creation of the estoppel. A statement which creates an estoppel by representation may be withdrawn or altered such that the representee is no longer justified in carrying out further actions in reliance on it and the common assumption which founds an estoppel by convention may come to an end with a similar effect. Equally the effect of a promissory estoppel may sometimes be brought to an end by notice given by the promisor.96 6.32  There is not normally any difficulty in distinguishing between a statement of fact or of law and a promise of what the promisor will or will not do in the future. A possible source of confusion is the well-known statement of Bowen LJ that the state of a man’s mind is as much a fact as the state of his digestion.97 While no doubt the electrical and chemical state of a person’s brain at a particular time is an existing fact at that time, and while that state creates what is called an intention to act in a certain way, that intention must normally be expressed in writing or orally as a promise that the person will act in that way if it is to form the foundation of the necessary element of promissory estoppel which is a promise of a certain type. A primary element of a promissory estoppel is therefore a statement or promise that a person will not enforce his full legal rights against another person. What is normally essential for the existence of this primary element of a promissory estoppel is the linguistic promise made.98 The fact that the promisor when he made the promise did not subjectively in truth intend to implement that promise is irrelevant to the existence of this part of the first and primary element of the estoppel. In principle, a promise made dishonestly or without any subjective intention to honour it may found a promissory estoppel as much as a promise made honestly. There are other and later elements of a promissory estoppel which

95 Eg, in Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, discussed in para 6.12, the promise of a landlord to accept only a half of the rent due under a lease made in 1940 was held to have legal effect only for the duration of the war which had then just started. 96 See para 6.112 for the withdrawal of a promise and para 6.89 for the giving of notice to end the effect of a promissory estoppel. 97 Edgington v Fitzmaurice (1885) 29 Ch D 459, 483. Any possible difficulty caused by the observation of Bowen LJ exists for estoppel by representation. 98 It is possible that in some circumstances the necessary promise will be inferred from the conduct of the promisor as opposed to being made by express words. As explained in para 6.125 et seq in very limited circumstances it may be possible to infer a promise from silence or inactivity.

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6.33  Promissory Estoppel do depend on the state of a person’s mind objectively assessed at the time when the promise was made, for example the rule that the promisor must objectively have intended the promise to be acted upon when he made it.99 It is at this later stage that the truth of the remark of Bowen LJ that the state of a person’s mind at a particular time is a matter of fact may become important, since when examining this requirement of the estoppel it may be necessary to determine objectively and as a matter of fact this part of the intention of the promisor when he made the promise. In summary, there are two questions in promissory estoppel relating to the state of mind of the promisor. The first question is whether at the time of the promise the promisor intended the promisee to act upon it. The existence of this intention, judged objectively, is essential for the establishment of the estoppel and in this account it is treated as a component of the first element of the estoppel. The second question is whether, at the time of the promise, the promisor subjectively and in fact intended to honour the promise. Whether or not he had that intention is not relevant to the operation of the legal principle. 6.33  Looked at analytically, and of course subject to other important matters, what is required for a promissory estoppel to operate is (a) a statement of intention, express or inferred, that a legal right will not be enforced, and (b) an intention by the maker of the statement that the recipient of the statement shall act on the statement and shall regard it as binding on the maker. The existence of the statement is a matter of fact. The intention is to be judged objectively in the sense that what matters is not whether the maker of the statement subjectively had the requisite intention, but rather whether a reasonable man with knowledge of all surrounding facts known to the promisee would conclude that the maker of the statement had the requisite intention.100 The existence of the intention, objectively determined at the time at which the statement is made, is also a matter of fact.

(ii)  Proprietary Estoppel 6.34  Promissory estoppel has certain affinities with proprietary estoppel. Both are of equitable origin and are derived in considerable part from mid-nineteenth century decisions. Both depend on a promise or the creation by some means of an expectation of what will happen in the future. The two main distinguishing features are as follows. Promissory estoppel must relate to an existing legal relationship with legal rights which is often a contract but is not necessarily so. Proprietary estoppel need not be related in the same way to an existing legal relationship. This has been said to be one of the main distinguishing features between the two forms of equitable estoppel.101 The other distinction is that proprietary estoppel, unlike promissory estoppel, may itself constitute a cause of action. A reason which has been given for the second difference is that proprietary estoppel must relate to identified property.102 There was at one time a reluctance to distinguish between promissory and

99 See para 6.141. 100 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 5 (Lord Hoffmann), a leading modern decision on proprietary estoppel discussed in detail in ch 7, para 7.39. The application of an objective test in judging intention or the state of mind of the promisor is examined further in para 6.141 et seq. The meaning of a promise made is also ascertained by way of an objective test: see para 6.133 et seq. 101 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 61 (Lord Walker). 102 ibid. There are other differences between the two forms of estoppel. An obvious difference is that the effect of a promissory estoppel is to prevent the enforcement of existing rights whereas a frequent effect of proprietary

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The Place of Promissory Estoppel in the Law  6.36 proprietary estoppel,103 but today the two principles are recognised as separate forms of equitable estoppel with their own separate rules and characteristics. Whatever may have been the position some decades ago, and whatever has been said in Australia and New Zealand as mentioned in the footnotes to this paragraph, it seems unlikely that in view of the major differences between the two principles there can in England simply be a merger between them.

(iii)  The Doctrine of Election 6.35  The principle of promissory estoppel also has certain affinities with and similarities to the doctrine of common law election. There are nonetheless clear differences between the operation of the two distinct areas of law. These differences are summarised later in this chapter104 and the doctrine of election is explained in chapter eight.

3.  One or More Principles 6.36  This chapter attempts to summarise the principle of promissory estoppel and to separate that principle into its main elements as the principle stands today.105 It is obvious that the principle has been refined and elaborated since its origin in Victorian decisions. The main turning point in this process of elaboration was the decision of Denning J in Central London Property Trust Ltd v High Trees House Ltd in 1947.106 Neither the Victorian cases nor

estoppel is to create a new interest in land or new rights. Another difference is that the range of orders and relief available once a proprietary estoppel is established is wider than is the case for promissory estoppel: see ch 7, part (D), section 3. For an attempted definition of proprietary estoppel see ch 7, para 7.2. In Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 420, Brennan J said that there was little purpose in dividing general principles of equity into, and the decided cases into, the categories of promissory and proprietary estoppel which were not necessarily exhaustive of the cases in which equity will intervene. He found support for his observation in what was said by Scarman LJ in Crabb v Arun District Council [1976] Ch 179, 193. The matter has been taken even further in New Zealand where, at least in academic writing, it has been argued that there now exists a modern law of equitable estoppel covering all of the four ‘reliance-based’ estoppels of estoppel by representation, estoppel by convention, promissory and proprietary estoppel: see Equity and Trusts in New Zealand, 2nd edn (Wellington, Thompson Reuters, 2009) ch 19. Oliver J in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 153 observed that Crabb v Arun District Council showed a virtual equation of promissory estoppel and proprietary estoppel. Such an approach was rejected by the Court of Appeal in Dun & Bradstreet Software Services (England) Ltd v Provident Mutual Life Assurance Association [1998] 2 EGLR 175, 181, where the Court rejected the argument that it did not matter whether a case fell within the category of a promissory or a proprietary estoppel (and in particular rejected the sometimes cited observation to that effect of Oliver J in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 151, a decision on proprietary estoppel). The modern approach in English law, particularly following Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, is to draw a clear distinction between the two forms of equitable estoppel. 103 The high-water mark of this reluctance may have been the judgment of Scarman LJ in Crabb v Arun District Council [1976] Ch 179, 193, in which he said that it did not matter for the principle he was applying and its operation whether the principle was called promissory or proprietary estoppel and that the distinction had no practical importance beyond the province of explanations in textbooks. 104 See paras 6.155–6.156. See also ch 8, para 8.111 et seq, dealing with common law election. 105 See paras 6.24–6.25. 106 [1947] KB 130.

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6.37  Promissory Estoppel the High Trees case sought to state the principle in fully comprehensive terms. By 1972, the House of Lords accepted that the decisions on promissory estoppel were not to be regarded with suspicion but Lord Hailsham observed that it was an expanding doctrine which raised ‘problems of coherent exposition which have not been satisfactorily explored’.107 6.37  The development and expansion of the principle have led to the suggestion that in truth there are two separate and distinct principles, one derived from Hughes v ­Metropolitan Rly Co108 and Birmingham and District Land Company v London and North Western Rly Co,109 and the other derived from the High Trees decision. The first principle is said to apply where A has acquired a right by reason of some conduct of B (for example, a right to terminate a lease as in Hughes) and is said to be that if B’s conduct was influenced by a belief, encouraged by A, that, if B so conducted himself A would not acquire or enforce the right in question, A is prevented from acquiring or enforcing that right.110 The second principle is described as a principle of substituted performance. This principle is said to apply where B owes a duty to A and A accepts some substituted performance by B of that duty such that B’s duty is fully discharged even though in the absence of the principle that duty of B would not be discharged.111 An obvious reason why, in this statement of the second principle, B’s duty would not be discharged apart from the application of the second principle is that there was no consideration for A’s promise to accept the substituted performance as a discharge of the duty. A somewhat similar view has been advanced in relation to proprietary estoppel where it is suggested that rather than there being one overall principle there are in truth three separate principles, namely an acquiescence-based principle, a representation-based principle and a promise-based principle.112 The difference in this case is in the type of initial conduct or statement which, subject to subsequent matters, brings about the estoppel. 6.38  It is plainly possible to take a decision or a series of decisions of the courts and to extract from them a particular principle of law. Statements of legal principle as described in the last paragraph are no doubt accurate statements in themselves of what may be derived first from the Victorian cases and then from the High Trees decision. However, as the law develops it is sometimes possible to synthesise previously established principles and to show that they can be regarded as aspects or applications of a wider principle. This is a ­reductionist approach and where it can reasonably be done it simplifies and benefits the law.113 The principle of equity as applied by Lord Cairns in Hughes in 1877, if it is correctly stated in the last paragraph, does not embrace the type of case in which today a promise to accept a lesser sum as the discharge of the duty to pay a larger sum can be enforced in certain circumstances and it may well be that Lord Cairns did not envisage that the principle

107 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741, 788. See para 6.21 where the full passage is cited. 108 (1877) 2 App Cas 439. 109 (1889) 40 Ch D 268. 110 See Snell’s Equity, 33rd edn (Sweet & Maxwell, 2015) para 12-020. The principle so derived has similarities to the equitable principle of granting relief from forfeiture in an appropriate case; and Lord Blackburn in Hughes v Metropolitan Rly Co (1877) 2 App Cas 439, 452, appears to have regarded the case as one of relief from forfeiture. 111 Snell’s Equity, 33rd edn (Sweet & Maxwell, 2015) para 12-021. 112 ibid, para 12-033 et seq. See ch 7, para 7.48 for a consideration of this view. 113 The same reductionist approach is seen in the development of science and particularly of fundamental physics where one aim is to find a generally applicable ‘theory of everything’ which brings together within one principle the operation of the fundamental forces of nature such as gravity and electromagnetism.

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The Place of Promissory Estoppel in the Law  6.40 of equity which he stated should embrace, or develop into, a wider principle which covers this different type of factual situation. Even so, the principle as applied in Hughes does have at its core the essential elements of the modern principle of promissory estoppel which are that there are existing legal rights, that there is a promise not to enforce them or fully enforce them, and that it is inequitable to allow the promisor to resile from that promise. In the High Trees decision, Denning J relied on the two Victorian cases as part of the justification for his conclusion that a promise to accept a lower rent in substitution for and in full discharge of a contractually agreed higher rent could in appropriate circumstances be enforced. His reliance has been described as surprising because of the difference between the principle of equity applied in the earlier cases and the principle as applied in the High Trees case.114 Perhaps the existence of the same essential legal components of the principle applied in each case should lessen that surprise. 6.39  It is generally accepted that any earlier particular principles have now been subsumed within a wider principle and it is that single wider principle which is generally applied today and which is sought to be described in this chapter. Authoritative modern judicial statements of the overall principle of promissory estoppel treat it as a single principle.115 A regrettable feature of the law of estoppel is that, having started with Coke’s description of three forms, it has today more than 20, sometimes overlapping, descriptions of what are varieties of estoppel.116 While the amalgamation of the whole or even the main forms of estoppel into a single statement of law is probably impractical, there is much to be said for an attempt to state in a uniform fashion certain essential elements which are common to a number of forms of estoppel.117 Where a form of estoppel such as promissory estoppel can be stated reasonably comprehensively and accurately by way of a single principle, it seems a regressive step to split that form of estoppel into a number of different principles or forms of estoppel.

4.  The Doctrine of Consideration 6.40  It is a fundamental tenet of the English law of contract, established for centuries, that a promise, other than one made in a deed, is not enforceable in law unless it is backed by consideration given by the promisee.118 Consideration is usually defined as some benefit to the promisor or detriment to the promisee in return for which the promise is made. The operation of promissory estoppel involves the enforcement of a promise of a particular nature in limited circumstances, the promise being that the promisor will not enforce his legal rights or his full legal rights under an existing transaction. It is not necessary that any consideration is given for the promise. Indeed, a requirement that there must be consideration would render the principle of promissory estoppel largely meaningless. For example, a landlord may agree in writing to a reduction in the rent payable by the tenant in return for 114 Snell’s Equity, 33rd edn (Sweet & Maxwell, 2015) para 12-021. 115 See para 6.24 for three such statements in modern decisions where the law is formulated as a single principle. 116 See ch 1, para 1.6. 117 This subject is explored in detail in ch 2, part (G). An attempt is made in ch 2, para 2.194 to suggest a uniform statement of a number of the main elements of the four reliance-based estoppels. 118 Rann v Hughes (1778) 7 Term Rep 350n.

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6.41  Promissory Estoppel some consideration given by the tenant such as a capital payment to the landlord or some change in the terms of the lease to the advantage of the landlord. In such a case there will be a contract in the usual way and that contract will amount to an enforceable variation of the lease.119 It is now necessary in this part of the chapter, as well as discussing the general impact of promissory estoppel as a limited exception to the need for consideration, (a) to discuss the variation of contracts and the effect of consideration on such variations, (b) to examine the rule in Pinnel’s Case as an application of the doctrine of consideration and the effect of promissory estoppel on that rule, and (c) to examine the rule in Stilk v Myrick as a further application of the doctrine of consideration and the attack on that rule and the rule in Pinnel’s Case by the principle of ‘practical’ consideration. At the end of the explanation of these matters an attempt is made to summarise the current state of the law on those subjects.

(i)  Variation and Rescission of Contracts 6.41  An essential aspect of promissory estoppel is that the promise which gives rise to the estoppel relates to the discharge of legally binding obligations under an existing transaction. That transaction is usually a contract of some sort.120 Where an existing contract is involved the effect of the estoppel, the holding of the promisor wholly or in part to his promise, is that the obligations of the other party to the contract are in practice varied in some way. The contractual obligation of the other party may be wholly abrogated or may be reduced or may be suspended for a particular time; which occurs depends on the content of the promise and the way in which the other party to the contract as the promisee has acted in reliance on the promise. In order to set promissory estoppel in its place in the general law of contract it is appropriate to mention how contracts may be varied or rescinded and in principle how the doctrine of consideration affects the process of the variation or rescission of a contract. Since the operation of the principle of promissory estoppel may be to vary, usually to a limited extent, obligations under a contract the extent of any conflict between that principle and the doctrine of consideration can only be seen in the context of general rules on the variation of contracts. 6.42  It is necessary to be clear on terminology as a preliminary to matters of substance. A contract may be rescinded or may be varied. Rescission in this context means bringing the contract wholly to an end so that no party has any future obligations under it. For example, the parties to a lease may agree that the lease shall be surrendered by the tenant to the landlord so that from the date of the surrender neither party has any further obligations to the other.121 The lease can be said to be rescinded from the date of the surrender.122 119 A lease for a term in excess of three years requires to be made by a deed. However, courts may give effect to a variation of a deed made by a simple contract: Berry v Berry [1929] 2 KB 316; Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, 133 (Denning J). 120 The contract may be one which gives rise to a proprietary interest in land, such as a lease, but in principle any contract, and indeed any transaction or situation which gives rise to binding obligations, may be affected by a promissory estoppel. 121 The parties to the agreement to surrender will often stipulate what is to happen as regards previous obligations that have not been discharged at the date of the surrender, such as the duty to pay rent. A surrender of a lease may also arise by implication, such as by an agreement to extend the term of the lease which operates as an implied surrender of the existing lease and the implied grant of a new lease for the extended term. 122 A contract can of course be rescinded or brought to an end by processes other than an agreement to rescind. The process by which a party to a contract commits a repudiatory breach of the contract and the other party

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The Place of Promissory Estoppel in the Law  6.43 Of course, the parties to a contract may agree to rescind that contract and to replace it with a new contract. A contract is varied when the contract remains in existence but its terms, usually as to future performance, are varied by a subsequent agreement. As a matter of principle the practical effect of a promissory estoppel may be equivalent to a rescission of the contract where only the promisee has any outstanding obligations under the contract and the promise is to release that party permanently from all of those obligations. In most cases the effect of the estoppel will be some variation of the contractual obligations. For example, in the High Trees case123 the practical effect of the estoppel was to vary for a limited period the terms of a long lease so that the tenant was obliged during the remaining period of the Second World War, but no longer, to pay only a part of the agreed rent. 6.43  The fundamental rule is that a contract may be rescinded or varied by a subsequent agreement but only where there is consideration for the promise or promises contained in that agreement.124 An obvious example of a variation would be where the parties to a contract for the sale and delivery of goods agreed that the price payable by the buyer would be reduced in return for an extended date for delivery allowed to the seller. The consideration for the promise by the seller to accept a lower price is that he is allowed a longer period in which to effect delivery, and the consideration for the promise by the buyer to accept a delayed delivery is that he is to pay a lower price. In both cases there is a benefit to the promisee which is one aspect of the classic definition of consideration. Difficulties as to consideration, and thus the enforceability of the agreed variation, can arise where only one party is benefited by the variation. In the above example, if the buyer agreed to accept a delayed delivery date but the contract was not varied as to price or in any other way, it appears that there would be no consideration for the promise by the buyer to accept late delivery so that in principle that promise could not be enforced as a contract and the buyer could sue for damages if delivery was not made on the originally stipulated date. An illustration of this principle and of the requirement for consideration is a case in which a creditor agreed that a bankruptcy notice would not be served on a debtor if the debtor paid the sum due into a bank in Eastbourne to the credit of the creditor’s solicitors. The debtor complied with this requirement but the bankruptcy notice was nonetheless served. The debtor failed in an action for damages for breach of the agreement not to serve the

accepts the repudiation so bringing the contract to an end is often called rescission. On other occasions, a contract is said to be discharged, such as by the operation of the doctrine of frustration. A contract which is liable to be rescinded under some principle of law, such as where the contract was induced by a misrepresentation, is sometimes said to be voidable or liable to be avoided. A misrepresentee generally has a choice on whether to avoid or rescind the contract. This situation is to be distinguished from that of a contract which is void ab initio, such as a contract to commit a criminal offence where no rights or obligations arise at any time under the purported contract. 123 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. 124 See Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) [1990] 1 Lloyd’s Rep 391, 398, where Lord Goff observed that an election was to be distinguished from a variation of a contract ‘which traditionally requires consideration in order to render it binding in English law’. See also the observation of Lord Denning in Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1971] 2 QB 23, 29–30, in the Court of Appeal. For this decision in the House of Lords see [1972] AC 741. As the matter was put by Briggs JSC in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119, para 33, the common law leaves the parties to choose their own formalities for the making of a contract so long as the essential elements of offer, acceptance and consideration are observed, and these matters ‘are as applicable to the variation of an existing contract as they are to the making of the contract in the first place’.

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6.44  Promissory Estoppel ­ ankruptcy notice since there was no consideration for the making of the promise not to b do so.125 It is ­possible to argue that the rigidity of the principle can be circumvented in some cases in that there may be some ‘practical benefit’ or ‘factual benefit’ to the promisor such as if in the above example the buyer by extending the delivery date obtained an expectation of a delivery of the goods, albeit late, when without the agreed extension he might not have obtained delivery at all and in practice might not have been able to recover damages for breach of contract from a seller who was in financial or other difficulties. This practical benefit might conceivably be regarded as consideration in that it would be a form of benefit to the buyer.126 If the agreement to rescind or vary the contract is in a deed the need for consideration does not apply.127 6.44  The same general principle applies to an agreement to rescind a contract as it does to an agreement to vary a contract. If there are outstanding obligations on the part of both parties, the agreed rescission of the contract is backed by consideration since each party promises to release the other party from that party’s obligations in return for being released from its own obligations. The agreed rescission therefore has effect as a contract. If only one party has outstanding future obligations and it is released from them by a purported rescission of the contract there is no consideration for the promise of release and the promise would have no effect as a contract. To revert to the sale of goods example mentioned in the last paragraph, if the goods had been delivered properly and on time and the seller had no outstanding obligations but the contract was then rescinded so that the buyer was released from his obligation to pay for the goods, the purported rescission of the contract would be of no effect since there would be no consideration for the promise to release the buyer from its obligation to make payment.128 6.45  It follows that in the circumstances described in the preceding paragraphs where there is no consideration for the variation or rescission of a contract the only way in which the purported variation or rescission could be enforced against a party which refuses to accept it would be by the assertion of a promissory estoppel, something which would of course depend on the requirements of the principle of promissory estoppel being satisfied. It is at this point that there is a possible clash between the strict application of the doctrine of consideration and the principle of promissory estoppel. 6.46  Some degree of confusion may still be caused in this area of the law by what are essentially difficulties of terminology or legal classification. An obligation in a contract may

125 Vanderbergen v St Edmund’s Properties Ltd [1933] 2 KB 223, 233 (Lord Hanworth MR), citing the words of Lord Selborne in Foakes v Beer (1884) 9 App Cas 605, that there must be ‘some independent benefit, actual or contingent, of a kind which might in law be a good and valuable consideration for any other sort of agreement not under seal’. 126 The nature of ‘practical’ or ‘factual’ consideration is further examined later in connection with the rule in Stilk v Myrick: see para 6.61 et seq. The main decision which supports matters of this sort as capable of constituting consideration is the decision of the Court of Appeal in Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1. However, this decision must now be considered as of doubtful authority following In Re Selectmove Ltd [1995] 1 WLR 474 and MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119. 127 The essentials of a deed are explained in ch 4, para 4.8 et seq, as part of the account of estoppel by deed. 128 See Commissioners of Stamp Duties v Bone [1977] AC 511, a decision of the Privy Council on appeal from Australia in which a testator had by her will forgiven or released debts due to her (Lord Russell at 519): ‘A debt can only be truly released and extinguished by agreement for valuable consideration or under seal’.

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The Place of Promissory Estoppel in the Law  6.47 be removed or reduced by an agreement to vary the contract which requires consideration (unless made in a deed). The same result may arise from a promissory estoppel where no consideration is required but where all of the requirements of the estoppel must be satisfied. Confusion is avoided if the two principles are kept separate.129 Thus, the extinction or modification of a contractual obligation may be brought about either (a) by an agreed modification of the contract which requires consideration if it is to be valid, or (b) by the operation of a promise which gives rise to a promissory estoppel which does not require consideration but does require the satisfaction of the essential elements of this form of estoppel. A further source of confusion is the frequent use of the word ‘waiver’ to connote an agreed variation of contractual obligations backed by consideration, or a promissory estoppel, or the loss of a right through application of the doctrine of common law election.130

(ii)  The Rule in Pinnel’s Case 6.47  A stark application of the doctrine of consideration, and that of some significance for the purposes of promissory estoppel and its place in the law, is what is called the rule in Pinnel’s Case.131 Cole owed Pinnel £8 and 10 shillings. Pinnel agreed to accept £5 and 2 shillings and 10 pence in satisfaction of the debt and that sum was paid to him. Pinnel sued by an action in debt for the remainder of the amount due and succeeded before the Court of Common Pleas. It was stated by the whole Court that the payment of a lesser sum on the day due for payment in satisfaction of a greater sum cannot be a sufficient satisfaction of the whole. In modern terminology there is no consideration for the promise to accept the smaller sum in full satisfaction of the larger sum. The Court added that the payment of a substituted benefit for the sum due, such as a house or a robe, or the payment of the whole on an earlier date to that on which payment was due, was a good satisfaction or, as would be said today, sufficient consideration for a promise not to enforce the debt.132

129 In the early days of the post-war development of promissory estoppel there was a tendency to wrap together such separate principles. A possible example is Charles Rickards Ltd v Oppenheim [1950] 1 KB 616, 623, where Denning LJ said: ‘If the Defendant, as he did, led the Plaintiffs to believe that he would not insist on the stipulation as to time and that, if they carried out the work, he would accept it, and they did it, he could not afterwards set up the stipulation as to time against them. Whether it be called waiver or forbearance on his part, or an agreed ­variation or substituted performance, does not matter. It is a kind of estoppel’. 130 The expression ‘waiver’ and the legal concepts involved in the expression are discussed in ch 2, part (H), where it is suggested that the word, if it is used at all, should be confined to the loss of a right through the operation of the doctrine of common law election, such as the waiver of the right to forfeit a lease brought about by the receipt of rent. 131 Pinnel’s Case (1602) 5 Co Rep 117a. 132 Such substituted benefits or time or mode of payments are sometimes referred to as an accord and satisfaction, the accord being the agreement to accept a substituted payment and the satisfaction being the making of that substituted payment. In Couldery v Bartrum (1881) 19 Ch D 394, 399, Jessel MR observed: ‘According to English common law a creditor might accept anything in satisfaction of a debt except a less amount of money. He might take a horse, or a canary, or a tomtit if he chose, and that was accord and satisfaction, but by a most extraordinarily peculiarity of the English common law, he could not take 19 shillings and sixpence in the pound; that was nudum pactum’. The correct position appears to be that the agreement to make, followed by the making or giving of, a substituted benefit or time or mode of payment, other than a payment of a part of a monetary debt, is an accord and satisfaction which discharges the liability of the debtor. The agreement to pay and the payment of a part of a monetary debt is not an accord and satisfaction. In the exceptional circumstances in which a promissory estoppel applies the payment of a reduced sum will discharge the full debt, but that does not affect the general principle; it constitutes an exception to the general principle. As it was put by Roxburgh J in Gwyther v Boslymon Quarries Ltd

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6.48  Promissory Estoppel 6.48  An agreement to accept a sum due at a later date than that fixed for payment does not fall within the principle of a sufficient satisfaction as stated by the Judges in Pinnel’s Case since it confers no benefit on the creditor and is not consideration for a promise not to sue for non-payment on the due date. The rule in Pinnel’s Case was upheld by the House of Lords and applied in this way nearly three centuries later in Foakes v Beer.133 Mrs Beer had obtained judgment against Dr Foakes for a sum due to her. She then promised not to take further proceedings on the judgment if Dr Foakes made a down payment and paid the remainder due by instalments. Dr Foakes did so. It was held that Mrs Beer, notwithstanding the full payment, was not bound by her promise, for which there was no consideration, and so could recover interest for late payment of the judgment debt.134 6.49  The rule in Pinnel’s Case applies only where the promise to accept part payment is in relation to an obligation to pay an ascertained or ‘liquidated’ amount. It does not apply where there is an obligation to pay an unquantified sum such as damages for a breach of contract and the promise is to accept a specified sum in full satisfaction of the obligation to pay the unquantified sum. This is so because the payment of the specified amount may be a benefit to the person entitled to the unquantified sum since it may in principle exceed what would be the amount of that sum if it was quantified. This reasoning holds good even if there appears to be a high likelihood that the sum due if quantified would be greater than the amount agreed to be paid in satisfaction of it. 6.50  It is obvious that the application of the principle of proprietary estoppel constitutes a substantial potential exception to the rule in Pinnel’s Case. Any possible conflict with the rule in Pinnel’s Case did not emerge in the Victorian cases which are the origin of promissory estoppel since the promises in those cases were promises not to insist on the time for the carrying out of certain works and did not directly concern payments of sums of money.135 The conflict was apparent in the High Trees case136 in which the promise was to accept a part of a fixed sum due as rent under a lease in substitution for the payment of the whole sum due. In the High Trees case Denning J dealt with the rule in Pinnel’s Case and the decision of the House of Lords in Foakes v Beer by saying that the principle of equity which he was applying operated despite the absence of consideration because of the fusion

[1950] 2 KB 59, 75, ‘accord and satisfaction necessarily involves some contractual modification of the original bargain’. However, statements on this point may not always be entirely clear: see Collier v P & MJ Wright (Holdings) Ltd [2008] 1 WLR 643, para 39 (Arden LJ); and D & C Builders v Rees [1966] 2 QB 617, 625 (Lord Denning MR). 133 (1884) 9 App Cas 605. See also D & C Builders Ltd v Rees [1966] 2 QB 617, explained in para 6.16. 134 A further possible basis for the decision is that as a matter of interpretation the promise of Mrs Beer not to take further proceedings did not extend to the recovery of interest on the debt. It has recently been said in the Supreme Court that the decision in Foakes v Beer was probably ripe for re-examination but that that process would have to be carried out by an enlarged panel of the Court: MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119, para 19 (Lord Sumption). See also In Re Selectmove Ltd [1995] 1 WLR 474, 481 (Peter Gibson LJ). Such a re-examination would probably involve a reconsideration of the rule in Pinnel’s Case and of the need for or the meaning of consideration in the law of contract. The genesis of the suggested re-examination was the concept of ‘practical’ or ‘factual’ consideration in recent decisions of the Court of Appeal, a subject explained in para 6.61 et seq. 135 Hughes v Metropolitan Railway Co (1877) 2 App Cas 439; Birmingham and District Land Company v London and North Western Rly Co (1889) 40 Ch D 268: see paras 6.8–6.10. 136 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. It is because of this difference that the principle of law enunciated in the High Trees case has sometimes been described as a separate principle of substituted performance: see para 6.36 et seq.

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The Place of Promissory Estoppel in the Law  6.51 of law and equity and added that this aspect of the matter was not considered in Foakes v Beer.137 A more recent example of where it was said to be at least arguable that a promissory estoppel could operate so as to remove the effect of the rule in Pinnell’s Case is Collier v P & MJ Wright (Holdings) Ltd.138 6.51  While the principle of promissory estoppel in a sense prevails over the rule in Pinnel’s Case, the latter rule is certainly not abrogated. If the circumstances which give rise to a promissory estoppel are not present the rule in Pinnel’s Case will operate so as to permit a claim for the whole of a sum contractually due despite an undertaking having been given by the creditor to accept part payment of the sum as a complete discharge of the debt. As will be more fully explained, a promissory estoppel will only be established if there has been a clear and unequivocal promise not to enforce or enforce fully an obligation under an existing transaction in circumstances where it would be inequitable to allow the promisor to resile from the promise because of a potential detriment to the promisee who has relied on the promise if there was such a resiling.139 In addition, a promissory estoppel cannot be used by itself to establish a cause of action.140 If any of these limiting requirements are not satisfied such that there is no estoppel, the rule in Pinnel’s Case will operate in its full rigour.141 In particular, an inability by a debtor to prove reliance on a promise and potential prejudice may preclude a promissory estoppel leaving the rule in Pinnel’s Case to be applied so permitting the full recovery of a debt.142 It is for this reason that in juridical terms the principle of promissory estoppel may represent a substantial qualification to the rule in Pinnel’s Case but not the elimination of that rule or its effect just as promissory estoppel may represent a qualification to the generality of the doctrine of consideration of which the rule in Pinnel’s Case is a part.143 It is explained later that where a promise to accept a smaller sum as the full discharge of a duty to pay a larger sum is enforceable by reason of a promissory estoppel, and as a qualification to the rule in Pinnel’s Case, the effect is often one of wholly abrogating, as opposed to suspending or postponing, the obligation to pay the relevant part of the debt.144 137 ibid, 135. The fusion of law and equity was effected by s 25(ii) of the Judicature Act 1873. See today s 49(1) of the Senior Courts Act 1981. 138 [2008] 1 WLR 643. 139 See para 6.24 for a summary of the elements of promissory estoppel. It was pointed out by Lord Sumption in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119, para 16, that the true safeguarding where the operation of Pinnel’s Case and Foakes v Beer created injustice was likely to lie in the area of estoppel. In the Rock Advertising case the Court of Appeal and the Supreme Court held that any detrimental reliance on the promise to accept a programme of delayed repayments of a debt was minimal so that the essential element of unconscionability was not satisfied. In any event, the Supreme Court held that any oral agreement to accept the delayed repayments was unenforceable due to the no oral modification clause in the original licence agreement under which the sums were payable. 140 Combe v Combe [1951] 2 KB 215, discussed in para 6.15. 141 A modern example of the ordinary application of the rule in Pinnel’s Case because one of the requirements of promissory estoppel, injustice or unconscionability was not satisfied is D & C Builders Ltd v Rees [1966] 2 QB 617, a decision discussed in para 6.16. 142 The requirements of reliance and detriment are explained in part (G) of this chapter. 143 See para 6.52 et seq for an examination of the general relationship between promissory estoppel and the doctrine of consideration. 144 See para 6.85. Of course a promise to accept a sum less than that contractually due as payments at specified intervals may, by its express terms or as an inference from its circumstances, constitute a promise to accept the reduced sum but only for a limited period. The leading case of Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130 is an instance of this last situation.

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6.52  Promissory Estoppel

(iii)  Promissory Estoppel and the General Doctrine of Consideration 6.52  The status and position of the principle of promissory estoppel within the wider law of contract, and specifically as regards the doctrine of consideration which is a fundamental part of the law of contract, are reasonably clear. A promise, unless contained in a deed, is not enforceable unless it is supported by consideration which moves from the promisee. Nonetheless, under the principle of promissory estoppel a person who makes a promise not supported by consideration may be held to his promise – in effect his promise will be enforced against him – but only in the limited circumstances in which a promissory estoppel operates. In summary these circumstances are (a) that there is a pre-existing transaction, usually a contract, between the promisor and the promisee, (b) that the promisor undertakes not to enforce or fully to enforce the obligation of the promisee under that transaction, and (c) that the promisee has acted in reliance on that promise such that he would suffer detriment with the result that it would be unconscionable if the promisor was entitled to resile from the promise.145 It is inherent in these limitations that the effect of the promise cannot itself constitute a separate and independent cause of action on the part of the promisee. However, it is apparent that within and subject to these limitations the courts do enforce the promise even in the absence of consideration given by the promisee. As Lord Denning has expressed it, a promise to vary a contract may be unenforceable as a contract because there is no consideration for it but the promise may be sufficient to work an estoppel which may have the same effect as a variation.146 6.53  To this extent the principle of promissory estoppel within its field of operation does create an exception, and a significant exception, to the doctrine of consideration. However, the exception is limited. It certainly does not abrogate the general need for consideration to support a promise if that promise is to become enforceable in law when not in a deed.147 It does not allow the promise to be sued upon as an ordinary cause of action as the promise could be if it had been supported by consideration and so became a part of a contract. It operates only where the promise relates to the enforcement of existing legal obligations. It only applies if the promisee has acted in reliance on the promise such that he would suffer detriment if the promise was revoked and even then the promise may only operate for a limited period. Taking the rule in Pinnel’s Case as a stark adumbration of the doctrine of consideration, the decision would on the facts revealed have been likely to have been the same if those facts had emerged in a modern decision.148 It is true that Pinnel promised Cole to accept a lesser sum in satisfaction of the full sum due from Cole. The promise would only be enforced today against Pinnel if Cole could show that he had acted to his disadvantage on the footing of Pinnel’s promise such that it would be inequitable to allow Pinnel to

145 See para 6.24. 146 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1971] 2 QB 23, 29–30 in the Court of Appeal. For this decision in the House of Lords see [1972] AC 741. 147 The matter was stated by Colman J in Thornton Springer v NEM Insurance Co Ltd [2000] 2 All ER 489, 519, in the following way: ‘If there was no subsequent agreement, that could be because there was no consideration. In that event promissory estoppel could not be relied upon to arrive at the same destination as if there had been a contract. That would be because of the policy of the law in protecting the doctrine of consideration: see Azov Shipping Co v Baltic Shipping Co (No 3) [1999] 2 All ER (Comm) 453 at 474–477’. 148 See para 6.47 for the facts in Pinnel’s Case (1602) 5 Co Rep 117a.

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The Place of Promissory Estoppel in the Law  6.55 resile from his promise. Equally in Foakes v Beer,149 the promise of Mrs Beer not to take any further proceedings on the judgment in her favour would only be enforced against her in a modern action if Dr Foakes could prove that he had acted to his detriment on the faith of that promise and that for that reason it would be inequitable to allow Mrs Beer to recover the interest on the judgment debt which she claimed.150 In truth and in summary the principle of promissory estoppel does not cut across the general requirement of the law of contract that a promise not in a deed is unenforceable unless supported by consideration, and similarly does not cut across the application of that principle established as the rule in Pinnel’s Case, except in closely confined and limited, albeit significant, circumstances.151 6.54  It has sometimes been suggested that apart from the forms of estoppel and the doctrine of common law election, there may exist a separate doctrine of waiver under which a party may voluntarily and unilaterally renounce a contractual right, and perhaps other rights, where the right is wholly for the benefit of the party in question. The effect of such a doctrine would be that the party was thereafter unable to enforce the right. The doctrine would operate whether or not the party with the corresponding obligation had acted upon the renunciation of the right. This subject is discussed in chapter two152 where it is argued that there is no such independent doctrine. If a right could be lost by a so-called waiver in the circumstances just described, (a) it would flout the doctrine of consideration since there would be no consideration for the promise not to enforce the right, and (b) it would make a nonsense of the principle of promissory estoppel since the effect of the promise would be to prevent reliance on the right in question even though the requirements of a promissory estoppel were not fulfilled.

(iv) The Stilk v Myrick Principle 6.55  A further aspect of the law of consideration is sometimes examined in connection with promissory estoppel. The situation which is relevant is where B owes to A a contractual obligation to do or abstain from doing some act and A promises to pay B an additional sum or provide some other benefit to B in return for B fulfilling B’s existing contractual obligation.

149 (1884) 9 App Cas 605. 150 A possibly more accurate statement of the detriment rule might be to say that the person asserting the estoppel usually has to show that he would suffer detriment or prejudice if the promisor was able to resile from his promise not to enforce the right: see para 6.152 et seq. The point is that the detriment involved is usually that which will or may occur in the future if a promisor is allowed to resile from the promise made. A similar concern over the relationship between promissory estoppel and consideration can be found in US jurisprudence where the principle of promissory estoppel has sometimes been said to be the equivalent of consideration. In Allegheny College v National Chautauqua County Bank 246 NY, 369, 374 (1927) Cardozo CJ said: ‘Certain … it is that we have adopted the doctrine of promissory estoppel as the equivalent of consideration in connection with our law of charitable subscriptions’. Following the decision of the Supreme Court in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119 that the rule in Pinnel’s Case is now due for re-examination in the Supreme Court but unless and until re-examination takes place the rule and its effect are unlikely to be subverted by the theory of ‘practical’ consideration. This theory is discussed in para 6.61 et seq. 151 The view expressed in Snell’s Equity, 33rd edn (Sweet & Maxwell, 2015) para 12-021 is that the decision in High Trees and other subsequent decisions are directly inconsistent with the rule in Pinnel’s Case, and that the rule should not have been overturned except by the Supreme Court or by Act of Parliament. 152 See ch 2, part (H). It is there suggested that the imprecise expression ‘waiver’, if it is used at all, should be confined to describing the result of the doctrine of common law election, that is a decision to assert one of two inconsistent rights with the result that the capacity to enforce the other right is lost.

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6.56  Promissory Estoppel For example, B may be obligated to deliver to A specified machinery in return for a payment of £2 million. In this example A may, after the formation of the contract, make a further promise to B to pay to him the higher sum of £2.25 million for the delivery of the machinery but with no other change in the terms of the contract. The underlying rule is that the promise by A to pay the additional sum is in principle unenforceable by B since B has given no consideration for that promise. The undertaking by B to carry out his existing duty to deliver the machinery is not good consideration since B is already obliged to deliver the machinery. In terms of the classic definition of consideration B confers no additional benefit on A and incurs no additional detriment himself. Of course, if the contract for sale and delivery of the machinery is altered in some way, such as by altering the specification of the machinery or bringing forward the date fixed for its delivery, there will be additional consideration given by B and A’s promise to pay the additional £0.25 million will be enforceable in the ordinary way as a variation of the contract. The question which arises is part of the more general question of when an agreed variation of an existing contract is e­ nforceable.153 The variation, in the first example just given, a variation in only the price, will only be enforceable if it generates its own consideration, and in the example it does not do this. While this aspect of the law of consideration is sometimes examined for the impact on it of promissory estoppel, the general requirements for the operation of a promissory estoppel are such that there seems to be no strong connection between this form of estoppel and this aspect of the doctrine of consideration. It is therefore pertinent first to summarise the particular operation of the law of consideration just mentioned and then to examine how, if at all, promissory estoppel impinges upon that aspect of the law of consideration and on the types of situation examined. 6.56  The title of this sub-heading of the chapter is ‘The Stilk v Myrick Principle’ because the decision in Stilk v Myrick154 encapsulated and illustrated the present aspect of the law of consideration. In that case the Plaintiff was a sailor engaged to serve as a crew member on a voyage from London to the Baltic and back for a wage of £5 per month. Two of the sailors deserted during the voyage and the captain was unable to replace them for the return journey to London. The captain promised that the sums which would have been paid to the two sailors who deserted would be divided equally between the rest of the crew including Myrick. Myrick sued for the additional sum promised. The action failed, the reasoning of Lord Ellenborough being that the sailors, including Myrick, were obliged by their agreement for services to work the ship for the sum of £5 per month during the whole of its outward and return journey and that this obligation remained despite the fact that two of the crew had deserted. There was therefore no consideration given by the sailors for the promise to pay them an additional wage. They simply performed their existing duty. In an earlier decision, Harris v Watson,155 Lord Kenyon had reached a similar conclusion but

153 See para 6.41 et seq. 154 (1809) 2 Camp 317, (1809) 6 Esp 129. The two reports are not wholly the same. See also Harris v Carter (1854) 3 E & B 559. Subsequent cases on the question of whether the performance of an existing contractual obligation can be good consideration include Swain v West (Butchers) Ltd [1936] 1 All ER 224, and Sybron Corpn v Rochem Ltd [1984] Ch 112 relating to a promise given to an employee by an employer in return for the performance of contractual duties by the employee. 155 Harris v Watson (1791) Peake 102.

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The Place of Promissory Estoppel in the Law  6.60 rested his decision on grounds of public policy. Lord Ellenborough preferred to base his reasoning on the absence of consideration and this has become the established rationale of the principle.156 6.57  The principle to be derived from Stilk v Myrick, or the impact of that principle, has subsequently been affected by two further lines of authority. 6.58  First, there is the common law rule that a contract is voidable if it was made under duress.157 The duress may be actual or threatened physical harm to a person or to his possessions. A more modern development has been to include within the general principle the concept of economic duress. What this amounts to is that economic pressure to enter into a contract may render the contract voidable if the pressure was illegitimate and constituted a significant cause which induced a party subjected to the pressure to enter into the contract.158 A threat not to perform an existing contractual obligation may constitute economic duress. Therefore, where a party to a contract promises to make a payment beyond that contractually due because the other party threatens that without the additional payment he will not perform its obligations under the contract, the variation of the contract to include the extra payment is likely to be unenforceable in any event by reason of the principle of economic duress irrespective of whether the variation is also unenforceable for a lack of consideration. Of course, if the promise to make the extra payment is purely voluntary and not induced by any form of threat or duress then the promisor if he is unwilling to make the extra payment will be thrown back on the plea of a lack of consideration for his promise. 6.59  The second possible qualification was the concept of ‘practical’ consideration introduced by the Court of Appeal about 30 years ago in Williams v Roffey Bros & Nicholls (Contractors) Ltd.159 The concept has since had a chequered history culminating for the moment in recent observations in the Supreme Court. The Roffey Bros & Nicholls decision is summarised in the next paragraph and this is followed by an account of the rise, and what appears now to be the probable fall, of the concept. 6.60  The impact on the principle established by Stilk v Myrick160 and the reasoning of the Court of Appeal in Williams v Roffey Bros & Nicholls (Contractors) Ltd161 were as follows. A contractor who was refurbishing residential property entered into a carpentry ­sub-contract for a fixed sum. The contractor then agreed to make an additional payment to the subcontractor. There was no threat by the sub-contractor such as might constitute economic duress and the reasons for the contractor agreeing to make the additional payment were a belief that the sum agreed was low and an apprehension that the sub-contractor might not carry out his work on time so exposing the contractor to difficulties in performing its

156 Attention should perhaps be drawn to the statement of Lord Scott, delivering the judgment of the Privy Council, in Bolkiar v State of Brunei [2007] UKPC 63, para 27, that the change of position necessary to support a promissory estoppel could not be the discharge by the promisee of a clearly enforceable contractual obligation ‘unless there is clear evidence that but for the representation the person concerned would not have complied with the contractual obligation’. The last part of this statement appears on the face of it to cut across the essence of the rule in Stilk v Myrick. 157 Pao On v Lau Yiu Long [1980] AC 614. 158 The Evia Luck [1992] 2 AC 152, 156 (Lord Goff). 159 [1991] 1 QB 1. 160 See para 6.56 for the facts of Stilk v Myrick. 161 [1991] 1 QB 1.

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6.61  Promissory Estoppel own obligations to the employer. It was held that there was consideration for the promise of the additional payment to the sub-contractor, namely the practical or factual benefit which the contractor got in obtaining performance on time by the sub-contractor of his work and the avoidance of potential difficulties as regards the contractor’s own duties to the employer. Since there was on this reasoning consideration for the promise to pay the additional amount, that amount was recoverable under the law of contract. The decision does not purport to abrogate any aspect of the doctrine of consideration; it was said that the decision was only such as to ‘refine and limit’ the principle in Stilk v Myrick.162

(v)  ‘Practical’ Consideration 6.61  The rule of law derived from Pinnel’s Case163 and from the decision of the House of Lords in Foakes v Beer164 admits of little doubt. A promise by a creditor to accept a lesser sum than is due as a good discharge of the whole debt backed by no consideration is not enforceable and the creditor may sue for the whole debt. Equally, the rule in Stilk v Myrick165 admits of little doubt. A promise to pay an additional sum for the discharge of an existing obligation and backed by no consideration is also not enforceable and the additional sum cannot be recovered. The reason for both principles is the need for valuable consideration to support a promise which is not contained in a deed if that promise is to be enforceable under the English law of contract. 6.62  Two attacks have been made against these clear principles over the last half century or so. The first is the rise of promissory estoppel as a principle, derived from Victorian origins but now given new life and the status of an established principle following the decision of Denning J in Central London Property Trust Ltd v High Trees House Ltd.166 That attack has been successful within its prescribed limits at least as far as the principle in Foakes v Beer is concerned, and can be regarded in juridical terms as an exception to the doctrine of consideration and to that principle. A promise to accept a lesser sum in full discharge of a larger sum due, or to accept payment of a sum due on relaxed or extended terms, may be enforceable if the requirements of promissory estoppel are established, namely the requirement that the promisee has acted to his detriment or prejudice in reliance on the promise.167 The other attack, which relates to the principle in Foakes v Beer and to the principle in Stilk v Myrick, is the rise of the notion of ‘practical’ consideration. 6.63  The practical consideration line of reasoning is not a frontal attack on consideration itself. It is a suggestion that when a party makes a promise, which is not backed by consideration in the ordinary sense such as a cross-promise by the promisee, there may still in practical terms be consideration for the promise derived from the fact that the promisor sees some benefit to itself from securing the certainty of payment of a lesser sum or 162 ibid, 16 (Glidewell LJ). Some might consider that the so-called refinement was substantially an abrogation of the principle. It seems probable that in the majority of cases a party to a contract will only agree to pay an extra sum for its performance if it apprehends some difficulty to it if it does not agree to pay the extra amount. 163 (1602) 5 Co Rep 117a. 164 (1884) 9 App Cas 605. 165 (1809) 2 Camp 317. 166 [1947] KB 130. 167 There may still be some possible doubt whether detriment or prejudice is an essential element of promissory estoppel: see para 6.192. The prevailing view is that detriment is necessary.

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The Place of Promissory Estoppel in the Law  6.65 from securing the present discharge of some reduced obligation, something which would or might not happen apart from the promise. Thus, if A is owed £1,000 by B and B offers to pay at once £750 in full discharge of its obligation A may reason that it would be a benefit to it to have the certainty of the £750 in hand now rather than the uncertainty of having to sue for the full £1,000 in the future, particularly where B is in financial difficulties so that in the end A may not obtain anything or may obtain only a small part of the £1,000. It is this perceived benefit which is said to be the ‘practical’ consideration which does not subvert the law of consideration and renders the promise to accept the lesser sum enforceable. In much the same way a party which was owed an obligation to provide goods or services in return for an agreed sum may reason that it is to its benefit to promise to pay an additional sum in order to secure the certainty of the provision of the services or goods now rather than to take the risk that the goods and services may not be provided and that any action for damages for failure of the obligation to provide those goods or services in the future may provide little practical result or benefit. If practical consideration in this sense is a valid doctrine it has been correctly said that it must logically apply whatever the nature of the contract. In MWB Business Exchange Centres Ltd v Rock Advertising Ltd168 in the Court of Appeal Arden LJ correctly pointed out that: The principle that a benefit can in law be consideration for a promise must logically apply whatever the nature of the contract. It must also apply whether the promisee has at the same time agreed to render the same performance as he originally promised or to render a lesser performance, and whether the promisor has renewed its original promise or, as in the Roffey Bros & Nicholls case, agreed to pay more.

6.64  The emergence of practical completion in the sense just indicated did not have a long life. A few years after the Roffey Bros & Nicholls decision the Court of Appeal in In Re Selectmove Ltd169 declined to follow the earlier decision, making the point that the so-called practical consideration was that which the House of Lords in Foakes v Beer had held was not adequate consideration such as was needed to support a contractual obligation. In MWB Business Exchange Centres Ltd v Rock Advertising Ltd,170 the Court of Appeal appeared to prefer the approach which was adopted in the Roffey Bros & Nicholls decision and, having considered the decision of the House of Lords in Foakes v Beer, held that there was an additional consideration which flowed to the benefit of MWB apart from the receipt of an immediate payment and the revised schedule for payments, such as the prospect of retaining Rock Advertising as licensees, which constituted practical consideration and so supported and rendered enforceable the promise to accept the immediate payment and the revised schedule as a good discharge of the obligations of Rock Advertising under the licence.171 6.65  The most recent contribution to the present question is the very recent decision of the Supreme Court in the Rock Advertising case. The Supreme Court decided, reversing the decision of the Court of Appeal, that the promise to accept the immediate payment and the deferred schedule of payments was a purported oral modification of the original licence



168 [2017]

QB 604, para 79. 1 WLR 474. 170 [2017] QB 604. 171 ibid, para 48 (Kitchen LJ). 169 [1995]

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6.66  Promissory Estoppel agreement and so was rendered invalid by the no oral modification clause in the original licence agreement.172 The Supreme Court agreed with the Court of Appeal that there was no question of an estoppel if only because of the minimal steps taken by Rock Advertising in reliance on any promise made to them. Consequently, there was no need for the Supreme Court to reach a decision on the practical consideration issue since the purported contract said to be supported by that consideration was invalid for a different reason. However, Lord Sumption considered that the consideration question, like the no oral modification clause question, was a truly fundamental issue in the law of contract. He described the consideration question as being ‘whether an agreement whose sole effect is to vary a contract to pay money but substituting an obligation to pay less money or the same money later is supported by consideration’. On the consideration question he offered the following observation: In Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 the Court of Appeal held that an expectation of commercial advantage was good consideration. The problem about this was that practical expectation of benefit was the very thing which the House of Lords held not to be adequate consideration in Foakes v Beer (1884) 9 App Cas 605: see, in particular, p 622, per Lord Blackburn. There are arguable points of distinction, although the arguments are somewhat forced. A differently constituted Court of Appeal made these points in In Re Selectmove Ltd [1995] 1 WLR 474, and declined to follow Williams v Roffey Bros & Nicholls (Contractors) Ltd. The reality is that any decision on this point is likely to involve a re-examination of the decision in Foakes v Beer. It is probably ripe for re-examination. But if it is to be overruled or its effect substantially modified, it should be before an enlarged panel of the court and in a case where the decision would be more than obiter dictum.173

6.66  In these circumstances the law today appears to be that the rule in Pinnel’s Case and the decision in Foakes v Beer are to be taken as remaining good law, and are not to be substantially subverted by notions of ‘practical consideration’ unless and until Foakes v Beer is examined by the Supreme Court and a decision made as to whether that which was held in Foakes v Beer is to be confirmed, modified or removed. This situation at least leaves the law tolerably clear and avoids the conflict between recent decisions of the Court of Appeal and avoids the attempt to conjure consideration out of events which may not truly constitute consideration at all.

(vi)  Promissory Estoppel and the Stilk v Myrick Principle 6.67  In the light of these qualifications, it needs to be asked what is left of the practical application of the principle in Stilk v Myrick. An agreement by a party to a contract to make some additional payment to or confer some additional benefit on the other party in return for that other party doing that which it is contractually bound to do will generally only arise in one of two situations. One situation is where the other party threatens not to perform its obligations unless it is given the additional payment or benefit. This will normally amount to economic duress such that the agreement to pay the additional amount or benefit will be voidable in any event. No question of consideration will then arise. The other situation



172 [2019] 173 ibid,

AC 119. para 18.

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The Place of Promissory Estoppel in the Law  6.68 is that the first party sees some practical benefit to itself, such as obtaining certainty of performance by the other party of the contractual obligations, which would make it worth its while to promise the extra benefit. In that case, and if the law is applied in accordance with the decision in Williams v Roffey Bros & Nicholls (Contractors) Ltd, there will be likely to be sufficient consideration by way of the benefit perceived by the party promising the extra sum to support the agreement to pay that sum. However, what was said in the Supreme Court in Rock Advertising indicates that pending a full re-examination of the matter by that Court, the principle in Foakes v Beer should be applied untrammelled by the concept of practical consideration as enunciated by the Court of Appeal in recent decisions. It follows that the rule in Stilk v Myrick is likely for the time being to remain an important area of the application of the doctrine of consideration. 6.68  Although the principle in Stilk v Myrick is discussed in connection with promissory estoppel it seems unlikely that this or any other form of estoppel can play any strong part in the type of factual situation in which the Stilk v Myrick principle may still be important today. The paradigm situation is that B owes to A the performance of contractual duties in return for an agreed payment by A, and A promises to B to pay to him an additional sum above that agreed in return for the performance or the completion of the contractual duties. B performs the duties and sues A for the additional sum. A refuses to pay on the plea that there was no consideration for the promise. It is difficult to see how promissory estoppel could have any major bearing on the issue which arises. If there was sufficient consideration for A’s promise, such as additional work which B agrees to carry out, B will succeed in his claim and no estoppel will have any relevance. If B is to fail in his claim because of an absence of consideration there appears to be no way in which a promissory estoppel could assist him in enforcing A’s promise. A promissory estoppel can arise where B owes a contractual duty to A and A promises that he will not enforce or fully enforce that duty and B acts to his detriment in reliance on that promise.174 A part of the requirements of the estoppel can in a sense, and perhaps with some strain, be satisfied in the paradigm situation just described. B does owe a contractual obligation to A. A in a sense promises that he will not enforce that obligation in that he says that he will not require B to perform the duties for the original amount agreed but will pay to B an additional amount for performance. B on his part may act in reliance on that promise, for instance by incurring liabilities in the expectation of receiving the additional sum. Despite all of that, B will not be able to enforce the promise by A to pay the additional sum since, in the absence of a contract backed by consideration to pay that sum, B’s only cause of action will be an alleged promissory estoppel. It is well established that promissory estoppel cannot operate so as to create a cause of action founded on a promise where there is no consideration for that promise. To allow a promissory estoppel to validate the promise in these circumstances would be to override in a general way the doctrine of consideration, to use the estoppel as a cause of action, and to overrule Combe v Combe.175 Consequently, even in these circumstances, and on the above analysis of the situation, it appears that the principle of promissory estoppel will not assist B and will not be relevant to the determination of the issue between the parties.



174 See

para 6.24 for a summary of the essential elements of the estoppel. 2 KB 215. See para 6.15.

175 [1951]

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6.69  Promissory Estoppel

(vii) Summary 6.69  An examination of the relationship between promissory estoppel and the doctrine of consideration as a fundamental component of English contract law has involved a discussion of the rule in Pinnel’s Case, the application and elaboration of that rule in Foakes v Beer, the question of the Stilk v Myrick principle, followed by a further discussion of conflicting decisions in the Court of Appeal on the impact on these long established rules of what can be called practical consideration. Following the recent observations of Lord Sumption in the Supreme Court in the Rock Advertising decision, it is now possible to summarise the present state of the law on the above subjects in a number of short propositions. (i) If B owes a contractual obligation, including an obligation to pay a sum of money, to A and A promises to accept a lesser obligation, such as a payment of a part of the money due or a payment at a later date than the date when payment is due, as a full discharge of the original obligation, that promise is in principle unenforceable for lack of consideration. This is the effect of Pinnel’s Case and of Foakes v Beer. (ii) It may occur that B acts in reliance on the promise to accept the lesser obligation as a full discharge of his original obligation, and in doing so acts to his detriment, such that it would be unconscionable if A was permitted to resile from his promise. In these circumstances there will be a promissory estoppel such that A is kept, in whole or in part, to his promise despite the absence of consideration to support it. (iii) However, if the promise to accept a lesser obligation as the discharge of the greater obligation has been induced by economic duress applied by B, such as a threat not to observe the obligation when B was able to observe it, it is unlikely to be unconscionable to allow A to resile from his promise to accept the lesser obligation as a full discharge of the original obligation and for that reason no promissory estoppel will arise. (iv) A may expect some practical or commercial benefit to accrue to him as a result of the promise to accept a lesser obligation, such as the immediate and certain performance of the lesser obligation, but the effect of Foakes v Beer, and thus the current law, is that this expectation is not in itself consideration which results in the payment being enforceable. (v) If B owes a contractual obligation to A, and A promises to make a further payment or to provide some further benefit to B in return for the performance of that obligation by B, that promise is unenforceable for lack of consideration. This is the effect of the principle in Stilk v Myrick. (vi) It may occur in the circumstances last described that B acted in reliance on the promise, and in so acting acted to his detriment such as by incurring expenditure which he would not otherwise have incurred and could not otherwise afford. Even so, B will not be able to enforce the promise to make a further payment by proceedings against A in reliance on a promissory estoppel (a) because the enforcement would be contrary to the doctrine of consideration, and (b) because in such proceedings B would be seeking to use the promissory estoppel as a cause of action in its own right. (vii) A may expect some practical or commercial benefit as a result of the promise to pay an additional sum or confer some additional benefit for the performance by B of B’s obligation, such as the certainty of the timely performance of the obligation, but 432

The Place of Promissory Estoppel in the Law  6.71 the effect of Stilk v Myrick and the Rock Advertising decisions, and thus the existing law, is that this expectation is not consideration which results in the promise being enforceable. (viii) The time is probably ripe for a re-examination by the Supreme Court of the principles of law as stated in these propositions.

5.  The Distinction between a Contract and an Estoppel 6.70  The concepts of promissory estoppel and contract are in a sense intertwined in English private law. It has been explained that enforcement of a promise by reason of a promissory estoppel is a significant exception to the doctrine of consideration in the law of contract but an exception which applies only in carefully limited circumstances. Even so, it is essential that the two concepts are kept carefully apart. It has been said that even if an estoppel may give rise to a contractual obligation it would be a strange doctrine that a contract should give rise to an estoppel.176 A vivid illustration of the difference between a contract and a promissory estoppel, as well as of the legal confusion which can arise from not appreciating the essential difference between the two areas of law, is shown by the decision of the House of Lords in Secretary of State for Employment v Globe Elastic Thread Co Ltd.177 An employee was told that there was no more work for him but that he could transfer his employment to another company in which his employer had an interest. The employee agreed to this proposal on an assurance by the companies that his period of employment with the first company would be counted towards his statutory entitlement to redundancy benefits in the future. When the employee was subsequently made redundant by the second company, it was held that under the relevant legislation his period of employment by the first company was not to be counted in assessing the redundancy payment due, since under the relevant statutory rules there was not a sufficient connection between the two companies to bring this about. 6.71  The significance of the decision for promissory estoppel is that an industrial tribunal held that the assurances or promise given to the employee constituted a promissory estoppel binding on the second company that any redundancy payment would be calculated taking into account the period of his employment by the first company.178 The House of Lords held

176 Secretary of State for Employment v Globe Elastic Thread Co Ltd [1980] AC 506, 518 (Lord Wilberforce). One possibility of a contract giving rise to an estoppel is that an agreed statement in a contract that some fact is true could give rise to what has sometimes been called contractual estoppel. This possibility is explained in ch 3, part (G), in connection with estoppel by representation. It is not apparent how a promissory estoppel, the essence of which is to prevent a person from asserting a legal right which would otherwise be available to that person, could give rise to a contractual obligation. The statement that a contract cannot give rise to an estoppel should not of course obscure the fact that an essential element of promissory estoppel is that at the time of the promise which creates the estoppel there is an existing transaction, usually a contract, between the parties to the estoppel which gives rise to enforceable legal rights. Indeed, this is one main element of the principle of promissory estoppel. Hence, while a contract cannot give rise to an estoppel a promissory estoppel may affect the enforceability of the rights under an existing contract, either abrogating those rights or suspending their operation. 177 [1980] AC 506. 178 The decision technically concerned the question whether the second employer could claim a rebate under the statutory provisions from the Secretary of State in respect of the amount which, in accordance with the decision of an industrial tribunal, it had paid to its employee.

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6.72  Promissory Estoppel that the arrangement between the employee and the employers was a contract for a breach of which the employee could sue in the courts.179 As such it could not be an estoppel. The error of the Court of Appeal in this and a previous decision180 had been to confuse what was an ordinary contract with an estoppel. Lord Wilberforce left open the question of whether, if anything in the nature of an estoppel arose, and whatever was its effect between an employer and an employee, that estoppel could confer on a tribunal a jurisdiction beyond that given by the relevant legislation.181 Lord Wilberforce also said that a promissory estoppel between an employer and his employee could not bind the Secretary of State who was being called upon under the legislation to make a rebate payment to the employer in respect of the enhanced redundancy payment paid to the employee. The Globe Elastic decision therefore raises, in addition to the distinction between a contract and an estoppel, two other questions of principle relating to promissory estoppel, namely (a) the effect of an estoppel on a statutory scheme such as that of redundancy payments, and (b) the effect of an estoppel on third parties.182 These subjects are considered in connection with estoppel generally in chapter two. The distinction between the enforcement of contractual promises and equitable principles such as promissory estoppel has been clearly put in the High Court of Australia where it was said that what distinguishes the equitable principle from the enforcement of contractual obligations is that there is no legally binding promise. ‘If there is such a promise, then the Plaintiff must resort to the law of contract to enforce it, it being the function of equity to supplement the law not to replace it’.183

(D)  Permanent or Suspensory Effect 1.  The Principle 6.72  A question which is sometimes raised is whether a promissory estoppel can have a permanent effect or can have only a suspensory or temporary effect. The core of the principle of promissory estoppel is that a person who has enforceable legal rights may be precluded in some way or to some degree from enforcing those rights because he has promised not to do so. Given this general proposition there seems no reason in principle why in appropriate circumstances the loss of the capacity to enforce legal rights which is the effect of the estoppel should not be total and permanent in its effect. Whether the estoppel will have this effect 179 Lord Wilberforce at [1980] AC 506, 518, explained the position as follows: ‘There was a contract with the employee that he would retain the benefit of his previous employment. To convert this into an estoppel is to turn the doctrine of promissory estoppel (the validity or scope of which I do not now examine) upside down’. 180 Evenden v Guildford City Association Football Club [1975] QB 917, 923–24 (Lord Denning MR). This decision was overruled. 181 [1980] AC 506, 519. The general question of whether the jurisdiction of a court or tribunal can be extended or altered by the operation of an estoppel is examined as a question applicable to estoppel generally in ch 2, part (E). The fundamental principle is that the jurisdiction cannot be altered by an estoppel except as regards procedural requirements. 182 The question of whether an estoppel can bind a third party usually arises where the estoppel concerns an interest in land and the interest of the person estopped is transferred before full effect has been given to the estoppel. The Globe Elastic decision has no bearing on this type of situation. The Secretary of State was not of course in any sense the successor in title of the second employer who had given the assurance. 183 Giumelli v Giumelli (1999) 196 CLR 101, para 35.

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Permanent or Suspensory Effect  6.73 must depend on the facts of each case and especially on the terms of the promise which underlies the estoppel and on the nature of the reliance by the promisee on that promise. In practice it is likely that the majority of applications of the principle of promissory estoppel will result in a suspension for a limited period of the capacity to enforce legal rights, but there seems no justification for a rigid rule such as has sometimes been suggested that the effect must always be suspensory only. The underlying rationale of promissory estoppel, as of estoppel generally, is justice and morality,184 and there seems no justification for erecting a principle of law that in no circumstances can the effect of a promissory estoppel be the permanent deprivation of the capacity of the promisor to enforce a legal right or a part of a legal right.185 This part of the chapter is concerned primarily with whether a promissory estoppel operates with a permanent or suspensory effect in regard to the right of the promisor which is the subject of a promise. A court has a wide and general discretion on how and to what extent the estoppel is to operate and this subject is discussed later.186 6.73  There appears to be no decision in which it has been held as part of the ratio decidendi that a promissory estoppel can in principle and in all instances have only a suspensory effect. Nor has any justification been advanced for the creation of such a rule. However, it is frequently said, and no doubt correctly said,187 that the effect of the estoppel will generally be suspensory and the origin of the principle of promissory estoppel in Hughes v Metropolitan Rly Co188 is sometimes referred to as showing the essentially suspensory effect of the principle. It has been said that to allow the principle to operate so as to have the effect of permanently depriving a promisor of his rights would conflict with other established principles of law. For example, it has been suggested that the operation of the principle of promissory estoppel such that it could in an appropriate case have a permanent effect would involve the overruling of the decision of the House of Lords in Foakes v Beer.189 The ratio of Foakes v Beer is that an undertaking to accept a lesser obligation in place of a wider enforceable obligation is unenforceable because there is no consideration for the undertaking or promise. The rule so stated goes back to Pinnel’s Case in 1602.190 The relationship between this aspect of the law of consideration and the principle of promissory estoppel has been considered more fully earlier in this chapter.191 In fact, the use of promissory estoppel to

184 See ch 1, para 1.1. 185 The law has been aptly stated to this effect in a recent decision by Kitchin LJ in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2017] QB 604, para 61, where, after a review of the authorities and a statement of the principle of promissory estoppel, he said: ‘It may be the case that it would be inequitable to go back upon his promise without giving reasonable notice, as in the Tool Metal case, or it may be that it would be inequitable to allow the promisor to go back on his promise at all with the result that the right is extinguished’. This decision was reversed on a different point in the Supreme Court: see [2019] AC 119. See also the statement of Lord Denning MR, who may justifiably be regarded as the progenitor of promissory estoppel in its modern form, in D & C Builders Ltd v Rees [1966] 2 QB 617, 624, that the estoppel may be applied to preclude the enforcement of legal rights as well as to suspend legal rights. For the D & C Builders case see para 6.16. 186 See para 6.99 et seq, and for a more general explanation of the form of relief which may be given by a court see para 6.209 et seq. 187 See, eg, Kim v Chasewood Park Residents Ltd [2013] EWCA Civ 239, para 41 (Parker LJ). 188 (1877) 2 App Cas 439. 189 (1884) 9 App Cas 605. This suggestion is made in Treitel, The Law of Contract, 14th edn (Sweet & Maxwell, 2015) para 3.113. See para 6.48 for the facts of Foakes v Beer. 190 (1602) 5 Co Rep 117a. See para 6.47 for the facts of Pinnel’s Case. 191 See para 6.52 et seq.

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6.74  Promissory Estoppel bring about a permanent cessation of the enforceability of a legal right would not overrule, in the sense of destroying, the rule in Pinnel’s Case or its application in Foakes v Beer. What the effect of promissory estoppel does is to create limited and carefully defined circumstances in which the rule in Pinnel’s Case and in Foakes v Beer is not applied because justice in those circumstances demands this result. The rule in Pinnel’s Case would remain unaffected in other circumstances when the particular requirements of a promissory estoppel could not be established. Further, it is not apparent why the substance of the rule in Pinnel’s Case as elaborated in Foakes v Beer is not affected by a promissory estoppel which has only a suspensory effect, for example where there is a promise by a creditor not to enforce the payment of a sum of money due for a limited period of time. In other words, if a qualification can properly be made to the rule in Pinnel’s Case there is no logical reason for confining that qualification to circumstances in which a promise not to enforce a legal right has only suspensory effect as opposed to such a promise having effect for all future time.

2.  The Three Categories (i)  The Categories Distinguished 6.74  It is useful to differentiate between three possible cases or three possible ways in which as regards the enforcement of contractual rights a promissory estoppel may operate. (a) The estoppel may operate so as permanently to deprive a party to a contract of its capacity to enforce a right or rights under that contract. (b) The estoppel may operate so as to deprive a party to a contract of its capacity to enforce a right or rights under that contract for a limited period only. The limit may be until a date which is certain or until the happening of some future event the occurrence or timing of which, or both, are uncertain. At the end of the limited period the rights will again become enforceable as to the future. (c) The estoppel may operate so as to deprive a party to a contract of its capacity to enforce a right or rights under that contract during a limited period but with the effect that after the end of that period that party will be able not only to enforce rights which accrue due in the future, but also rights which have accrued due in the past but were not for a time enforceable because of the period of suspension. The three cases as stated refer to contractual rights but promissory estoppel can in principle operate in respect of any legal rights and the same classification would apply to such other rights. 6.75  In the last case, the capacity to enforce legal rights is never completely removed as regards rights which have accrued due at any time but the capacity to enforce the rights is simply postponed for a period with the ability at the end of that period to enforce the rights which have accrued due during the period of postponement. The difference between the second and third cases will be most apparent where the duty of a party to a contract is to make certain payments at regular and specified intervals. The difference between the second and third cases may be illustrated by an example. A party to a contract may have a duty to pay regular sums by monthly instalments. A promise not to enforce the payments for six months may mean that by reason of an estoppel the right to enforce payment of the 436

Permanent or Suspensory Effect  6.77 instalments may be removed for six months so that those instalments are never payable, or the effect of estoppel may mean that during the six months instalments will not be payable but at the end of the six months the arrears over that period become payable as well as future instalments becoming payable as they subsequently fall due. The three categories of the operation of the estoppel distinguished in the last paragraph may be called respectively the permanent abrogation of duties under a contract, the suspension for a limited period of duties under a contract, and the postponement of the time at which duties under the contract must be performed. 6.76  It is possible that a right, such as a right to determine a contract or a right to be paid some monetary sum, can arise on the occurrence or non-occurrence of some event. The enforcement of the right may be suspended for a period but may revive if the occurrence or non-occurrence of the event happens at a date during the period of suspension. In such a case, the effect of the estoppel is in one sense permanent or abrogatory since the specific right to determine the contract or to receive the payment at the contractually stipulated date is permanently lost. However, an equivalent right arises by reference to a later date at the end of the period of suspension. The decision in Hughes v Metropolitan Rly Co,192 which is one of the origins of the principle of promissory estoppel, is of this nature. In this type of case it is a matter mainly of semantics to determine whether what occurs is the abrogation of a right and its replacement by an equivalent right differing only in its timing, or a ­suspension for a period of the right.

(ii)  Matters Most Relevant to the Distinction 6.77  The category into which each application of a promissory estoppel falls depends on all relevant matters but particularly on the nature and content of the promise, on the nature of the rights to which the promise relates, and on the nature and timing of the detriment which the promisee would suffer if the promise was not observed. In many cases the promise will be, or can be interpreted to be, one which by its terms signifies that the obligation of a party to the contract to comply with its terms is to be suspended for a time rather than permanently ended. The second matter, the nature of the contractual obligation of the promisee which is affected, may be such that it is unlikely that the intention of the promisor was that the duty by the promisee to perform the obligation should never in the future be or become enforceable. The third matter, the nature of the reliance on the promise by the promisee, is important. A purpose of a promissory estoppel is to prevent the promisee from suffering the detriment which he would suffer if he has acted upon the promise yet the promise not to enforce rights is wholly unenforceable by him. If the suspension of the contractual duties of the promisee for a limited period will enable the promisee to restore himself to his original position and so avoid further detriment to him the estoppel is likely to have only a suspensory effect. What is important to bear in mind is that the exact linguistic context of a promise which founds an estoppel, unlike that of a promise which founds a contract, may not be decisive. If the promise not to enforce a legal obligation is by its express terms stated to operate for a limited time it seems most unlikely that a court would give it any extended temporal effect. On the other hand, if the promise was made without

192 (1877)

2 App Cas 439.

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6.78  Promissory Estoppel any limitation of time a court might well conclude that any injustice to the promisee could be avoided if the promisor was held to the promise but only until he gave reasonable notice that he was to resume his full legal rights. These two different situations illustrate the critical difference between the two types of promise in that in the case of a contractual promise a court will give effect to the exact words used in the promise, whereas in giving effect to a promise which founds a promissory estoppel, a court will of course pay close regard to the terms of the promise, but in the final analysis the function of the court is to give effect to the equity created such that the remedy given is more flexible. A number of particular types of circumstances where the effect of the estoppel is likely to be held to be suspensory are described later in this part of the chapter.193 6.78  A further important matter in considering the present question is that a court has a discretion on how to give effect to the equitable principle which underlies promissory estoppel. Promissory estoppel, as an equitable doctrine and a form of equitable estoppel, rests on the need to protect a person against an unjust detriment and is flexible in its operation. A court has a discretion on how the estoppel is to operate, as it does with proprietary estoppel as the other of the two forms of equitable estoppel, and such as is not present, or certainly not present to the same extent, with other forms of estoppel such as estoppel by deed where a party will be held to a statement made by him in a deed irrespective of any prejudice to another party.194 ‘The effect of an equitable estoppel is to give the court power to do what is equitable in all the circumstances’.195 A consequence of this flexibility is that where the effect of the estoppel is either suspensory or is simply a postponement of duties, ie, it falls within the second or third of the categories mentioned earlier,196 the court may direct that the enforcement of rights by a promisor is permitted to resume only when some notice has been given by him or only upon terms.197 It is sometimes said that the court will impose on the promisor the minimum burden which is necessary to give effect to the equity created by a promissory estoppel.198 This approach to the appropriate remedy for an equitable estoppel can be described as the minimum equity, this is the minimum amount of interference with the legal rights of the parties which is needed if justice is to be done. 6.79  The authorities by which the details of the application of the principle of promissory estoppel have been built up illustrate that the operation of the estoppel may fall within any of the three categories of operation mentioned earlier.199 The general tendency has been to

193 See para 6.91 et seq. 194 See ch 4, para 4.45 et seq. 195 Roebuck v Mongovin [1994] 1 All ER 568, 575 (Lord Browne-Wilkinson). Lord Browne-Wilkinson referred to the equally flexible power of the court in the other form of equitable estoppel which is proprietary estoppel. There is some dispute on whether a common law estoppel by representation can be operated flexibly such that it can in an appropriate case have effect as regards only a part of the representation of fact made, a so-called pro tanto effect, or can even be ordered by the court to have effect subject to a condition. See ch 3, part (F). 196 See para 6.74. Such a direction or order seems more likely to be appropriate in the second category of case than in the third category since a promise in the third category, a postponement of the carrying out of an obligation, is likely to specify exactly how long the postponement is to be. 197 Notice and terms are discussed in para 6.99 et seq. 198 Crabb v Arun District Council [1976] Ch 179, a decision on proprietary estoppel, being the creation of an easement, but in which the observation of Scarman LJ was directed towards promissory and proprietary estoppel which he declined to separate from each other. The question of the minimum equity is discussed in connection with proprietary estoppel in ch 7, para 7.273 et seq. 199 See para 6.74.

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Permanent or Suspensory Effect  6.81 hold that the ability of a party to a contract to enforce a contractual right is suspended rather than wholly and permanently destroyed, either because that is the substance of what that party has promised, or because prejudice to the other party can adequately be avoided by suspending rather than permanently destroying the ability to enforce a contractual right. In addition, there is a suggestion that the merely suspensory effect of the estoppel may create less conflict with the fundamental principle of law that a promise is only enforceable if it is supported by consideration.200 Examples will now be given from the decided cases of the three categories of operation. The facts and the general importance of some of these cases in the development of promissory estoppel have been explained earlier in this chapter.

3.  The First Category: Permanent Removal of Rights 6.80  An example of the first category, the permanent removal of a right, is at any rate on one analysis Hughes v Metropolitan Rly Co.201 The promise expressed, or inferred from the language of the landlord, was such that the tenants’ duty of repair within six months after notice given to them was not to be applicable during the period of the negotiations for the purchase by the tenants of the freehold. It follows that the landlord’s right to terminate the lease at the end of the six months’ notice given for a failure to repair before the end of that specific period was lost. That specific right as at that date was lost permanently. A further right to terminate the lease would have taken effect if the tenants had not carried out the repairs after the extended period following the end of the period of negotiations, and leaving that period out of the six months calculation, but that further right never arose since it seems that the tenants did carry out the repairs before the end of the extended period. It is correct that the right in general and in principle to terminate the lease after a failure to repair following a six months’ notice to repair was not destroyed and the substituted right of the landlord to terminate the lease if the repairs were not carried out by the end of the extended period was not destroyed. Nonetheless, the specific right to terminate the lease at the end of the originally specified six months was, by reason of the estoppel, lost permanently. The reason for the permanent abrogation of that right was that on the facts of the case as a particular right exercisable at a particular time it could never as such revive. In most cases of this sort the strict analysis may be that a specific right exercisable in given circumstances at a specific time is abrogated and is replaced by an equivalent substituted right exercisable at a later time. As mentioned, whether this process means that the estoppel has an abrogatory or suspensory or substitutory effect may be one more of semantics than of substance. Indeed, if cases of the Hughes type are regarded as a permanent abrogation of a legal right then a number of instances of promissory estoppel usually considered as falling into the second of the three categories identified earlier will be abrogatory in character. 6.81  A possibly clearer illustration of the permanent removal of a right by reason of a promissory estoppel derived from an undertaking not to enforce that right is

200 The relationship between promissory estoppel and the doctrine of consideration is explained in para 6.40 et seq. 201 (1877) 2 App Cas 439. The facts are set out in para 6.8.

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6.82  Promissory Estoppel Brikom Investments Ltd v Carr.202 The landlords had let flats with a covenant by them to repair the roof but with the tenants being required to contribute towards the costs of the repair. Prior to the grant of the leases the landlords had stated to the tenants, in some cases orally and in some cases in writing, that they would not claim contributions from the tenants to the costs of the repair. It was held by the Court of Appeal that the landlords were not entitled to recover the contributions either against the original lessees or against assignees of the leases. The majority of the Court203 preferred to rest their decision on the existence of a collateral contract not to enforce the payment of contributions in return for which the tenants entered into the leases, with the benefit of that contract passing to assignees of the leases. Lord Denning MR held that the statements of the landlords created a promissory estoppel which permanently prevented the landlords from asserting their contractual right to obtain contributions from the tenants.204 He considered that there was no reason why the representation as to future conduct which creates a promissory estoppel should not precede the entering into the contract rights under which cannot be enforced because of the promise.205 If this is correct, the statements of the landlords are examples of the creation of a promissory estoppel, and their effect was the permanent loss of the right of the landlords to claim contributions towards the costs of roof repairs. The nature of the promise made by the landlords and the nature of the right to recover contributions dictated the result as just stated. 6.82  Reference can also be made to Pearl Carriers Inc v Japan Line Ltd (The Chemical Venture)206 as an example of a right having been completely and permanently lost by reason of a promissory estoppel. Under a charterparty agreement, the owners of a ship were entitled to object to the ship being taken to a port where it might be damaged by various risks such as war or hostilities. The conduct of the shipowners was held to be an unequivocal promise by them that they would not object to the passage of the ship to a Kuwaiti port during the Iraq–Iran conflict. This promise prevented the owners from obtaining damages when the ship was damaged during its visit to Kuwait. The effect of the estoppel was therefore to abrogate totally and permanently the right of the shipowners to damages in the circumstances which occurred.207 6.83  The facts of D & C Builders Ltd v Rees208 demonstrate that in appropriate circumstances a right to a part of a sum contractually due may be permanently lost as a result of a promissory estoppel. In that case, a promise to accept a lesser sum as a full discharge of a

202 Brikom Investments Ltd v Carr [1979] QB 467. 203 Roskill and Cumming-Bruce LJJ. 204 Lord Denning said that the benefit of the estoppel ran with the land so that the benefit could be obtained by assignees of the original lessees. The general question of the effect of an estoppel on third parties is discussed in ch 2, part (I). 205 It is explained in para 6.162 that the reasoning of the majority is to be preferred as a justification of the decision of the Court. The difficulty in the reasoning of Lord Denning is that it is an essential element of a promissory estoppel that the promise which creates the estoppel is not to enforce rights under a legal transaction which created those rights and which existed at the time when the promise was made. At the time of the promise not to enforce the contributions there were no prior enforceable legal rights. 206 Pearl Carriers Inc v Japan Line Ltd (The Chemical Venture) [1993] 1 Lloyd’s Rep 508. 207 Even this decision can be analysed as the suspension of the right to obtain damages for a particular breach of the charterparty but leaving the possibility of enforcement for any subsequent breach. 208 [1966] 2 QB 617.

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Permanent or Suspensory Effect  6.85 duty to pay a larger sum was not enforced as a promissory estoppel since the conduct of the promisee, which amounted to economic duress,209 was such that it was not inequitable to permit the promisor to enforce the contractual debt in full despite the promise not to do so. Even so, if the facts had justified it, and the effect of economic duress had not been present, an estoppel might, at any rate in the view of Lord Denning, have prevented the promisor from recovering the whole of the debt contractually due to it so that the effect would have been that it would have been permanently deprived of the right to recover an element of the debt. This decision is bound up with the rule in Pinnel’s Case,210 as applied by the House of Lords in Foakes v Beer,211 that a promise to accept part payment in substitution for a whole payment is unenforceable for lack of consideration. The point to be noted is that when the purity of the rule in Pinnel’s Case can be limited in the particular circumstances of a promissory estoppel, the effect of the estoppel is likely to be a permanent abrogation of a right to recover a part of a sum of money which would otherwise be due.212 6.84  It is scarcely necessary to continue to multiply illustrations of decisions in which a specific right under a contract was, or could have been, permanently lost as a consequence of a promissory estoppel. Even so, attention may usefully be drawn to a few other instances. One is Charles Rickards v Oppenheim213 in which a promise not to treat a contract as at an end following a repudiatory breach was enforced under the principle of promissory estoppel. The effect was of course that of destroying permanently the right which would have otherwise existed at that time to treat the contract as at an end by reason of that breach. Mention may also be made of Maharaj v Chand,214 in which a man who had acquired a property lived in it with a woman and children and promised to her that it would be a permanent home for her and her children. This was held to create a promissory estoppel which prevented the eviction of the woman and the children and the estoppel was obviously of permanent effect. 6.85  One of the clearest statements of the potentially permanent effect of a promissory estoppel is that found in Collier v P & MJ Wright (Holdings) Ltd.215 A partner in a firm was jointly liable with his partners for an amount of money payable by the firm. He alleged that an agreement had been made between him and the creditors that if he paid a certain sum each month up to a certain limit his liability would end. He paid the amount stated. It was held in insolvency proceedings that the partner had shown a real triable issue that his liability was discharged. The partner’s case was that there was a promissory estoppel which prevented the creditors from suing him for a sum in excess of what he agreed to pay and did 209 See para 6.16. 210 (1602) 5 Co Rep 117a. 211 (1884) 9 App Cas 605. The operation of the rule in Pinnel’s Case, together with the decision of the House of Lords in Foakes v Beer, under the law today, and having regard to what was said in the Supreme Court in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119, is summarised in para 6.69. 212 There could of course be more complex promises which would be rendered unenforceable by an absence of consideration in accordance with the rule in Pinnel’s Case unless rescued by the principle of promissory estoppel, such as a promise that a debt due need not be payable for a certain period or a promise that only a part of a debt need be paid and that that part need not be paid for a certain period. In both cases, if there was a promissory ­estoppel which rendered the promise enforceable, the effect would be wholly or partly suspensory. 213 [1950] 1 KB 616. 214 Maharaj v Chand [1986] AC 898. See also below (n 284). It may be that this decision is better analysed as an example of proprietary estoppel since what was created was a right to occupy land. 215 [2008] 1 WLR 643.

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6.86  Promissory Estoppel pay in discharge of his greater liability. The interest in the case is in the statement of principle by Arden LJ who said: ‘The effect of promissory estoppel is usually suspensory but, if the effect of resiling is sufficiently inequitable, a debtor may be able to show that the right to receive the debt is not merely postponed but extinguished’.216 It may be that in the light of these authorities the correct statement of the law is that, if a debtor can show that as a result of a promise made to him to accept payment of a part of his debt in discharge of the whole it is inequitable, usually because of his actions in reliance on this promise, that he should be called upon to pay the whole, then his liability to pay the whole will be permanently extinguished. This is an obvious example of the permanent abrogation of a right or of a part of a right. A very recent decision in which it was stated that a promissory estoppel could in an appropriate case have the effect of suspending or extinguishing a right is MWB Business Exchange Centres Ltd v Rock Advertising Ltd.217

4.  The Second Category: Suspension of Rights 6.86  Moving to the second category, there are numerous examples of promissory estoppel having a purely suspensory effect, as one would expect if that is the more usual effect of the principle. The obvious example is the High Trees case,218 regarded as the modern resuscitation or refreshing of the principle. The promise by the landlords under a 99-year lease to accept only a half of the rent endured only during the period of the Second World War, that period running from the giving of the promise to accept limited rent in 1940 to the end of the war in 1945. It is of interest that the limitation of the promise derived not from the express terms of the promise, but from the inference of the Court from the circumstances of how long the limitation was intended to endure. 6.87  A further example of what was clearly a suspensory effect of a right is Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd219 where the express promise was not to enforce payment of a sum until a new agreement was made. Obviously this promise was not intended to end permanently the duty to pay the sum. This decision raises the question of when and how a suspensory effect in relation to a contractual obligation can be brought to an end and that matter is dealt with below.220 6.88  The Victorian cases which were the genesis of promissory estoppel as a principle of law can also be regarded on one analysis as operating to suspend rights. The decision in Hughes v Metropolitan Rly Co221 abrogated the right of a landlord to determine a lease at a specific given date which he would otherwise have had but did not wholly destroy

216 ibid, para 37. Longmore LJ was more cautious in his observations on promissory estoppel. 217 [2017] QB 604, para 56 (Kitchen LJ). This decision was reversed on appeal on another point by the Supreme Court at [2019] AC 119 in what is a leading authority on the possibility of an oral modification of a contract which contains a no oral modification clause. This last subject is examined separately in ch 3, para 3.81. The Supreme Court did not find it necessary to consider in detail the estoppel point. 218 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. The facts of this decision are set out in para 6.12. 219 [1955] 1 WLR 761. The facts of this decision are set out in para 6.14. 220 See para 6.89. 221 (1877) 2 App Cas 439. The facts of this decision are set out in para 6.8.

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Permanent or Suspensory Effect  6.90 every operation of that right since if there had been a failure by the tenants to repair within an extended time the right to determine the lease on the part of the landlord remained in being. The decision of the Court of Appeal in Birmingham and District Land Company v London and North Western Rly Co222 illustrates the same point. Since in that case the termination date of the building agreement was suspended as a result of the promise which gave rise to the estoppel, the rights of both parties under the building agreement were restored when the agreed period of suspension, that to endure until the result of a railway scheme was known, had ended. 6.89  Perhaps the clearest example of a statement that a promissory estoppel may have only suspensory effect is the decision of the Privy Council in Ajayi v Briscoe (Nigeria) Ltd223 where a party stated that hire purchase payments regarding lorries would be suspended for certain lorries while the lorries were withdrawn from active service. There was held on the facts to be no reliance by the promisee on the statement so that no estoppel was established but it was said by the Privy Council that in principle the period of suspension of rights would end upon the promisor giving reasonable notice that enforcement of the rights was to resume, and it was also said that the promise would only become final and irrevocable if the promisee could not resume his position. This decision illustrates the two main reasons which may render a promissory estoppel one which has a suspensory rather than a permanent effect, the first reason being the terms of the promise and the second reason being the ability of a court to avoid any unacceptable detriment to the promisee who has acted on the faith of the promise in circumstances where a promisee who has altered his position by reason of the promise made to him can make further arrangements which restore his previous position. The corollary of the second reason must be that unless the promise was made expressly or by implication to last only for a limited period, the promisor may permanently lose his ability to enforce the rights in question if it is impossible for the promisee to make arrangements to restore his position to that which it would have been if the promise had not been made and if he had not altered his position in reliance on it.224

5.  Distinguishing between a Permanent and a Suspensory Effect 6.90  It seems to be beyond doubt that as a matter of principle a promissory estoppel may have either a permanent or a suspensory and temporary effect. If nothing else the language used in the earliest decisions on the principle state in express terms that this is so. In the first recorded statement of the principle Lord Cairns in Hughes v Metropolitan Rly Co225 referred to the possibility that ‘the strict rights arising under a contract will not be enforced, or will be kept in suspense, or held in abeyance’. In Birmingham District Land Company v London

222 (1889) 40 Ch D 268. The facts of this decision are set out in para 6.10. 223 [1964] 1 WLR 1326. The facts of this decision are set out in para 6.17. 224 An illustration of the impossibility of a promisor being restored to a previous position is Maharaj v Chand [1986] AC 898 in which a woman had been promised that a property would be a permanent home for her and her children. It was held by the Privy Council that she could rely on this promise to prevent her eviction. It was also held that it was not possible to restore the woman to her former position (see Sir Robin Cooke at 908). 225 (1877) 2 App Cas 439, 448.

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6.91  Promissory Estoppel and North Western Rly Co,226 Bowen LJ used almost exactly the same words. Illustrations have been given of a loss of a right being permanent or suspensory. It is apparent from the language used by each of the Judges that it was envisaged that in an appropriate case the estoppel might operate permanently or for a temporary period. Once the party claiming the benefit of the estoppel has made out the essential facts needed to support its claim, the clear promise not to enforce or fully to enforce existing rights and its reliance to its potential detriment on that promise, the exact way in which effect is given to the principle of equity involved is a matter for the discretion of the court on the facts of each case. 6.91  The three main considerations which are likely to determine whether there is a permanent or suspensory effect have been stated earlier.227 Even so, within this general statement of principle if the effect of the estoppel is suspensory the circumstances will often fall within one of a number of typical factual situations. Four such situations are now outlined. 6.92  The promise not to enforce rights may be expressly made and may be expressly suspensory in its terms. For example, in Ajayi v Briscoe (Nigeria) Ltd,228 the promise was to suspend hire purchase payments on vehicles while the vehicles were not in active service. There was held to be no estoppel because the promisee had not altered his position on reliance on the promise but if the elements of a promissory estoppel had been made out, the period of the suspension of the payments could obviously not have endured beyond a time when the vehicles were returned to active service by the promisee. On the other hand, in Maharaj v Chand,229 the express promise was that a property would be a permanent home for a woman and her children. Clearly the estoppel derived from this promise had a permanent effect, or at least an effect while the property was needed for the purpose stated in the promise. 6.93  There may be an express promise not to enforce full rights under a contract but no express statement of how long that forbearance is to continue. In such a case a court will decide when the forbearance is to end having regard to the purpose for which the promise to forbear was given and the likely intention of the parties. The best example of such a case is the High Trees230 decision in which the landlords under a 99-year lease stated early in the Second World War that they would reduce the rent to a half of that reserved in the lease but did not state when that concession was to end. It was held that the forbearance was to last until the end of the war at which point the rent would revert to the full sum stated in the lease since this was the likely intention of the parties when the concession of a half rent was granted because of wartime conditions. 6.94  The estoppel may arise out of an implied rather than an express promise that legal rights will not be enforced. In such a case the court has to find the implied promise and in doing so must also determine the period during which the implied promise not to enforce rights is to have effect, a period which may be limited. For example, in Hughes v M ­ etropolitan Rly Co231 the implied promise was not to enforce the determination of a lease by reason of 226 (1889) 40 Ch D 268,286. 227 See para 6.77. 228 [1964] 1 WLR 1326. 229 [1986] AC 898. 230 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. 231 (1877) 2 App Cas 439. See para 6.9 where it is mentioned that the promise in that case not to enforce a right to terminate a lease was at any rate near to being an express promise.

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Permanent or Suspensory Effect  6.97 failure by the tenants to carry out works to comply with the notice to repair given to them during the period in which negotiations for the purchase of the freehold by the tenants continued. 6.95  The last type of case is where a promise is given not to enforce rights while a particular state of affairs of uncertain duration continues to exist but with no other statement of when the period of forbearance is to end. In such cases a court is likely to look at the way in which the promisee has altered his position or acted or failed to act in reliance on the promise and at the detriment which the promisee would suffer if there was the resumption of the capacity to enforce or enforce fully the rights in question. A possible conclusion might be that the period of forbearance was to last only for a reasonable time or might be brought to an end by the giving of reasonable notice which allowed the promisee time in which to re-arrange his affairs so as to accommodate the resumption of the full obligation. The Ajayi case232 is an example of when a court would have imposed the ending of the period of forbearance by reasonable notice being given if an estoppel had existed. The full rights of the promisor could then have been resumed even though the state of affairs, to which the promise not to enforce rights was tied, in that case non-use of lorries, continued. A further possibility is that a court might allow the promisor to resume the full enforcement of his rights on terms other than or additional to the giving of notice and this possibility is mentioned later.233 6.96  Of course not all cases which arise can be brought within the confines of these four types of circumstances and the object of this form of equitable estoppel is to do justice between the parties if the circumstances are such that a promissory estoppel can be successfully asserted. This overall object is fundamental to the exact operation of the estoppel.234

6.  The Third Category: Postponement of Payment 6.97  Turning to the third category, there is little authority on whether the estoppel can work in such a way that the promisee is relieved of the duty to pay a sum of money during a period of promised forbearance but is required at the end of that period to pay any arrears which have accrued. The question is only likely to arise where the promise is not to enforce payment of a monetary sum and is most likely to arise where the monetary sum is payable by instalments. The answer to the question is likely to turn on the exact terms of the promise and the reason for which it was given. Thus if a landlord promised that he would postpone for three months the date on which the tenant was due to pay a quarter’s rent because of a 232 [1964] 1 WLR 1326. See para 6.17. See also the statement of the principle of promissory estoppel as made by Robert Goff J in BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783, 410 cited in para 6.24. 233 See paras 6.99 and 6.210. 234 The principle can sometimes be described as that the court will order the minimum needed to satisfy the equity or the minimum equity to do justice: Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394, 419; Crabb v Arun District Council [1976] Ch 179, 198 (Scarman LJ). The minimum equity is also discussed in connection with the appropriate relief to give effect to a promissory estoppel in the recent decision of the Court of Appeal of New Zealand in Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567.The concept of the minimum equity is also discussed in connection with proprietary estoppel where it represents one view of the overall purpose of the relief ordered by a court when the elements of proprietary estoppel are established: see ch 7, para 7.273. The principle of the minimum equity is discussed further in para 6.215.

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6.98  Promissory Estoppel particular short and temporary financial difficulty experienced by the tenant (what is sometimes and colloquially called a cash flow problem) the landlord might be estopped from recovering the quarter’s rent on the quarter day on which it was contractually due and for three months thereafter, and would be estopped from asserting any consequential remedy for non-payment on that quarter day such as forfeiture of the lease, but could then claim the unpaid quarter’s rent at the end of the three months. 6.98  It seems in principle unlikely that an estoppel would fall into the third category so as to operate to permit the recovery at the end of a period of suspension of payments accrued due during that period unless the promise is expressly to that effect or the circumstances make it apparent that that was what was intended. In the High Trees case235 the promise made in January 1940 was to reduce the rent payable under a long lease by a half and this was interpreted as meaning that the reduction in the rent due would endure for the duration of the war. The war ended in mid-1945 and it would seem scarcely credible that in 1945 the half payments of rent during the period of five and a half years suddenly became wholly payable. In the Tool Metal case236 the payment of sums due under an agreement relating to a patent was suspended during the period until a new agreement which was to be made was executed. The period of suspension was brought to an end by notice. The courts were not called upon to adjudicate on the question of whether following the termination of the period of suspension sums which were contractually due during that period could be recovered, but the view of Denning LJ in a subsequent decision237 was that no such recovery would have been possible. Denning LJ likened the situation to that in the High Trees case.

7.  Flexibility and Discretion 6.99  Most forms of estoppel are fairly precise in their effect. A representation of fact or a statement of fact in a deed or a commonly held assumption of fact or of law may prevent the maker of the representation or the statement or a person who has shared the assumption from asserting in legal proceedings the contrary of what is contained in the representation or statement or assumption. Little element of discretion as to the content or duration of the estoppel is normally involved.238 With promissory estoppel there may be less certainty and

235 [1947] KB 130. The claim in the action in that case was for the full rent in the period after the end of the war and that claim succeeded. There was no claim for the half of the rent not paid during the war period. 236 [1955] 1 WLR 761. See 69 RPC 108 for the first action in the Court of Appeal. The facts are set out in para 6.14. 237 Lyle-Meller v A Lewis & Co Ltd [1956] 1 WLR 29, 35: ‘He [the promisor] had foregone the past sums beyond recall’. This view seems wholly plausible. It is possible to explain a decision such as Hughes v Metropolitan Railway Co (1877) 2 App Cas 439, which was not a payment of money case, as falling within the third category since the obligation to carry out repair work was postponed during the period of discussions on the purchase of the freehold with that obligation to revive if the discussions failed. See para 6.8. 238 In the case of a common law estoppel by representation, the possibility of an estoppel having only a partial effect occurs where the representation is that a sum of money is due to a payee and the money is paid. The payee may then in reliance on the representation expend a part, but not the whole, of the sum mentioned in a way where that part cannot be recovered by him. The representee may then assert an estoppel if the representor seeks to recover the sum mistakenly paid by a claim under the law of restitution. Although the matter is not wholly free

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Permanent or Suspensory Effect  6.100 greater flexibility. The underlying rule in this form of estoppel is of course that the promisor is held to his promise not to enforce legal rights. The court, as befits the origin of the principle as one of equity, has a discretion on the way in which and the extent to which it will compel the promisor to adhere to what he has stated. This process is sometimes described as satisfying the equity. Lord Denning MR has stated the law as being that where a person has made a promise that he will not insist on his strict legal rights then a court of equity will not allow him to go back on it and that it is for a court of equity to say in what way the equity will be satisfied.239 Where the promise not to enforce a legal right is suspensory in its effect the promise may itself state how the period of suspension is to be brought to an end. If there is no clear statement to this effect the court may fix the date or the event which brings the period of suspension to an end in accordance with the likely intention of the parties.240 In other circumstances where no clear date or specific provision for the ending of the period of suspension has been stated the court may hold that the promise not to enforce a right can be brought to an end by a reasonable notice given by the promisor.241 Where the promise does not contain its own statement of what is reasonable notice the court will decide what is a period of reasonable notice. The predominant consideration is likely to be how long it would take the promisee to re-arrange his affairs after he has acted on the faith of a promise of a suspension of the enforcement of rights against him. It is unlikely that any particular form of notice will be required so long as it is made clear to the promisee that the period of suspension of the enforcement of rights against him is to end at a particular time. It is also possible that no exact date for the end of the period of suspension need be stated in a notice provided that notice of ending the suspension has been given and the promisor waits for a reasonable period before seeking to resume the enforcement of his full rights. 6.100  It may be that in a suitable case a person who has made a promise not to enforce rights is allowed to revert to the full enforcement of the rights but only upon certain terms. In Brikom Investments v Seaford242 a fair rent was registered by a rent officer under the Rent Act 1968 on the application of the landlords on the footing that the landlords were liable to

from doubt, the generally prevailing view today is that where it is just that it should do so the estoppel will operate only pro tanto, that is only to the extent that the representee has acted to his detriment by the irrecoverable expenditure. This subject is fully explained in ch 3, para 3.147 et seq. There may also be some element of discretion when a representation is later corrected or altered or an assumption ceases to be commonly held and a question arises on the effect of the new situation on actions carried out in reliance on the previous situation. These are unusual circumstances and generally the party against which the estoppel is established is simply held to the truth of what has been stated or assumed. 239 Crabb v Arun District Council [1976] Ch 179, 188 (a decision on proprietary estoppel). An explanation of the various types of order which may be made to give effect to a promissory estoppel is contained in part (G), section 4 of this chapter. See the concept of ‘the minimum equity to do justice’ as referred to by Scarman LJ in Crabb v Arun District Council. See also the review of English, Australian and New Zealand authorities on the appropriate relief in promissory and proprietary estoppel, following a promise not to enforce a right of first refusal, in Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567. 240 The High Trees decision, Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, is an ­illustration of this process since the promise in that case, although it specified no period for its effect, was held to have effect only until the end of the war. 241 For cases in which a period of notice was said to be appropriate see Tool Metal Manufacturing Co Ltd v ­Tungsten Electric Co Ltd [1955] 1 WLR 761; Ajayi v Briscoe (Nigeria) Ltd [1964] 1 WLR 1326. 242 Brikom Investments Ltd v Seaford [1981] 1 WLR 863.

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6.101  Promissory Estoppel carry out certain types of repair. This resulted in a higher rent than would have been registered if the tenant had been responsible for the repairs. The landlords accepted this situation and recovered the rent as registered but later established that on the true meaning of the lease the repairs were the liability of the tenant. It was held that a form of estoppel arose and that the effect was that the landlords could enforce the repairing obligation of the tenant but only on terms that they took steps to have a new rent registered on a true understanding of the incidence of the liability to repair. It seems that the case was dealt with as one of a representation of fact which would give rise to a common law estoppel rather than a promissory estoppel243 but the same principle would apply to a promissory estoppel. There seems no reason in principle why a promisor should not be permitted to revert to the full enforcement of his legal rights but only on condition that he makes a monetary payment to the promisee to compensate him for a detriment which the promisee would then suffer through having acted in reliance on the promise. An illustration of this last situation is the judgment of Brennan J in the High Court of Australia in Commonwealth v Verwayen (Voyager Case)244 in which he concluded that the Government should be allowed to resile from a promise not to assert a limitation defence but only on terms that compensation was paid to the Claimant for the loss and damage he had suffered, not necessarily a wholly monetary loss, through commencing and continuing the litigation on the understanding that no such defence would be asserted. 6.101  The examination of the other of the two forms of equitable estoppel, proprietary estoppel, in chapter seven makes it clear that a court has available a wide range of remedies, probably an unlimited range, for the satisfaction of the equitable rights created by that form of estoppel.245 The basis of proprietary estoppel is that an assurance has been given to the claimant that he has or will have an interest or rights in land. The obvious way of satisfying the equity created by the estoppel is by an order vesting in the recipient of the assurance the interest or rights which are the subject matter of the assurance. In practice different orders are made where the assurance is imprecise or it is impractical to give literal and full effect to the assurance because after the date of the assurance parts of the land have been sold to third parties or because the amount of the detriment suffered by the recipient of the assurance would make the vesting in that person of the interest or rights as assured wholly disproportionate or excessive as a means of doing justice. The order satisfying the equity may therefore vary from a vesting of the freehold, or the grant of a lease, or the variation of a lease, or the grant of a perpetual licence, or the grant of a licence for life, or a licence for as long as the claimant wishes to live at the property, or the creation of a lien over land, to an order for the payment of money to the claimant. There appears to be

243 ibid, 868 (Ormrod LJ). If the representation in this case is to be regarded as having given rise to a common law estoppel by representation then it raises the question of whether that form of estoppel can operate subject to a condition. 244 (1990) 170 CLR 394. The facts are set out in para 6.19. In the Court of Appeal of New Zealand in Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567 one possibility considered by the Court was that a party should be allowed to resile from its promise not to enforce a right of pre-emption on terms that the promisee was reimbursed for wasted expenditure such as a non-refundable fee paid for arranging a loan where that expenditure was incurred in reliance on the promise. 245 See ch 7, part (I) for a consideration of the various orders which may be made in the case of a proprietary estoppel.

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A Clear Promise  6.103 less scope for such diverse remedies in the case of a promissory estoppel, partly because the promise which initiates the estoppel has to be clear and unambiguous whereas in the case of a proprietary estoppel the assurance which initiates the estoppel need only be ‘clear enough’ so extending the scope of the order which might be thought appropriate to satisfy the equity created.246

(E)  A Clear Promise 1. Introduction 6.102  It has been explained that in order for a promissory estoppel to operate the person who asserts the estoppel has to establish three matters, (a) that a clear and unequivocal promise intended to be acted on has been made to him, (b) that the promise is that the promisor will not enforce or fully enforce the legal rights of the promisor under an existing transaction, and (c) that as the person asserting the estoppel he has acted in reliance on the promise in circumstances which, when all relevant matters are taken into account, make it unconscionable that the maker of the promise should be allowed to resile or wholly resile from that promise. This part of the chapter examines the first element of the requirements of the estoppel as stated in this paragraph which is that there is a clear promise.247 6.103  While it is convenient for purposes of explanation to break down the requirements or elements of the estoppel into their constituent parts it must always be remembered that the principle of promissory estoppel is a single principle. In deciding whether a statement made is a sufficiently clear promise to support the estoppel it may be significant to consider the nature of the existing rights the enforcement of which is the subject of the promise. The clarity or certainty of the promise may depend on the fact that it must relate to existing and enforceable rights and not to other matters and may depend on the nature of those existing rights. If the existing right is to receive regular and definite payments such as rent under a lease it may be easier to find a clear promise that payments are to be suspended for a limited period than it would be to distil from a person’s words or conduct a clear promise to reduce in a particular way the discharge of a more complicated obligation which is part of a commercial contract. In addition the clarity of the promise may be relevant to the question of whether the promisee has acted in reliance on the promise, i.e. a component of the third element of the requirements under the overall principle of promissory estoppel. In the case of proprietary estoppel a warning has been given against dividing the principle into watertight compartments because of the possible inter-relationship between one element and another, and the warning is equally apt for the purposes of promissory estoppel.248



246 See

Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776; and see ch 7, para 7.141. para 6.24. 248 Gillett v Holt [2001] Ch 210, 335 (Robert Walker LJ). 247 See

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6.104  Promissory Estoppel

2.  Clear and Unequivocal Promise (i)  The Need for a Promise 6.104  In order for there to be a promissory estoppel there must be a promise.249 A promise in this context is a statement of how the maker of the statement will behave in the future.250 It is to be distinguished from a statement or representation of an existing fact or of some past event, which may bring into operation some other form of estoppel such as estoppel by representation or estoppel by deed, and must be distinguished from other forms of statement such as the giving of advice251 or a threat.252 A promise rests on the concept that the person making the promise binds himself to act in the future in the way stated in the promise. It is therefore to be distinguished from a statement of a present intention to act in a certain way but with no express or implied assertion that the maker of the statement will not change his mind. Such a statement of a revocable present intention is not a promise for the purposes of promissory estoppel.253 Another way of putting the same point is to say that what is written or spoken must have been intended to be taken seriously and relied upon. There are two aspects of the principle of promissory estoppel which here merge into each

249 As Lord Goff put it in Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) [1990] 1 Lloyd’s Rep 391, 399: ‘The party to an equitable estoppel is representing that he will not in the future enforce his legal rights. His representation is therefore in the nature of a promise which, though unsupported by consideration, can have legal consequences. Hence it is sometimes referred to as a promissory estoppel’. In New Zealand, the basis of the estoppel has been put as a representation constituted by words or conduct: Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567, para 44. 250 ‘Promissory estoppel, on the other hand, does not depend on the party estopped having made a representation relating to the state of facts at the date of the representation; it looks to the future. It depends on the party estopped having made to the other party to the estoppel a promise or an assurance or a representation in the nature of a promise, that he will act or abstain from acting in some particular way in the future’: James v Heim Gallery (London) Ltd (1981) 41 P & CR 269, 275 (Buckley LJ). Language is a flexible instrument and the word ‘promise’ may be used in general parlance in wider senses than it is used in describing an ingredient of promissory estoppel. Thus, a person may promise that he was not present at a meeting. This is a statement of fact and of a past event. The use of the verb ‘promise’ simply adds emphasis to the statement. A may promise B that C will pay to B a debt due from C to B. This is a form of guarantee and constitutes a promise to B that A will pay to B the amount due if C fails to do so. 251 In China-Pacific SA v Food Corporation of India [1981] QB 403, 430 (Megaw LJ), it was held that the statement alleged to be a promise was advice from solicitors to their client as to the liability of their clients and was not an unequivocal promise. 252 Drexel Burnham Lambert International NV v El Nasr [1986] 1 Lloyd’s Rep 356, 365 (Staughton J). 253 Gillett v Holt [2001] Ch 210, 228 (Robert Walker LJ); Baird Textile Holdings Ltd v Marks & Spencer Plc [2001] EWCA Civ 274, para 93 (Mance LJ). To take an extreme example, a hint by a rich elderly person that a relative will receive a gift under his will would not be a promise that the relative will be a beneficiary under the will. The same principle applies to the assurance required to support a proprietary estoppel. In Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 3, a leading case on proprietary estoppel, Lord Hoffmann drew a distinction between a statement which was reasonably understood to mean merely that the maker of the statement presently intended to leave property to a person in his will, and a statement which could reasonably be understood to mean that he would definitely do so. It is a statement which constitutes a promise or an assurance in the latter sense which is required to found a promissory or proprietary estoppel. The same distinction was drawn by Lord Neuberger at para 74. See also the distinction drawn in the Court of Appeal in Thorner v Major [2008] EWCA Civ 732, para 72, between (a) a statement intended to be relied upon or intended as a promise and (b) a statement of present intention which might well be maintained but as to which there is no commitment. The statement must fall into the first category if it is to found a promissory estoppel. In Lloyd v Sutcliffe [2007] EWCA Civ 153, para 38, Wilson LJ put the matter as: ‘the law requires that the promisor should make clear not that the promise cannot be revoked, but that it will not be revoked’.

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A Clear Promise  6.106 other. One is the requirement that the statement made is a promise and not just a statement of revocable intention as discussed here and the other is the intention of the maker of the promise that his promise shall be acted on by the promisee.254 Both aspects relate to the mental state of the maker of a statement at the time the statement is made and in both instances that mental state must be judged objectively.255 As a matter of terminology a statement of what a person will or will not do in the future is sometimes described in judgments and elsewhere as a representation as to future conduct, i.e. a promise. What of course is important in every case is to look at the substantive nature of what has been written or spoken rather than the description which the parties or others have given to it. To sum it up, a promise such as is needed to found a promissory estoppel (a) must be a statement of what a person will or will not do in the future, (b) must be intended to be binding on the promisor and not just a statement of a present intention which is liable to be changed, and (c) must be intended by the promisor to be acted on by the promisee. The third requirement is examined later in this chapter.256 6.105  It is important to establish the exact nature of the statement relied upon to found an estoppel since that nature determines the form of the estoppel which arises and different forms of estoppel have different requirements for their operation. For example, a statement of fact or of mixed law and fact contained in a deed cannot bring about a promissory estoppel but it may bring about an estoppel by deed where the person asserting the estoppel is not faced with the additional requirement, present in promissory estoppel, that that person must show that it would be inequitable to allow the maker of the statement to go back on what has been stated. On the other hand other forms of estoppel do not have to relate to existing facts, an illustration being estoppel by convention which can relate to any shared assumption of existing fact or law.257 It may seem to be too obvious to need to be stated that the necessary promise must have been made to the person who seeks to rely on the estoppel and not to some other person.258 There have been instances, including in the judgments of Lord Denning, when what appear on the face of it to be statements of existing fact or law have been described as promises so as to justify the application of the principle of promissory estoppel.259 6.106  It is therefore essential that anyone who is considering the existence or application of an estoppel should determine at the outset what is the nature of the statement or utterance made by the person against whom it is contemplated that an estoppel might operate. If the utterance is a statement of an existing matter such as that some fact exists at the time or that some event has or has not happened in the past, then, subject to the other requirements of the estoppel, a common law estoppel by representation may arise. However

254 See para 6.139 et seq. 255 See para 6.141. 256 See para 6.139 et seq. 257 See ch 4 for estoppel by deed and ch 5 for estoppel by convention. It seems probable that as a result of recent decisions a common law estoppel by representation, which was once thought to depend on a representation of fact or of mixed law and fact, can today be founded on a representation of pure law: see ch 3, para 3.18 et seq. 258 BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783, 812 (Robert Goff J). 259 See Robertson v Minister of Pensions [1949] 1 KB 227 (Denning J); and Perrott (JF & Co) Ltd v Cohen [1951] 1 KB 705, 710 (Denning LJ). This approach may be in part due to the view of Lord Denning that he was applying an overall concept of estoppel which embraced representations of existing fact, promises and shared assumptions.

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6.107  Promissory Estoppel in these circumstances there cannot be a promissory estoppel. On the other hand if the utterance is a promise it cannot found a common law estoppel by representation.260 It may, subject of course to the other requirements of the estoppel, found a promissory estoppel. It is because of this fundamental distinction between the two forms of estoppel that the distinction between a statement of an existing matter and a promise is examined here and in chapter three on estoppel by representation.261 A form of estoppel which straddles the two forms of utterances is proprietary estoppel. The foundation of proprietary estoppel is an assurance which creates an expectation of an entitlement to an interest in or rights over land. The assurance is usually that rights will arise over the land in the future but may also be an assurance that rights over the land currently exist. Proprietary estoppel, as the other of the two forms of equitable estoppel with promissory estoppel, is explained in chapter seven.

(ii)  The Need for Clarity 6.107  Given that what has been stated is a promise as to future conduct, there is abundant authority to show that the promise, if it is to be the basis of a promissory estoppel, must be clear and unequivocal. The expression ‘clear and unequivocal’ was used by Lord Hailsham and others in Woodhouse AC Israel Cocoa Ltd SA v Nigerian Marketing Produce Co Ltd262 and similar language has been used in other decisions.263 The foundation of this requirement, as explained in the Woodhouse case, was the long established requirement that the representation which founds a common law estoppel by representation, must be ‘precise and unambiguous’.264 There does not seem to be any significant difference between the meaning of the two sets of adjectives. However, the requirement of a clear and unequivocal promise to found a promissory estoppel is to be contrasted with the assurance needed to found a proprietary estoppel where the assurance need only be ‘clear enough’.265 260 This rule was established by the House of Lords in Jorden v Money (1854) 5 HLC 185. 261 See ch 3, para 3.34. An estoppel by representation may also be founded on a statement of mixed law and fact and recent authority indicates that today it may be founded on a statement of law. 262 [1972] AC 741, 755. See Viscount Dilhorne (at 761), Lord Salmon (at 771), Lord Cross (at 767). 263 See, eg, Baird Textile Holdings Ltd v Marks & Spencer Plc [2001] EWCA Civ 274, para 91 (Mance LJ); A ­ uckland Harbour Board v Kaihe [1962] NZLR 68, 90: ‘clear and unqualified’; Seechurn v Ace Insurance SA- NV [2002] EWCA Civ 67, 26 (Ward LJ): ‘A clear, unequivocal, unambiguous and unconditional promise’. It does not seem correct to say that the promise must always be wholly unconditional. There might, as an example, be a promise that payments due from the promisee would be reduced during the existence of some event over which neither party had any control, such as the price of oil exceeding a stated level and this should, subject to other matters, be capable of founding a promissory estoppel. In Sidney Bolsom Investment Trust Ltd v E Karmios & Co (London) Ltd [1956] 1 QB 529, 540, Lord Denning stated that in order to work an estoppel the representation must be clear and unequivocal. See also JT Developments v Quinn [1991] 2 EGLR 257, 261 (Ralph Gibson LJ); Dun & Bradstreet Software Services (England) Ltd v Provident Mutual Life Assurance Association [1998] 2 EGLR 175, 181 (in which Peter Gibson LJ rejected the proposition that it did not matter whether a case fell within the category of promissory or proprietary estoppel); Uglow v Uglow [2004] WTLR 1183, para 19 (Mummery LJ). In MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119, para 16, it was said that any representation that an oral variation of a contract was valid, despite the presence of a ‘no oral modification’ clause would have to be unequivocal if any estoppel was to arise. The need for a clear and unequivocal promise (there described as a representation) as an essential element of a promissory estoppel has recently been reiterated by the Court of Appeal of New Zealand: Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567. 264 Low v Bouverie [1891] 3 Ch 82, 106 (Bowen LJ). See ch 3, para 3.38. 265 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 56 (Lord Walker). See ch 7, para 7.141. In New Zealand it is said that the tendency has been to regard different forms of estoppel with their different rules and requirements, including estoppel by representation and promissory and proprietary estoppel, as aspects of a

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A Clear Promise  6.109 For this reason alone it may be important to know whether a court is being asked to apply a promissory or a proprietary estoppel. It was at one time thought that no practical ­distinction was to be drawn between the two forms of estoppel,266 but this view cannot be sustained today. 6.108  There are of course many reasons which might make a promise less than clear and unequivocal. The use of the words ‘without prejudice’ or ‘without guarantee’ have various meanings in legal usage. The words ‘without prejudice’ may mean that a document marked with these words is an attempt to reach a settlement of a dispute and is not to be referred to in court in any subsequent litigation on the dispute or it may mean that some action taken is not to be treated as an acceptance that a previous action is invalid. For instance, if it is alleged that a notice served under a contract is defective a new notice may be served, if the terms of the contract allow that to be done, but without prejudice to the validity of the first notice. This process allows the server of the notice to contend first that the former notice was valid but, if that fails, then to rely on the second notice which does not contain the alleged defect. The use of expressions such as these in what is alleged to be a promise creating a promissory estoppel may, if used in a proper context and for good reason, prevent the promise being sufficiently unequivocal.267 Such language may also be apt to show that the promisor did not intend that the promisee should act in reliance on the promise and may for this reason also prevent there being a promissory estoppel. 6.109  The expression ‘subject to contract’ attached to an agreement may have a similar effect. In an appeal to the Privy Council from Hong Kong there was an agreement between the Government of Hong Kong and a group of companies for an exchange of land with a balancing payment, the agreement being made ‘subject to contract’.268 The companies resiled form the agreement. It was alleged that there was an expectation created by the companies that the companies would carry out the agreement. The decision was fought on an analysis of proprietary estoppel and it was held that the companies were entitled to withdraw from the transaction, one reason being that they had shown that they had not given an assurance that they would never do so. It was said to be possible but unlikely that a course of conduct following a subject to contract agreement might create an estoppel which would prevent the parties from refusing to complete the transaction.269 It is unfortunate that expressions generalised modern equitable estoppel. This process may involve watering down the distinction between a clear and unequivocal promise and an assurance which is clear enough. See Burbery Mortgage Finance & Savings Ltd v Hindsbank Holdings Ltd [1989] 1 NZLR 356 in which there was held to be a promissory estoppel even though the promisor had done no more than give an impression. However, as noted above (n 263) the need for a clear and unequivocal promise as the foundation of a promissory estoppel has recently been reiterated by the Court of Appeal of New Zealand in Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567. 266 See what was said by Scarman LJ in Crabb v Arun District Council [1976] Ch 179, 193. 267 IMT Shipping & Chartering GmbH v Chansung Shipping Company Ltd (The Zenovia) [2009] EWHC 739, para 33 (Tomlinson J); Thornton Springer v NEM Insurance Co Ltd [2000] 2 All ER 489 (Colman J). 268 Attorney General of Hong Kong v Humphreys Estate (Queen’s Gardens) Ltd [1987] AC 114. The marking of a document with the words ‘subject to contract’ normally means that the document is not to have binding legal effect and that legally enforceable obligations will arise only when and if a further formal document is executed between the parties. See the commentary on this decision in the context of proprietary estoppel by Lord Scott in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 36. 269 Attorney General of Hong Kong v Humphreys Estate (Queen’s Gardens) Ltd [1987] AC 114, 127–28 (Lord Templeman). One possibility is that if both parties proceed on a shared assumption that a subject to contract arrangement is a binding contract, there may arise an estoppel by convention which prevents either party from going back on that assumption. This possibility is discussed in ch 5, para 5.32. See also the decision of the High

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6.110  Promissory Estoppel such as ‘subject to contract’ or ‘without prejudice’ are often attached to correspondence in commercial and property matters not because they have any precise legal meaning but merely for purposes of caution. If a statement is made which is on the face of it a clear and unequivocal promise not to assert a right it seems unlikely that the promise would be rejected as the basis of a promissory estoppel merely because some expression such as ‘without prejudice’ or ‘subject to contract’ had been put at the head of the relevant correspondence without a proper appreciation of the legal purpose and import of those words. Of course in a commercial contract a good deal may depend on the particular course of discussions between the parties.270 6.110  An illustration of a promise which was insufficiently clear is the Woodhouse decision in the House of Lords.271 The issue in that case was the method of payment under contracts for the purchase of cocoa. The sellers wrote to the buyers ‘to confirm that payment can be made in Sterling and in Lagos…you are at liberty to make payment in sterling not only with contracts already entered into but with future contracts’. There was an ambiguity in this promissory statement, the ambiguity being that it might have referred to how the payment was to be measured (the currency of account) or to the mode of discharge of the payment (the currency of payment). The result was that the promise as to the method of payment was not sufficiently clear to enable it to found a promissory estoppel.272 6.111  The rule that there must be a clear and unequivocal promise may not be in practice as stark as it at first appears. The promise does not have to have been made by words constituting an express promise whether written or oral and can be an inference from the conduct of the parties with the inference of a promise often being drawn from what the parties have expressly stated.273 Since the promise must be not to enforce or fully enforce existing legal rights it might be thought that in order for the promise to be clear and unequivocal it would have to identify clearly the right not to be enforced or fully enforced and, where the forbearance from enforcement was to be for a temporary period only, the exact duration of that period. A promise may indeed be unclear if it fails to identify with precision the right or rights not to be enforced but it is apparent from the authorities that a failure to state clearly or at all the period of the suspension or postponement of the enforcement of rights will not render the promise too unclear to support an estoppel. In a leading decision on the development of the principle of promissory estoppel the promise not to enforce full payment of sums periodically due said nothing on how long the relaxation of full payment was to last but the court filled the gap by itself fixing the period of the relaxation which must have been intended.274 In other cases courts have been willing to impose their own terms on how long Court of Australia in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 in which the Court applied an estoppel to render binding an agreement for a lease in the absence of the form of exchange of agreements necessary under statute to make such agreements enforceable. 270 Vitol SA v Esso Australia Ltd [1989] 2 Lloyd’s Rep 451. 271 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741. 272 The House of Lords held that the correct construction of the correspondence between the parties was that the parties were referring to the currency of payment, not the currency of account. The dispute arose as a result of the devaluation of the pound sterling by the then Labour Government. 273 For inferred promises, see para 6.114 et seq. 274 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. cf the statement of Lord Pearson in Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741, 762, that the promise or assurance ought to be reasonably clear and definite both as to the terms of the contract which are being waived and as to the duration of the waiver.

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A Clear Promise  6.113 a suspension of rights is to endure by stating that the period of suspension can be ended by the giving of reasonable notice.275 Where the promise is to suspend for a time the duty to make payments periodically or by instalments the promise may not make it clear whether at the end of the period of suspension any payments not made during that period may be recovered at the end of the period but this deficiency will not necessarily prevent the promise being sufficiently clear to create an estoppel.276 The requirement that the promise alleged to found a promissory estoppel must be clear is bound up with the rule that the nature and content of the promise are to be determined objectively, i.e. in the way in which a reasonable person with knowledge of the facts known to the promisee would interpret the language of the promise made, and this rule is considered separately later.277

(iii)  Withdrawal of Promise 6.112  It is of course open to a party which promises not to enforce its legal rights to withdraw that promise. A withdrawal should be as clear and unequivocal as the promise.278 The important point is the consequences in law of such a withdrawal. There is plainly no overall principle that a promisor can automatically avoid the consequences of a promise by making a withdrawal of it. The effect of a withdrawal depends on when it is made and how the promisee has acted between the time of the promise and the time of its withdrawal.279 6.113  The first example of this situation is where a promise is made and then is withdrawn before the promisee has acted upon the promise. In such circumstances no promissory estoppel will arise because essential components of the principle are that the person asserting the estoppel must have acted on the promise and acted in such a way that that person would, or might, suffer detriment if there was a resiling from the promise. Without these components the essential element of unconscionability cannot be established. In the circumstances here postulated that cannot occur.280 A different situation is that in which a promisee has acted in reliance on the promise, and might suffer detriment if there was a resiling from the promise, but the amount of detriment has been reduced by the withdrawal of the promise. Given a withdrawal of the promise the promisee may be able to take steps to minimise its detriment. One possible approach to promissory estoppel is that the estoppel should operate only to the extent needed to avoid injustice, sometimes called the minimum equity principle.281 275 Ajayi v Briscoe (Nigeria) Ltd [1964] 1 WLR 1326; Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd [1955] 1 WLR 761. 276 The question of whether arrears can be recovered at the end of a period of suspension of payments is discussed in para 6.98. A court will of course itself determine the meaning and effect of the promise as may be necessary. 277 See para 6.133 et seq. 278 In practice, what may happen is not that the promisor makes an express withdrawn of the promise but that the promisor attempts to assert the legal rights which it has promised not to assert so that its attempt to do so may constitute a withdrawal of the promise at any rate as to the future. 279 A similar question arises as to the withdrawal or contradiction of a representation which brings into being an estoppel by representation (see ch 3, para 3.65 et seq); and as to the revocation of an assurance which brings into being a proprietary estoppel (see ch 7, para 7.173 et seq). 280 For a decision in which an implied promise not to rely on defective documents as a reason for terminating a contract, which might otherwise have worked a promissory estoppel so preventing the exercise of the right to terminate the contract, was held not to have that effect because of the speedy withdrawal of that promise; see Société Italo-Belge pour Le Commerce et L’Industrie SA (Antwerp) v Palm and Vegetable Oils (Malaysia) Sdn Bhd (The Post Chaser) [1982] 1 All ER 19. 281 See above (n 234) and para 6.215 for the concept of the minimum equity.

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6.114  Promissory Estoppel Accordingly an early withdrawal of the promise, even if it does not prevent a promissory estoppel operating, may significantly affect the relief which a court gives to the person who asserts and establishes the estoppel. In the case of a proprietary estoppel, which usually relates to an assurance that a person will have an interest in or rights over land and which also requires that a claimant has acted to his detriment in reliance on the assurance, it may be that even if some detriment has occurred following the assurance a court would conclude that after a revocation of the assurance the equity created was satisfied by an order for a monetary payment to the claimant.282 A wide range of remedies is available to give effect to a proprietary estoppel but promissory estoppel is also a principle of equity and the remedies available should also contain a degree of flexibility.283

3.  Inferred Promises 6.114  The necessary clear and unequivocal promise may be inferred from the conduct of the parties.284 Indeed the two early decisions which presaged the formulation of the principle of promissory estoppel as that principle is applied today were at any rate to some extent instances of an inferred promise. In Hughes v Metropolitan Rly Co285 there was inferred a promise by a landlord that he would not determine the lease because works were not carried out pursuant to a notice to repair over a period while negotiations went on for the purchase of his interest by the tenants even though the landlord had made no exact express promise to that effect.286 In Birmingham and District Land Company v London and North Western Rly Co287 a promise was inferred not to insist on the contractual completion date for work under a building agreement when the landowner had told the builders to suspend work pending the promotion of a railway scheme. There is therefore no need for a ‘significant event’ at which a dramatic express announcement of the promise is made.288

(i)  The Test for Inferences 6.115  There is no universal legal test for the drawing of inferences or the making of implications from express statements or other events. Sometimes an implied term is readily or 282 See Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 89 (Lord Neuberger). 283 For an examination of the forms of relief available to give effect to a promissory estoppel, see para 6.209 et seq; and for a consideration of flexibility and discretion in the operation of the estoppel, see para 6.99 et seq. 284 Youell v Bland Welch & Co Ltd [1990] 2 Lloyd’s Rep 431, 450. In JT Sydenham & Co Ltd v Enrichem Elastometers Ltd [1989] 1 EGLR 257, 260, there was a determination of a rent by an expert under a rent review clause in a lease but on an incorrect basis. The landlord in due course challenged the determination but for a year prior to the challenge accepted rent on the basis of the determination without challenge. It was held that this conduct by the landlord gave rise to a promissory estoppel which prevented him from retrospectively seeking an increased rent for the year in question even though, as is usual, the terms of the lease allowed him to do so. 285 (1877) 2 App Cas 439. See para 6.8. 286 There was an exchange of letters between the parties in which the landlord acceded to the request that the repairs should be deferred until it was ascertained whether an agreement could be reached for the purchase of the freehold (see Lord Cairns at 444–45) and this may have been regarded as an express promise not to determine the lease at the end of the period of notice if the works had not been completed at that time. 287 (1889) 40 Ch D 268. See para 6.10. 288 See Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 24 (Lord Rodger), a decision in which the assurance needed to found a proprietary estoppel was constituted by a series of imprecise statements and actions over a number of years. See ch 7, para 7.10.

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A Clear Promise  6.116 even automatically found such as by the rule that in leases the landlord is taken to give an implied covenant for quiet enjoyment unless there is some express covenant to a different effect. More often something is inferred when the inference can reasonably be made. Sometimes a much stricter test for an inference may be enjoined for the purposes of estoppels and there is a rule that there may be an implied statement in a deed such as to create an estoppel by deed but only where there can be said to be a necessary inference in the sense that without it other provisions of the deed would not have any real meaning.289 The strictness of this rule seems to have been derived to avoid conflict with the rule that estoppel by deed depends on there being a clear and unambiguous statement of fact in a deed. It is doubtful whether the same strictness is required in order to found an implied promise for the purposes of a promissory estoppel even though the promise for the purposes of this form of estoppel also has to be clear and unambiguous. One general formulation of the correct approach to inferences in the area of estoppels is that of Lord Denning who has said that short of an actual promise an inference may arise if a person, by his words or conduct, so conducts himself as to lead another to believe that he would not insist on his strict legal rights.290 Whether a promise is to be inferred from the words or other actions of the alleged promisor must be assessed objectively and so by reference to whether a reasonable man with the knowledge of the alleged promisee would make the inference of a promise. 6.116  Some assistance on whether a clear and unequivocal promise can be inferred may be gained from decisions on proprietary estoppel which often depends on an assurance having been made creating an expectation that a person will become entitled to an interest in property. In one case the House of Lords upheld the decision of a Judge that an assurance that a person would receive a property under a will could be spelt out of conversations between two taciturn and undemonstrative men who communicated obliquely but understood each other.291 The question of whether a promise is to be inferred may also depend on the context in which communications are made and the character and knowledge of the alleged promisor and promisee. Thus a promise might properly be inferred from what was said between two men working in agriculture and not used to precise language when no such promise would be inferred from the same language used between two lucid and experienced lawyers. In some cases a promise may be inferred from a sequence or course of actions and words from a promisor and in such cases it is not always necessary to pinpoint the exact time at which the promise became clear and unequivocal. Certainly this is correct for an assurance inferred from conduct and imprecise language which creates a proprietary estoppel.292

289 Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 159 (Oliver J). 290 Crabb v Arun District Council [1976] Ch 179, 188, relying on what had been said by Cotton LJ in Birmingham and District Land Company v London and North Western Rly Co (1889) 40 Ch D 268, 277. Crabb v Arun District Council is best regarded as a decision on proprietary estoppel. In MSC Mediterranean Shipping Co SA v Glencore International AG [2017] EWCA Civ 365, [2017] 2 Lloyd’s Rep 186, an issue was whether a contractual obligation to deliver goods carried by sea meant that there had to be actual delivery or whether the provision of PIN codes which facilitated access to the goods was enough. In the case of a misappropriation of goods it was held that actual delivery was required. On numerous previous occasions the receipt of PIN codes had been accepted as a sufficient delivery. It was held that there could not be inferred from these events a variation of the contract and that there could not be inferred an unequivocal promise that delivery of PIN codes would always be accepted as the discharge by the carriers of the contractual duty to make delivery of the goods carried. 291 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776. Proprietary estoppel is explained in ch 7. 292 ibid, para 8 (Lord Hoffmann).

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6.117  Promissory Estoppel It follows that in some circumstances there may be an overlap in time between the events from which the promise is inferred and the actions carried out in reliance on the promise. That having been said caution should be taken in applying decisions on proprietary estoppel to promissory estoppel since the promise which initiates a promissory estoppel has to be clear and unequivocal whereas it is sufficient that the assurance which initiates a proprietary estoppel is ‘clear enough’.293

(ii)  Negotiations, Limitation Periods and Pleadings 6.117  It is possible that a promise not to enforce the legal rights of one party could be made during negotiations between parties on a claim or dispute but as is generally the case there would need to be a clear promise made during the negotiations for there to be an estoppel.294 It seems unlikely that in most cases a promise not to enforce rights would be inferred simply from the carrying out of negotiations concerning those rights or a defence to those rights or from any doubt expressed by the holder of the rights about their validity or enforceability. It has been said that there is no decision in any branch of the law where a mere acceptance of a late periodic payment has given rise to an implied representation.295 The possibility of an estoppel arises where after the expiry of a limitation period the parties continue to negotiate on a claim. In one case it was held at first instance that there was to be inferred a representation or promise that a limitation defence would not be advanced because a local authority had continued negotiations on the amount of a claim for compensation due for the compulsory purchase of property after the end of the limitation period for making such claims. There was said to be an estoppel with the effect that the authority could not rely on a limitation defence.296 In a later decision Arden J, giving judgment in the Court of Appeal, was unable to find from the similar conduct of a local authority any clear representation or promise that a limitation defence would never be raised.297 Each case turns on its own particulars facts of what was said and done but so far as there is a conflict between these two last decisions the second decision appears to be preferable. The fact that a particular defence, including a limitation defence, is not raised at a particular juncture in a dispute may be due to ignorance or inadvertence rather than due to any decision that the defence will never be taken. Reference can be made in this context to the proposition, discussed later, that silence on a matter is generally equivocal and does not give rise to an

293 See ch 7, para 7.141. 294 An example of no clear promise being proved to have been made in negotiations between a mortgagor and a mortgagee after the mortgagor had defaulted in his payments is Braithwaite v Winwood [1960] 3 All ER 642, 646 (Cross J). 295 The Scraptrade [1983] QB 529, 535 (affirmed at [1983] 2 AC 694); Bird v Hildage [1948] 1 KB 91; Panoutsos v Raymond Hadley Corporation of New York [1917] 2 KB 473. As against this and in a rather different context, an acceptance of a late tender of an instalment of the hire charge under a charterparty agreement may amount to a common law election by the shipowner not to exercise the right available to him to withdraw the ship in the event of late payment: Mardorf Peach & Co Ltd v Attica Sea Carriers Corporation of Liberia [1977] AC 850, 872. 296 Co-operative Wholesale Society v Chester le Street District Council (1997) 73 P & CR 111. The main ground of the decision was that an estoppel by convention arose. 297 Hillingdon LBC v ARC Ltd (No 2) [2000] 3 EGLR 97. The reliance by the Claimant for compensation on an estoppel by convention was also rejected by the Court of Appeal.

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A Clear Promise  6.119 inferred promise or representation on the matter.298 Of course the situation is different if an express statement is made that a limitation defence will not be relied upon.299 A promise not to rely on a limitation defence would be more likely to result in a promissory estoppel if it was made during the running of the limitation period since the promisee would be more likely to act to his prejudice by failing to commence proceedings within the period.300 Obviously this particular item of prejudice cannot occur when a limitation period has expired at the time of the alleged promise but a promisee could still act to his prejudice in reliance on the promise, and so be enabled to set up an estoppel, for example by instructing and paying experts to assist him in pressing his case, something he would not have done if he had not been told that no limitation defence would be asserted.301 Perhaps the correct and general principle is that where a party, whether in negotiations or elsewhere, does not assert a particular defence, even though that party knows all the facts relevant to that particular defence, this will not normally lead to the inference that that party has made a clear and unequivocal promise that he will never raise that defence. 6.118  It was at one time thought that time was ‘of the essence’ in rent review clauses in leases with the result that if a landlord omitted to give notice requiring a review of the rent by the date stipulated in the lease he permanently lost the right to that rent review. A landlord in this situation and with this understanding of the law, having failed to give notice in time, made a remark to a tenant indicating that the matter of that particular review was closed. It was subsequently held by the House of Lords in a different case that in fact rent reviews could usually be initiated by a late notice.302 The landlord then sought to initiate the review. He was not prevented from doing so by his observation since what he had said was no more than a statement of the inevitable in the light of what the law was thought to be at the time and was not a promise that the right to the review was given up for all time.303 6.119  A statement in a pleading in legal proceedings or an omission in a pleading to raise a defence is not in itself an implied promise that an application will not be made in the future to amend the pleading and assert some new or different defence or matter.304 Thus the fact that no limitation point is raised in a defence will not of itself constitute a promise that the Defendant will not seek permission to amend his pleading to raise that defence.305 Of course a clear statement outside the pleadings that no limitation defence will be relied upon may satisfy the first element of promissory estoppel.306

298 See para 6.125 et seq. See also para 6.119 on a failure to raise a matter in a pleading. 299 As in Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394. See para 6.19. 300 Such a promise was alleged to have been made in Seechurn v Ace Insurance SA-NV [2002] EWCA Civ 67 but was not made out on the facts. 301 In Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394 the Claimant commenced and continued proceedings after the end of a limitation period and was influenced by a statement of a Government Solicitor that any limitation defence would be waived. The High Court of Australia held that the Government was prevented from relying on a limitation defence by reason either of an estoppel or a waiver (a common law election). 302 United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904. 303 James v Heim Gallery (London) Ltd (1981) 41 P & CR 269. 304 United Australia Ltd v Barclays Bank Ltd [1941] AC 1, 18–19 (Viscount Simon LC). Nor will the content of a pleading normally constitute a binding election between alternative rights. This subject is examined in the context of the doctrine of common law election and inconsistent remedies in ch 8, para 8.45. 305 Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394. 306 ibid.

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6.120  Promissory Estoppel 6.120  It may be possible that a clear promise can be inferred from the mere silence or inactivity of the alleged promisor but this is only likely to happen in exceptional circumstances. This question is considered separately later.307

4.  A Comparison with Contractual Terms (i)  Contractual and Non-Contractual Promises 6.121  An existing contract may be varied by a new contract which alters the terms of the first contract. For such a contractual variation to have effect it is necessary that there is consideration for the making of the second contract.308 Such a new contract may vary an existing contract by including a term that a right under the first contract will not be enforced. In accordance with general principles consideration is necessary if a new agreement of this kind is to be valid and enforceable as a contract. The principle of promissory estoppel is different in that it allows a promise not to enforce rights under an existing contract (or under some other transaction) to be enforced providing certain conditions are fulfilled even in the absence of consideration. It is sometimes asked whether the promise which gives rise to an estoppel must be as clear as a promise which, if backed by consideration, might form a term of a contract and so might, if supported by consideration, form a term of a contract to vary an existing contract. 6.122  The answer sometimes given is that the same clarity and certainty in a promise which founds a promissory estoppel is required as in a promise which effects a contractual variation of a contract. It has been pointed out that the promises, where their undertaking is not to enforce a legal right, may have the same effect as a contractual term as they would have as an estoppel.309 In fact such an answer is only a part of the true position and to achieve accuracy a two stage answer is needed. In the first place, a promise which is so vague and uncertain in its content and meaning that it cannot constitute a contractual term cannot give rise to an estoppel. An opposite conclusion would be an absurdity.310 Secondly, it is not a corollary of this statement that any promise which can form a term of a contract would, given the same language, subject matter and other relevant matters, work a promissory estoppel. A contractual term, unlike a non-contractual promise which works on estoppel, does not have to be wholly clear and unambiguous for it to be enforced. Where there is an ambiguity in a contractual term a court will seek to give to that term the meaning which it would convey to a reasonable person at the time when the contract was made in the light of all relevant facts known to the parties to the contract at that time.311 Therefore a promise

307 See para 6.125 et seq. 308 The need for consideration for a rescission or variation of an existing contract is examined in para 6.41 et seq. 309 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1971] 2 QB 23, 59–60 (Lord Denning MR), in the Court of Appeal (see [1972] AC 741 for this decision in the House of Lords). 310 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741, 757 (Lord Hailsham); China-Pacific SA v Food Corporation of India [1981] QB 403, 429 (Megaw LJ) (see [1982] AC 939 for this decision in the House of Lords); Drexel Burnham Lambert International NV v El Nasr [1986] 1 Lloyd’s Rep 356, 365 (Staughton J). 311 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896. For a recent discussion on the general principles to be applied in the interpretation of contracts see Arnold v Britton [2015] AC 1619.

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A Clear Promise  6.124 in a contract may in purely linguistic terms be capable of bearing several possible meanings but a court will attribute to it that meaning which it is most likely to bear in accordance with the principle of interpretation just stated and having regard to other considerations such as achieving business efficacy. In an extreme case a contract may contain a term which is so uncertain that the court cannot attribute any definite and precise meaning to it with the result that the contract is void for uncertainty312 but such cases are rare and a court will strive to attribute a meaning to a contractual term if it can do so.313 This is not the approach adopted towards promises made for the purposes of promissory estoppel. A promise which was reasonably capable of a number of meanings given its language would be likely to be rejected as not clear and unequivocal and so being incapable of justifying an estoppel. The correct conclusion is that a higher degree of clarity and certainty is required for a promise which works an estoppel than it is for a promise which is a contractual term. 6.123  The requirement of a clear and unequivocal promise must not be pressed to extremes. Human ingenuity is such that even when a document is carefully drafted it may be suggested that the document can have some meaning different to its apparent meaning.314 The existence of some such possible, albeit most unlikely, meaning will not prevent the promise being sufficiently clear and unequivocal in its obvious and apparent meaning to give rise to an estoppel.315

(ii) Analysis 6.124  A correct analysis of the respective degrees of clarity and certainty required if a promise is to constitute a contractual term or is to found a promissory estoppel may be along the following lines. (a) The promise may be clear and unambiguous in its meaning but a person might be able to suggest a possible alternative meaning even though that alternative meaning is unlikely to be the true meaning. Such a promise may in appropriate

312 Eg, in Scammell v Ouston [1941] AC 251 a contract for the sale of goods on ‘hire purchase’ terms was held void for uncertainty since it could not be ascertained what particular hire purchase terms, of which there were numerous variations, had been intended to apply. 313 Holding a contract to be void for uncertainty has been said to be a ‘counsel of despair’: Nea Agres SA v Baltic Shipping Co Ltd [1976] QB 933, 943. 314 An illustration of such ingenuity is the judgment of Hoffmann LJ in Co-operative Wholesale Society v Westminster Bank Plc [1995] 1 EGLR 97 and in the other cases heard by the Court of Appeal at the same time where it was held that in rent review clauses in leases the correct interpretation was that there should be no rent-free period assumed in the hypothetical lease even though the language of the clause appeared on its most apparent meaning to state the contrary. A more measured approach placing greater emphasis on the ordinary meaning of the language used by the parties to the contract may be seen in the recent decision of the Supreme Court in Arnold v Britton [2015] AC 1619. It would be wrong to be unrealistically rigorous when satisfying the ‘clear and unambiguous’ requirement of estoppels. The courts do not search for ambiguity or uncertainty which would defeat the estoppel but should assess the question of clarity and certainty practically and sensibly: Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 85 (Lord Neuberger). 315 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741, 771 (Lord Salmon). Much the same had been said in Low v Bouverie [1891] 3 Ch 82, 86, by Bowen LJ in connection with common law estoppel by representation where he stated that the need for a precise and unambiguous statement to establish such an estoppel did not mean that the language of the representor must be such that it could not possibly be open to different constructions.

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6.125  Promissory Estoppel circumstances either found a promissory estoppel or constitute a contractual term.316 (b) A promise may be so ambiguous that a number of possible and not implausible meanings can be attributed to it. In that case if the promise is intended to be a term of a contract a court will normally attribute to it that meaning which a reasonable person knowing all relevant facts known to the parties to the contract would attribute to it. However, in this case the promise is unlikely to be sufficiently clear and unambiguous to found a promissory ­estoppel.317 One useful test may be to ask whether the promise is sufficiently clear as it stands. If the promise requires further clarification before its meaning can be properly ascertained it is unlikely that it could form the basis of a promissory estoppel.318 (c) A promise may be so unclear and uncertain that it is not possible to attribute any clear meaning to it. Such a situation will rarely occur but if it did the promise could not constitute a term of a contract and, of course, could not found a promissory estoppel.319

5.  Silence and Promises (i) General 6.125  It may seem a matter of common sense to say that an omission to say anything at all cannot constitute a clear and unequivocal promise that certain rights will not be enforced. There is authority to the effect that normally this proposition is legally as well as intuitively correct. Silence and inactivity are, in the absence of special circumstances, uncertain in their intention and effect and cannot of themselves constitute an unequivocal promise that a person will not rely on a particular right available to him in the future.320 Therefore, the fact that a party to a dispute is silent as to some matter even for a substantial period is unlikely to amount to an unequivocal promise that a point based on that matter will never be taken.321

316 See above (n 315). In the Woodhouse case (at 771) Lord Salmon described a promise of this character as ‘alpha plus’. A promise which was so clearly expressed that nobody could even suggest anything except a single meaning, if such could exist, might be characterised as ‘alpha double plus’. Put another way, the test may be not that someone could not with sufficient ingenuity suggest some alternative meaning to that which the promise appears to mean, but that someone could not reasonably suggest such an alternative meaning: see Goldsworthy v Brickell [1987] Ch 378, 410 (Nourse LJ). 317 In the Woodhouse case at 771 Lord Salmon described a promise of this character as ‘alpha’. The position is different with proprietary estoppel where there is no requirement that the assurance is clear and unequivocal and it is enough that the meaning of the assurance is ‘clear enough’: see ch 7, para 7.141. In Goldsworthy v Brickell [1987] Ch 378, 411, Nourse LJ put the point in precise terms, saying that it was not enough that the promisee might reasonably have arrived at a conclusion on the meaning of a promise (treating a tenancy as varied despite the existence of terms dishonestly concealed when the agreement was executed), but rather it must be such that the promisee ‘could not reasonably have arrived at any other conclusion’. 318 Kim v Chesewood Park Residents Ltd [2013] HLR 24. 319 Lord Salmon might have described such a promise as ‘gamma minus’. Therefore in this useful method of classifying degrees of clarity with its academic overtones, alpha plus is needed to create a promissory estoppel but alpha is enough to create a contractual term. 320 Argo Systems FZE v Liberty Insurance (Pte) Ltd [2011] EWCA Civ 1572; Morris v Tarrant [1971] 2 QB 143. 321 Argo Systems FZE v Liberty Insurance (Pte) Ltd [2011] EWCA Civ 1572. The silence, which did not give rise to a promise, was that of an insurer who failed for seven years to mention an alleged breach of warranty on the part of the insured. This did not prevent subsequent reliance on the contention of a breach of the warranty by the insured.

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A Clear Promise  6.126 The reason that silence or inactivity cannot normally amount to an unequivocal promise has been said to be that silence is of its nature equivocal.322 It has been held that where owners under a charterparty had at times accepted late payments without protest there was not to be inferred from their previous silence a promise that in the event of a subsequent delay in payment the owners would not exercise their right to withdraw the ship.323 Thus, a failure to take a point in a dispute or in litigation may be because a party is for a time unaware of the point or is investigating whether there is factual material or a legal argument to support that point.324 The general rule that a person is not estopped from making an assertion by reason of his previous inactivity or silence applies to other forms of estoppel. An illustration of the general rule is that a person is not under a general duty to look after his property325 and so is not estopped from asserting his title to property by his mere inaction or silence because inaction or silence, by contrast with positive conduct or a statement, is colourless and cannot influence a person to act to his detriment.326 A landlord entitled to a rent review under a lease does not promise that he will not insist on the review simply because for a significant time he takes no step to initiate the review such as by serving the necessary notice requiring a review.327 6.126  While the circumstances in which silence may amount to an unequivocal promise may be rare it may be wrong to exclude all possibility of this occurring. Much may depend on the circumstances in which the silence occurs. A party to a dispute might say that it was only prepared to go on negotiating and incur the expenses of legal and other expert advice in doing so if the other party was willing to accept that a particular issue, such as an alleged fraud, did not arise in the dispute. If the other party remains silent on the point and the negotiations then proceed with the party who made the request incurring the expenses mentioned, it might be possible to infer from this a promise by the other party that it would not raise an allegation of fraud or would not assert any existing right founded on fraud. The courts have been willing to infer promises from events which do not contain an express

322 In the context of an argument that a party could no longer pursue an arbitration reference by virtue of an alleged promissory estoppel Robert Goff LJ said in Allied Marine Transport Ltd v Vale Do Rio Doce Navegacao SA [1985] 1 WLR 925, 937: ‘It is well settled that the principle [of promissory estoppel] requires that one party should have made an unequivocal representation that he does not intend to enforce his legal rights against the other, yet it is difficult to imagine how silence and inaction can be anything but equivocal’. See also, Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890, 903 (Lord Wilberforce). 323 The Scraptrade [1983] QB 529 (Robert Goff LJ). 324 If the dispute has reached the stage of litigation in which there are pleadings, the taking of a point at a late stage may require an amendment to the pleadings and permission to amend may in certain circumstances be refused: see Civil Procedure Rules, Part 17. See para 6.117 on the failure by a party to assert a limitation defence. There is a further principle that if a party to an action fails to bring forward all his claims in an action he may be prevented from bringing a later action to enforce claims which could have been asserted in the first action but on which he was then silent. The foundation of this principle is not strictly an estoppel per rem iudicatam but is founded on public policy in that the second action may be rejected as an abuse of the legal process: see Henderson v Henderson (1843) 3 Hare 100; Johnson v Gore Wood & Co [2002] 2 AC 1. This aspect of public policy is covered in ch 9, as the third of the three principles which together make up estoppel by record. 325 Farquharson Brothers & Co v King & Co [1902] AC 325, 332. 326 Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890. 327 Amherst v James Walker Goldsmith & Silversmith Ltd [1983] Ch 305. See also Morris v Tarrant [1971] 2 QB 143 where a period during which the owner of a property took no steps to remove a trespasser was held not to generate an implied promise that the person involved would not be treated as a trespasser during that period. See para 6.172.

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6.127  Promissory Estoppel statement and an inference from silence in circumstances such as just postulated seems not unreasonable.328 It is possible that in these circumstances an estoppel by convention might arise, namely a shared assumption that no issue of fraud was relevant to the dispute between the parties.329 It is also possible that circumstances of the nature just described could amount in some cases to a contract between the parties, supported by consideration, that no issue of fraud would be raised in the proceedings. A contract can be inferred or constructed from the conduct of an offeree without the need for an express acceptance of an offer.330 It may be that in this particular area of the law a distinction can be drawn between on the one hand simple silence as to a particular right not a part of communications on the matter, where an implied promise not to assert the right is very unlikely, and silence on the same matter when the possible existence of the right has been expressly raised by the party against whom it is exercisable, when the implication of a promise not to assert the right may be more plausible. It is well established that a necessary element of proprietary estoppel, an assurance given to the claimant, can be given ‘expressly, or impliedly, or, in standing by cases, tacitly’.331 Under the analogous doctrine of common law election, that is the communication of a decision to assert one of two or more inconsistent rights, there may be no absolute rule that silence or inactivity can never constitute a communication of an election to assert one of the inconsistent rights.332 There is a similar situation regarding common law estoppel by representation, namely that a representation of fact will not normally be inferred from silence or inaction in the absence of a duty to speak or to provide information but may have that consequence in certain circumstances, although no clear principle has emerged to delineate what exactly are those circumstances.333 6.127  An illustration of the difference, when it comes to the inference of a promise, between silence and some active conduct is provided by the decision of Goff J in The Post Chaser.334 A contract for the sale and shipment of palm oil contained the usual clause that the sellers should provide a ‘declaration of ship’ to the buyers as soon as possible after the vessel sailed. Time was of the essence of this obligation. The sellers delayed for a month before providing the declaration. The buyers made no protest but requested the sellers to hand over documents to sub-buyers which was done. Two days after their request, the buyers rejected the goods on the basis that the documents were defective. It was held that

328 For a general consideration of inferred promises sufficient to found a promissory estoppel, see para 6.115 et seq. In Wallis’s Caxton Bay Holiday Camp Ltd v Shell-Mex and BP Ltd [1975] QB 94, Lord Denning MR was willing to infer a promise not to rely on rights accruing under the law of adverse possession when the persons having those rights kept silent and declined to reply to letters from the owner offering to sell the land to them. He invoked the principle derived from Hughes v Metropolitan Railway Co (1877) 2 App Cas 439 and his own decision in Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130; Stamp LJ (at 586) did not accept this analysis of the conduct of the persons in adverse possession. 329 For estoppel by convention see ch 5. 330 Brogden v Metropolitan Rly Co (1877) 2 App Cas 666. cf Baird Textile Holdings Ltd v Marks & Spencer Plc [2001] EWCA Civ 274, [2002] 1 All ER (Comm) 737, in which no overall and continuing contract was inferred from a long course of individual sales and purchases between the parties. 331 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 61 (Lord Walker). 332 See ch 8, para 8.94. 333 See ch 3, para 3.50 et seq. 334 Société Italo-Belge pour Le Commerce et L’Industrie SA (Antwerp) v Palm and Vegetable Oils (Malaysia) Sdn Bhd (The Post Chaser) [1982] 1 All ER 19, 27.

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A Clear Promise  6.129 the silence and absence of protest at the delay by the buyers did not amount to an implied promise not to enforce their right to terminate the contract but that the request to hand over documents did constitute such an unequivocal promise. The decision illustrates the difference between overt conduct, which may give rise to an implied promise, and silence, which is less likely to do so.335

(ii)  Breach of Duty Generally 6.128  It is said that a representation or a promise which can be the foundation of an estoppel can arise by silence when a person with a duty to state a matter is silent and omits to do so. In order to understand this proposition as a rule of law it is necessary to investigate the nature of the duty of disclosure which is said to have been broken. That duty of disclosure may be a legal duty such as a contractual duty or may be merely a moral duty. The general principle is said to be that in order that silence or inaction may acquire a positive content there must be a duty to speak or to act in a particular way, owed to the person prejudiced or to the public or a class of the public of which he is one.336 6.129  The main decisions on silence where there is a duty to speak concern estoppel by representation and they are examined in more detail where that form of representation is explained.337 The essence of promissory estoppel is the making of a promise not to enforce existing legal rights and it is not easy to see how in ordinary circumstances there could be a legal duty to make such a promise. It is much more likely that any duty to speak or to impart information would relate to the stating of some fact, such as the duty of a customer to inform a bank that a cheque drawn on his account may have been forged, with the result that any representation inferred from a failure to observe the duty would be a representation of fact which might, subject to other matters, bring about a common law estoppel by representation. Problems which can cause difficulties in the application of the law of estoppel in these circumstances are also discussed in connection with estoppel by representation.338 One suggestion made in connection with estoppel by representation is that there may be a separate form of estoppel, known as estoppel by negligence, which arises from an inferred representation by conduct in circumstances where a person is under a duty to provide information and negligently fails to do so. This subject is examined in chapter three on estoppel by representation and it is there suggested that what may be called estoppel by negligence may be accommodated within the established principles and rules governing representations inferred from conduct such that no separate form of estoppel is either required or justified.339 Since it is possible that a promise as well as a representation could be inferred from silence, the main principles on this subject are summarised here.

335 Two days after impliedly giving up their right to do so by the request to hand over documents, the buyers rejected the goods. This may raise a question of the possibility of the withdrawal of a promise not to enforce legal rights which is discussed in para 6.112. 336 Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890, 903 (Lord Wilberforce); Mercantile Bank of India Ltd v Central Bank of India Ltd [1938] AC 287, 304 (Lord Wright); Bethell Construction Ltd v Deloitte & Touche [2011] EWCA Civ 1321, para 20. 337 See ch 3, para 3.50 et seq. 338 See, in particular, ch 3, para 3.57 et seq. 339 See ch 3, part (H).

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(iii)  Breach of Legal Duty 6.130  The first situation, that of a legal duty of disclosure broken by silence on the part of the person with the duty, is illustrated in Greenwood v Martins Bank.340 The Plaintiff had an account with the bank and his wife had forged his signature on cheques in order to draw sums from the account. The Plaintiff became aware of the forgeries but did not disclose the information to the bank. He subsequently sued the bank for the return to him of sums paid out to his wife on forged cheques. The bank alleged, as was the case, that the Plaintiff was under a contractual duty to the bank to disclose the forgeries as soon as he became aware of their existence. It was held that the Plaintiff could not recover the amounts paid against the bank on the forged cheques because, after he became aware of the forgeries, his deliberate abstention from providing the relevant information to the bank was an inferred representation that the forged cheques were in order.341 As a result of the estoppel, the Plaintiff was unable to deny the accuracy of the representation and thus the validity of the forged cheques and so was unable to claim from the bank the amount paid to his wife under the forged cheques. This decision is therefore an illustration of an estoppel arising from deliberate silence in circumstances where there was a contractual duty of disclosure. The estoppel in question was a common law estoppel by a representation of fact. It is perhaps conceivable that in similar circumstances, and on appropriate facts, a promissory estoppel could be inferred from silence when there was a legal duty to provide information, although the inference of a promise may be much more difficult to draw than an inference of a statement of fact. 6.131  It might be questioned why it is necessary to introduce any form of estoppel into this type of breach of contract constituted by a failure to provide information. If someone such as a bank has suffered loss by reason of a breach of contract, that body can protect its position by claiming or counterclaiming damages or by relying on the rule that a person cannot benefit from his own wrong,342 without resort to any form of estoppel and without the reasoning that some form of representation, sufficient to support an estoppel, can be inferred from silence. The estoppel route to defeating a claim of this nature is said to avoid circuity of litigation. In addition, damages recoverable by an action for damages for a failure to disclose a matter may be reduced where, if the duty had been complied with, all that the party to whom the contractual duty was owed would have obtained was a chance of avoiding a loss. By contrast, the successful assertion of an estoppel would result in the party in question gaining the certainty of avoiding any loss.343 The possibility of an estoppel by representation arising where there is a failure to comply with a legal duty to speak is well established in law for the purposes of that form of estoppel but there seems little opportunity or need to import a similar rule of law into the realm of promissory estoppel. Promissory estoppel is a valuable addition to the older forms of common law estoppel such as estoppel by representation and estoppel by deed, but its usefulness depends on the limitations on its availability such that there seems little call for it to intrude into areas such as a

340 Greenwood v Martins Bank [1933] AC 51. 341 ibid, 58 (Lord Tomlin). 342 See, eg, Alghussein Establishment v Eton College [1988] 1 WLR 587; New Zealand Shipping Co Ltd v Societe des Ateliers et Chantiers des France [1919] AC 1. 343 This reasoning is explained in more detail in connection with estoppel by representation in ch 3, para 3.58.

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A Clear Promise  6.132 duty to speak where promissory estoppel may have an uneasy presence. One of the difficulties with an inferred representation of fact arising from silence or inactivity is to know the exact content of the inferred representation.344 There might be an equal or greater difficulty in knowing the content of an inferred promise derived from the silence of the promisor.

(iv)  Breach of Moral Duty 6.132  There also seems no doubt that a breach of a moral duty to speak may in an appropriate case lead to an estoppel by representation against the person who fails to observe the duty. The leading decision on an estoppel by an inferred representation in these circumstances is Spiro v Lintern345 in which the owner of a house was held to have such a non-legal duty to inform a prospective purchaser of the house that the person with whom the purchaser was entering into a contract of sale, the owner’s wife, was not the owner of the property. The decision gave rise to the well-known statement of principle by Buckley LJ which was in the following terms: If A, having some right or title adverse to B, sees B in ignorance of that right or title acting in a manner inconsistent with it, which would be to B’s disadvantage if the right or title were asserted against him thereafter, A is under a duty to B to disclose the existence of his right or title. If he stands by and allows B to continue in his course of action, A will not, if the other conditions of estoppel are satisfied, be entitled to assert his right or title against B.346

The principle, so stated, and its application, so as to create an estoppel, raise the obvious question of what are the exact circumstances in which as a generality there is a purely moral duty to impart information which is broken by silence. A further question has arisen on how far this type of duty, and the possibility of an estoppel, can be taken into the area of subsisting disputes between parties and even into the conduct of litigation.347 These subjects are explored where they arise in connection with estoppel by representation.348 In the d ­ ifferent

344 The exact nature of the inferred representation is discussed in ch 3, para 3.59. 345 Spiro v Lintern [1973] 1 WLR 1002. 346 ibid, 1010. This formulation has affinities to the principle of proprietary estoppel which in its modern application is probably not confined to interests or rights in land. Thus, if A stands by when B builds on A’s land in the mistaken belief that he is entitled to do so and A offers no protest, it may be said that A has given to B an implied assurance that B is entitled to act as he has and a proprietary estoppel may arise which requires A to give effect to his implied assurance. Proprietary estoppel is a subject which has increased in importance and become more clearly defined in recent decades and the requirements for its operation are examined in detail in ch 7. 347 See the decision of Webster J in Pacol Ltd & Others v Trade Lines Ltd and R/I Sif IV (The Henrik Sif) [1982] 1 Lloyd’s Rep 456; and the decision of Clarke J in The Stolt Loyalty [1993] 2 Lloyd’s Rep 281, 288–89. The duty has been said to include a duty to correct obvious mistakes. There are at least two difficulties in importing a moral duty of disclosure, leading to a possible estoppel if the duty is not observed, into the area of legal disputes and litigation. One is that in the adversarial system of litigation which operates in this country there is no general duty on one party to assist another party. The other is that legal and other advisers are placed in a difficult position in, on the one hand, fulfilling a supposed moral duty to correct the mistakes of other parties and, on the other, fulfilling their contractual duty not to act in a way which will cause disadvantage to their own client. The exact circumstances in which in the context of legal disputes and civil litigation a duty on a party to correct factual mistakes made by another party, let alone to make a promise not to enforce a right against another party, remain to be clarified. The question can arise in the preparation of evidence, including expert evidence. It could arise if one party sees that an opposite party’s expert has made a mistake in a report, say a numerical error or a mistake as to a relevant date, when the question will be whether the first party is under a duty to point out the error as soon as possible. 348 See ch 3, para 3.63.

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6.133  Promissory Estoppel area of promissory estoppel there seems no reason to impose the principle stated above or some analogous principle such that a breach of a moral duty to speak can give rise to an inferred promise as opposed to an inferred representation, and it seems unlikely that factual circumstances would arise which brought about such an inferred promise.

6.  The Meaning of the Promise: An Objective Test (i)  The Test 6.133  The question of what exactly is the content of the clear and unequivocal promise which may give rise to a promissory estoppel has to be determined by the application of an objective and not a subjective test. The question is not what the promisor himself intended or understood the promise to mean or what the promisee himself understood the promise to mean (a subjective test), but rather what a reasonable person in the position of the promisee and with the knowledge available to the promisee would have understood the promise to mean (an objective test).349 A rule that the promise must be clear and unequivocal makes it less likely than it otherwise would be that the application of the two possible tests will produce different meanings of a promise not to enforce legal rights. The fact that the promisee genuinely attributed one meaning to the promise whereas a reasonable man in the position of the promisee would have attributed to it a different meaning, may itself suggest that the promise is not sufficiently unequivocal to support the estoppel. As with an express promise, when it comes to the inferring of a promise from the statement or other conduct of a party the matter, as with most inferences, is also to be assessed in an objective fashion, the question being whether a reasonable man would draw an inference, and if so what exact inference, from what had been said and done in the light of all relevant surrounding circumstances.350 The same rule applies to common law estoppel by representation where the meaning of a representation made is determined objectively.351 An objective approach to the meaning of an assurance given is well established in proprietary estoppel352 and there

349 Bremer Handelsgesellschaft GmbH v Vanden Avenne-Izegem [1978] 2 Lloyd’s Rep 109, 126 (Lord Salmon). In part of his judgment in Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741, 767–69, Lord Cross appears to suggest that a subjective test may be that to be applied; for example, at 767, letter F, he stated: ‘What I understand Bowen LJ [[in Low v Bouverie] [1891] 3 Ch 82] and McNair J [in Marquess of Bute v Barclays Bank Ltd [1955] 1 QB 202] was saying – rightly or wrongly – was that the question to answer was whether the representee was justified in having no doubt that the words meant what he took them to mean’. However, these words, with their reference to the representee having to be justified in attributing a particular meaning to the language of the representation, can also be read as pointing to an objective test. 350 In Argo Systems FZE v Liberty Insurance Pte (Ltd) [2011] EWCA Civ 1572, para 46, Aikens LJ said that silence or inaction had to be considered objectively to discover whether exceptionally a promise could be inferred from it. In Seechurn v Ace Insurance SA-NV [2002] EWCA Civ 67, para 54, Ward LJ in examining whether a clear and unequivocal promise could be distilled from certain correspondence posed the question as being ‘whether the letters objectively construed contained the necessary promise, expressed or implied’. See also, Azov Shipping Co v Baltic Shipping Co [1999] 2 Lloyd’s Rep 159, 173 (Colman J). 351 See ch 3, para 3.48 et seq. 352 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 5 (Lord Hoffmann). The error of the Court of Appeal in this case was to apply a subjective approach to the meaning of an assurance made, and to the intention of the maker of the assurance. An objective approach emphasises the importance of examining the context in which a statement, whether a promise or an assurance, is made. A sentence which could be ambiguous and unclear in one context may be a clear and unambiguous assurance in another context: see ibid, para 84 (Lord Neuberger).

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A Clear Promise  6.136 seems no reason to adopt a different rule towards ascertaining the meaning of a promise which can found a promissory estoppel as compared with an assurance which founds a proprietary estoppel. Indeed, depending on its content a promise may be the basis of a promissory or proprietary estoppel. 6.134  It seems to follow from the nature of an objective test that the meaning of a promise or the inference of a promise must be determined in the light of facts known at the time of the promise and not by reference to any subsequent events. Yet in one case the meaning of a promise derived from a statement made was determined in the light of a subsequent decision of the House of Lords which changed the understanding of the law on the subject matter of the statement.353 Of course, as well as knowing of present facts and past events parties may have commonly held reasonable expectations of future events and the meaning of a promise may be coloured by such expectations.354 6.135  The objective approach is here to be applied to what may be perhaps separate but closely related questions. One question is whether what has been written or spoken is in truth a promise at all as opposed to some other form of communication such as the giving of advice or the making of a threat.355 Another question is, given that the statement made was a promise, what precisely is the meaning and content of that promise. A third question is whether a promise can be inferred from a statement or other conduct of a person. All of these questions are to be answered by the application of an objective test. There is a fourth question which arises from the requirement that the promisor intended his promise to be binding on him and to be acted on by the promisee. This requirement is examined separately later and, as will be explained, the intention of the promisor is again to be ascertained by applying an objective test.356 The use of an objective approach permeates the requirements of the law of promissory estoppel as it does estoppel generally.357

(ii)  Justification for an Objective Test 6.136  Since the application of an objective test permeates the law of estoppel it is worth here summarising the justification for that test within the area of promissory estoppel. Similar considerations apply to the same test as used within the area of estoppel by representation and the area of proprietary estoppel. There are good theoretical reasons for the rule that in judging whether what has been communicated by an alleged promisor is a promise and, if it is, in judging the content or meaning of the promise, an objective test is to be applied. The ultimate justification for the principle of promissory estoppel is that it is unjust that the

353 James v Heim Gallery (London) Ltd (1981) 41 P & CR 269. See para 6.118. Logic suggests that the meaning of a representation or promise made should be judged by reference to what the parties rightly or wrongly understood the facts and the law to be at the time of the representation or promise. 354 A good example of this last situation is Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130 in which a promise by landlords to accept only a reduced rent was interpreted to last for the duration of the Second World War. The expectations of the parties when the promise was made in 1940 were obviously important to this interpretation of the promise. See para 6.12 for the High Trees decision. 355 China-Pacific SA v Food Corporation of India [1981] QB 403. See para 6.89. For this decision on appeal see [1982] AC 939. 356 See para 6.141. See also ch 1, para 1.53, for a discussion of an objective test as a factor which applies throughout many aspects of the law of estoppel as a whole. 357 See below (n 359) for a possible exception to the objective test where the promise is made orally.

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6.137  Promissory Estoppel person who acts on a promise that strict legal rights will not be enforced against him should then and to his detriment have those rights enforced against him. It is a corollary of this principle that the recipient of a statement concerning the enforcement of rights against him should be able to evaluate and act on that statement as a reasonable man would understand the meaning of the statement. The maker of the statement should not in such a case be able to respond that, whatever the recipient of the statement reasonably thought was the status of the statement or whatever the recipient reasonably judged was the content of the statement, he as the maker intended that the statement should have a different status or a different meaning. The maker of a statement should in general accept the legal consequences of his statement founded on that which a reasonable man would make of his statement in terms of what it amounted to and the meaning of its content. Equally, the recipient of the statement should be bound to interpret that statement as a reasonable person in his position would interpret it and should not be able to say that he subjectively attributed a different status or meaning to the statement than would have been given to that statement by a reasonable person. 6.137  The principles of the interpretation of contracts in writing and other documents, such as notices, lead to the same conclusion. A promise of the kind which leads to a promissory estoppel is in many ways similar to a promise which forms a term of a contract, the main distinction usually being that in the former case the promise is not supported by consideration so as to enable it to become a contractual term. A fundamental principle of the law of contract is that the meaning of a written contractual term is to be elicited by an objective test. A person who is offered terms to which he may assent, and to which he does then assent, is bound by those terms as they would be understood by a reasonable person whatever may be the actual or subjective intention of the person offering those terms.358 A person who assents to offered terms is bound by the same meaning even though he may himself have understood the terms to have some different meaning. The construction of a document, such as a contractual notice, is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which is reasonably available to a person or class of persons to whom the document is addressed.359 It is significant to note that where an action is not consensual, such as a notice or a promise other than a contractual promise given by one person to another, it is the knowledge of the recipient at the time of the receipt of the communication which is relevant in applying an objective test to the status and meaning of the communication. A recipient of a promise alleged to create a promissory estoppel cannot be expected to appraise its meaning by reference to facts known to the promisor but not known to him. A further consideration, often referred to today, is that if there are two possible constructions of a statement in a contract, a court is entitled to prefer the construction which is consistent with business common

358 Smith v Hughes (1871) LR 6 QB 597; Thake v Maurice [1986] QB 644. 359 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896; Homburg Houtimport BV v Agrosin Private Ltd (The Starsin) [2004] 1 AC 715. See, however, Carmichael v National Power Plc [1999] 1 WLR 2042, 2043–49 (Lord Hoffmann) on oral contracts. It is possible that where a contract is wholly oral, the maker of the promise may be allowed to give evidence of what he subjectively meant by his language. If this is so as regards a promise made in an oral contract, it is arguable that the same exception to the usual objective test applies to ascertaining the meaning of an oral promise alleged to found a promissory estoppel. This point is further discussed in connection with oral assurances which may found a proprietary estoppel: see ch 7, para 7.152.

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A Clear Promise  6.138 sense and to reject the other construction.360 The meaning of a consensual promise, that is a promise which is given for consideration provided by the promisee and so forms a part of a contract, is ascertained objectively but in the light of the knowledge available to all of the parties to the contract. It would make little sense if a different and subjective test or approach to interpretation was applied to that which is alleged to be a promise creating a promissory estoppel as compared with that which is alleged to be a promise contained in a written contract or to that which is alleged to be a notice given under a contract.361 6.138  There is a limit to a purely objective approach to the interpretation of a written contract. If A and B enter into a contract which includes a term which objectively interpreted has a clear meaning but where A did not subjectively intend it to bear that meaning, and B knew of A’s intention when the term was agreed, then A may not be bound by the objectively assessed meaning. In these circumstances, A may resist the enforcement of the objective meaning of the term on at least two grounds. He may plead that there was no contract because there was no true meeting of minds or consensus ad idem on the term when both parties knew that a term in the sense in which it appeared in the contract was not intended.362 The other ground is that the contract might be rectified so as to bring it into accord with what the parties intended it to mean. In principle, and subject to other aspects of the law of rectification, a party which executes a contract which contains a term inserted, or inserted using particular language, as a result of a mistake made by him may obtain rectification when the other party was aware of the mistake and did nothing.363 In addition, in certain circumstances, a purported contract made in the above circumstances might be invalidated by reason of a mistake.364 A similar end result is likely to ensue if A makes a non-contractual promise capable of founding a promissory estoppel which considered objectively has one meaning but which both he and the promisee knew was intended to have a different meaning. Questions of consensus ad idem and of rectification do not arise in the same way as they might for a contract, but in the circumstances postulated the promisee would be unlikely to establish a promissory estoppel founded on the objective meaning of the promise since in the light of his own knowledge the promisee would be unlikely to be able to show that it would be inequitable to allow the promisor to resile from a promise which both parties knew had not been intended to bear the meaning which looked at on an objective test it appeared to bear. In addition, a promisee might have difficulty in showing that his actions in reliance on the promise were reasonably taken in such circumstances.

360 Rainy Sky SA v Kookmin Bank [2011] 1 WLR 2900, para 21 (Lord Clarke). See also Arnold v Britton [2015] AC 1619. 361 A similar role to that applied in construing contracts, namely the taking into account of all surrounding circumstances (the so-called matrix of fact), was considered for use in the realm of estoppel in Surrey Shipping Co Ltd v Compagnie Continentale (France) SA [1978] 2 Lloyd’s Rep 154, 158. 362 Attrill v Dresdner Kleinwort Ltd [2013] 3 All ER 607, para 86 (Elias LJ): ‘So a party who in fact knows that the other party does not intend to create legal relations cannot seek to contend otherwise by asserting that the evidence, objectively analysed, supports his case. He knows the truth and should not be allowed to deny it: Patman v Pay (1974) 232 EG 457. A similar rule applies to stop an offeree from seeking to snap up an offer on terms consistent with the objective evidence when in fact he knows that the offeror did not intend to agree those terms: Hartog v Colin & Shields [1939] 3 All ER 566’. 363 In general a mistake common to both parties is needed to support a claim for rectification of a contract but an unilateral mistake in the sense explained in this paragraph may in certain circumstances be sufficient: Riverlate Properties Ltd v Paul [1975] Ch 133; Thomas Bates & Son Ltd v Wyndham’s (Lingerie) Ltd [1981] 1 WLR 505. 364 See Treitel, The Law of Contract, 14th edn (Sweet & Maxwell, 2015) ch 8.

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6.139  Promissory Estoppel

7.  The Mental State of the Promisor (i)  Intention that Promise be Acted Upon 6.139  The law is that to establish a promissory estoppel it is not sufficient to show that a clear and unequivocal promise has been made but it is necessary also to show that the promisor intended the promise to be acted upon. This aspect of the principle shades into the requirement that what has been written or spoken is indeed a clear promise as opposed to some other statement, such as the giving of advice or the giving of a warning. An example given earlier is a statement made during the course of negotiations when a mortgagee had fallen into arrears in making mortgage payments where there was held to be no promise; there was no intention that what was stated should be taken to be a promise.365 In the High Trees366 decision in 1947 various prior cases relied on by Denning J as supporting the principle which he applied in this decision were cited as cases which the Judge thought were ‘really promises – promises intended to be binding, intended to be acted upon, and in fact acted on’.367 The language in which the requirement that the promise must be intended to be acted upon is stated differs between various expressions of that requirement. Sometimes it is said in terms that the promise must be one intended to be acted upon. Sometimes it is said that the promisor must know that the promise would be acted upon.368 Further variations on the same point are that the promisor must intend his promise to be binding369 or that the promise must have been made intending to affect the legal relations between the parties,370 or that the promisor must have had an intention to make, effect or confirm a legal relationship.371 6.140  The principle of promissory estoppel originated in and has been developed by and through successive decisions of the courts rather than through statute and so it is inevitable that somewhat different judicial expressions of what it is essential to show in order to rely on the principle have emerged. Leaving aside linguistic differences, the substance of what has been stated in earlier paragraphs of this chapter is that for the first of the three essentials of promissory estoppel to be satisfied, ie, a clear and unequivocal promise, it is necessary (a) that that which is relied on is a promise in the sense of being a statement of what the promisor will or will not do in the future with that statement intended to be binding,372 (b) that

365 Braithwaite v Winwood [1960] 3 All ER 642. 366 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. 367 ibid, 134 (Denning J). The previous decisions cited included Fenner v Blake [1900] 1 QB 426; and Re William Porter & Co Ltd [1937] 2 All ER 361. See para 6.11 for these decisions. 368 James v Heim Gallery (London) Ltd (1981) 41 P & CR 269, 277 (Buckley LJ). The facts of this decision are summarised in para 6.118. It is suggested below (see para 6.146) that a more accurate way of expressing the requirement is that the promisor at the time of the promise must have reasonably foreseen that the promisee would act in some way in reliance on the promise. 369 ibid, 375 (Buckley LJ). 370 Seechurn v Ace Insurance SA-NV [2002] EWCA Civ 67, para 24 (Ward LJ); Argy Trading Development Co Ltd v Lapid Developments Ltd [1977] 1 WLR 444, 457. In Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 421, Brennan J said that equitable estoppel (by which he appeared to mean promissory or proprietary estoppel) had no application to an assumption or expectation induced by a promise which was not intended by the promisor and understood by the promisee to affect their legal relations. 371 Baird Textile Holdings Ltd v Marks & Spencer Plc [2002] 1 All ER (Comm) 737, para 92 (Mance LJ). 372 The distinction here drawn is between a statement as to future conduct which may be changed and a statement as to future conduct which is intended to be binding in the sense that it cannot be changed: see Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 5 (Lord Hoffmann).

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A Clear Promise  6.142 the promise is clear and unequivocal in its content, and (c) that the promisor intends not only that he will be bound by it but also that it will be acted on by the promisee.

(ii)  Objective Assessment of the Intention 6.141  It is these components of the first of the three essential elements of a promissory estoppel which dictate the necessary mental state of the promisor. It has been explained that for reasons of both authority and principle the assessment of the existence of the first two components is to be by way of an objective approach. The question is whether a reasonable person in the position of and with the knowledge of the promisee would regard what was stated as being a promise in the sense stated and would discern a clear and unequivocal content of that promise.373 The question of whether the promise was intended to be acted upon by the promisee, that is the third component, is also be assessed by way of an objective test.374 Thus, the question of whether the promisor intended that the promise should be acted upon is that of whether a reasonable person in the position of the promise, and with relevant knowledge available to the promise, would conclude that the promise did have this characteristic. 6.142  Further support for the application of an objective test in deciding whether the promisor intended a promise to be acted on is found in the law of the other form of equitable estoppel, proprietary estoppel. For the purposes of proprietary estoppel it is generally necessary that the person against whom the estoppel operates has given an assurance intended to be acted upon that another person will have an entitlement to an interest in property.375 In Thorner v Major,376 certain communications passed between two men in the same family working in agriculture one of whom worked for years for no pay on the farm of the other. The House of Lords held that an assurance that the farm would be left to the person who had so worked in the will of the farm owner could be derived from the communications. Lord Hoffmann said that the Court of Appeal had departed from the correct principle in demanding proof that the person making the assurance had subjectively intended the effect of his words on the person with whom he was communicating. The correct test was whether the language used by the maker of the assurance would reasonably have been understood by the recipient of the assurance as something which was intended to be taken seriously as an assurance which could be relied upon,377 ie, an objective test. There can be no reason for applying a different test for promissory estoppel which is the other of the two forms of equitable estoppel. In a similar way, in order for a common law estoppel by representation to arise, it is necessary that the representor when he made the representation of an existing

373 A further question to be decided by an objective test is whether a promise can be inferred from the language or other conduct of a person. See para 6.115. 374 In Baird Textile Holdings Ltd v Marks & Spencer Plc [2002] 1 All ER (Comm) 737, para 97, Mance LJ said that ‘it was an established feature of promissory estoppel that the parties should have had the objective intention to make, effect or confirm a legal relationship’. 375 See ch 7 for proprietary estoppel, and see the statement of the principle by Oliver J in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 144; and the statement of the main elements of the estoppel in Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 29 (Lord Walker). 376 [2009] UKHL 18, [2009] 1 WLR 776. 377 ibid, para 5 (Lord Hoffmann).

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6.143  Promissory Estoppel matter intended that the representation should be acted upon by the representee, and in this case also the existence or otherwise of the necessary intention is to be judged objectively.378

(iii)  Probability of Reliance and its Foreseeability 6.143  In his formulation of the classic requirements of promissory estoppel and of estoppel by representation in Steria Ltd v Hutchison379 Neuberger LJ referred to it being reasonably foreseeable that the promisee or representee will act on the promise or representation made. This means that the promisor at the time of the making of the promise must as a reasonable person have reasonably foreseen that the promisee would act on the promise. Lord Neuberger made the same point in Thorner v Major,380 a decision on proprietary estoppel, where he said that there could be exceptional cases in which, even though a person reasonably relies on a statement made to him, it might be wrong to conclude that the statement-maker was estopped when he could not reasonably have expected that person so to rely. He suggested that such cases would be rare. Reasonable foreseeability of a future event at the time of some action taken is a concept relevant in other areas of the law, such as the principles governing remoteness of damage in tort and in contract.381 Since foreseeability is a part of the mental state of the promisor it is convenient to deal with this matter at this stage of the explanation, even though it is also relevant to a later element of the estoppel which is that the promisee has acted in reliance on the promise made. 6.144  The question here raised may be approached by a number of considerations. First, as already explained it is a component of the first element of the estoppel, the need for a clear and unequivocal promise, that the promisor at the time of the promise intended that the promisee should act upon it. It seems inherent in this requirement that the promisor must have reasonably foreseen that the promisee would or might act in some way in reliance on the promise since without such foresight the promisor could not normally have intended that there should be action on the part of the promisee. Secondly, and to go to the other extreme, it is not necessary that the promisor should have foreseen the exact way in which the promisee did in the event act on the promise.382 Nor need the promisor have known or foreseen the exact detriment which would ensue to the promisee if the promisor was able later to resile from the promise. Thirdly, it seems to be in conformity with what Lord Neuberger said, and to be in conformity with common sense, that the promisor can only be held to a promissory estoppel if (a) the promisor at the time of the promise should as a reasonable person have foreseen that the promisee might act in some way in reliance on the promise, and (b) the way in which the promisee did act in reliance on the promise

378 See ch 3, para 3.87 et seq. 379 [2006] EWCA Civ 1551, para 93. The full passage is cited in para 6.176. 380 [2009] UKHL 18, [2009] 1 WLR 776, para 78. 381 For the remoteness rule as to damages for a tort, see Clerk and Lindsell on Torts, 21st edn (Sweet & Maxwell, 2014) chapter 2, section 5. For the remoteness rule as to damages for a breach of contract see Treitel, The Law of Contract, 14th edn (Sweet & Maxwell, 2015) para 20-098 et seq. 382 See the framework of the principle of promissory estoppel stated by Morgan J in Crossco No 4 Unlimited v Jolan Ltd [2011] EWHC 803 (Ch), para 332, cited above (n 79), which refers to the promisor having known or reasonably foreseen that the promisee would act on the promise. For this decision on appeal, see [2011] EWCA Civ 1619. See ch 3, para 3.92 et seq for a consideration of the same question in connection with estoppel by representation.

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A Clear Promise  6.147 was within the zone of reasonable contemplation of the promisor at the time of the making of the promise. It seems fair that a promisor should not be visited with the consequences of a promissory estoppel if the promisee acted on the promise in some way which was wholly unforeseeable to the promisor at the time of the promise.383 6.145  A possible further way of approaching the question of the foreseeability of the promisee acting on the promise is to say that foreseeability and probability are primarily matters of evidential significance. The more foreseeable and likely it was to the promisor at the time of the promise that the promisee would act in some way in reliance on the promise, the more readily it can be concluded that the promisor intended that the representee should act on the promise and that the promise was to bind the promisor.

(iv)  Summary of the Necessary Intention 6.146  The law on the intention of the promisor and the foreseeability of the actions of the promisee may be summarised as follows. (a) The promisor must at the time of the promise have had the intention, objectively assessed, that the promisee would act in some way in reliance on the promise. (b) The promisor must at the time of the promise have reasonably foreseen that the promisee would act in some way in reliance on the promise. (c) The actual acts carried out by the promisee must have been within the zone of reasonable contemplation of the promisor at the time of the promise as that which might be done in reliance on the promise. (d) The promisor need not have foreseen that the promisee would carry out the particular and specific acts which he actually carried out. (e) The promisor need not have foreseen the particular detriment which would be likely to be suffered by the promise if the promisor was to be permitted to resile from his promise.

8.  Knowledge by the Promisor of his Rights (i)  The General Rule 6.147  A further question to be considered is whether, in order for a promissory estoppel to arise, it is necessary that the promisor at the time when he promises not to enforce a right knows of the existence of that right. An initial and obvious question is how it can come about that a person promises not to enforce a right when he is unaware of that right. In fact, what can happen is that a person states that he will not act in some way or will not make some assertion or raise some defence when in fact that person had a right to act in that way or make the assertion or raise the defence but was unaware of the right. An illustration of such a situation would be that a defendant in legal proceedings stated that he would not take any point on the lateness of the bringing of the proceedings after the occurrence of the

383 It is easy in this area of the developing law to find statements in authorities which run contrary to what may be a sensible appreciation of the necessary detailed rule. In Goldsworthy v Brickell [1987] Ch 378, 411, Nourse LJ said that the person asserting a promissory estoppel, there based on a promise not to exercise a right to set aside a lease, had to establish that the promise ‘was made with the knowledge or intention that it would be acted upon by [the promisee] in the manner in which it was acted upon’. It is doubtful whether the rigidity of the requirement so stated applies generally.

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6.148  Promissory Estoppel alleged wrong by him when he does not know that there is a limitation period, statutory or contractual, applicable to the claim which then gives or would later give him an unassailable defence to the claim. In such a case, the position is that the promisor promises not to assert a right of which he is not aware. The ignorance of the promisor may be one of law or one of fact. In the last example, a person may promise not to enforce a defence based on the lateness of the claim when he could raise that defence either because of his lack of knowledge of the law of limitation or because, despite his awareness of that law, he is unaware or mistaken as to the date on which some event has occurred. 6.148  Decided authority and considerations of policy combine to show that knowledge of a right by a promisor when he promises not to enforce that right is not a necessary ingredient of a promissory estoppel. The main authority is the decision of the House of Lords in Bremer Handelsgesellschaft GmbH v Vanden Avenne-Izegem.384 Under a contract for the sale of soya beans from the United States to Rotterdam, the vendors were entitled to serve notice requiring an extension of a shipment period in certain circumstances such as force majeure. The vendors served notice following an embargo on the sale of soya beans by the US Government. The purchasers claimed in the proceedings that the notice was defective. The Court held that the purchasers had lost their right to challenge the validity of the notice by reason of their earlier conduct and the decision may be regarded as one of promissory estoppel. It was held that the fact that the promisors were not aware of their right to challenge the validity of the notice at the time of their conduct was no bar to the estoppel.385 This statement of the law was subsequently applied by the Court of Appeal in Bremer Handelsgesellschaft mbH v C Mackprang Jr (No 1).386

(ii)  Justification of the Rule 6.149  Turning to justification and policy considerations, these militate in favour of the view expressed by Lord Salmon as recorded in the last paragraph that knowledge by the promisor of the right which is promised not to be enforced is not necessary. There are a number of reasons in favour of this view. It is true that for the purposes of some allied doctrines or principles a different rule as to the need for knowledge of rights is applied. It is the absence of any requirement that the promisor is aware of the right which he promises not to enforce which is one of the matters which distinguishes the principle of promissory

384 [1978] 2 Lloyd’s Rep 109. See also Habib Bank v Tufail [2006] EWCA Civ 374, para 23 (Lloyd LJ). 385 Bremer Handelsgesellschaft GmbH v Vanden Avenne-Izegem [1978] 2 Lloyd’s Rep 109, 126 (Lord Salmon). 386 Bremer Handelsgesellschaft mbH v C Mackprang Jr (No 1) [1979] 1 Lloyd’s Rep 221. Stephenson LJ considered that the lack of knowledge of rights by a promisor was only relevant in circumstances where the lack of knowledge was due to a patent deficiency such as a failure by the promisor to read the notice the validity of which was in dispute. His view therefore seems to have been that if the promisor as a reasonably prudent person ought to have known of his rights, his promise not to enforce those rights may lead to an estoppel against him even if he in fact did not know of his rights but that no estoppel can operate against a promisor who did not know of his rights and would not have so known even if he had exercised reasonable prudence. cf the view of Phillips J in Youell v Bland Welch & Co Ltd [1990] 2 Lloyd’s Rep 431, 450, where he said in connection with representations inferred from conduct that a right would not be exercisable if the person alleged to have made the inferred representation ‘was aware of the right when he embarked on the course of conduct inconsistent with it or that he was content to abandon any rights which he might enjoy which were inconsistent with that course of conduct’. It seems unlikely that any different rule as to the necessary knowledge of the promisor applies to express and implied promises. See also Proctor and Gamble Philippine Manufacturing Corporation v Peter Cremer GmbH [1988] 3 All ER 843, 854.

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A Clear Promise  6.151 estoppel from the doctrine of election.387 A different rule from that in promissory estoppel is also applied in proprietary estoppel. Proprietary estoppel rests on an assurance given by the owner of land that the person to whom the assurance is given can expect an entitlement to some interest or rights in that land. The preponderance of authority suggests that the assurance cannot bind the owner of the land unless at the time of the assurance the owner was aware of his rights which would be affected by giving effect to the assurance.388 The exact extent of the knowledge of a party who makes an assurance alleged to create a proprietary estoppel relating to other matters, such as knowledge of the expectation held by the recipient of the assurance of an entitlement to an interest or rights in land, is important for the purposes of proprietary estoppel and is discussed and summarised in chapter seven which deals with that form of estoppel.389 Despite the differences on the matter of knowledge between different doctrines or between different forms of estoppel, the reasons in support of the view of the law as stated for promissory estoppel in the last paragraph are as follows. 6.150  First, there is the underlying justification for the principle of promissory estoppel. In a similar way to other forms of estoppel it seems contrary to ordinary conceptions of morality that a person should promise clearly that he will not enforce a right and then, after the recipient of the promise has acted on what has been stated, that person is entitled to enforce the right after all. The fact that the promisor was not aware of the right at the time of the promise does not weaken the feeling that the law would not be in a satisfactory state if the promisor could ignore his promise. 6.151  Secondly, if it is necessary that the promisor knew of the right in question it is difficult to be certain on what degree of knowledge the promisor must have before the promise not to enforce the right can work an estoppel against him. Knowledge of a right can vary from a total understanding of the right relying on a full appreciation of the law and a complete knowledge of the relevant facts to a sketchy understanding of whether a right exists and, if so, what is its content. In practice, there may be intermediate degrees of uncertainty and of imperfection of understanding on these matters. It may be that due to uncertainties in the law or doubts on the facts nobody can state with confidence at the time of the promise whether the right existed or its exact content. There remains the question of whether the culpability of the promisor in not finding out the true position regarding his rights by a proper investigation of the facts or by the obtaining of legal advice is relevant. Particularly unattractive, because of the uncertainty which it creates, is the view that a promissory estoppel can arise in principle when the promisor is unaware of his rights but only when that lack of awareness is due to a failure by the promisor to make obvious investigations such as carefully reading a notice where the right in question depends on the validity of that notice.390 All of these difficulties and complexities can be avoided if there is a simple rule that the knowledge or otherwise of his right is irrelevant to the question of whether, by reason of his promise, a promisor is prevented from asserting the right. 387 See para 6.156. The general rule in common law election is that a person cannot be held to give up a right by reason of a decision to enforce an inconsistent right unless he knew of the right given up at the time of the decision. 388 For a full description of the rule in proprietary estoppel see ch 7, part (D), section 7. A proprietary estoppel can probably apply to rights other than rights in land. 389 See ch 7, para 7.172. 390 See the view of Stephenson LJ summarised above (n 386).

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6.152  Promissory Estoppel 6.152  Thirdly, the circumstances of individual cases where an estoppel is relevant can vary greatly. If in any particular case it appears harsh that a person should be bound by his promise that he will not enforce a right when he had no knowledge, and he could have had no knowledge, of his right (for example, if the promisee had deliberately failed to point out some relevant fact known only to the promisee) then the third main element of promissory estoppel, the requirement of injustice or unconscionability, can be brought into play. If for any reason as just indicated it is not inequitable to allow the promisor to assert his right, the third element of the principle will not be satisfied and the promisor will be permitted to assert his right. This residual possibility, founded on the flexibility of the promissory estoppel principle, avoids any potential difficulty in a hard or exceptional case such as in some cases where the promisor, however carefully he acted, could not have had knowledge of his full rights or where the promisor had been misled in some way. 6.153  As indicated above, once knowledge of a person’s rights at a particular time is made a part of a particular principle of law a number of problems emerge. These problems, including some already mentioned, may be summarised as follows. First, knowledge of the existence of a right may require knowledge of the law or of relevant facts or of both. Knowledge of a right to treat a contract as at an end due to a repudiatory breach of contract may require both knowledge of this general aspect of the law of contract and knowledge of the facts which constitute the breach. Even in the law of election between inconsistent rights, where it is clear that knowledge of the relevant facts is needed before a person’s acts can amount to an election between the rights, there remains some doubt as to whether knowledge of the relevant law is needed.391 Secondly, there is the difficulty mentioned in respect of actual knowledge of distinguishing between knowledge of an event and a mere suspicion that an event has occurred which creates an enforceable right.392 Thirdly, there is the matter of constructive knowledge or notice, ie, whether a person who has no actual knowledge of some matter is deemed to have knowledge of that matter if he could have ascertained it by investigations which it would have been reasonable for him to have made. Fourthly, there is the question of imputed knowledge or notice, ie, circumstances in which the knowledge of an employee or agent or adviser such as a solicitor can be imputed to the employer of that person. Fifthly, there is the distinction between knowledge and notice. A person may have notice of a particular fact at a particular time but he may not at that time know of the fact because he has omitted to read the notice or has misread the notice or has simply forgotten that of which he was notified.393 All of these conundra can arise in connection with common law election but can be avoided in connection with promissory estoppel if knowledge by the promisor of the right to which the promise relates is not a necessary component of the principle. There is a discussion of certain of these matters in the explanation of the doctrine of election.394 391 See Peyman v Lanjani [1985] Ch 457 in the Court of Appeal holding that knowledge of the law needed to ascertain the existence of inconsistent rights is required for the purposes of election but note that this question was deliberately left open in the House of Lords by Lord Goff in Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) [1990] 1 Lloyd’s Rep 391, 398. 392 See Chrisdell v Johnson (1987) 54 P & CR 257. 393 In connection with the doctrine of common law election the question of whether a person who has been told of some matter but has forgotten it still ‘knows of ’ that matter has been said to be an interesting philosophical point: MCP Pension Trustees Ltd v AON Pension Trustees Ltd [2012] Ch 1, para 17 (Elias LJ). 394 See ch 8, part (C), section 5.

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A Clear Promise  6.155 6.154  There is then no rigid rule of law that for the purposes of promissory estoppel a promise not to assert a right cannot create the estoppel unless the promisor was aware of the right at the time of the promise. Nonetheless, whether the promisor was so aware may be significant for the purposes of other aspects of the estoppel. For example, if the promisor is unaware of a particular right it is the less likely that what he states will be a clear and unequivocal promise not to assert that right. Also if a promisor is unaware of a right it may be that much less likely that his intention, objectively assessed, was to bind himself to give up the right. It may also be more difficult to infer a promise to give up a right from the conduct of the promisor if at the time of his conduct he was not aware of the right. The knowledge by the promisee of the right may also be significant. If the promisee is unaware of the right in question it may be less likely that he will act in reliance on a promise made to him that the right will not be asserted.395

9.  A Comparison with the Doctrine of Election 6.155  A central feature of most forms of estoppel is that a party, by reason of its ­statement or promise or assurance or assumption, loses its capacity to assert in legal proceedings some right or matter which it would otherwise be able to assert. So understood, promissory estoppel as a form of estoppel has a degree of similarity with other legal doctrines, and in particular with the doctrine of common law election. In general terms, the doctrine of election operates when a person having two alternative but inconsistent rights, and with knowledge of those rights, acts in a way which is consistent with a decision to assert one but not the other of those alternative rights.396 The effect of the doctrine is that the person involved is then bound by his election and cannot subsequently assert the other right. ­Possibly the best example of the doctrine, certainly in the field of land law, is the ‘waiver’ of the right to forfeit a lease where the tenant has committed a breach of covenant. If the landlord with knowledge of the breach demands or accepts rent under the lease which has fallen due after the breach he is said to have waived the breach and loses his right of forfeiture. The reason is that the demand for or acceptance of rent is consistent only with a decision by the landlord that, notwithstanding the breach of covenant, he elects that the lease shall not be forfeited but shall continue. This rule is an aspect of the doctrine of election.397 The knowledge of the landlord must be both of the facts which constitute the breach and of the right to forfeit the lease.398 Forfeiture clauses are almost universal in leases and a court will

395 See HIH Casualty Plc & General Insurance Ltd v Axa Corporate Solutions [2002] EWCA Civ 1253, para 21 (Tuckey LJ). 396 The doctrine of election including its relation to estoppel is considered in ch 8. There is a further form of election, equitable election based on the concept of approbation and reprobation, which is explained in summary in ch 8 but is not of significance for promissory estoppel. 397 Croft v Lumley (1858) 6 HL Cas 672, 705 (Bramwell B). The doctrine is well established in the law of landlord and tenant and goes back to Pennant’s Case (1596) 3 Co Rep 64a. The doctrine of election operating in this type of situation must be distinguished from the acceptance of rent after the determination of a lease which may lead to the inference of some new legal relationship relating to the land, such as a new periodic tenancy or a tenancy at will or a licence: see, eg, Javid v Aqil [1991] 1 All ER 243. Such an inference has nothing to do with election. 398 Peyman v Lanjani [1985] Ch 457. This rule as regards knowledge of rights, established in the Court of Appeal, may still be open to reconsideration in the Supreme Court: see ch 8, para 8.77 et seq.

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6.156  Promissory Estoppel probably assume as a matter of law that a landlord has knowledge of his right to forfeit the lease for breach of covenant.399 6.156  The significance of the doctrine of election for the mental state of the promisor in promissory estoppel is to confirm the difference between the rule in election that the owner of a right must know of his right at the time of his actions if his actions are to give rise to an election and the loss of a right whereas, as stated above, the promisor under the principle of promissory estoppel is not required to have knowledge of his right at the time of his promise for an estoppel to arise under which he loses the capacity to assert that right. The difference is one of the matters which serves to emphasise the differences between the doctrine of election and the principle of promissory estoppel as a form of the overall doctrine of estoppel. Both aspects of the law result in a person who has rights losing his capacity to enforce those rights. The differences between the two aspects of the law are explained more fully in the chapter which deals with election.400 In summary, the differences are as follows. (a) Promissory estoppel relies on a promise not to enforce a particular right under an existing transaction. Election rests on a decision to assert one of two or more inconsistent rights. (b) Conduct of the promisee in reliance on the promise is an essential element of promissory estoppel. No such reliance is necessary for the operation of an election. (c) Under the operation of promissory estoppel, the enforcement of a right may be suspended for a limited period, whereas under the operation of an election the inconsistent right or rights not asserted are permanently lost. (d) An election operates only when the person electing to assert an inconsistent right has knowledge of the facts and the general law or of a particular contractual or other provision which give rise to his inconsistent rights. No such knowledge is needed for a promissory estoppel to have effect. (e) Promissory estoppel requires an intention by the promisor that the promise shall be acted upon. There is no equivalent requirement in election that the person electing to assert one of two or more inconsistent rights intends that any action should be taken on his election. (f) Promissory estoppel is a more flexible principle than election in that, for example, the court may impose terms on a promisor before he is allowed to resume the enforcement of a right. No such flexibility or discretion operates as regards an election. The result of these differences is that a promissory estoppel and an election, albeit that they both result in the loss of an ability to assert a right, have important practical and conceptual differences in their operation.

(F)  Rights under an Existing Transaction 1.  The General Principle 6.157  The second of the three elements of promissory estoppel, or the second matter that the person who asserts the estoppel has to establish, is that there is a promise to the effect that the promisor will not enforce or fully enforce the legal rights of the promisor under



399 ibid, 400 See

482 (Stephenson LJ). ch 8, and in particular para 8.14 et seq.

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Rights under an Existing Transaction  6.158 an existing transaction.401 The principle of promissory estoppel since the days of its initial creation has been confined to promises, express or implied, not to enforce or not fully to enforce rights under an existing legal relationship between the promisor and the promisee. In Hughes v Metropolitan Rly Co,402 Lord Cairns spoke of rights arising under a contract not being enforced. In Birmingham and District Land Company v London and North Western Rly Co,403 Bowen LJ referred to persons with contractual rights inducing those against whom the rights were exercisable to believe that the rights would not be enforced or would be kept in suspense or abeyance for some particular time. Since these decisions, all applications of the principle have been kept within this boundary.404 The same boundary or limitation has been authoritatively stated in modern times.405 In Thorner v Major,406 it was said in the House of Lords that promissory estoppel ‘must be based on an existing legal relationship (usually a contract, but not necessarily a contract relating to land)’. 6.158  Although the legal right of the promisor must exist at the time of the promise, the exercise of the right may be something which can only happen in the future and sometimes on the occurrence of some future contingent events. For example, a landlord may have a present right to determine a lease by reason of some action or inaction by the tenant which has occurred, or he may have a right to determine the lease if some future event occurs such as that the tenant fails to carry out certain repairs to the demised property. A promise which gives rise to an estoppel may relate to the exercise of a right in either of the two types of circumstances just described. A promise of a positive nature that a party will exercise a right under a contract or other transaction is not apt to create a promissory estoppel.407 It is essential that promissory estoppel, if it is to fit into the underlying doctrines of English private law, shall be strictly limited in its operation. The limitation as just described is supported by the fact that the estoppel cannot in itself create a cause of action. The principle of promissory estoppel already impinges to a degree into the basic rule that consideration is needed to support a promise not contained in a deed. If the ambit of promissory estoppel was expanded so as to apply to promises beyond those which were not to enforce rights under an existing transaction, it is said that the principle would come to have an unacceptable conflict with the law on consideration.408 The view expressed 401 See para 6.24. 402 (1877) 2 App Cas 439, 448. See para 6.8. 403 (1889) 40 Ch D 268, 277. See para 6.10. 404 Possible exceptions are mentioned below in paras 6.162 and 6.163. Any such exceptional decisions do not accurately represent the law as it stands today. 405 See the definitions of promissory estoppel cited in para 6.24. The principle is explained as including the requirement of an existing legal relationship at the time of the promise in Chitty on Contracts, vol 1, 32nd edn (Sweet and Maxwell, 2015) paragraph 4-089. 406 [2009] UKHL 18, [2009] 1 WLR 776, para 61. This decision is primarily one on proprietary estoppel and is examined in detail in ch 7, para 7.39 et seq. The law was once stated in New Zealand as containing this fundamental requirement (see, eg, Higgs v Wilkinson (1903) 23 NZLR 74). More recently the need for a pre-existing obligation as the subject of the promise has been rejected in this jurisdiction: Burbery Mortgage Finance & Savings Ltd v Hindsbank Holdings Ltd [1989] 1 NZLR 356. A different test was suggested which was that the promisor and the promisee must have interests in the same subject matter. 407 Drexel Burnham Lambert International NV v El Nasr [1986] 1 Lloyd’s Rep 356. 408 See para 6.40 et seq for a fuller discussion of the relationship between promissory estoppel and the law of consideration. The matter of a limitation on the operation of the doctrine of estoppel as a whole and important principles of the common law such as the doctrine of consideration are examined in ch 2, para 2.159 et seq.

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6.159  Promissory Estoppel by Lord Denning that promissory estoppel is not confined to cases where the parties are bound by rights and obligations to each other409 cannot be regarded as correctly stating the law today. 6.159  It might be asked what exactly is meant in the law of promissory estoppel by the expression ‘an existing legal transaction’. Promissory estoppel centres on a promise not to enforce legal rights. An existing legal transaction is a situation which has arisen prior to the promise which creates or is alleged to create the situation in which one person or persons has rights enforceable in law against another person or persons. It does not matter in what area of law the rights arose. While a contract may be the most fertile source of rights likely to be affected by an estoppel (and a contract here includes rights under transactions creating proprietary interests in land which are fundamentally contractual in nature such as leases or mortgages) the rights affected may derive from a variety of other areas of law such as the law of torts, trusts, restitution, patents, sale and purchase of goods, etc. The word ‘transaction’ is here given a wide sense and it may be preferable to state the principle in terms of rights under an existing legal relationship.410 What is essential is that at the time of the promise there is an existing situation which creates legally enforceable rights available to the promisor against the promisee which the promisor states to the promisee will not be enforced or fully enforced. The exception is public law. No promissory estoppel can have an effect in criminal law and the relationship between public civil and administrative law, the law of town planning and the like, and promissory estoppel has not always been wholly clear. This last matter is best examined as a separate legal topic.411 Rights under an existing legal transaction are generally taken to mean rights which are enforceable in law and not to encompass the expectation that something will be done which is binding in good conscience but is not binding in law. It has been said in Australia that an expectation that a non-contractual and non-enforceable obligation (to take a lease under an arrangement which was unenforceable because written agreements had not been exchanged) would be honoured could in some circumstances create an estoppel which had the same effect as an enforceable agreement for lease.412 6.160  The decided cases confirm that the existing transaction or legal relationship, as well as constituting any type of contract, may take a wide variety of forms. Examples have been given earlier in this chapter. The pre-existing transaction may include a hire purchase agreement,413 a lease,414 a claim for a statutory pension following a war disability,415 a claim for 409 Evenden v Guildford Association Football Club [1975] QB 917, 924. This decision was overruled by the House of Lords in Secretary of State for Employment v Globe Elastic Thread Co Ltd [1980] AC 506. In Evans v Atticus Healthcare Ltd [2004] 2 WLR 713, paras 303–04, Wall J identified the existence of a legal relationship between the parties as one of the conditions necessary for a promissory estoppel to operate but added that the absence of this condition (or of other identified conditions) was not necessarily fatal to the estoppel. No authority was cited for this view and it does not appear correctly to state the law today. 410 See the citation from the judgment of Donaldson J in Durham Fancy Goods Ltd v Michael Jackson (Fancy Goods) Ltd [1968] 2 QB 839 set out below (n 417). 411 See ch 2, para 2.100, where an attempt is made to summarise the principles which today govern the relationship between the statutory functions of public bodies and the law of estoppel as a whole. 412 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 406–67 (Mason CJ and Wilson J). The decision may owe much to a desire to merge together forms of estoppel, such as promissory and proprietary estoppel, into a single unified principle as well as to special factors present in the case (see paras 36 and 37 of the judgments). 413 Ajayi v Briscoe (Nigeria) Ltd [1964] 1 WLR 1326. 414 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. 415 Robertson v Minister of Pensions [1949] 1 KB 227.

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Rights under an Existing Transaction  6.162 statutory compensation following a compulsory purchase of land,416 liability to the holder of a bill of exchange,417 and domestic and family relationships.418 There seems no reason why the existing legal relationship between the parties should not be that of a tortfeasor and the victim of the tort. In such a case the victim normally has a right to damages and he may promise not to assert that right or may promise to limit that right. Equally, the alleged tortfeasor may promise not to rely on some defence such as a limitation defence. It seems correct that in these circumstances the promisee, provided that he has acted to his ­detriment in reliance on the promise, should be able to assert that the other party should be kept to his promise.419

2.  Particular Instances (i)  Promise Made in Advance of a Contract 6.161  The typical example of a promissory estoppel is where a person has existing rights under a contract and promises that he will not enforce or fully enforce those rights and many instances of the operation of the principle fall into this category. The contract is then the pre-existing legal relationship. A somewhat different situation is that in which parties intend to enter into a contract and one party promises to the other that if and when the contract is entered into the first party’s rights under the contract will not be enforced or fully enforced against the other party. In these circumstances there is no pre-existing legal relationship, in the sense of a relationship creating enforceable rights and duties, at the time of the promise. It follows that in this type of situation the second necessary element of the principle of promissory estoppel, the need for rights under a pre-existing legal relationship, is not satisfied and that the promise cannot found a promissory estoppel. 6.162  It appears in view of the above reasoning that reliance by Lord Denning on a promissory estoppel in Brikom Investments Ltd v Carr420 cannot be supported. In that case a lease

416 Co-operative Wholesale Society v Chester le Street District Council (1997) 73 P & CR 111. 417 Durham Fancy Goods Ltd v Michael Jackson (Fancy Goods) Ltd [1968] 2 QB 839. Donaldson J (at 847) explained that the principle in Hughes v Metropolitan Railway Co (1877) 2 App Cas 439 was not confined to a pre-existing contractual arrangement but could extend to any case where ‘there is a pre-existing legal relationship which could in certain circumstances give rise to liability and penalties’. See also Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 399–400 (Mason CJ); and Attorney General v Codner [1973] 1 NZLR 545, 553. 418 Maharaj v Chand [1986] AC 898 (Privy Council on appeal from Fiji). In this case the Plaintiff and the Defendant, an unmarried couple, lived together with children in a property owned by the Plaintiff. The Plaintiff had acquired the property and when he left sought to evict the Defendant and her children. The Plaintiff had represented to the Defendant when he acquired the property that it would be a permanent home for her and the children. It was held by Sir Robin Cooke, delivering the judgment of the Privy Council, that these facts gave rise to an estoppel which gave a good defence to the Defendant. It was said (at 908) that at the time of the promise ‘A sufficient relationship had previously existed between the parties’. It is possible to analyse this decision in terms of a promissory or a proprietary estoppel in the sense that the Defendant was in effect awarded an irrevocable licence to occupy property for the rest of her life, a remedy which has more than once been taken to be appropriate in proprietary estoppel. In Fontana NV v Mautner [1980] 1 EGLR 68 Balcombe J rejected reliance on a promise of a similar nature by a landlord that a tenant could remain in occupation of a flat as long as he wished on the ground that the tenant had not established that he acted in reliance on the promise. 419 See Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394 (a decision of the High Court of Australia concerning a claim for damages for negligence). See para 6.19. 420 [1979] QB 467.

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6.163  Promissory Estoppel was granted under which the tenants were required to make contributions to the costs of repairs to the roof of the property carried out by the landlords. Prior to the grant of the lease the landlords had given an assurance that no such contributions would be levied. When the landlords sought to exact the contributions Lord Denning gave as his primary reason for them not being able to do so the assurance or promise which they had made. The two other members of the Court of Appeal421 rested their decision on there being a collateral contract between the landlords and the tenants. A collateral contract is a contract made during negotiations for a main contract and is a separate contract creating its own rights and obligations which may be enforced under the law of contract.422 The collateral contract in this case was an undertaking given by the landlords that in consideration of the tenants entering into the lease no contributions towards the costs of roof repairs would be exacted. The decision in this case on the basis of a collateral contract was in accordance with established rules of law so that it was unnecessary to have resort to a promissory estoppel in order to enforce the promise of the landlords. 6.163  There are other cases in which the important requirement of a pre-existing transaction with enforceable legal rights is treated in a somewhat cursory fashion. One is Maharaj v Chand423 in which a man had allowed a woman and her child to share his house and made her a promise that it would continue to be her home; this arrangement was said to amount to a pre-existing transaction although what exact legally enforceable rights were generated by the arrangement was not explored. It is possible that this decision of the Privy Council can be better analysed under the principle of proprietary estoppel where there is no equivalent requirement of a pre-existing legal relationship.

(ii)  Promise that a Contract Exists 6.164  A person may act in such a way that it is to be inferred from his conduct that he is promising that an existing arrangement or understanding between him and someone else is a contract when in truth that arrangement does not create a contract. In a similar way, a person may act so that it is to be inferred that he is promising that there is a contract between him and some other person when in fact the contract which exists is between the promisor and a different party or between the promisee and a different party. There is some suggestion that in these circumstances the party from whose conduct the promise is inferred may be bound by reason of a promissory estoppel from denying that there is a binding contract between him and the promisee.424 6.165  This suggestion appears to be incorrect in principle. The principle of promissory estoppel depends on a promise not to enforce legal rights under a previous transaction or a previous relationship where such legal rights exist. If the previous transaction did not create legally enforceable rights because it was not an enforceable contract, then the 421 Roskill and Cumming-Bruce LJJ. 422 See De Lasalle v Guildford [1901] 2 KB 215; Esso Petroleum Co Ltd v Mardon [1976] QB 801. 423 [1986] AC 898, 908. See also above (n 418). 424 Pacol Ltd & Others v Trade Lines Ltd and R/I Sif IV (The Henrik Sif) [1982] 1 Lloyd’s Rep 456, 466 (Webster J). Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 is a decision of the High Court of Australia in which a non-enforceable arrangement was in effect turned into an enforceable agreement by the operation of some form of estoppel. The facts of this case are summarised in para 6.18.

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Rights under an Existing Transaction  6.167 second element of promissory estoppel is absent and the promise that there is an enforceable contract cannot create a promissory estoppel which prevents the party making the promise from asserting that there is no contract. In one case, there had been for many years a general trading arrangement under which a manufacturer of goods had under individual contracts provided them to a retailer for sale in the retailer’s shops.425 It was held that no overall contract was to be inferred from the long trading relationship, so that there was no contractual term to the effect that the retailer could only terminate the relationship by giving a reasonable period of notice. It was also held that no estoppel arose which obligated the retailer to give reasonable notice to end the trading relationship. A primary ground for the rejection of an estoppel was that the estoppel was sought to be used to establish a cause of action, but a further objection to a promissory estoppel was that there were no preexisting contractual or other rights between the parties at the time of any alleged promise that reasonable notice would be given. A further difficulty in the way of an estoppel is that the pre-existing arrangement is sometimes prevented from being a valid contract by reason of some statutory restriction, such as that a contract for the sale or other disposition of an interest in land must be in writing, a requirement imposed by section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989. The effect of an estoppel which rendered the contract valid would then be to override a statutory provision.426 6.166  The particular suggestion that when A makes a promise to B that there is a contract between them, whereas the actual and existing contract is between B and C, a promissory estoppel arises between A and B is subject to the same difficulty. A suggestion of this general nature arose in The Henrik Sif427 where it was held that charterers had estopped themselves from denying that they were parties to bills of lading which were owners’ bills of lading to which the charterers were not in fact a party. This decision is difficult to justify, at any rate under the principle of promissory estoppel,428 since at the time of the alleged promise there was no contractual relationship between the Plaintiffs and the Defendant charterers. It has been suggested429 that the result of the decision may be justified, since at the time of the alleged promise there were contractual obligations derived from the bills of lading but this explanation ignores the fact that the contractual relationship was not one to which the charterers, as the party alleged to be estopped, were a party. 6.167  It is submitted that the true principle is that where A makes a promise to B that a binding contract of some nature exists between A and B when there is at the time no binding contract between A and B, the promise cannot create a promissory estoppel which binds A to his promise that a contract exists. Other elements of the principle of promissory estoppel may be present, such as that B has acted to his detriment in reliance on the promise, but one essential element is necessarily lacking, namely that at the time of the promise there must be a pre-existing transaction or legal relationship which creates rights which A promises not to enforce. The same conclusion should be reached whether the reason for the absence of 425 Baird Textile Holdings Ltd v Marks & Spencer Plc [2001] EWCA Civ 274. 426 The effect of this statutory restriction on a proprietary estoppel is a matter of some uncertainty, and the matter is examined in ch 7, para 7.63 et seq. 427 Pacol Ltd & Others v Trade Lines Ltd and R/I Sif IV (The Henrik Sif) [1982] 1 Lloyd’s Rep 456. 428 The Judge, Webster J, also considered that there were other possible grounds which justified his reasoning, such as estoppel by acquiescence (which usually means a proprietary estoppel), or estoppel by convention. 429 See Baird Textile Holdings Ltd v Marks & Spencer Plc [2001] EWCA Civ 274, para 89 (Mance LJ).

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6.168  Promissory Estoppel pre-existing rights between A and B was that there was no contract at all or was that there was a contract but A or B was not a party to that contract.430 6.168  One reason why what would otherwise be a contract does not create binding rights and obligations is that the arrangement is made ‘subject to contract’ with the meaning that no obligations are created until a further and formal contract is concluded. It is of course open to the parties to agree that their arrangement shall no longer be subject to contract and, provided that the other characteristics of a valid contract are present, the agreement will then become a binding contract in the usual way.431 It is possible that one party to a subject to contract arrangement makes a promise to the other party that the arrangement shall no longer be subject to contract. It seems unlikely that this could amount to a promissory estoppel when at the time of the promise, and because of the subject to contract status of the arrangement, there are no legally binding rights and obligations between the parties. However, in an appeal from Hong Kong432 concerning a subject to contract arrangement for an exchange of properties Lord Templeman said: It is possible but unlikely that in circumstances at present unforeseeable a party to negotiations expressed to be ‘subject to contract’ would be able to satisfy the court that the parties have subsequently agreed to convert the document into a contract or that some form of estoppel had arisen to prevent both parties from refusing to proceed with the transaction envisaged by the document.

A possibility is that the subject to contract arrangement could be in effect converted into a contract by reason of the operation of an estoppel by convention where the existence of a prior transaction itself creating enforceable rights and obligations is not an essential requirement of the estoppel in the same way as it is for promissory estoppel.433 6.169  The type of estoppel examined in the last few paragraphs could result in a person being estopped from denying that a contract existed between him and another person, but by reason of the operation of the principle of estoppel by convention rather than by reason of a promissory estoppel. Where parties have acted on a common but mistaken assumption of law, such as that there is a valid and enforceable contract between them when no such contract exists, a person may be estopped under the principle of estoppel by convention from denying the correctness of the assumption where it would be inequitable that he should be able to resile from the common assumption or convention.434 Some suggestion has been made that an estoppel by convention cannot extend to an assumption that a contract exists when there is no such contract, but there may be no reason in principle that this type of assumption cannot operate to create an estoppel by convention in appropriate but probably very limited circumstances.435 The critical difference between the two forms of estoppel is that an estoppel by convention does not depend on some legal relationship with legal

430 As mentioned earlier, there is the additional difficulty in the way of a promissory estoppel that the estoppel would in some cases of this type be sought to be used as a cause of action. 431 Law v Jones [1974] Ch 112. 432 Attorney General of Hong Kong v Humphreys Estate (Queen’s Gardens) Ltd [1987] AC 114, 127–28. 433 This matter is discussed in connection with estoppel by convention in ch 5, para 5.32. 434 If the reason for the absence of a valid contract is non-compliance with some statutory requirement, such as that the contract is not in writing as required by s 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989, then the estoppel cannot operate so as to contradict the statutory requirement: see ch 2, part (F); and ch 7, part (B), section 5. 435 See ch 5, para 5.32.

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Rights under an Existing Transaction  6.170 rights and obligations being in existence between the parties at the time of the o ­ ccurrence of the events which give rise to the estoppel. It is sufficient for estoppel by convention that there is some form of existing transaction or relationship between the parties to which the shared assumption can apply. That having been said, for there to be an estoppel there has to be shared between the parties an assumed state of fact or law so that in the circumstances here postulated the party asserting the estoppel by convention would have to share and act upon an assumption that their transaction had changed from a non-binding arrangement to a binding contract.

(iii)  Public Law 6.170  The extent to which estoppel as a general doctrine of law can apply in administrative law as an aspect of public law is a topic of some possible debate. Since the relevant considerations and authorities on this question apply to estoppel as a whole, the subject is best considered separately and on an overall basis and this is done in chapter two.436 The general thesis there advanced is that estoppel as a doctrine of private law has no part to play where public bodies are carrying out statutory public functions (for example, planning functions) which are required to be carried out so as to serve the purposes of the statute and in the public interest. An example, though not a very helpful example, of the supposed application of promissory estoppel in the area of administrative law may be mentioned here since it illustrates the unsatisfactory consequences of applying a promissory estoppel in circumstances which pay no heed to the proper limitations of the principle. In Augier v Secretary of State for the Environment,437 an applicant for planning permission, which had been refused by the local planning authority, succeeded on an appeal to the Secretary of State. The issue was the provision of sight lines so as to provide a safe access to a public highway from the proposed development. By sight lines is meant an area of land on both sides of the access (ie, a visibility splay) which must be kept clear of obstructions so as to enable emerging traffic to drive safely onto the highway. The Appellant, who was not the owner of the land needed to provide the sight lines, had undertaken that he would obtain that ownership, and the Secretary of State allowed the appeal and granted planning permission on this assurance. An application was made to the High Court to quash the decision of the Secretary of State on the argument that the undertaking was unenforceable. A reason given for the upholding of the decision of the Secretary of State was that the assurance was enforceable as a form of promissory estoppel. It is apparent that this reasoning raises the question of what pre-existing enforceable rights, with a promise not to enforce them, supported the finding of a promissory estoppel. The following issues of principle are raised by this decision. (i) There is the question of whether estoppel, and in particular promissory estoppel, applies at all in public law.438

436 See ch 2, part (D). 437 Augier v Secretary of State for the Environment (1979) 38 P & CR 219. 438 In most cases involving administrative law the promise in question is given by a public authority, but in the Augier decision the promise was one given to a public authority.

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6.171  Promissory Estoppel (ii) Of central importance to this part of the explanation of promissory estoppel and its second element is the difficulty in fathoming what possible rights the Appellant was promising not to enforce when he gave the assurance to the Secretary of State. (iii) If the promise said to be the subject of the estoppel could be enforced at all it was by the Secretary of State, to whom the promise was given, or conceivably by the local planning authority. Yet such an enforcement would be to use the estoppel as a cause of action, that which it had been repeated for decades could not be done.439 This aspect of the matter appears not to have been considered in the decision. 6.171  If the principle of promissory estoppel is to take its place in the corpus of English private law, a place which it undoubtedly now has, it must be a principle applied as an exception to the fundamental requirement of consideration necessary to make a promise enforceable and, like any exception, must therefore be subject to its own clear limitations of which the existence of a pre-existing transaction creating enforceable rights is a cardinal limitation. The credibility and usefulness of the principle is weakened if it is extended into or applied in circumstances where its essential elements are not present, with the result that a carefully circumscribed principle is used as a reason for enforcing any promise in any circumstances whether or not the usual essential characteristics of a contract, in particular the requirement of consideration, are present.

(iv) Trespassers 6.172  A possible application of the need for pre-existing rights before there can be a promissory estoppel arises when a person occupies land as a trespasser. In one case,440 a wife left the matrimonial home which she owned leaving her husband in occupation. Following a decree of divorce, the wife brought proceedings to evict her former husband from the house and to claim damages for trespass. It was held that there was no implied licence that the husband could occupy the house.441 It was argued that the husband was entitled to resist a claim for damages for trespass from the date of the decree absolute of divorce until the date when he left the property on the principle that the wife had conducted herself such that there was an inferred promise that she would not assert her right to possession until she had given reasonable notice that she proposed to assert that right. It was held that the principle to be drawn from Hughes v Metropolitan Rly Co442 and other later cases had no application as between a landowner and a trespasser.443 Leaving aside this exclusion of promissory estoppel from a particular area of legal relationships, the decision under consideration is readily justifiable on the footing that the wife, simply by delaying proceedings to evict her husband and claim damages for trespass, had not acted in such a way that any promise should be 439 See, eg, Combe v Combe [1951] 2 KB 215. A more acceptable course would have been for the Secretary of State, in allowing the appeal and granting planning permission, to have imposed a condition that the development could not be commenced until the developer was in a position to provide the necessary visibility splays, and that thereafter the splays would be kept free of obstructions. 440 Morris v Tarrant [1971] 2 QB 143. 441 It was also held that the husband was entitled to occupy the house while he applied to the Court for an order that he be allowed to remain under the Matrimonial Homes Act 1967 and was not to be treated as a trespasser during that time. 442 (1877) 2 App Cas 439. 443 Morris v Tarrant [1971] 2 QB 143, 160 (Lane J).

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Injustice or Unconscionability  6.174 inferred that the husband would not be treated as any other trespasser or that a reasonable period of notice would be given before he was obliged to leave the property. Mere inactivity or silence is not generally sufficient to amount to a promise not to enforce a legal right.444 6.173  It is difficult to understand why a situation of landowner and trespasser should be excluded automatically and in principle from the possible application of promissory estoppel. Leaving aside the complexities of matrimonial relationships and matrimonial law, if A enters onto the land of B as a trespasser B obtains at once a legal right to have A removed and a right to damages for trespass until A leaves. It is possible that B may promise not to assert these rights for a limited period or until B gives some notice. If A acts to his detriment on this promise there seems no reason of principle why B should not be held to the promise. The essential characteristic of a promissory estoppel, that a person having existing rights, here a right to evict a trespasser and obtain damages from the trespasser, promises not fully to enforce those rights, is satisfied.445 It seems regrettable that an exception should be created to the general operation of promissory estoppel within its area of availability, when there is no good reason to erect that exception. Looking at land transactions more generally, the three leading cases which led to today’s principle of promissory estoppel were cases involving the letting or occupation of land.446

(G)  Injustice or Unconscionability 1.  The Requirement of Showing Injustice or Unconscionability and their Meaning 6.174  The general foundation and justification of the various forms of estoppel developed by the law is the concept of morality and justice that when a person has made a statement or promise intending it to be binding there are circumstances in which that person should be kept to what he has written or stated.447 The primary route in law for such an enforcement of a promise is of course the law of contract. Yet circumstances arise in which a promisee

444 See para 6.125 et seq. 445 It might be difficult to infer a contractual licence in favour of A in the circumstances here postulated, since A gives no consideration for the promise not to evict him. A different and possibly simpler legal analysis of the situation described is that the actions of A constitute the granting of a bare licence which as long as it subsists prevents B being a trespasser. 446 Hughes v Metropolitan Railway Co (1877) 2 App Cas 439; Birmingham and District Land Company v London and North Western Rly Co (1889) 40 Ch D 268; Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. It seems that in the first two cases the person who remained in occupation of the land after the termination of his strict legal rights would have been a trespasser had it not been for the operation of the estoppel. In Perrott (JF) & Co Ltd v Cohen [1951] 2 KB 705 the promise or assurance, which in the view of Denning J brought about an estoppel, was that a person who was using property did so as a tenant and not a trespasser. A further decision in which promissory estoppel has been held to apply to the occupation of land and a family relationship is Maharaj v Chand [1986] AC 898. In Wallis’s Caxton Bay Holiday Camp Ltd v Shell-Mex and BP Ltd [1974] 3 All ER 576, 580, Lord Denning MR was prepared to hold that there could be inferred against a trespasser by reason of his refusal to answer letters a promise that he would not claim a possessory title based on a period of adverse possession. 447 An exception to this principle is estoppel by deed where it is not a requirement that it should be just that a person is kept to that which he has stated in a deed. The justification for this form of estoppel seems to depend more on the enhanced status of statements supported by the formality of a deed. The forms of estoppel which require

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6.175  Promissory Estoppel cannot rely on a contract. The most notable instance is where the promise is not supported by consideration.448 Other reasons may occur, such as some formal requirement of certain types of contract being missing or that a limitation period applicable to a breach of contract has expired, whether a statutory limitation period449 or a limitation period expressed as a term of the contract. In such cases the application of the principle of promissory estoppel may render a promise enforceable.450 Promissory estoppel requires that certain strict requirements are satisfied before it enjoins that the promise is in effect enforced, which are that the promise is clear and unequivocal and is a promise not to enforce rights which exist under some previous transaction. These limiting requirements are central to the justification and the operation of the principle of promissory estoppel. However, the root justification of the promissory estoppel principle is that of morality, and this dictates that there is a further requirement before the estoppel can operate, namely a requirement that it is inequitable or unjust or unconscionable that a person should be able to ignore his promise. This further limitation befits the origin of the principle as one of equity.451 6.175  There has been some discussion based on observations in the authorities on what exactly is meant by injustice, or inequity or unconscionability. No distinction is to be drawn in the present context between these three abstract nouns, and for this reason this part of this chapter, as similar parts of other chapters dealing with other forms of estoppel, has reference in its heading to ‘injustice’ or ‘unconscionability’.452 These observations in the decided cases revolve around the questions of whether a person asserting a promissory estoppel has to show that he acted in reliance on the promise made and whether he has to show that he would suffer detriment or prejudice if the promise was not enforced. These matters will be considered separately but it is preferable before doing so to come directly to the clear and authoritative modern exposition of this subject and of the third of the three main elements of the principle of promissory estoppel. If one has to identify a single factor which a person asserting most forms of estoppel has to establish in order to obtain some relief from the court it would be the injustice or unconscionability which has to be shown to be likely to arise if there is no estoppel.453 It is important to have in mind that ­injustice or reliance on the statement made and have the element of unconscionability as one of their essential requirements are sometimes grouped together as ‘reliance-based’ estoppels. The forms of estoppel within this classification are estoppel by representation, estoppel by convention, promissory estoppel and proprietary estoppel. Estoppel by record, often called estoppel per rem iudicatam, also has no requirement of injustice or unconscionability. See ch 9 for estoppel by record and its three principles. The doctrine of common law election which has affinities to promissory estoppel is also not dependent on a requirement of injustice. Election is explained in ch 8. 448 See para 6.52. 449 The general limitation period for claims for breaches of a contract not contained in a deed is six years from the accrual of a cause of action arising from the breach: Limitation Act 1980, s 5. 450 Where the contract is unenforceable or invalid by reason of a statutory limitation there may be a difficulty in a promissory estoppel overriding that limitation: see para 6.146. The relationship between estoppel as a general doctrine and statutory provisions, such as those requiring some form of formality for a contract or other transaction or those conferring protection on certain types of tenant, is discussed generally in ch 2, part (F). In the case of a promise not to rely on a statutory or contractual limitation period the promise which is directly enforced by reason of a promissory estoppel is the promise not to rely on the limitation provision as a defence to the enforcement of the original contractual promise or other right. 451 Injustice is also an essential element of the common law estoppels by representation and by convention. 452 See the headings for parts or sections of chs 3, 4, 5 and 7. 453 Gillett v Holt [2001] Ch 210, 225 and 232 (Robert Walker LJ); Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 91 (Neuberger LJ). The view of Robert Walker LJ was that unconscionable conduct ‘permeated’ all the elements of the doctrine of proprietary estoppel: Gillett v Holt, ibid, 225.

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Injustice or Unconscionability  6.177 ­ nconscionability has to be judged as at the moment when the promise falls to be performed u and so looks backwards to the events which have occurred up to that date.454 6.176  The need which arises is to define or refine what needs to be shown in order to demonstrate injustice or unconscionability in the context of promissory estoppel.455 When a subject of this nature is discussed there is an inevitable tension between, on the one hand, the establishment of what exactly is meant by the concept of unconscionability, and on the other, the avoidance of erecting a verbal straightjacket when so many different factual circumstances are found in different cases. With this proposition in mind the leading exposition of the meaning of injustice or unconscionability as a requirement of a promissory estoppel is that given in the Court of Appeal by Neuberger LJ in Steria Ltd v Hutchison.456 The decision concerned an alleged estoppel arising by reason of a representation or promise made to a contributor under a pension scheme. In connection with the allegation of an estoppel by representation or a promissory estoppel it was said as an avowedly broad general formulation that, it seems to me very unlikely that a claimant would be able to satisfy the test of unconscionability unless he could also satisfy the three classic requirements. They are (a) a clear representation or promise made by the defendant upon which it is reasonably foreseeable that the claimant will act, (b) an act on the part of the claimant which was reasonably taken in reliance upon the representation or promise, and (c) after the act has been taken, the claimant being able to show that he will suffer detriment if the defendant is not held to the representation or promise. Even this formulation is relatively broad brush, and it should be emphasised that there are many qualifications or refinements which can be made to it.457

It should be noted that in formulating the second and third of the three classic requirements Neuberger LJ regarded them as normally leading to the satisfaction of the test or requirement of unconscionability. 6.177  Much the same thing had been said by Neuberger J in connection with estoppel by convention where he pointed out that in order for an estoppel by convention to be established, the court must generally be satisfied that (a) the claimant will suffer real prejudice if the other party or parties to the convention are not kept to it and (b) the prejudice arises from its reliance on the convention.458 A very similar rule applies to proprietary estoppel

454 Walton v Walton (unreported, 14 April 1994: see [1994] Court of Appeal Transcript No 479) para 21 ­(Hoffmann LJ). This is said to contrast with contract. This rule may be of greatest significance to proprietary estoppel where the court decides what remedy to issue at the time the matter comes before the court, but it is also significant generally for all of those forms of estoppel where injustice or unconscionability is an essential element of the estoppel. 455 Unconscionability has been said to be something which would ‘shock the conscience of the court’ (Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 92 (Lord Walker)) or that which appears in some way morally reprehensible (Multiservice Bookbinding v Marden [1979] Ch 84 (Browne-Wilkinson J)). Unconscionability as a general concept within the law of estoppel is examined in ch 1, para 1.44 et seq; and its specific application as one of the four main elements of proprietary estoppel is examined in ch 7, para 7.95 et seq. 456 [2006] EWCA Civ 1551. 457 ibid, para 93. This formulation is supported by the statement of Lord Scarman in the Privy Council in Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank [1986] AC 80, 110, that the essence of an estoppel by representation is a representation, whether express or implied, intended to induce the person to whom it is made to adopt a course of conduct which results in detriment or loss. 458 PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994 (Ch), [2004] Ch 142, para 222.

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6.178  Promissory Estoppel as regards reliance and detriment.459 Following this broad-brush formulation of the unconscionability or injustice test, it is necessary to look in more detail at the second and third of the classic requirements as formulated which are reliance and detriment. There appears to be no decision in which it has been doubted that it is necessary that a person who wishes to rely on a promissory estoppel has to establish that it would be unjust or unconscionable for the promise which founds the estoppel not to be enforced before he can take advantage of the estoppel. Nor has it ever been in doubt that it must appear that the person asserting the estoppel has acted in some way in reliance on the promise made. The doubts which have been expressed concern ancillary questions such as what exactly is connoted by reliance, how reliance is to be established, and whether detriment to the promisee is an essential component of injustice and, if so, what is meant in this context by detriment. Fortunately any doubts on these ancillary but important matters have now been to a considerable extent resolved. 6.178  It should be emphasised in connection with the formulation of Neuberger LJ that reliance and detriment are components of what is the ultimate or overarching element of injustice or unconscionability. It is doubtful if a promissory estoppel can ever be established without both reliance on the promise by the promisee and the prospect of detriment to the promisee if no estoppel operates. On the other hand, there may be circumstances in which reliance and detriment are shown but it is still not unconscionable to allow the promisor to resile from his promise. This latter situation may occur either because there is some additional factor, such as the effect on third parties of allowing the estoppel which results in the overall unconscionability test not being satisfied, or because of some aspect of reliance or detriment, such as the detriment being unlikely to occur or small in extent, which renders it not unconscionable to allow the promisor to resile from the promise. It is likely that unmeritorious conduct by the promisee in connection with the overall transaction between the parties could result in it not being unconscionable that the promisor is allowed to resile from his promise even though the other elements of a promissory estoppel are satisfied.460 These possibilities are examined later. 6.179  In addition, it should be remembered that the formulation is avowedly broad brush. It assists the orderly examination of the present subject to analyse what was said in Steria Ltd v Hutchison in some ways as though it was a statutory provision even though that was not of course its intent. In accordance with this method of approach, it is necessary to look more closely at parts of the formulation such as (a) what is meant by it being ‘reasonably foreseeable’ that the promisee will act on the promise, (b) what is meant by the act of the promisee being ‘reasonably taken’ in reliance on the promise, (c) what is meant by the promisee having to show that ‘he will suffer’ detriment, and (d) what is meant by an act being taken ‘in reliance’ on a promise. These aspects of the law are examined in this part of the chapter or elsewhere in this chapter. They are examples of the qualifications or refinements to which the Judge referred. Since the formulation applies to estoppel by representation as well as

459 See ch 7, para 7.101. The first of the three requirements as stated by Neuberger LJ is somewhat different for proprietary estoppel in that that form of estoppel is founded on an assurance which may be, but is not necessarily, a representation or promise and there is no requirement that the assurance is clear and unequivocal. 460 An example is the reasoning of Lord Denning MR in D & C Builders Ltd v Rees [1966] 2 QB 617 discussed in para 6.16. The same possibility arises in connection with proprietary estoppel. See ch 7, para 7.252.

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Injustice or Unconscionability  6.181 promissory estoppel much the same questions arise in respect to estoppel by representation, and where appropriate cross-references to chapter three on estoppel by representation are given in the footnotes to this chapter. Similar questions also arise in connection with estoppel by convention and proprietary estoppel and are examined in chapter five and chapter seven. It is therefore necessary now to turn to the rules on reliance and prejudice which are central to the requirement of injustice or unconscionability.

2. Reliance (i)  The Need for Reliance 6.180  The two components of the third main element of promissory estoppel, the element of injustice, are therefore that the person who asserts the estoppel has acted in reliance on the promise made and that that person will suffer detriment if the promisor is not held to the promise. Of course, action is here used in the sense of the conduct of the promisee and inactivity in reliance on a promise is sufficient, an obvious example of inactivity being that the promisee fails to take legal proceedings within a limitation period because he has been told that the promisor will not rely on limitation as a defence to proceedings. It is not surprising that the conduct of the promisee is often that of an absence of action since the promise which creates the estoppel will often be a promise not to enforce a legal right that a person must do something, and the natural reaction of the promisee is not to do that which apart from the promise he would be required to do such as carrying out works to property or paying a sum of money.461 6.181  There would be no justification for enforcing a promise as an estoppel unless the recipient of the promise had acted in reliance on the promise. All leading authorities accept that a person setting up a promissory estoppel is constrained by the need that it must be shown that he has relied on the promise which constitutes the estoppel. The earliest formulations of the principle contain this requirement. In Hughes v Metropolitan Rly Co,462 Lord Cairns referred to one of the parties to a transaction being led to suppose that the strict rights against him under a contract would not be enforced. In one of the clearest modern formulations of the principle it was stated that the principle required, inter alia, ‘reliance by the representee (whether by action or by omission to act) on that representation’.463 In the High Trees decision, Denning J said that the promise had to have been acted upon if an estoppel was to arise.464 There is an abundance of authority which repeats the need for

461 Going back to the origins of the promissory estoppel principle both Hughes v Metropolitan Railway Co (1877) 2 App Cas 439 and Birmingham and District Land Company v London and North Western Rly Co (1889) 40 Ch D 268 were instances of the promisee omitting to take action required by a contract which would otherwise have been carried out because of the communications made to him. 462 (1877) 2 App Cas 439, 448. 463 BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783, 810 (Robert Goff J). The full citation is set out in para 6.24. 464 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, 134. In Tool Metal Manufacturing Co Ltd v Tungston Electric Co Ltd [1955] 1 WLR 761, 764, Viscount Simmonds described the principle to be applied as that the promisee must have been led to alter his position by reason of the promise.

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6.182  Promissory Estoppel reliance if there is to be an estoppel. One further example will suffice. In Amherst v James Walker Goldsmith & Silversmith Ltd,465 a landlord had a right to a rent review under a lease which could be initiated by a notice served by him. It was suggested that a considerable period of delay by the landlord in serving a notice gave rise to an estoppel which prevented the landlord from asserting his right to a rent review. One of the reasons given by the Court of Appeal for rejecting this suggestion was that the tenants could not prove that they had relied on any representation or promise made concerning the rent review.466

(ii)  The Meaning of Reliance 6.182  It is pertinent to ask exactly what is meant in the case of a promissory estoppel by a person acting, or omitting to act, ‘in reliance on’ a particular promise.467 It is evident that what is meant is that there must be a causative link between the promise and the conduct of the promisee.468 However, this simple statement conceals a number of questions or possibilities which may arise. It could be argued that in order to establish reliance on the promise, the promisee has to show that his conducting himself in a certain way would not have happened apart from the promise; this may be called the sine qua non or ‘but for’ test. On the other hand, it may be that all the promisee needs to show is that the promise was at least one of the factors which brought about his conduct even though it was not the only, or even the most important, factor and that once this has been shown the degree of importance of the promise as a motivating factor towards the conduct of the promisee is of no further relevance to the requirement of reliance. It is possible in this context to argue for a more general or factual or common sense approach to the question such as is sometimes applied by courts faced with issues of causation.469 The usual approach will be to determine first, whether and when a promise was made and in what terms it was made, and then to decide whether subsequent acts by the promisee were taken in reliance on the promise. One reason why the actions of the promisee were not taken in reliance on a promise may be that the promisee misunderstood the promise. Therefore, if a promise on its correct interpretation as 465 [1983] Ch 305. 466 ibid, 330 (Lawton LJ): ‘He would only have been estopped if the tenants could have proved that by his words or conduct he had represented that he did not intend to ask for the payment of a higher rent and in reliance on that representation they had altered their position to their prejudice’. A further question which arises from this decision is the extent to which a promise not to enforce a right can be inferred from silence and from the absence for a period of any assertion of the right: see para 6.125 et seq. 467 A very similar question arises in estoppel by representation where it has to be shown that the action or inaction of the representee was in reliance on the representation made to him. The general formulation of the ‘three classic requirements’ by Neuberger LJ in the Steria case applies equally to promissory estoppel and to estoppel by representation and there is no reason to think that there is any significant difference between the principles of law on the present subject between the two forms of estoppel. See ch 3, para 3.111 for the formulation of Neuberger LJ. The same requirement of reliance applies to proprietary estoppel. See ch 7, part (E). 468 In the formulation of rules of law causation is a jurisprudential or even philosophical concept which should be approached with caution. One view is that general rules defining causal connection or examining ‘proximate cause’ are misguided and may even be ‘a deception and a cheat’: see Hart and Honoré, Causation in the Law, 2nd edn (Clarendon Press, 1983) 4. 469 ‘I think the case turns on a pure question of fact to be determined by common-sense principles. What is the cause of the loss?’: Leyland Shipping Co v Norwich Union Fire Insurance Society [1918] AC 350, 363 (Lord Dunedin). On occasions in the law of estoppel there is reference to a representation or promise having to be a proximate cause of action by the representee or promisee: see Dixon J in Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641, 676; and in Thompson v Palmer (1933) 49 CLR 507, 547.

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Injustice or Unconscionability  6.183 objectively determined has one meaning, and the promisee mistakenly attributes a different meaning to it, it cannot be said that actions taken by the promisee were in reliance on the promise as actually made.470 If the promise has to be inferred from acts and statements of the promisor which take place over a period of time it may be that there will be some time overlap between the acts of the promisor which create the inferred promise and the acts of the promisee which constitute reliance on that promise.471 6.183  In considering reliance in the context of promissory estoppel, the courts have set themselves against some of these approaches and have in general favoured an approach which is to assess the degree of influence which the promise had on the conduct of the promisee and then to conclude, whether in the light of that influence, it would be unjust that the promisor should be allowed to disregard his promise and enforce his strict legal rights.472 From this general approach there can be derived three propositions which indicate the correct test to be applied when a question of reliance arises in promissory estoppel. First, it is clear that the person asserting the estoppel does not have to show that his conduct derived only from the promise of the promisor.473 There may also be other contributing factors of greater or lesser weight than that promise. Secondly, what the promisee does have to show is that the promise had at least some influence on his conduct. The promise must be at least a contributing factor to his action or inaction. For example, there may be cases where the promisee has proceeded initially on the basis of a belief derived from some other source independent of the promisor, but where his belief has subsequently been confirmed by the promise of the promisor. The matter is therefore one of influence.474 It follows that the promisee, provided he can show that the promise influenced his conduct, does not have to show that the promise was necessarily the decisive factor which led to his conduct. There is no ‘but for’ test. In other words the promisee does not have to show that, if the promise had not been made, he would not have carried out a particular action.475 Nor does the promisee have to establish exactly what he would have done if the promise or inferred promise had not been made.476 Thirdly, the degree to which the promise influenced the subsequent actions of the promisee will be relevant to the overall question of whether allowing the

470 Kim v Chasewood Park Residents Ltd [2013] EWCA Civ 239, paras 36–40. It may be that in such a case the promise will in any event be insufficiently clear to form the basis of a promissory estoppel. 471 Thorner v Major [2009] UKHL 18 [2009] 1 WLR 776, para 8 (Lord Hoffmann). This case is a decision on an assurance founding a proprietary estoppel but the same principle should apply to a promise founding a promissory estoppel. 472 See, in particular, the citations from the judgments of Robert Goff J and Morgan J set out below (n 478). 473 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 104 (Robert Goff J at first instance). 474 ibid, 104 (Robert Goff J). 475 Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 117 (Neuberger LJ). Neuberger LJ referred to the promise having to be a ‘significant’ factor taken into account by the promisee in deciding on his course of action (in that case a decision to join a pension scheme) and it may be that there is a rule that there can be no estoppel if the promise was something of only trivial importance in the decision of the promisee. See, however, the next paragraph and below (n 478) for what could be argued to be a more flexible analysis and rule, which is that the importance or weight of the promise as a contributory factor to the action of the promisee is relevant to the ultimate question of whether it would be unjust to allow the promisor to resile from his promise. 476 Vitol SA v Esso Australia Ltd [1989] 2 Lloyd’s Rep 451, 461 (Mustill LJ), concerning a failure to take a particular defence: ‘[The promisees] do not have to prove exactly what they would have done if [the promisors] had taken the shortfall defence at an earlier stage, merely to show that [the promisors] caused them to alter their course of conduct’.

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6.184  Promissory Estoppel promisor to go back on his promise would be unconscionable so that the principle of promissory estoppel will operate to prevent a resiling from the promise.477 6.184  The law as to reliance therefore is that a person seeking to set up a promissory estoppel has to establish that he relied on the promise made to him for the purposes of his subsequent conduct but that person can prove that reliance if he shows that the promise, while not necessarily the only or the predominant motive for his conduct, did have an influence on that conduct. In showing this, a person seeking to rely on an estoppel overcomes a hurdle in that he establishes reliance on the promise, but this is but a step towards the overall third element of the principle of promissory estoppel which is that it would be unjust or unconscionable in all the circumstances to allow the promisor to resile from his promise. The degree of the influence of the promise on the conduct of the promisee will be a consideration which the court will take into account in reaching its ultimate conclusion on whether or not the third of the three main elements of promissory estoppel, injustice, has been established. The view advanced here is that as regards the degree of influence of a statement, such as a promise or a representation on the subsequent conduct of the promisee or the representee, there is a two-stage test. First, the influence must be at least significant before there can be an estoppel. This is a threshold test. Secondly, if the threshold test is satisfied the degree of influence of the statement or promise is relevant to the final and overriding question of whether it would be unconscionable to allow the maker of the statement or promise to resile from it. This view accords with the general approach to ‘substantiality’ put forward in this book which is that when it comes to components of an estoppe, such as the amount of detriment or the risk of detriment, the amount or the risk must be at least significant. This leads to the suggestion that there should generally be a two-stage test to be applied to such components. The first stage is that a matter such as the amount of the detriment has to be at least significant so that if this test is not satisfied there can be no estoppel. The second stage, assuming that the first or threshold test is satisfied, is to assess the degree of the matter in question, such as how great is the detriment or the risk of it, and to use the answer to this question as one of the factors to be weighed in the overall, and final element of unconscionability.478 477 Lark v Outhwaite [1991] 2 Lloyd’s Rep 132, 142 (Hirst J). 478 ‘In such a case the question is not whether the representee acted, or desisted from acting, solely in reliance on the encouragement or representation of the other party; the question is rather whether his conduct was so influenced by the encouragement or representation (I take the word “influence” from the judgement of Bowen LJ in Edgington v Fitzmaurice (1885) 29 Ch D 459, 481) that it would be unconscionable for the representor thereafter to enforce his strict legal rights’: see Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 105 (Robert Goff J at first instance). In the light of the various judicial pronouncements one way of putting the matter is to say that the only relevance of the weight which the promise has on the conduct of the promisee is that the triviality of that influence may mean that the promisee cannot establish the injustice or unconscionability element of promissory estoppel. This more flexible approach avoids an absolute rule as to triviality of influence and allows the degree of influence of the promise on the conduct of the promisee to be assessed as one of the factors which may be relevant to the ultimate question of injustice. In Crossco No 4 Unlimited v Jolan Ltd [2011] EWHC 803 (Ch), para 332, Morgan J aptly described the principal issue before the Court as being whether the promise or assurance given had a sufficiently material influence on the conduct of the promisee to make it inequitable for the promisor to depart from it. On the other hand, it is also possible to argue that there is a rule that the influence of the promise on the conduct of the promisee must be at least significant before there can be a promissory estoppel. It is argued in this paragraph that, as for other questions involving substantiality, this last approach is the most satisfactory approach to the matter if it is incorporated into the twofold test suggested in this paragraph. A similar question arises for other forms of reliance-based estoppel and raises the general topic of substantiality. This topic is described in ch 1, para 1.55 et seq, as one of the factors applying to estoppel generally.

496

Injustice or Unconscionability  6.186

(iii)  The Reasonableness of the Actions of the Promisee 6.185  It should be noted that in his formulation of principle in Steria Ltd v Hutchison479 Neuberger LJ stated that the act on the part of the promisee must have been ‘reasonably’ taken in reliance on the promise. Unreasonableness in the conduct of the promisee may be in the decision which the promisee took to act at all in reliance on the promise. There could be other powerful factors indicating that no action should be taken on the promise such that it would be unreasonable to take any action in reliance on it. Alternatively, while some action in reliance on the promise may be reasonable the particular action taken by the promisee may not be reasonable. The statement of Neuberger LJ summarised in the same terms the principles, the ‘classic requirements’ as they were called, of estoppel by representation as well as those of proprietary estoppel, so that a person who asserts a common law estoppel by representation must also show not only that he acted on reliance on the representation made to him, but also that his actions so taken were reasonably taken in all the circumstances.480 The same rule has been stated in connection with proprietary estoppel where the person claiming the benefit of the estoppel must show that he has acted in reliance on the assurance made to him and that his actions were reasonable.481 The rule on the reasonableness of the actions of the promisee seems a desirable component of promissory estoppel in its own right as well as being a part of a principle which applies across various forms of estoppel. 6.186  A possible different approach is to say that reasonable action by the promisee is not in itself to be regarded as an essential aspect of promissory estoppel but that the reasonableness of that action is one of the matters which is to be taken into account in deciding whether the third requirement of the estoppel, injustice in the absence of an estoppel, is satisfied. A possible attraction of this approach is that it is more flexible in that it does not involve a rigid rule. Thus, if there is some doubt on the reasonableness of the conduct of the promisee in any particular case it does not have to be decided as an inflexible question, capable only of a yes or no answer, whether that action was reasonable or unreasonable, so that in the latter case the estoppel is ruled out at that stage and in principle, but rather the question of the reasonableness of the action is examined as a matter of degree and is taken forward to be weighed with other matters in the final judgement of whether it would be unconscionable to allow the promisor to depart from his promise. Other matters, such as the degree of influence which the promise had on the actions of the promisee can then also be weighed in the overall balance.482 It is doubtful whether the two approaches here described would be likely to lead to different results in most cases and the desideratum of a uniform set of rules applicable to different major forms of estoppel is a telling argument 479 [2006] EWCA Civ 1551, para 93. 480 See ch 3, para 3.115 for a consideration of this rule in connection with estoppel by representation. 481 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, paras 77, 78 and 81. In the definition of the essential requirements of promissory estoppel by the Court of Appeal of New Zealand it has been said that the reliance on a promise must have been reasonable if a promissory estoppel is to be established: see Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567 and see above (n 78). 482 See above (n 478) for observations in decided cases which favour this approach as regards the degree of influence of a promise on the subsequent actions of the promisee. Other factors to be weighed in the final balance on injustice or unconscionability might include a comparison of the detriment which would be suffered by the promisee if the promisor were to be allowed to depart from his promise and the detriment which would be suffered by the promisor if he was held to his promise.

497

6.187  Promissory Estoppel in favour of the first approach. In any event, authority appears to indicate that it is the first approach which is to be applied.

(iv)  The Burden and Standard of Proof on Reliance 6.187  The basic rule of evidence in all civil proceedings is that the burden of proof on an issue lies on the party who asserts the affirmative of that issue. Ei qui affirmat non ei qui negat incumbit probatio.483 One would expect that this principle would apply to all forms of estoppel so placing the burden of proof on all factual issues on the person who asserts that he has the benefit of an estoppel. Hence, for the purposes of promissory estoppel the person asserting the estoppel would need to prove that a clear and unambiguous promise intended to be acted upon had been made to him, that the promise was not to enforce an existing legal right (something which in many cases may be more a matter of law than of fact),484 and that he reasonably relied on the promise as regards his subsequent conduct in the sense of reliance as just explained. It is difficult to see what legal case could be made out for some different evidential rule regarding the burden of proof to be applied to the factual probandum of reliance. 6.188  A suggestion that the normal principle regarding the burden of proof does not apply to the requirement of reliance in promissory estoppel emanates from statements of Lord Denning. In the High Trees case,485 Denning J referred to the previous decisions on which he relied as involving ‘promises intended to be binding, intended to be acted on, and in fact acted on’.486 Yet when applying the principle of the estoppel in a decision over 30 years later, Lord Denning said: ‘Once it is shown that a representation was calculated to influence the judgement of a reasonable man, the presumption is that he was so influenced’.487 If this last statement was a correct expression of the law today the result would be not that reliance on a promise was removed from being an essential component of promissory estoppel, but that it would be for the person alleged to be estopped to prove that the promise made by him was not an influence on the subsequent conduct of the promisee, ie, he would have to rebut

483 This principle in its Latin form has been said to be an ancient rule founded on considerations of good sense and one which should not be departed from without strong reasons: Constantine Line v Imperial Smelting Corporation [1942] AC 154, 174 (Lord Maugham). 484 There is of course no question of burden of proof on an issue of law; the court simply decides what it considers to be the correct law. 485 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. 486 ibid, 134. 487 Brikom Investments Ltd v Carr [1979] QB 467, 482. It may be that this decision is not properly based on promissory estoppel but is more correctly explained as an operation of a collateral contract: see para 6.162. Lord Denning has taken the same view in connection with proprietary estoppel. In Greasley v Cooke [1980] 1 WLR 1306, 1311, a decision concerning an assurance given to a person that she could continue to live in a house, Lord Denning said that there was a presumption that the person to whom the assurance was given relied on the assurance. He said that the burden was not on the person to whom the assurance was given to prove reliance, but was on the person who gave the assurance to prove that the first person did not rely on the assurance. There is stronger authority in connection with proprietary estoppel for saying that the burden of showing absence of reliance is on the person against whom the estoppel is alleged. This matter is discussed in ch 7, para 7.217 et seq. That desideratum of a uniform set of rules governing reliance-based estoppels suggests that for all such forms of estoppel the rule should be that the burden of proving all factual matters needed to establish the estoppel is on the party who asserts the estoppel. A suggested uniform formulation to this effect is in ch 2, para 2.194.

498

Injustice or Unconscionability  6.190 the presumption of reliance. In the absence of such proof, reliance on the promise in the sense of the promise being an influencing factor on the subsequent conduct of the promise, would be taken to be established. Not only would such a situation reverse the ordinary rule as to the incidence of the burden of proof in civil proceedings, but it would also require one party, the promisor, to disprove the mental state of another party, the promisee, at the time of actions or decisions taken by that other party. 6.189  Modern authority suggests that in fact the general principle within the law of evidence prevails and that a person alleging a promissory estoppel must prove that the ­promise made to him was a factor which he took into account when deciding on his conduct. It was said in Steria Ltd v Hutchison488 that the observation of Lord Denning on the burden of proof should not be taken as an indication that, in all cases where a representation or promise has been made, the onus is on the representor or promisor to show that it has not been acted on, and that the onus is not on the representee or promisee to show that it has been acted on.489 It would be an unsatisfactory situation that in some cases the burden of proof of proving reliance should be on the promisee and in other cases the burden of proof of disproving reliance should be on the promisor, especially without any guiding principle on how it should be decided into which category any particular case falls. There is further authority supporting the principle that a promisee must prove reliance by him on any promise made, and that failure to do so will prevent the assertion of a promissory estoppel even if other elements of the principle of such an estoppel can be made out.490 The true overall rule is likely to be that the burden of proof is always on the promisee. No presumption of fact will arise.

(v)  Methods of Proof 6.190  The standard of proof required is that generally applicable in civil proceedings which is proof on the balance of probability. What is required is that the promisee (assuming that the burden of proof is on him) establishes on the balance of probability that he acted in a certain way and that the promise made to him was a factor which influenced that action. The action itself will usually be apparent from what has or has not been done by the promisee, for example that he omits for a limited period to carry out repair work to property which he is required to carry out under the terms of his lease.491 The essence of proving reliance on a promise is proof of the mental state, the reasons or motive, of the promisee for carrying out or not carrying out a particular action. There are in general two ways in which a promisee can establish this mental state which constitutes reliance. He can of course

488 [2006] EWCA Civ 1551, para 117 (Neuberger LJ). 489 ibid, para 128 (Neuberger LJ), commenting on the observation of Lord Denning in Greasley v Cooke. 490 See, eg, Allied Marine Transport Ltd v Vale Do Rio Doce Navegacao SA (The Leonidas D) [1985] 1 WLR 925 (failure by the owner under a charterparty agreement to prove that he had acted in reliance on an alleged representation by the charterer that arbitration proceedings which had been commenced had been abandoned). In Fontana NV v Mautner [1980] 1 EGLR 68 one of the reasons given for rejecting a promissory estoppel based on a promise that a person could continue to live as a tenant in property as long as he wished was the absence of proof that the promisee had relied on the promise. cf Habib Bank v Tufail [2006] EWCA Civ 374, para 21 (Lloyd LJ). 491 Hughes v Metropolitan Rly Co (1877) 2 App Cas 439.

499

6.191  Promissory Estoppel give evidence in the proceedings that he was influenced by the promise made to him in his decision to act or not act in the way in which he did. It will then be a question of whether the court believes his evidence or not. Where there is a dispute about reliance, a person asserting a promissory estoppel will usually be advised to give evidence of his reliance on a promise made when he conducted himself in a particular way.492 On the other hand, in many cases a court will infer from the surrounding circumstances that a promisee did act in a certain way by reason of the promise made to him or that at any rate that promise was one of the motivating factors which led the promisee so to act. For instance, if a lessee is told that as long as certain emergency conditions prevail he need pay only a part of the rent due under his lease, and thereafter during the period of those conditions the lessee does pay only the reduced rent, it is a strong inference that his omission to pay the full rent was in reliance on the promise made to him.493 In other words, a court will look at any evidence presented to it and at any inference which can reasonably be drawn from the facts as established and will decide whether on the balance of probability and in the light of these matters the promisee has established that the promise made to him not to enforce an existing legal right was at least one of the factors which influenced a particular action or course of action which he took. It may also be necessary for the court to determine by reference to the same sources how strong was the promise as one of the factors which influenced the actions of the promisee given that a decision on this further matter may be germane to the ultimate question of whether it would be unjust to allow the promisor to resile from his promise.494

3.  Detriment or Prejudice (i)  The Need for Detriment 6.191  Reference is often made to a requirement that the promisee, if he is to rely on a promissory estoppel, must not only show that he acted in reliance on a promise made to him but also that he acted to his detriment or prejudice in reliance on that promise. The words ‘detriment’ and ‘prejudice’ here have the same meaning. It has been stated in the Privy Council in connection with estoppel by representation that the essence of an estoppel is a representation (express or implied) intended to induce a person to whom it is made to adopt a course of conduct which results in a detriment.495 It has been said in the Court of Appeal that there is no reason, in theory or in practice, why this proposition of law should

492 ‘They do not say so themselves, and how can we assume that men are misled, who, when they are called into the box, will not and do not say so’: see Proctor v Bennis (1887) 36 Ch D 740, 762 (Bowen LJ), a decision concerning persons being allegedly misled as to the existence of patent rights. In Matthews v Smallwood [1910] 1 Ch 777, 787, Parker J said in connection with the doctrine of common law election that if a person did not go into the witness box and state what he did or did not know at the relevant time an inference as to his knowledge might be drawn against him. 493 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. 494 See para 6.184. 495 Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank [1986] AC 80, 110 (Lord Scarman). See also Société Italo-Belge pour Le Commerce et L’Industrie SA (Antwerp) v Palm and Vegetable Oils (Malaysia) Sdn Bhd (The Post Chaser) [1982] 1 All ER 19 (Robert Goff J).

500

Injustice or Unconscionability  6.192 not be equally true of promissory estoppel.496 It is also, as a general proposition, applicable to estoppel by convention497 and to proprietary estoppel.498 6.192  Even so, there has been said to be some controversy whether detriment is required for there to be a promissory estoppel.499 While the ultimate question is whether it would be unconscionable to allow a promisor to resile from a promise not to enforce a legal right, modern authority indicates that it will generally be impossible for a promisee to establish a promissory estoppel, and so prevent the promisor resiling from the promise, unless he can show that the promise influenced him to act in such a way that he would suffer detriment if the promisor could resile from his promise and enforce the right in question.500 It has been said, certainly in connection with proprietary estoppel, that the overwhelming weight of authority shows that detriment is required, although the requirement must be approached as part of a broad enquiry into injustice or unconscionability.501 The most recent examination of the need for detriment in promissory estoppel does not seem to take the matter much further.502 The simplest and most satisfactory way of stating the law today is that for 496 Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 95 (Neuberger LJ). See para 6.176 for the full citation. Mummery LJ (at para 73) put the matter less decisively when he said, citing the Tai Hing decision, that detriment has to be established in a case of estoppel by representation and ‘Even if it is not a requirement of the doctrine of promissory estoppel, it is relevant to whether it is inequitable to act inconsistently with the promise’. In Ajayi v Briscoe (Nigeria) Ltd [1964] 1 WLR 1326 a plea of promissory estoppel was rejected because the person claiming the estoppel could not show any detriment as a result of the promise made. See also Banner Industrial & Commercial Properties Ltd v Clark Paterson Ltd [1990] 2 EGLR 139 where a rent demand was said to be a representation that the landlord would accept an arbitrator’s award in a rent review but an estoppel was rejected in the absence of detriment. Hoffmann J said (at 140): ‘But estoppel requires that the tenant should have relied upon that representation to its detriment, in the sense that he has altered his position in a way which would make it unjust that the landlord now be allowed to challenge the award’. 497 PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994 (Ch), [2004] Ch 142, para 222 (Neuberger J). 498 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 29 (Lord Walker). 499 See Emery v UCB Corporate Services Ltd [2001] EWCA Civ 675, para 28, (Peter Gibson LJ). Any doubt or controversy may derive in part from the statement of Lord Denning MR in WJ Alan & Co Ltd v El Nasr Export and Import Co [1972] 2 QB 189, 213: ‘I know it has been suggested in some quarters that there must be detriment. But I can find no support for it in the authorities cited by the Judge’. Lord Denning said that a study of the cases in which the principle of promissory estoppel had been applied showed that all that was required is that one party should have ‘acted on the belief induced by the other party’. In that case, Megaw and Stephenson LJJ rested their decision on the conclusion that there had been a contractual variation of a contract of sale rather than an estoppel. See also Youell v Bland Welch & Co Ltd [1990] 2 Lloyd’s Rep 431, 454 (Phillips J). It is said in Treitel, The Law of Contract, 14th edn (Sweet & Maxwell, 2015) paras 3.084 and 3.148, that detriment is not an essential element of promissory estoppel at least in the same sense as it is a requirement of estoppel by representation. This last statement seems dubious in the light of the authorities cited. In addition, it is difficult to discern any reason why the requirement of detriment should be any different for the four forms of reliance-based estoppel. 500 See the previous paragraph. 501 Gillett v Holt [2001] Ch 210, 237 (Robert Walker LJ); Fisher v Brooker [2009] 1 WLR 1764, para 63 (Lord Neuberger); Goldsworthy v Brickell [1987] Ch 378, 411. 502 The latest contribution to the debate is in the recent decision of the Court of Appeal in MWB Business Centres Ltd v Rock Advertising Ltd [2017] QB 604 in which the owner of property agreed to accept arrears of a licence fee for the use of the property under a revised payment schedule but then sued for the whole amount due. Kitchen LJ considered that a promissory estoppel could be and had been applied in cases where the promisee had suffered no detriment: see para 54. The Judge of first instance had concluded that the licensee had suffered no detriment but it was said that the question should have been considered in broader terms, namely whether it was inequitable for the licensor to assert its legal rights under the terms of the licence. Despite the above observation on the absence of detriment, the defence of promissory estoppel was in the end rejected in part on the ground that the licensee had not suffered any detriment or prejudice: see para 63. This decision was reversed on other grounds by the Supreme Court and no detailed examination of the detriment or estoppel point was found necessary by that Court: see

501

6.193  Promissory Estoppel promissory estoppel, as for the other forms of reliance-based estoppel, unconscionability is an essential element of the estoppel and it is difficult to envisage any circumstances in which unconscionability could be established unless there was a risk of detriment to the promisee if the promisor was permitted wholly to resile from the promise made. 6.193  As a general proposition, that which was stated by Neuberger LJ in the Steria decision is undoubtedly correct, but as an avowedly broad-brush expression it may not give full emphasis to certain important features of the third main element of promissory estoppel, that element being that the person asserting the estoppel must show that he has acted in reliance on the promise in circumstances which make it unjust or unconscionable, when the relevant matters are taken into consideration, that the maker of the promise should be able to resile from the promise.503 Certain of these features are now examined.

(ii)  The Relationship between Detriment and Injustice 6.194  The first feature to note is that the foundation of the third main element of promissory estoppel is that it must be unjust or unconscionable for the promisor to be allowed to resile from his promise. Without this requirement, this form of estoppel has no moral basis or justification. That a person would suffer detriment if the promise was broken is the primary way, and probably the only way, of showing the injustice of a promisor being allowed to ignore his promise. That having been said, it is not necessarily and in all cases enough to create a promissory estoppel that a clear promise has been made not to enforce a legal right and that the promisee has acted in reliance on, that is influenced by that promise, such that he would suffer detriment if the promise was broken. There may be other factors which could mean that despite these matters being established it would still not be unjust to allow the promisor to resile from his promise. Examples of this can be readily found. It could be that the promise, while it significantly influenced the actions of the promisee, which is all that is required for there to be reliance, was only one of a number of more important influencing factors. It could be that the detriment suffered by the promisee was small, particularly in relation to the detriment which would be suffered by the promisor if he was unable to enforce his full legal rights. It could be that the promisee has obtained advantages from acting on the promise which outweigh any potential disadvantage to him if the promise can be revoked. It could be that the promisee has acted unmeritoriously in some way in connection with the events said to give rise to the estoppel. Considerations of this nature will be taken into account in deciding the ultimate question of whether it would be unjust that a promisor should be allowed to resile from his promise.504

[2019] AC 119, para 16 (Lord Sumption). Kitchen LJ did not find it necessary to refer to what had been said by Neuberger LJ in Steria v Hutchison and the decision of Hoffmann J in the Banner Industrial case was not cited to the Court. The main significance of the Rock Advertising decision is in respect of the possibility of an oral modification of a contract where the contract contains a no oral modification clause, and this matter is considered separately in ch 3, para 3.81. 503 See para 6.24. 504 See Fisher v Brooker [2009] 1 WLR 1764 (a decision on proprietary estoppel). This line of reasoning is certainly correct for proprietary estoppel where a claimant may be denied any remedy if the benefit which he has obtained as a result of an assurance made to him, for example, rent-free occupation of property, outweighs any detriment to him such as unpaid work done on the property. Equally for the purposes of proprietary estoppel, unmeritorious conduct by a person who asserts the estoppel is to be taken into account in considering what is unconscionable.

502

Injustice or Unconscionability  6.196 6.195  It could therefore be that the general circumstances in which the promise not fully to enforce a right was made were such that there would be no injustice in allowing the promisor to ignore his promise and to enforce his full legal right. This possible situation is illustrated by the decision in D & C Builders Ltd v Rees505 in which creditors promised to accept £300 in full satisfaction of a debt of £482 due to them. The creditors made that promise in part because of the threat of the debtor that if the smaller amount was not accepted as a full discharge no payment at all might be made. The fact that the promise was made under a form of threat was treated as a reason for allowing the creditors to ignore their promise to accept the smaller amount, the reason being that the circumstances of the giving of the promise, including the threat, meant that it was not unjust to allow the promisors to insist on their full legal rights.506 It has been stated earlier that consistently with the explanation just given the limited influence of the promise on the decision of the promisee to act in a certain way is a factor to be taken into account in deciding whether it is unjust to allow the promisor to go back on the promise.507 A further reason why it might not be unjust to allow a promisor to go back on his promise and enforce full legal rights against a promisee might be where third parties would be adversely affected if rights against a particular person could not be enforced, for instance other persons having rights against the promisor.508 Very similar principles apply to estoppel by convention where it has been emphasised that even if a party satisfies the criterion of significant prejudice arising from reliance on the convention, there may be no estoppel where there are other, and more powerful, factors pointing against an estoppel.509

(iii)  The Time of the Detriment 6.196  The second feature to note is that any detriment or prejudice does not result directly from the promise as such. Indeed, in most cases a promise not to enforce a legal right against a person is likely to result in a benefit rather than a detriment to that person. The detriment which has to be shown is that which would occur in the future if the promise is not kept and the legal right is enforced against the promisor contrary to the terms of the promise. The real detriment or harm from which the law seeks to give protection is that which would flow from the change of position of the promise if the promise or assumption that led to it were deserted.510 This proposition is apparent from the formulation of the applicable rules

505 [1966] 2 QB 617. See para 6.16. 506 ibid, 624–25 (Lord Denning MR). It is possible that circumstances such as those of this decision would render a promise unenforceable even if it was given for good consideration and was part of a contract because of the principle of economic duress as explained in para 6.58. 507 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 104 (Robert Goff J). 508 See, eg, Trustee Solutions Ltd v Dubery [2006] EWHC 1426 (Ch), [2007] 1 All ER 308, para 51(ii); and see Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 109 (Neuberger LJ). For example, under a contract X may be owed money by A but may itself owe money to B and C. If the amount payable by A is eliminated or reduced as a consequence of a promissory estoppel the result may be that X will have insufficient funds to discharge its obligations to B and C. In such circumstances overall justice may be that the estoppel is not allowed so as to affect the obligation of A. 509 PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994 (Ch), [2004] Ch 142, para 222 (Neuberger J). 510 Gillett v Holt [2001] Ch 210, 233 (Robert Walker LJ, quoting Dixon J in Grundt v Great Boulder Pty Gold Mines Ltd (1938) 59 CLR 641, 674–75).

503

6.197  Promissory Estoppel on this aspect of promissory estoppel by Neuberger LJ in Steria Ltd v Hutchison, the most important passage from which has been cited earlier.511 The question of injustice therefore falls to be decided in the circumstances which exist not at the time the relevant promise was made, but at the time when the promisor seeks to resile from the promise. It is only by reference to circumstances at this latter time that it can be known what detriment the promisee would suffer if the promisor could resile from the promise. It is on this basis that the overall question, whether it would be unjust to allow the promisor to resile from the promise such that an estoppel operates, must be answered.

(iv)  The Need for Additional Detriment 6.197  The third feature to note is as follows. If a person is promised what amounts to a benefit in that it is promised that some onerous duty will not be enforced against him, the fact that that person will not obtain that benefit if the promise is not kept is not in itself a detriment or a sufficient detriment for present purposes. There must be something more beyond the mere absence of the promised benefit.512 It follows that in accordance with this aspect of the law a promise not to enforce payment of a sum of money due will not create a promissory estoppel if the debtor to whom the promise is made does not act or alter his position in any way except that he does not pay the sum contractually due. It would be otherwise if the debtor had acted in some further way such as committing himself to some irrecoverable expenditure with the result that he would suffer a detriment if the promise that he would not have to pay the sum in question was not enforced. The law on promissory estoppel may be assisted on this matter by an analogous situation which has arisen in connection with estoppel by representation.513 Although the law today is as just stated it may be noted that in the first of the more modern decisions on promissory estoppel, the High Trees case,514 the promise was that tenants would have to pay only a part of the rent due under a lease while certain conditions prevailed and this was held to constitute

511 [2006] EWCA Civ 1551, para 93. The citation is in para 6.176. 512 Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 125 (Neuberger LJ); Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394, 429 (Brennan J). In Société Italo-Belge pour Le Commerce et L’Industrie SA (Antwerp) v Palm and Vegetable Oils (Malaysia) Sdn Bhd (The Post Chaser) [1982] 1 All ER 19, 27, Robert Goff J said that to establish the inequity required for a promissory estoppel to operate it was not necessary to show detriment and that the representee may have benefited from the representation and yet it might be inequitable, at least without reasonable notice, for the representor to enforce his legal rights. What appears to be meant is that the promise itself need not create a detriment but that what is important is whether due to subsequent events there will be detriment if the promise is not enforced. This reasoning is endorsed by the fact that subsequently in his judgment Robert Goff J referred to action by the representee in reliance on the representation and prejudice being ‘a necessary element for the application of the doctrine of equitable estoppel’. 513 For the principle of the pro tanto operation of estoppel by representation see ch 3, part (F). The problem which there arises is that a person is mistakenly told that a sum of money is due to him and then incurs expenditure equal to a part of that sum which he could not otherwise afford. The question is whether that person can, by reason of an estoppel, resist repayment of the whole, or only a part, of the sum. This general aspect of promissory estoppel is illustrated by Ajayi v Briscoe (Nigeria) Ltd [1964] 1 WLR 1326 where there was held to be no estoppel following a promise to suspend hire purchase payments since the promisee had not proved that he had acted on the promise. See para 6.17. 514 Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. The instalments of rent claimed in this case, in what was described as a friendly action, fell due after the end of the wartime conditions during which the promise was to operate and so were recoverable.

504

Injustice or Unconscionability  6.199 an estoppel even though there was no examination of how the tenants would suffer any ­detriment if the promise could be revoked.515 6.198  It may be possible to explain the decision in the High Trees case on the reasoning that the detriment to the lessees which would have ensued if they had been called upon to pay the full rent while the wartime conditions prevailed was that they had conducted their affairs on the basis that only the lower rent was payable and that that made it inequitable that they should be called upon to pay the full rent.516 It may be that by adopting reasoning of this nature courts will not be slow to find detriment to a promisee who has acted for a considerable time in reliance on a promise that rights, such as an entitlement to a sum of money, will not be enforced. In the High Trees case,517 the promise not to require the full payment of rent had lasted and had been acted on for about five years. Common sense suggests that the longer the period of reliance the more likely it is that a court will find that there would be a detriment to a promisee if the promisor could go back on his promise and enforce his full rights over the whole period of the reliance. A relevant point on the matter of detriment and injustice would be that in such circumstances a promisee, if he could not assert a promissory estoppel, could suddenly and unexpectedly be called upon to pay arrears which had accrued over a substantial period of years, perhaps as long back as the relevant limitation period. In such a case, a court might conclude that justice could best be done by holding the promisor to his promise for any past period and then allowing the promisor to recover any sums which fell due in the future after a reasonable period of notice that the promise was revoked.518 6.199  The requirement of an additional detriment as just described may not be easy to apply in a case in which the promise is not to enforce the payment of a monetary sum such as instalments of rent under a lease or hire purchase instalments. The promisee must show some additional detriment to him which will occur if the promisor can resile from the promise beyond the fact that if the promise is not enforced the promisee will have to pay the sum or sums as contractually due. The requirement must also be applied, perhaps more easily, to cases where the promise is that the promisee need not carry out some other form of obligation either for a time or permanently. The same fundamental requirement of potential additional detriment remains and is sometimes apparent. Thus, in Hughes v Metropolitan Rly Co519 the promise was not to require the tenants to carry out repair works

515 The absence of any such examination is consistent with the view of Lord Denning that detriment to the promisee is not an essential component of promissory estoppel and that it is sufficient that the person raising the estoppel has acted in reliance on the promise: see WJ Alan & Co Ltd v El Nasr Export and Import Co [1972] 2 QB 189, 213: see para 6.192. This is not a view of the law which generally prevails today. 516 Société Italo-Belge pour Le Commerce et L’Industrie SA (Antwerp) v Palm and Vegetable Oils (Malaysia) Sdn Bhd (The Post Chaser) [1982] 1 All ER 19, 27 (Robert Goff J). 517 [1947] KB 130. The facts are summarised in para 6.12. 518 See paras 6.99 and 6.209 et seq for the ending of the effect of a promissory estoppel by notice. 519 (1877) 2 App Cas 439. A question that might be asked is what detriment the tenants would suffer in a case such as the Hughes case if they had been told that they need not carry out repair works during the period of negotiations but in circumstances in which there was no right to terminate the lease if the repairs were not done within the period prescribed in a notice to repair. A possible answer may be that even in those circumstances the tenants might have suffered detriment if the landlord could have resiled from his promise, since by deferring the works in reliance on that promise they might have opened themselves to an action for damages for failure to complete the works within the prescribed period.

505

6.200  Promissory Estoppel while negotiations went on for them to acquire the landlord’s reversion. If the promise of the landlords had not been enforced, the tenants would have incurred the prospect of the lease being ended because the works were not carried out within the time specified in a contractual notice to carry out the works, something which was obviously a major and additional detriment to them.

(v)  The Risk of Detriment 6.200  The detriment which is required to establish a promissory estoppel is not detriment which has occurred, as would often be the case where damages for a wrong such as a tort are claimed, but detriment that will or may occur in the future if a person is allowed to enforce a right despite his promise not to do so. The detriment will therefore often be to a degree potential, or even speculative, rather than certain. Formulations of the essential characteristics of a promissory estoppel usually state that the person asserting the estoppel must show that that person will suffer detriment if a party is not held to his promise.520 In some cases it may be certain or next to certain that a particular detriment will be suffered if a particular right can be enforced. An example is Hughes v Metropolitan Rly Co521 where it was obvious that if the landlord was entitled to determine the lease because works had not been carried out by the tenants by a certain date despite the landlord’s promise to extend the time for the works, the tenants would suffer detriment through the loss of their lease. 6.201  It is less apparent what is the test where there is only a possibility of some future detriment if the promisor is not held to his promise. Both the occurrence and the nature or scale of future detriment to the promisee may be uncertain. The first question is what degree of probability of detriment has to be shown before an estoppel can be established. Where at the time of legal proceedings an issue is whether some event relevant to liability has occurred in the past, the court decides that issue on the balance of probability. If there is a 60 per cent chance that the event has occurred then the event is taken to have occurred. If there is a 40 per cent chance that the event has occurred then the event is taken not to have occurred. This is the approach which is applied to the question of whether a promisee has acted in reliance on a promise made to him.522 The approach to the occurrence of future events is different. Courts do not shrink from making estimates of the probability of a future event occurring, whether in actual or hypothetical circumstances, however difficult that estimate may be523 except where the prospect is so speculative as to be fanciful.524 When it comes to assessing the likelihood of future events, such as may be necessary to assessing damages for loss, a court does not apply a balance of probability test but assesses the ­numerical prospect

520 An example is the formulation by Neuberger LJ in Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93: ‘after the action has been taken, the claimant being able to show that he will suffer detriment if the defendant is not held to the representation or promise’. The full passage is set out in para 6.176. 521 (1877) 2 App Cas 439. The facts are set out in para 6.8. 522 See para 6.187. 523 Chaplin v Hicks [1911] 2 KB 786 (chance of succeeding in a competition). 524 See Priestley v MacLean (1860) 2 F & F 288, 289, where Erle CJ said: ‘supposing a lady to have been injured and disfigured in a railway accident, she could not say that she ought to recover damages because she was prevented from going to a ball, at which she might have met a rich husband’.

506

Injustice or Unconscionability  6.203 of the event occurring and adjusts the damages accordingly.525 For example, if a person is proposing to make a claim to recover £1 million, but is prevented from doing so by the negligent conduct of his solicitor in failing to observe a limitation period, the court in an action for damages against the solicitor will assess the prospect of that person succeeding in the claim if he had been able to bring it to court and if, for example, that prospect is assessed at 80 per cent the damages awarded are likely to be £800,000 and not £1 million.526 6.202  When it comes to proof of anticipated detriment for the purposes of promissory estoppel neither of the above approaches with their numerical precision seems appropriate. It is unlikely to be the case that a person will be able to establish a promissory estoppel if he can show that there is a 51 per cent chance that he will suffer detriment if a promisor is not held to his promise, but will not be able to establish the estoppel if he can only show that there is a 49 per cent chance of that detriment being suffered. Equally, the operation of an estoppel is an all or nothing result. It cannot be said that a person should have an ‘80 per cent estoppel’ because he can show an 80 per cent chance that he will suffer detriment if a promisor is not held to his promise. All that can be done is to replace arithmetical precision by a linguistic formulation, such as to say that in order to establish the estoppel one of the matters which a person must show is that, if the promisor can resile from his promise, there is at any rate a real or significant chance that he will suffer detriment. 6.203  The rule of law is indeed likely to be that normally a person will not be able to assert a promissory estoppel unless he can show that the result of the promisor being able to go back on his promise is that there is at least a significant expectation that the promisee will for that reason suffer detriment.527 What must be remembered is that at the end of the day questions of detriment are relevant to the overall question necessary to assess the third of the main elements of promissory estoppel, ie, whether it would be unjust that the promisor should be allowed to go back on his promise. As explained,528 even if the existence of a component of the estoppel, namely a real and significant prospect of detriment to the promisee is established, a court may still conclude that in overall terms and for other reasons it would not be unjust or sufficiently unjust that the promisor should be able to enforce the right which he has promised not to enforce as to justify a promissory estoppel. In the same way, if there is a significant expectation of detriment to the promisee, but that expectation falls very much on the uncertain or speculative side of the spectrum of

525 Davies v Taylor [1974] AC 207 (prospect that an estranged husband would have returned to his wife if he had not been killed in an accident where that prospect was relevant to a claim by the wife under the Fatal Accidents Acts 1846–1959). 526 Allied Maples Group v Simmons & Simmons [1995] 1 WLR 1602. When compensation is payable for the compulsory acquisition of land a similar principle operates and the value of the land for a particular development may be reduced because of the risk that planning permission for that development will not be granted: Porter v Secretary of State for Transport [1996] 3 All ER 693; Transport for London v Spirerose Ltd [2009] UKHL 44, [2009] 1 WLR 1797, paras 42–44 (Lord Walker). 527 There is some support for this approach in the decision of the Privy Council in Fung Kai Sun v Chan Fui Hing [1951] AC 489. In that case there was an inferred representation of fact created by a failure to supply information that certain mortgages had been forged such that the representee lost the chance of recovering money from the forger. There was therefore a risk of detriment in that an attempt to recover the money may or may not have been successful. Lord Reid referred to the chance of recovery having been ‘substantially prejudiced’. 528 See para 6.178.

507

6.204  Promissory Estoppel probability of the detriment, then this may be a factor which at the end of the day, when all matters are weighed up, leads the court in its discretion to hold that there would not be sufficient injustice with the result that no promissory estoppel should operate. The principles of law discussed under the present sub-heading are common to other forms of reliance-based estoppel, estoppel by representation, estoppel by convention and proprietary estoppel, and it is suggested that a uniform approval to the matter is desirable for each case.529 The approach generally suggested in this book, and that which may be apposite to the risk of detriment in promissory estoppel, is the application of a two-stage test. The first, or threshold, stage is that the risk of detriment must be at least significant. If this test is satisfied, the second stage is that the degree of the risk of detriment is a factor to be taken into account, and weighed where appropriate with other factors, in deciding the ultimate question of whether it would be unconscionable to allow the promisor to resile from the promise made.

(vi)  The Amount of Detriment 6.204  A further question is how great the contemplated detriment to the promisee must be if there is to be a promissory estoppel. The probable and sensible rule is that there must be a risk of some significant detriment to the promisee if the promise to forego a right is not enforced. The prospect of a trivial or very minor detriment is unlikely to be enough.530 As with a number of other questions which arise in relation to reliance and detriment, a further route to taking into account a low level of anticipated detriment is the overriding requirement of injustice, which is the third element of the estoppel. Just as a court may conclude that it is not unjust to allow the promisor to resile from his promise if the level of probability of a detriment is small, so a court may conclude that it is not unjust to allow a resiling from a promise if any detriment, even if it did occur, would be slight. This last approach has the merit that in deciding the overall question of injustice it enables a court to make a comparison between the harm which a promisee will suffer if there is no estoppel and the right of the promisor which is the subject of the promise can be fully enforced against him and the harm which the promisor will suffer if he is wholly prevented from enforcing his legal right.531 As with other reliance-based estoppels the most satisfactory rule may be that there is a threshold test that the amount of detriment must be at least significant, so that if this test is not satisfied there can be no promissory estoppel, but with the additional consideration that even if the threshold test is satisfied the smallness of the detriment may be something to be weighed with other relevant factors in deciding whether it would be unconscionable if the estoppel was not allowed to have effect. This may again be an approach which can be uniformly applied to the four reliance-based forms of estoppel.532 529 See ch 3, para 3.129 (estoppel by representation); ch 5, para 5.70 (estoppel by convention); and ch 7, para 7.234 (proprietary estoppel). ‘Substantiality’ is a subject which applies generally to aspects of various forms of estoppel and is discussed in general terms in ch 1, para 1.55 et seq. 530 See Banner Industrial & Commercial Properties Ltd v Clark Paterson Ltd [1990] 2 EGLR 139. One of the reasons for rejecting any question of a promissory estoppel in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2019] AC 119, para 16, was that any steps taken by the party to an agreement for the licence of a property who might have asserted the estoppel after a promise made to it that amounts of a licence fee could be paid under a revised schedule of payments were minimal and not enough to support an estoppel. 531 See para 6.171. 532 See ch 3, para 3.136 (estoppel by representation); ch 5, para 5.77 (estoppel by convention); and ch 7, para 7.234 (proprietary estoppel); and see para 6.203 as regards the degree of risk of detriment.

508

Injustice or Unconscionability  6.207

(vii)  Illustrations of Detriment 6.205  There is no limit in principle to the varieties of detriment which might ensue if a promisor is entitled contrary to his promise to assert a legal right. The nature of the particular detriment in any case will depend on the content of the promise made, the right in question which is promised not to be enforced, and the way in which the promisee has acted in reliance on the promise. 6.206  The exposure of a party to a penalty or detriment, such as the termination of a lease by reason of not carrying out works to property in proper time, is a good example of detriment.533 In some such cases a court may avoid the complexities of promissory estoppel by using a simpler process of avoiding detriment, such as giving relief against the forfeiture of the lease.534 An inability to assert some right may be the relevant detriment. Where a tenant has a right to renew a lease, the exercise of that right is often made conditional on the tenant having observed all its covenants under the lease.535 A tenant who had failed to carry out the repairs because the landlord had said that the repairs were not necessary would be likely to be able to show detriment if the landlord subsequently relied on those works not having been done as a reason for not renewing the lease. If, as sometimes occurs, the landlord had sent in surveyors who had drawn up a schedule of the repairs necessary and sent it to the tenant, this would be likely to be taken as an inferred promise that the carrying out of those repairs was sufficient to ensure compliance with the covenants such that if there emerged other repairs which had not been done, the tenant could show detriment by having confined himself to the schedule of repairs and so resist a suggestion that any other repairs had to be done before the lease could be renewed.536 6.207  A further illustration of detriment is that a company, having been told by a director that payment of the director’s fees would be postponed or abrogated, carried on trading instead of going into liquidation. This appears to have been a detrimental course of action for the company if the trustee in bankruptcy of the director was entitled, contrary to what the director had said, to claim fees due to him.537 A person who incurred obligations on the faith of a promise that rights would not be enforced against him would be likely to be able to establish detriment if the enforcement of the rights would lead him to have to borrow money at disadvantageous rates or dispose of assets in order to comply with the obligations. An omission to assert a right against the promisor may be a detriment. In one case an owner of property failed to act to prevent a tenant of an adjoining building from using lavatories in

533 Hughes v Metropolitan Railway Co (1877) 2 App Cas 439; Birmingham and District Land Company v London and North Western Rly Co (1889) 40 Ch D 268. 534 In Hughes v Metropolitan Railway Co (1877) 2 App Cas 439, 452, Lord Blackburn appeared to base his decision on the granting of relief against forfeiture: see para 6.8. 535 Bass Holdings v Morton Music [1988] Ch 493. 536 In Finch v Underwood (1876) 2 Ch D 310, 316 (Mellish LJ), the Court suggested that, if a tenant had sent in his own surveyor to draw up a schedule of necessary works which the tenant had sent to the landlord and if the tenant had carried out the works, this would be sufficient to constitute compliance with the covenants in the lease. This result could be rationalised as an inferred promise that the landlord would not rely on any other defects as something which prevented a renewal of the lease. It would of course be open to a landlord on receiving such a schedule to point out that other items of repair were necessary. 537 Re William Porter & Co Ltd [1937] 2 All ER 361, 364 (Simonds J). See para 6.11 for further discussion of this decision which was cited by Denning J in Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, 134, as an example of the evolving doctrine of promissory estoppel.

509

6.208  Promissory Estoppel the landlord’s property when the tenant alleged that the lavatories were within the lease of that adjoining building and so were his to use. The owner claimed damages for non-repair of the lavatories and it was held that the tenant was estopped from asserting that the lavatories were not within the leasehold interest.538 Denning J treated the conduct of the tenant as a promise or assertion that the lavatories were within the lease, and so applied the principle of promissory estoppel, the detriment to the adjoining owner presumably being that but for the assertion he would have acted to prevent the use of the lavatories. 6.208  The rule that more is required than a loss of an expected benefit for there to be a detriment is further illustrated by Amherst v James Walker Goldsmith & Silversmith Ltd.539 A landlord entitled to a rent review under a lease delayed for some time in serving on the tenants the notice required to initiate the review. It was held that there was no inferred promise that the review would not in due course be initiated. Even if there had been such a promise it would have been difficult for the tenants to establish any detriment by reason of a later notice given in breach of the promise, since they would have benefited rather than been prejudiced by the fact that the date on which they had to pay any increased rent would have been postponed.540 If there is a clear promise not to enforce a rent review a tenant might be able to enforce that promise as a promissory estoppel if, for example, he had in reliance on the promise incurred obligations in carrying out improvements to the property which he would not otherwise have carried out.

4.  Form of Relief (i)  Forms of Relief Available 6.209  The selection of the form of relief to satisfy the equity is closely connected with the means of avoiding unconscionability so that it is appropriate to discuss the form of relief for a promissory estoppel at this point. The simple and obvious way in which to give effect to a promissory estoppel when its elements have been satisfied is to hold the person who has promised not to enforce legal rights wholly and permanently to the promise as made. The promise itself may of course have been framed so as to have a permanent effect or may

538 Perrott (JF) & Co Ltd v Cohen [1951] 1 KB 705, 710. The assertion by the tenant appears to be more a ­representation of fact or of law than a promise. It may be that the decision, as explained by Somervell and Cohen LJJ, is better understood by the application of a particular principle governing the extent of the demised premises within a lease (see Tabor v Godfrey (1895) 64 LJ (QB) 245; and Hastings (Lord) v Saddler (1898) 79 LT 355) than by any application of promissory estoppel. See also Smirk v Lyndale Developments [1975] Ch 317, and W Woodfall, Woodfall’s Law on Landlord and Tenant (Sweet & Maxwell) para 19.008, for the law of encroachment by a tenant onto adjoining land of the landlord. 539 [1983] Ch 305. See para 6.197 et seq for a discussion of this rule. 540 The tenants were bound to pay the increased rent determined on a review over the period between the rent review date and the date of the delayed assessment of the reviewed rent, but would have had the benefit of not having to make that payment until a later date. In such circumstances, there is sometimes a provision in the lease which requires the tenant to pay interest on the difference between the previous rent and a reviewed and increased reviewed rent over the period between the review date and the date on which arrears of the reviewed rent are paid. See Fisher v Brooker [2009] 1 WLR 1764, a decision on an alleged proprietary estoppel, for a case in which the party asserting the estoppel benefited rather than suffered a detriment from the fact that a right was not enforced against that party for a substantial time, the result being that the estoppel claim failed.

510

Injustice or Unconscionability  6.211 have been framed to have an effect only for a limited period, and in the latter case holding the promisor to the exact terms of the promise will mean a suspension of rights for only the limited time as stated in the promise. However, promissory estoppel is one of the two forms of equitable estoppel and is described as raising an equity in the usual sense that a court has a discretion on how effect is to be given to that equity. Consequently, there are a number of forms of relief available to a court and the court is not confined to a decision between giving full and precise effect to the terms of the promise and refusing to uphold any estoppel at all. 6.210  Given this flexibility, there are various orders available to a court. (a) The promise may be enforced exactly in its terms which, depending on those terms, may mean that legal rights owned by the promisor are fully and permanently lost.541 (b) The promise, albeit couched as having permanent effect, may be enforced for only a limited period. This may be done where any detriment to the promisee can be avoided by the promise being enforced but only for a limited period.542 (c) The court may order that although the promise may have an initial effect, the legal rights of the promisor may be resumed after the giving of a period of notice to the promise, which may be specified as a particular period of notice or simply as the giving of reasonable notice.543 (d) The promisor may be allowed to resile from the promise but only subject to conditions.544 (e) The promisor may be allowed to resile from the promise but only on terms that the promisor makes monetary compensation to the promisee for any loss or detriment suffered by the promisee as a result of his actions in reliance on the promise.545 (f) The promisor may be kept by virtue of the estoppel to a part of his promise but not to the whole of it.546 These categories of remedy or relief are not of course comprehensive and it seems that in principle, and as with the other form of equitable estoppel, proprietary estoppel, it is possible that the court may order any form of relief which is considered appropriate for the facts of any particular case. 6.211  A general distinction may have to be made between the forms of common law estoppel and the forms of equitable estoppel. With common law estoppel, that is estoppel by representation, estoppel by deed and estoppel by convention, a court which upholds and applies the estoppel will normally be confined to giving effect to it such as by p ­ reventing the

541 Examples

of the permanent removal of rights are given in para 6.80 et seq. some cases the limitation on the period during which rights are not to be enforced may be inherent in the terms or the circumstances of the promise even if not expressly there stated: see, eg, Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. 543 Ajawi v Briscoe (Nigeria) Ltd [1964] 1 WLR 1326. 544 Brikom Investments Ltd v Seaford [1981] 1 WLR 863. 545 In Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394, where the promise was not to rely on the right to put forward a limitation defence to a claim, Brennan J suggested that the Commonwealth should be allowed to advance the defence but only on terms that it compensated the Claimant for any expenses incurred as a result of reliance on the promise, and for any effect on his health caused by the stress and worry caused. In Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567 there was a promissory estoppel arising out of a promise by an owner of a right of first refusal over property not to exercise the right in respect of a transfer by the property owner made in order to raise finance. When the promisor sought to resile from the promise, the Court of Appeal of New Zealand considered where to enforce the promise, giving what it called expectation-based relief as opposed to reliance-based relief which involved allowing the promisor to resile from the promise only on terms that compensation was paid to the property owner for any detriment to it, such as a non-refundable loan fee paid. The first type of relief was considered appropriate. This recent decision contains a valuable review of the English, Australian and New Zealand decisions on the appropriate form of relief to give effect to a promissory or proprietary estoppel. 546 See para 6.216 for a suggestion on when this form of relief may be appropriate. 542 In

511

6.212  Promissory Estoppel person estopped from asserting anything to the contrary of what is contained in the statement made or in the common assumption made by that person.547 By contrast in the case of proprietary estoppel, a court has a wide and in practice unlimited variety of remedies which it may order.548 There is no doubt that in proprietary estoppel cases the court may as the relief which it grants order the payment of a sum of money, or some other form of relief, instead of ordering the grant or transfer of an interest in land in accordance with the assurance of an entitlement to an interest which founds the estoppel. The most usual circumstances in which the payment of a sum of money is ordered are where it is impractical to vest property in a claimant or where the vesting of the property promised in a claimant would be to confer on that claimant a benefit which would be wholly in excess of, or disproportionate to, the detriment suffered by that claimant. Because of what it does, namely enforce a clear promise of a limited nature, promissory estoppel is less diffuse in the class of available remedies but there seems no reason in principle why as complete a panoply of forms of relief should not be available as are available for a proprietary estoppel. 6.212  It is not easy to find any overarching principle which should dictate the form of relief most applicable to the circumstances of any particular case of promissory estoppel. Two general purposes or considerations which have been suggested in the authorities as those which may guide the form of relief are the possibility of a resumption of position by the promise, and the concept of the minimum equity. These two forms of guidance are now examined.

(ii)  Resumption of Position 6.213  The form of detriment which is likely to be suffered if a promise is not kept may dictate the exact operation of a promissory estoppel or, put differently, the form of relief given by a court. A promisor can scarcely be required to do more than adhere to what he has promised as regards a legal right which he owns, whether the promise is to abrogate or suspend or postpone the operation of the legal right. The promisor may be required to do less than the whole of what he has promised. It is for the court to determine how the equity can best be satisfied. The nature of the detriment anticipated if the promise is not enforced at all, that will be central to the decision on the way in which the estoppel is to operate. In Ajayi v Briscoe (Nigeria) Ltd549 Lord Hodson said that the equity was such that the promise not to enforce a right could become permanently unenforceable by the promisor if ‘the promisee cannot resume his position’. Thus, a court may scrutinise the likely detriment and may give effect to the equity by allowing the right of the promisor to be enforced, but only after the giving of notice to the promisee or on other terms which ensure that so far as possible the promisee does not suffer the detriment which he would be likely to suffer if the right could

547 It is probable that today an estoppel by representation may operate in part only. See para 6.216 and the cases cited below (n 555). 548 See ch 7, part (I), where the purpose of proprietary estoppel and the effect of that purpose on the choice of remedies are discussed. In Australia and New Zealand, the tendency has been to elide together promissory and proprietary estoppel such that questions of the appropriate remedy are common to both. For example, in the discussion of the Wilson Parking decision in the Court of Appeal of New Zealand, mentioned above (n 545), the relevant authorities were reviewed by the Court without drawing a distinction between the two forms of estoppel. 549 [1964] 1 WLR 1326, 1330.

512

Injustice or Unconscionability  6.215 be enforced without any limitation and with no more ado. A question which may often arise is whether the loss by a promisor of a legal right is to be permanent or suspensory in its effect. This question is discussed specifically and in detail earlier in this chapter.550 6.214  It may not be easy to decide how a promisee is to ‘resume his position’ consistently with the promise not to assert a right not being fully enforced against the promisor and consistently with the avoidance of detriment to the promisee. The essence of the promisee resuming his position may be that he must take any steps which he can to avoid, or to limit, the time and extent of, any detriment which he would suffer if the promise could be revoked. The promise not to assert legal rights should be enforced only to the extent needed to prevent detriment to the promisee on the assumption that the promisee does take such steps. As an example, a landlord of property used to manufacture goods for sale might promise to reduce the rent for five years or might promise not to operate a rent review under the lease which would, if operated, be likely to lead to an increased rent over the next five years. The tenants might in reliance on this promise enter into a long-term contract to manufacture and sell goods at a lower price than would have been agreed apart from the promise. If the landlord was allowed to recover the full rent, even after a short period of notice, it is difficult to see how the tenants could resume their position since by having to pay the full or increased rent they might make a loss on the contract. Possibly this is the sort of case where the promise not to recover the full rent would be enforced fully in accordance with its terms. If the potentially unprofitable contract of sale of goods could be terminated by notice, a possible solution would be to allow the landlord to recover his full rent or initiate the rent review after a similar period of notice. The circumstances of individual cases will vary enormously and it may be that the relief granted by the court can be tailored to meet individual circumstances as part of the inherently flexible nature of the equity. One possibility is that a promisor may be allowed to resile from his promise but only on terms that he pays monetary compensation to the promisee for any loss suffered by the promisee, and the loss for which compensation is to be paid may go beyond just economic loss.551

(iii)  The Minimum Equity 6.215  The minimum equity is an expression which has gained some currency. It means that in selecting the relief to be ordered for either form of equitable estoppel a court should make the minimum order which is needed to satisfy the equity and avoid injustice or loss to the person entitled to assert the estoppel. It is an expression used by Scarman LJ in Crabb v Arun District Council552 which answers the third of the three questions he posed in relation to an assertion of a proprietary estoppel, namely whether an equity is established, what is the extent of the equity if one is established, and what is the relief appropriate to satisfy the equity.553 An illustration of the operation of this concept might be a promise made by a 550 See part (D) of this chapter. 551 As suggested in a dissenting judgment in Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394, 429 (Brennan J). The payment of compensation if an assurance giving rise to a proprietary estoppel could be revoked was discussed in Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 89 (Lord Neuberger). 552 [1976] Ch 179, 188. 553 ibid, 193. Scarman LJ refused in formulating these questions to draw any distinction between promissory and proprietary estoppel. In the law today, it is usual to distinguish between these two estoppels as the two forms of equitable estoppel.

513

6.216  Promissory Estoppel defendant not to raise a limitation defence made after the expiry of the limitation period. If a claimant then brought proceedings and the defendant sought to assert a limitation defence contrary to his promise, the minimum equity might be achieved by allowing him to do so but only on terms that he compensated the claimant for any abortive expenditure incurred by the claimant up to that point and any other loss suffered by the claimant up to that point. To enforce the promise in full and to prevent the defendant from putting forward a limitation defence might go further than was necessary to eliminate any loss to the claimant.554 6.216  A further possibility is that the promisor may be allowed to resile from his promise in part but be held to his promise in part. If this is done it may be seen as an application of the minimum equity concept. An example of a partial abrogation of a right in accordance with this possibility might be as follows. B owes £10,000 to A and A promises that he will accept £5,000 in full satisfaction of the debt. B has the £10,000 available as needed to make the full repayment, but in reliance on this promise expends £2,500 on a family holiday or on some other form of purchase which he would not otherwise do and which he cannot recoup. B would suffer financial embarrassment if he had to repay the whole £10,000 including the £2,500 which he has expended. The elements of the estoppel, including reliance and detriment, are here satisfied but only as to a part of the promise. If B had done nothing as regards the £2,500 which was a part of the subject of the promise he would suffer no detriment if he had to repay the full £10,000, save losing the benefit of not having to repay any of the £5,000. Given the expenditure of £2,500, the estoppel can operate in accordance with equity and justice in this case if it operates so as to relieve B only from the repayment of the £2,500 which he has irretrievably expended. It therefore seems that the promissory estoppel could operate in this fashion. Very much the same problem can arise in respect of estoppel by representation where the representation by A is that £5,000 is due to B and that amount is paid to B, and B expends £3,000 without any prospect of retrieving that sum. Although there is some doubt on the subject it now seems likely that a common law estoppel by representation can operate pro tanto such that A is held to only a part of his representation and can still recover £2,000 from B.555 The fact that there is probably no difficulty in dealing with this type of situation under the principle of promissory estoppel may derive from the equitable nature and resultant flexibility of this form of estoppel.

5.  Conclusion on Injustice 6.217  It was said about 45 five years ago in the House of Lords that decisions on promissory estoppel raised problems of coherent exposition which needed to be reduced to a coherent body of doctrine by the courts.556 Of the three main elements of the principle it

554 See above (n 551) where this is mentioned as an approach favoured by Brennan J in Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394. 555 See ch 3, part (D); and see Avon County Council v Howlett [1983] 1 WLR 605; Gordon Derby v Scottish Equitable Plc [2001] EWCA Civ 369, [2001] 3 All ER 818; National Westminster Bank Plc v Somer International (UK) Ltd [2002] QB 1286. The claim to recover the £2,000 will be under the law of restitution as money paid under a mistake. 556 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741, 788 (Lord Hailsham LC).

514

Injustice or Unconscionability  6.217 is the third element, injustice, which has perhaps proved the least tractable in the search for a body of coherent rules. It is now possible to summarise with reasonable precision the appropriate rules. (i) The fundamental and underlying rule is that a promissory estoppel will operate only if it would be unjust (or, as it is sometimes put, inequitable or unconscionable) that the person who has made a clear promise not to enforce a legal right should nonetheless be able to enforce that right without restriction. (ii) It follows that even if all other components of a promissory estoppel are made out, including reliance on the promise made and a significant degree of detriment to the promisee which would or might ensue if the promise could be ignored, a court may still refuse to give effect to an estoppel if in all the circumstances it would not be unjust or unconscionable to allow the promisor to resile from the promise. Possible examples of an absence of unconscionability are cases where the detriment or the risk of it are small (as explained below) or an adverse effect on third parties which might ensue if the estoppel was allowed. (iii) In order for there to be a promissory estoppel resulting from a promise, the promisee must normally prove on the balance of probability that he has relied on the promise by acting or omitting to act in a certain way. (iv) By reliance is meant that the promise, albeit not the only factor or even the most important factor which influenced or brought about the conduct in question by the promisee, had at least a significant influence on the relevant conduct of that promisee. (v) It will normally not be unjust that the promisor is allowed wholly to resile from his promise unless the promisee can show that there is at least a significant prospect that significant detriment or prejudice to him will result if the promisor can enforce the legal right in question without restriction. (vi) The detriment, the prospect of which is shown, must be a significant detriment and must be something over and above the simple loss of the benefit of the right being unenforceable. (vii) If the influence of the promise or the detriment or the prospect of detriment is small, albeit not insignificant, the smallness is still something which may be taken into account together with any other relevant factors in deciding the final question of whether it would be unconscionable to allow a promisor to resile from the promise made. (viii) A court has a discretion as to how it will give effect to the equity which arises as a result of the requirements of a promissory estoppel being satisfied. The way in which the estoppel will prevent the promisor from resiling from his promise, for example how long he will be held to his promise or on what terms or to what extent he may be allowed to resile from his promise and enforce the legal right in question, is at the discretion of the court and likely to be heavily influenced by the nature of the likely detriment or prejudice to the promisee if the legal right of the promisor can be enforced without restriction. A primary aim of the operation of the estoppel is to give effect to the equity so as to restore the position of the promisee to that which it would have been if he had not acted in reliance on the promise and to avoid so far as possible any detriment to him which would be likely to result if the legal right could be enforced or fully enforced. 515

6.218  Promissory Estoppel

(H) Summary 6.218  As with some other chapters, the concluding part of this chapter is an attempt to be helpful by setting out in summary form the main rules which constitute and govern the principle of promissory estoppel as that principle stands today. It should be understood (a) that in some instances the general statement of a rule as set out will not refer to various details and sub-rules or even in some cases to limited qualifications or exceptions, and (b) that while a rule as stated seeks to state the best view of the law as it is today in the light of the authorities and other considerations, it is inevitably possible in some instances to argue in favour of a somewhat different view of a particular aspect of the law. In general, the sequence of this summary follows the same sequence in which various aspects of the estoppel have been examined earlier in this chapter. A more detailed summary of the third main element of the estoppel, unconscionability, has just been given.557

1.  The Nature and Elements of the Estoppel 6.219  Promissory estoppel is a form of equitable estoppel (the other form being proprietary estoppel) depending on a principle of equity established by decisions of the courts in the latter part of the nineteenth century and developed into a coherent body of rules by decisions mainly since 1945. 6.220  The principle may be stated as follows. If B owes a binding legal obligation to A under a contract or other transaction and A clearly and unequivocally promises to B that A will not enforce or will not fully enforce that obligation, then if B acts in reliance on the promise such that he would suffer significant detriment if A could resile from the promise A will be held to the promise as to the enforcement of the obligation where it would be inequitable or unconscionable to allow A to resile from the promise. 6.221  In accordance with this principle, in order for a promissory estoppel to operate, the party who asserts the estoppel has to establish three elements, namely (a) that a clear and unequivocal promise intended to be acted on has been made to it, (b) that the promise is that the promisor will not enforce or fully enforce the legal rights of the promisor under an existing transaction, and (c) that as the party asserting the estoppel it has acted in reliance on the promise in circumstances which would make it unjust or unconscionable, when all relevant matters are taken into consideration, that the maker of the promise should be allowed to resile wholly or partly from that promise. 6.222  A promise in the sense here used is a statement of what the maker of the statement will or will not do with that statement intended by its maker to be binding on it.

2.  The First Essential Element: The Promise 6.223  The first main element of the estoppel, the clear and unequivocal promise, may be express or may be inferred from the facts and the communications between the parties.

557 See

para 6.217.

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Summary  6.232 6.224  The status as a promise and the meaning of what has been written or spoken by the promisor is to be determined objectively in the sense that the question is how a reasonable person with the knowledge available to the promisee at the time of the promise would understand and interpret what was written or spoken. 6.225  It is possible that a particular utterance could contain such a degree of ambiguity that it could not form the promise needed to support a promissory estoppel but could still be interpreted by a court so as to have a meaning which would allow it to form a provision in a contract. Silence can in certain circumstances, particularly when it constitutes a breach of a duty to speak, bring about an inferred representation of fact leading to an estoppel by representation, but it seems unlikely the silence by itself can ever bring about an inferred promise which could support a promissory estoppel. 6.226  For the promise to operate as an estoppel, it must be shown that at the time of the promise the promisor intended the promise to be binding upon it and to be acted upon by the promisee. The existence of this aspect of the mental state of the promisor must also be determined objectively. 6.227  There is no requirement that at the time of a promise not to enforce a right the promisor was aware that the right in question was available to it.

3.  The Second Essential Element: Existing Rights 6.228  The second main element of the estoppel is that the promise must be a promise not to enforce, or not fully to enforce, a legal right available to the promisor at the time of the promise. The right must be a right under a transaction or relationship existing at that time and is often, though not necessarily, a right under a contract.

4.  The Third Essential Element: Injustice or Unconscionability 6.229  The third main element of the estoppel, the overall requirement that it would be unjust (or, as it is sometimes put, inequitable or unconscionable) that the promisor should be allowed wholly or partly to resile from his promise not to enforce a legal right, normally involves two components. 6.230  The first component is that the promisee has reasonably acted or failed to act in some way in reliance on the promise. 6.231  The reliance component is satisfied if the promisee proves that he was significantly influenced in his conduct by the promise. It is not necessary for the promisee to show that the promise was the only or the predominant factor which brought about his conduct. 6.232  The second component is that there is at least a significant risk that the promisee would suffer some significant detriment if the promisor was allowed wholly to resile from the promise. The detriment component may be any form of loss or prejudice which the promisee will or may suffer if the promisor resiles from his promise. However, the mere fact that, if the promise is not kept, the promisee will not obtain some benefit which he anticipates will flow from the promise is not in itself a sufficient detriment for present purposes. 517

6.233  Promissory Estoppel 6.233  It is doubtful whether the element of injustice or unconscionability can ever be satisfied unless reliance and detriment are shown to exist. However, even if these components are proved it is still necessary to consider the overall effect of unconscionability. It is possible that at this final stage the estoppel fails despite the existence of reliance and detriment since there may still be some further factor which means that in the final analysis it would not be unconscionable to allow the promisor to depart from the promise. Examples of such a factor may be an adverse effect on third parties if there is an estoppel or some form of unmeritorious conduct by the party claiming the estoppel.

5.  The Burden and Standard of Proof 6.234  The burden of proof as regards all matters of fact required to establish a promissory estoppel is on the person who asserts the estoppel, the standard of proof being that of the balance of probability. There is a possible exception regarding the burden of proving that actions taken by the promisee were taken in reliance on the promise where some authority suggests that the burden is on the promisor to disprove such reliance.

6.  Giving Effect to the Estoppel 6.235  A court has a discretion as to the way in which it will give effect to a promissory estoppel. Depending on the content of the promise and the nature of the likely detriment, (a) the right of the promisor in question may be wholly or partly abrogated, (b) that right may be wholly or partly suspended for a period of time, or (c) the exercise of the right may be postponed in that the full right continues to exist but it is not exercisable until the end of some period of time when it becomes exercisable retrospectively in respect of that period. In addition, the court in an appropriate case may impose a condition on the promisor, that is permit him to exercise his right but only subject to some specified condition, such as the giving of notice that the right is again to become fully enforceable. The operation of the estoppel is inherently flexible and other forms of relief, such as the imposition of some form of condition, or a requirement for the payment of a sum of money to the promisee to avoid any detriment, before a resiling from the promise is allowed, may be possible in an appropriate case.

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7 Proprietary Estoppel (A) Introduction 1.  The Character and Statement of the Principle 7.1  It may be that fundamental principles of common law and equity first arose and were developed from records of what individual judges thought was a just result on facts brought before them. Inevitably, as the law progressed, general principles emerged from these individual decisions. If this was not so law could scarcely exist as a practical and scholarly discipline. The formulation and statement of a clear principle of law sometimes face a tension between a statement that is so general and diffuse that it offers limited guidance to courts and practitioners and a statement that is as rigid and incapable of qualification or amendment as is a statutory provision.1 To an extent, a definition of proprietary estoppel has suffered from such competing desiderata of legal theory. In Gillett v Holt,2 a modern decision of the Court of Appeal in which a proprietary estoppel was held to apply to the expectation of receiving property under a will, it was said by Robert Walker LJ that the doctrine of proprietary estoppel could not be sub-divided into three or four watertight compartments, such as an assurance or reliance or detriment, since the elements could be intertwined and one could affect another.3 Yet, several years later in a case in which a proprietary estoppel was held to operate by the House of Lords, again in relation to a gift of property under a will, Lord Walker advanced the law by identifying the three main elements of proprietary estoppel as a representation or assurance made to the claimant, reliance on it by the claimant, and detriment to the claimant on account of his reliance.4

1 The courts are of course adept at altering the meaning of statutory language, particularly of older statutes expressed in general or obscure terms, under the guise of interpretation. As an illustration of what occurs, in Argyle Motors (Birkenhead) Ltd v Birkenhead Corporation [1975] AC 99, 129, Lord Wilberforce observed that s68 of the Lands Clauses Consolidation Act 1845 ‘has, over a hundred years, received through a number of decisions, some in this House, and by no means easy to reconcile, an interpretation which fixes upon it a meaning having little perceptible relation to the words used’. 2 Gillett v Holt [2001] Ch 210, 225. 3 The same potential interrelationship between their constituent elements arises with other forms of estoppel. Estoppel by representation requires the making of a representation of an existing matter which is intended by the representor to be acted upon. The nature of the statement may itself offer a good indication of whether it was intended to be taken seriously and to be acted upon. This facet of the law does not prevent the requirement of separate elements being satisfied if the estoppel is to be established. 4 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 29. Lord Walker commented that most scholars agreed with this analysis. Lord Neuberger (at para 72) said that the main elements of proprietary estoppel were often summarised as being ‘assurance, reliance and detriment’.

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7.2  Proprietary Estoppel This appears to be not very different from identifying the main requirements or elements of other forms of estoppel such as estoppel by representation. 7.2  Other warnings have been given against excessive rigidity or inflexibility, both in relation to proprietary estoppel and in relation to the classification and differentiation of different forms of estoppel.5 In its most extreme form, the argument against rigidity and formal statements of principle suggests that at any rate so far as some forms of estoppel are concerned all that is necessary is to enquire whether it is unconscionable for one party to make a mistake which was shared by other parties.6 It has also been said that there is no definition of proprietary estoppel that is both comprehensive and uncontroversial although many attempts have been neither.7 Despite these precautionary words, an attempt is made at the outset of this chapter to state the principle of proprietary estoppel as it stands today. That statement is as follows. Where A owns an interest in land and by an express or implied assurance leads B reasonably to hold an expectation that B has become or will become entitled to an interest or rights in the land, and B acts reasonably and to his significant detriment in reliance on this assurance and expectation, with A both knowing of the expectation of B and doing nothing to remove that expectation, then when it would be just to do so A will be compelled to transfer to B an interest in A’s land or to make some other form of recognition of the rights of B or to make some other recompense to B.8 Inevitably, a fairly long, 5 In Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n Oliver J, after examining two of the early decisions which led to the establishment of the principle of proprietary estoppel, Gregory v Mighell (1811) 18 Ves Jun 328 and Ramsden v Dyson (1866) LR 1 HL 129, said that he was not at all convinced that it was desirable or proper to lay down hard and fast rules which sought to dictate circumstances which would persuade a court that the situation was so unconscionable as to require the operation of a proprietary estoppel. His view stated, at 154, was that what should be applied was ‘the broad test of whether in the circumstances the conduct complained of is unconscionable without the necessity of forcing those incumbrances into a Procrustean bed constructed from some unalterable criteria’. This was said in the context of a consideration of the five probanda stated by Fry J in Willmott v Barber (1880) 15 Ch D 96. See para 7.26 et seq for a discussion on the probanda. In fact, in this same decision, the Judge articulated (at 144) what has become one of the most useful overall statements of the estoppel. This formulation is set out in para 7.98. 6 Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 104 (Robert Goff J at first instance), relying on the comment by Oliver J as stated in the last footnote. The decision of the Court of Appeal in this case became a leading authority on estoppel by convention and led to the clear statement of the principle of that form of estoppel by Lord Steyn in Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878. See para 7.45 et seq for a discussion of the status of unconscionability in proprietary estoppel. 7 S Gardner, An Introduction to Land Law (Bloomsbury Professional, 2007) para 7.1.1. 8 This statement refers to transactions and events involving land and interests in land. As explained later in part (H), the principle is likely to extend to other forms of property and other rights. In In Re Basham decd [1986] 1 WLR 1498, 1503, Mr Edward Nugee QC stated the principle of proprietary estoppel in its broader form as follows: ‘Where one person, A, has acted to his detriment on the faith of a belief, which was known to and encouraged by another person, B, that he either has or is going to be given a right in or over B’s property, B cannot insist on his strict legal rights if to do so would be inconsistent with A’s belief ’. There is no reference in this definition to the need for an express or implied assurance, regarded today as the first of the main elements of the estoppel, but the need for an assurance may be implicit in the reference to a belief being encouraged. This statement of principle was accepted as correct in the Court of Appeal in Wayling v Jones (1993) 69 P & CR 170. The statement of Mr Nugee was criticised in Taylor v Dickens [1998] 1 FLR 806 but those criticisms appear to have been largely rejected by the Court of Appeal in Gillett v Holt [2001] Ch 210, 227–28. A further definition of proprietary estoppel was suggested in the consultation document ‘Land Registration for the Twenty-First Century’, Law Com No 254 (1998) para 3.34 as follows: ‘The owner of land, in some way leads or allows the Claimant, B, to believe that he has or can expect some kind of right or interest over A’s land. To A’s knowledge, B acts to his detriment in that belief. A then refuses B the anticipated right or interest in circumstances that make that refusal unconscionable’. The formulation of the principle suggested in this chapter is intended to be the best that can be done but it may be far from comprehensive; for example, it is possible that the estoppel can operate such that the person asserting it, rather than compelling the

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Introduction  7.3 perhaps even convoluted, sentence is required to bring together into a single statement the components of the principle. The subsequent analysis of proprietary estoppel in this ­chapter is based on the above statement and on the main elements of the estoppel which are expressed in it.9

2.  The Historical Development of the Principle (i) Introduction 7.3  Since proprietary estoppel is a wholly judge-made principle of law it assists in its understanding to examine at any rate in outline how the principle developed.10 This is in itself a fascinating aspect of legal history and an illustration of the development of common law (in the sense of non-statutory law – the principle was developed mainly by courts of equity). It can be described here only in outline.11 The origin of the elements of proprietary estoppel as it is applied today can be seen in the earlier cases. There are three phases in the development of the principle. The first phase is a series of decisions in the eighteenth century and the first half of the nineteenth century. It is difficult to discern any overarching principle from these decisions, although certain aspects of principle still relevant today are sometimes stated. The development of the law may also have been assisted by the doctrine of part performance which was emerging before or at broadly the same time as the decisions examined in the first phase. The second phase is a series of three decisions in mid-Victorian times, out of which an overall principle was clearly emerging and which foreshadowed the modern understanding of the principle. The third phase is a series of decisions since the Second World War which illustrate the elements and the form of today’s principle. These decisions culminated in two leading cases in the House of Lords, 2009–10, which stated the main elements of the principle.12 Modern expositions of the principle of proprietary estoppel contain extensive references to the older decisions and it is difficult to understand the exact content of the main elements of the principle without some reference to the older decisions and the development of the principle.13 transfer of an interest in land to him, can compel the acquisition of an interest in land from him on certain terms: see Salvation Army Trustee Co Ltd v West Yorkshire Metropolitan County Council (1980) 41 P & CR 179. 9 See para 7.98 et seq for a statement of these elements. 10 The leading modern examinations of the principle have necessarily involved a careful consideration of the main older decisions on the subject: see Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n; Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752; Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776. 11 Besides the decisions mentioned in this account other earlier significant decisions referred to in the trilogy of cases in the second phase of the development of the principle are Duke of Beaufort v Patrick (1853) 17 Beav 60 and Unity Joint Stock Mutual Banking Association v King (1858) 25 Beav 72. These two decisions are mentioned later in this account at an appropriate point. The second phase is described in para 7.19 et seq. 12 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752; Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776. These two decisions and the principles which emerge from them are examined in detail in para 7.32 et seq. 13 In Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, referred to in the next paragraph, Oliver J examined some 20 authorities on the subject going back to Stiles v Cowper in 1748. Even so attention might be drawn to the cautionary words of the same Judge in Habib Bank Ltd v Habib Bank AG Zurich [1981] 1 WLR 1265, 1285, where he referred to ‘archaic and arcane’ distinctions between the assertion of equitable rights and the enforcement of legal rights by equitable principles of the law of acquiescence and laches.

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7.4  Proprietary Estoppel 7.4  It is proposed in this account to examine in outline the first phase and in rather more detail the second phase. Apart from the two leading decisions of the House of Lords, most of the decisions in the third phase up to the most modern decisions are best considered as they illustrate the elements which now make up the principle of the estoppel. Anyone wishing to see the significance of the decisions in the first and second phases as something leading to the present principle of proprietary estoppel is indebted to the scholarly analysis of certain of them in the judgment of Oliver J in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd.14 In a sense, the division of the development of proprietary estoppel into three phases is arbitrary and it is a historical accident that the modern principle emerged in three important decisions by the Lord Chancellor or the House of Lords or the Privy Council in the period from 1862 to 1884. These decisions are here called the second phase of the development of the principle. It is perhaps of general historical, and not just legal, interest that the development of what is today an important principle of English law was significantly influenced and advanced by events in the mid-nineteenth century in a new colony being established at almost exactly the opposite side of the world.15 It is also of interest, at least historically, that at about the time of the second phase which established proprietary estoppel as a separate discernible principle two major decisions, one of the House of Lords and one of the Court of Appeal, established the foundation of promissory estoppel.16 It was only after a further century that these two principles became designated as separate forms of equitable estoppel and were given their modern names. Progress was slow, and even in the latter part of the last century it was said in the Court of Appeal that the drawing of a distinction between proprietary and promissory ­estoppel was wholly unnecessary for the purpose of deciding cases before courts.17 That is not the modern view and the essential difference between the two principles has been stated in modern decisions.18 The mid-Victorian period or a little earlier also provides a series of decisions and statements of principle which established clearly the major elements of estoppel by representation.19

(ii)  The First Phase: The Authorities 7.5  The selection of decisions from 1711 to 1858 in this phase is designed to concentrate on those judgments which proceeded by reference to an aspect of principle stated often, though not always, by the Lord Chancellor or the Master of the Rolls in the former Court of Chancery prior to its abolition and the transfer of its jurisdiction to the Chancery Division of the High Court by the Judicature Acts 1873–75. The decisions are explained generally in a chronological fashion.

14 [1982] QB 133n. See above (n 13). 15 Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699, concerning the building of a jetty and warehouse in Wellington Harbour to assist in receiving immigrants into New Zealand. 16 Hughes v Metropolitan Rly Co (1877) 2 App Cas 439; Birmingham and District Land Company v London and North Western Rly Co (1889) 49 Ch D 268. See ch 6, para 6.8 et seq. 17 Crabb v Arun District Council [1976] Ch 179, 193 (Scarman LJ). 18 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776 (Lord Walker). The differences between the two forms of equitable estoppel are examined in para 7.57. 19 Pickard v Sears (1837) 6 Ad & E 469; Freeman v Cooke (1848) 2 Exch 654; Jorden v Money (1854) 5 HLC 185; Knights v Wiffen (1870) LR 5 QB 660. See ch 3, para 3.1.

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Introduction  7.7 7.6  An early illustration of the type of principle involved is Huning v Ferrers.20 As a matter of general law a tenant for life under a settlement could not grant a lease for years of the settled property which would endure beyond the date of his death and thus the cessation of his own interest.21 The Plaintiff took a lease for a term of 30 years from the tenant for life and spent £2,800 on improving the property. On the death of the tenant for life an entail in the property passed to his son who sought to evict the tenant for years on the ground that the lease did not bind him. The son knew of the grant of the lease but did not make any protest at what was done or warn the tenant of his entitlement to a remainder in the property following the death of his father. On the contrary, he wrote to the tenant seeking that the property be kept in repair. It was held that the tenant for years was entitled to remain in possession under his lease. The critical factor was the largely passive acquiescence of the son of the tenant for life in what was being done when he had knowledge of it. The decision presages later cases in which an acquiescence or standing by on the part of a person with an interest in land, in this case a future interest, can amount to an implied assurance creating an expectation in another person of either having or acquiring an interest in the land binding on the person who has stood by. In another case in 1744 Lord Hardwicke LC, who did much towards the development of principles of equity in the eighteenth century, referred to some cases having been adjudged on the principle that the equity will intervene in the case ‘where a man suffers another to build upon his land, and stands by, and makes no objection; or shows his own title’.22 Here again acquiescence is in the forefront of the decision. The Lord Chancellor differentiated such a case from one, as on the facts then before him, in which lessees of land had carried out improvements as they were entitled to do under their lease and the landlord was not obliged to give notice to the lessees that they should not carry out the improvements.23 7.7 In Steed v Whitaker in 1740,24 the question was whether an injunction should be continued until trial. A agreed to sell an area of land to B which became contained in B’s marriage settlement. B entered the land and started building on it. Subsequently, and before the sale was completed, A mortgaged the land to C who brought proceedings to remove B from the land. The wife of B brought proceedings in the Court of Chancery to restrain C from continuing his proceedings for possession. In ordering the continuation of the injunction, Lord Hardwicke observed that an ingredient for the continuation of the

20 Huning v Ferrers (1711) Gilb Rep 85. An even older illustration of the genesis of the principle may be Edlin v Battaly (1674) 2 Levinz 152 in which a purchaser of a life interest in land expended £250 in building on the land unaware of the true title of a person who had been beyond the seas for 20 years. On the return of the true owner and on his claim to the land, the Master of the Rolls held that the purchaser was to be entitled to hold the land unless he was paid the amount expended in building. It appears that the case was in due course compromised by the true owner relinquishing his claim in return for a payment of £80 to him. 21 The inability of a life tenant under a settlement to sell the settled land or grant leases which would endure beyond his own life was a major disadvantage of the law of real property which impeded the alienation and ­exploitation of land until the Settled Law Act 1882 and then the Settled Land Act 1925, gave greater powers of disposition to the tenant for life under a settlement. The modern law on this subject is now contained in the Trusts of Land and Appointment of Trustees Act 1996 which introduced a single system of trusts of land so that it is now impossible to create new settlements of the former character. 22 Attorney General v Balliol College, Oxford (1744) 9 Mod 407, 411. 23 ibid. Lord Hardwicke said that in such latter cases the maxim was ‘solum, cedet aedifio’. 24 Steed v Whitaker (1740) Barn Chancery 220.

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7.8  Proprietary Estoppel injunction was that C, the mortgagee, had lain by and let B go into the land and build on it without giving him any notice of the mortgage.25 7.8  The third of the decisions in the 1740s of Lord Hardwicke in the Court of Chancery is Stiles v Cowper.26 A person with an interest under a settlement of property at Lincoln’s Inn Fields in London let the property on a 61-year lease but without the usual covenants in a building lease. The Plaintiff, who was an assignee of the lease, expended £5,000 in rebuilding a house on the property. Rent was regularly paid and accepted by the lessor and after his death by the Defendant, who held an entailed interest in the property under the settlement. The Defendant brought an action to remove the Plaintiff by reason of the absence of the usual covenants in the lease. The Plaintiff sought an injunction in the Court of Chancery to prevent the proceedings for possession.27 The Lord Chancellor ordered a new lease to be granted to the Plaintiff with the proper covenants. He described the principle he was applying as ‘when the remainder-man lies by, and suffers the lessee or assignee to rebuild, and does not by his answer deny that he had notice of it, all these circumstances together will bind him from controverting the lease afterwards’.28 Here the defective lease granted to the original tenant amounted to a formal assurance that the holder of the lease could expect a fully protected leasehold interest in the land and the remainderman stood by while the lessee expended money in improving the land knowing of these actions and this expectation. The principle as stated and applied, and the direction that a new lease be granted in satisfaction of equitable rights, fall in with the present understanding of proprietary estoppel and its main elements. It appears that by the end of the eighteenth century a principle was emerging in the decisions of the Court of Chancery. When A with an interest in land is aware that B is acting in some way to his detriment in relation to the land, such as by building on it, in the expectation that he has or will obtain an interest in that land and A acquiesces in what B is doing, that is stands by and says and does nothing, A may become bound to recognise as vested in B, or may become bound to grant to B, some interest in the land. 7.9  By 1800, the Court of Chancery had come to be presided over by Lord ­Loughborough LC. In a case heard by him, the Plaintiff held a 30-year lease of land near his house.29 The lease reserved all trees which were or might be planted to the landlord who was a substantial landowner in what is now south east London. The Plaintiff carried out extensive tree planting and other similar work to the land which greatly improved it. The landlord was aware of what was done and cooperated with the tenant and held discussions on the matter, for instance agreeing that some trees would be removed. The landlord subsequently sought an injunction requiring that all the trees which were reserved to him should be taken down from the land. The landlord suffered no harm from the trees and it appeared that his wish to remove all the trees may have been motivated by spite. The Lord Chancellor said that he had no difficulty in issuing an injunction to prevent the landlord removing all trees and

25 ibid, 221. 26 (1748) 3 Atk 692. See also East India Company v Vincent (1740) 2 Atk 84. 27 Such an injunction issued by the Court of Chancery overruling or preventing the enforcement of orders made in common law courts was called the ‘common injunction’ and was established following the resolution of the jurisdictional dispute between the common law courts and the Court of Chancery in favour of the latter Court in The Earl of Oxford’s Case (1615) 1 Rep Ch 1. 28 (1748) 3 Atk 692, 693. 29 Jackson v Cator (1800) 5 Ves Jun 688.

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Introduction  7.10 that his decision depended on the landlord’s conduct since the grant of the lease.30 The substance of that conduct was that the landlord had not protested at, and had even cooperated with, the planting and establishment of the trees and the garden on the demised land, all of which was done with his knowledge. This decision, and Stiles v Cowper described in the last p ­ aragraph, were used before Lord Eldon LC two years later in argument by Counsel in Dann v ­Spurrier.31 The doctrine accepted by Lord Eldon as established by the authorities was that: This Court will not permit a man knowingly, though but passively, to encourage another to pay out money under an erroneous opinion of title; and the circumstances of looking on is in many cases as strong as using terms of encouragement.32

This passage from the judgment of Lord Eldon was recently cited in a judgment in the House of Lords in support of the view that the classic example of proprietary estoppel is based on silence and inaction rather than on any statement or action.33 7.10  Of interest in the development of the equitable principles being applied is the decision of the Master of the Rolls in the Court of Chancery in Tilling v Armitage34 especially since it was cited by Lord Kingsdown in Ramsden v Dyson35 as stating the principle which corresponded with the principle which he there explained and which has become one of the foundations of the modern concept of proprietary estoppel. A contrast was drawn between two situations as regards leases. One situation is when a tenant under a term of years or an annual periodic tenancy carries out improvements at his own volition on the demised premises without any encouragement or participation by the landlord even though the landlord knows what is being done. In such circumstances, no right in equity to a new lease at the end of the existing tenancy arises. The other situation is where there is some arrangement between the parties as to the works, such as where the landlord advances a part of the cost. It is said that in this latter situation it would be contrary to good faith to encourage a tenant in so positive and direct a manner to proceed to carry out particular improvements with the result that equity will intervene to ensure that the tenant should have the full benefit from the improvements.36 One method of such intervention would be to direct the grant of a new lease to the tenant at the end of his existing lease. The essential point is that for an equitable right to come into existence there must be an expectation of some interest in the land of another person, such as a renewal of a lease of that land, created by the conduct of that other person. The working out of this principle can be seen today in a decision such as Thorner v Major37 in 2009 in which a person was led to expect that a farm on which he had worked for years for no real reward would be left to him in the will of the owner and it was held by the House of Lords that effect should be given to this expectation.

30 ibid, 692. 31 Dann v Spurrier (1802) 7 Ves Jun 231. Lord Eldon succeeded Lord Loughborough as Lord Chancellor in 1801. 32 ibid, 235–36. The principle as expressed was applied in a rights of light case in Couchings v Bassett (1862) 32 Beav 101. 33 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 84 (Lord Neuberger). 34 Tilling v Armitage (1805) 12 Ves Jun 78. 35 (1866) LR 1 HL 129, 171. See para 7.20. 36 (1805) 12 Ves Jun 78, 88 (Sir Dudley Grant MR). 37 [2009] UKHL 18, [2009] 1 WLR 776. See para 7.39.

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7.11  Proprietary Estoppel 7.11  The next decision to mention in this summary of the establishment in early cases of the underlying principle of proprietary estoppel is Lord Cawdor v Lewis38 which exhibits the classical characteristics of the operation of the principle. The Plaintiff, Lord Cawdor, was an owner of an estate in South Wales; the Defendant was the son of the land agent for the estate. The Plaintiff ’s father erected a smelting-house and other buildings on land which he believed was his. The land agent supervised the works and never made any claim that he was himself entitled to the land. After the death of Lord Cawdor and of the agent, the agent’s son asserted that the land in question was owned by his father and was now owned by him. The Defendant, the agent’s son, brought and at first succeeded in an action for possession of the land. In proceedings before the Court of Exchequer, the Chief Baron, Lord ­Abinger, accepted that the case was one for equitable interference on the ground that one party had stood by and allowed another to spend money on the first party’s property without giving him notice of the first party’s title.39 Lord Abinger suggested that the appropriate relief might be a perpetual injunction or an allowance by way of compensation or a lease.40 It is possible to see at this stage what has become one of the principal characteristics of proprietary estoppel as it is operated today, namely the variety and flexibility of the remedy or relief which a court may direct once the facts essential for the operation of the principle have been established. 7.12  The decisions so far mentioned have to an extent concerned rural and mainly agricultural communities sometimes with large landowners such as existed widely in the eighteenth century. It is not surprising that the principles of equity emerging from the decided cases came to be applied to the conditions of the following century with railways and canals and powers of compulsory purchase subject to payment of compensation such as characterised the Industrial Revolution. The principles of law remained the same. One decision may be mentioned in which equitable principles were applied to the new and different economic conditions which had emerged. In Somerset Coal Canal Company v Harcourt41 a canal company had power to acquire land for its canal subject to the payment of ­compensation.42 The company took possession of an area of land and had the compensation assessed. The owner of the land was an infant so that no conveyance of the freehold was executed in favour of the canal company and the company for 40 years paid a rent for the land. The company also acquired leasehold interests in the land. The landowner then sought possession of the land and alleged that he had a right to build a bridge over the canal. It was held by the Lord Chancellor, Lord Chelmsford, that the landowner should be restrained from seeking possession of the land on which the canal had been built. The foundation of the reasoning of the Court was that the landowner had stood by for years without seeking

38 Lord Cawdor v Lewis (1835) 1 Younger and Collyer 427. 39 ibid, 433. 40 ibid. This decision is an early instance of the benefit and burden of the estoppel passing to successors in title of the person whose conduct bought about the estoppel. This last subject is discussed generally in ch 2, part (F). 41 Somerset Coal Canal Company v Harcourt (1858) 2 De Gex & Jones 596. See also Duke of Beaufort v Patrick (1853) 17 Beav 60; Duke of Devonshire v Eglin (1851) 14 Beav 530. 42 In this way a canal or railway company and other similar enterprises were usually authorised by local or private Acts of Parliament and in due course more general legislation was passed to deal with the acquisition of land and the payment of compensation such as the Lands Clauses Consolidation Act 1845 and the Railways Clauses Consolidation Act of the same year.

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Introduction  7.14 to disturb the canal company in its possession and use of the land knowing that if he did so the company could compel the owner to sell the land, so that by his conduct the landowner had lulled the company into security and confidence. The Lord Chancellor referred to decided cases in which it had been held that when a person who stands by and encourages an act he cannot afterwards interfere with the enjoyment of what he has thus permitted to be done.43 7.13  Shortly before this last decision, the principle under which the courts were working was described by Sir John Romilly MR in another canal case, Rochdale Canal Co v King.44 The Master of the Rolls said that the principle on which the Defendants relied was one often recognised by the court, namely that if one man stands by and encouraged another, though but passively, to lay out money, under an erroneous opinion of title, or under the obvious expectation that no obstacle will afterwards be interposed in the way of his enjoyment, the court will not permit any subsequent interference with it by the person who formerly promoted and encouraged those acts of which he now either complains or seeks to take advantage. There can be discerned in this statement of principle the core of proprietary estoppel as it is today understood and applied which is that a person may become entitled in equity to an interest in land, or to compensation in lieu of obtaining that interest, if that person has reasonably formed an expectation of an entitlement to that interest by reason of an assurance given to him by the owner of the land where that assurance may be constituted by positive statements of the owner, or may be implied from passive acquiescence by the owner to certain events.45

(iii)  The First Phase: Characteristics and Principles 7.14  Nobody could suggest that these decisions spanning a century and a half created a defined and generally comprehensive principle of law.46 Nevertheless, the decisions do exhibit certain characteristics which led in due course to the establishment of such a principle. The following main characteristics emerge as part of a developing principle. (a) Certain conduct by an owner of land and by some other person can result in a court ordering that the owner shall create or transfer in favour of that other person an interest or rights over that land when the interest and rights have not been created or transferred by ordinary means, such as a transfer of the freehold or a grant of a lease or a specifically enforceable agreement. (b) For this to occur generally, the owner of the land must have conducted himself (including passive conduct by raising no objection to some matter) so that the other person is led to expect that he either has or will be granted the interest or rights in question. (c) Before any interest or rights can arise in the other person, he must have acted in some way, typically by incurring expenditure, in reliance on the expectation. (d) The owner of the land must

43 Somerset Coal Canal Company v Harcourt (1858) 2 De Gex & Jones 596, 607–09. 44 Rochdale Canal Co v King (1853) 16 Beav 630, 633–37. This decision was referred to in a leading modern authority on proprietary estoppel as an example of building works carried out on land whose owner had not agreed to the works: see Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 51 (Lord Walker). 45 See para 7.2 for an attempted description of the full modern principle of proprietary estoppel. 46 The decisions explained are of course only a selection of the relevant reported cases but are sufficient to show the nature of the equitable principle which was emerging.

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7.15  Proprietary Estoppel have known of the expectation and will usually have known of the conduct of the other person. (e) Given that these circumstances arise, the court in giving effect to the equitable principle can decide what interest or rights or benefits are to be vested in the other person in satisfaction of the equitable principle. Many of these characteristics became subsumed in the principle of proprietary estoppel as it has been applied in modern cases. In other words, the development of the law in this area has been to take these characteristics and the statements of principle and the orders made in the older cases and to put them together in the modern law into one broad and comprehensive principle which can then be broken down into its essential elements.

(iv)  The Doctrine of Part Performance 7.15  By virtue of section 4 of the Statute of Frauds of 1677 a contract for the sale of an interest in land was unenforceable in the absence of a sufficient memorandum in writing. This provision was repeated in section 40 of the Law of Property Act 1925. These provisions are now repealed and replaced by section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 which requires that contracts for the sale or other disposition of an interest in land shall be made in writing. Under the previous law, in the absence of a sufficient memorandum in writing, a contract within the statutory restriction was not invalid but was unenforceable; under the current law, a contract within the present statutory restriction which is not in writing is invalid. 7.16  It came to be settled by way of an invention of the Court of Chancery that once a party had partly performed a contract within the ambit of the statute, it was entitled to enforce that contract despite the language of section 4 of the Statute of Frauds. A typical instance of part performance was that a purchaser was allowed to take possession of the land and to carry out works on the land. The part performance doctrine is first found in the law reports in 168647 within 10 years of the enactment of the Statute of Frauds and was approved by the House of Lords by the beginning of the eighteenth century.48 The principle behind this rule of equity was said in a more modern decision to be that if one party to an agreement stands by and lets the other incur expense or prejudice, his position on the faith of the agreement being enforceable, he will not then be allowed to turn around and assert that the agreement is unenforceable. It was thought that it was fraudulent that a party should act in this way.49 It is easy to see a degree of congruity between this specific equitable principle applying to contracts to sell land and the more general principle of equity which was gradually being developed as traced in earlier paragraphs. In both cases, there is the central feature that a person acts in some way to his disadvantage and with the

47 Butcher v Stapley (1686) 1 Vern 363 (a decision of Judge Jeffreys LC, a judge better known for activities shortly before this time following the battle of Sedgemoor which had no bearing on the establishment of general principles of equity. He was appointed Lord Chancellor in 1685 following the Bloody Assize and is said in The Concise Dictionary of National Biography to have displayed great acuteness in civil cases). 48 Lester v Foxcroft (1700) Colles PC 108. 49 Steadman v Steadman [1976] AC 536, 540 (Lord Reid). As mentioned in the text of this paragraph, one possible explanation of the doctrine of part performance was that it could be regarded as a form of estoppel: see Actionstrength Ltd v International Glass Engineering SpA [2003] 2 AC 541, para 23 (Lord Hoffmann), citing what Lord Reid had said in Steadman v Steadman.

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Introduction  7.19 k­ nowledge of the landowner in the expectation that he has or will be granted an interest in the owner’s land. It has been explained that there were two theoretical justifications for the doctrine of part performance. One was a principle akin to estoppel as just mentioned, and the other was that the acts of part performance provided the proof of the existence of the contract which would otherwise have been provided by a written instrument. 7.17  The two principles are by no means the same. The part performance principle applied only to contracts for the sale of land while the wider principle is not dependent on the existence of a valid, albeit unenforceable, contract. The part performance principle was developed to avoid an unacceptable effect of the operation of a statutory provision (and, as it was said, to prevent the Statute of Frauds being itself used as an engine of fraud) whereas the wider principle has no such genesis or limitation. The part performance principle had a single and specific effect. It resulted in the contract of sale becoming enforceable in accordance with its terms under the general law of contract. The wider principle is applicable at the discretion of the court where it would be unjust that it should not apply and the form of relief required to achieve justice is at the discretion of the court. 7.18  It is not apparent that when the principle of proprietary estoppel began to take a more modern and comprehensive shape in the decisions in the second phase of its development between Dillwyn v Llewelyn50 in 1862, and Plimmer v Mayor, etc, of Wellington51 in 1884, either the doctrine of part performance or the decisions which established that doctrine had any great effect on the courts. The only case cited in these later decisions which was a part performance case was Gregory v Mighell52 mentioned by Lord Kingsdown in Ramsden v Dyson.53 The concept of part performance in relation to contracts to sell land lost its significance when section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 came into effect in that year, but of course the principle of proprietary estoppel has continued to develop and be applied with full vigour. The question in today’s law of the relationship between proprietary estoppel and the requirement of section 2 of the 1989 Act that a contract for the sale or other disposition of an interest in land must be in writing is examined later.54

(v)  The Second Phase: The Trilogy of Cases 7.19  The decision of the Lord Chancellor, Lord Westbury, in Dillwyn v Llewelyn55 is the first of three decisions over two decades in mid-Victorian times which laid a further ­foundation for what has today become the established principle of proprietary estoppel. 50 Dillwyn v Llewelyn (1862) 4 De GF & J 517. 51 (1884) 9 App Cas 699. 52 (1811) 18 Ves 328. 53 (1866) LR 1 HL 129. On the other hand decisions on the operation of the doctrine of part performance were supported by what would today be regarded as proprietary estoppel; see, eg, McManus v Cooke (1887) 35 Ch D 681, referring to earlier decisions such as Jackson v Cator (1800) 5 Ves Jun 688 (see para 7.9), Lord Eldon in Dann v Spurrier (1802) 7 Ves Jun 231 (see para 7.9), and Lord Selborne in Russell v Watts (1884) 10 App Cas 590, 602. 54 See para 7.63 et seq. One suggestion which has been made is that if proprietary estoppel is permitted a wide area of operation despite the requirement in s 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 this form of estoppel could come to constitute as wide a judge-made exception to the statutory provision as was constituted by the doctrine of part performance to the provision in s 4 of the Statute of Frauds. 55 (1862) 4 De GF & J 517. See also Unity Joint Stock Mutual Banking Association v King (1858) 25 Beav 72 for a further case of an imperfect gift of land by a father to a son.

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7.20  Proprietary Estoppel A father made a will in which as a typical family settlement he devised his property to his wife for life, with remainders to other members of the family. A few years later the father, with the assent of his wife, signed a memorandum stating that he presented a farm which was a part of his property to his second son for the purpose of that son building a house on it. The son took possession of the farm and expended £14,000 in building a house as intended. The father died without altering his will. The issue was of what interest the second son had, or should have vested in him, in the property containing the house which he had built. The son wished to have the freehold of the land the subject of the memorandum irrespective of the terms of the settlement under the will. A difficulty which he faced was that a court of equity would not on established principles order the completion of the title of a donee in the case of an imperfect gift56 (the purported gift was ineffective because it was not made in a deed). Despite this the Lord Chancellor, Lord Westbury, made a declaration that the son was entitled to a conveyance of the freehold of the property in fee simple, including the house from the trustees of the father’s will. The decision was justified by the following principle of law: So if A puts B in possession of a piece of land, and tells him, ‘I give it to you that you may build a house on it’, and B, on the strength of that promise, with the knowledge of A, expends a large sum of money in building a house accordingly, I cannot doubt that the donee acquires a right from the subsequent transaction to call on the donor to perform that contract and complete the imperfect donation which was made.57

There is no reason to think that Lord Westbury was confining his statement of the principle involved to the building of houses or construction work or to an imperfect gift of a freehold estate. It is possible to see in this decision the genesis of the main elements of proprietary estoppel as it is applied today, namely assurance, reliance and detriment, and ­unconscionability.58 There was an assurance by the father that the second son was to have the freehold in a part of the father’s property creating an expectation in the son that he would have that interest. The son acted to his detriment in building the house in reliance on that assurance and expectation and with the knowledge of the father. As Lord ­Westbury observed, no one builds a house for his own life only,59 and this would have been understood by the father. It was plainly just and equitable that the freehold of the property with the house should be vested in the son who had built the house. 7.20  The decision of the House of Lords in Ramsden v Dyson,60 the second of the trilogy of cases, is best known for the dissenting judgment of Lord Kingsdown. Sir John Ramsden, a large landowner in the area of Huddersfield, operated a system in which he granted 60-year renewable leases to persons who built a house on a part of his land. There was available an alternative to this system under which persons were allowed to take possession of a piece

56 Milroy v Lord (1862) 4 De GF & J 264, 274. 57 Dillwyn v Llewelyn (1862) 4 De GF & J 517, 521. 58 See para 7.101 for a statement of the main elements as designated in modern authority. 59 Dillwyn v Llewelyn (1862) 4 De GF & J 517, 522. A similar principle is now applied in modern decisions on estoppel such as Voyce v Voyce (1991) 62 P & CR 290, 296, where Nicholls LJ pointed out that an intention to make a gift of land followed by conduct of the proposed donee such as carrying out works on it making it inequitable for the proposed donor to continue to assert ownership would give rise to an estoppel resulting in the proposed donee becoming the owner of the property even in the absence of a contract. 60 (1866) LR 1 HL 129.

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Introduction  7.20 of land and build on it and they then remained in possession as tenants at will without any formal lease. The rent under the alternative arrangement was lower than that under the long leases. It was understood that the tenants at will after they had built a house would not be dispossessed provided they paid the rent. The purpose of this alternative arrangement was said to be to create a new and cheap mode of conveyancing.61 The Plaintiffs were a tenant at will under these arrangements and his mortgagee. When notice to quit was given to the tenant by the grandson of Sir John Ramsden they brought proceedings claiming that in equity the tenant at will was entitled to a long lease. Four of the Judges rejected the claim on the ground that when he had entered the land and built the house the tenant knew that he was only a tenant at will and was under no mistake as to the ownership of the land. Lord Kingsdown would have allowed the claim on principles of equity and stated the rule of law in the following terms: If a man, under a verbal agreement with the landlord for a certain interest in land, or, what amounts to the same thing, under an expectation, created or encouraged by the landlord, that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord, and without objection by him, lays out money upon the land, a Court of Equity will compel the landlord to give effect to such promise or expectation.62

The essence of proprietary estoppel as it stands today can be seen in what Lord Kingsdown said. First, there has to be an assurance or some other conduct by the owner of land creating an expectation that some other person is to have an interest in the land. It should be noted that Lord Kingsdown referred to an expectation by the tenant at will that ‘he shall have a certain interest’ in the land on which he had built a house. What Lord Kingsdown appears to have meant was not that the tenant at will had a hope of a long lease or that he had an expectation of being able to negotiate, perhaps with success, for a long lease, but that his expectation was of an entitlement to call for and be granted a long lease. This aspect of the judgment of Lord Kingsdown is consistent with the exact nature of the expectation needed to found a proprietary estoppel as explained in modern authority.63 Secondly, that other person, usually with the knowledge of the landowner, must act to his detriment in some way in reliance on the assurance and the expectation such as by building on the land. Thirdly, in these circumstances a court of equity will give effect to the expectation and will order a transfer of an interest in land by the owner so as to give effect to what is the expectation and to what is just. Despite it being in a dissenting judgment, it is the principle as stated by Lord  Kingsdown that is a foundation and forerunner of the present law and it has been treated as such.64 The principle as stated by Lord Kingsdown, as that stated by 61 ibid, 162. 62 ibid, 170. 63 See para 7.121. 64 eg, it was referred to in the decision of the Privy Council about two decades later in Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699 as the principle which the Court in that case was applying: see below (n 72). It has recently been said that the statement of law of Lord Kingsdown has often been preferred to that of other members of the Court: Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 52 (Lord Walker). In Crabb v Arun District Council [1976] Ch 179, 193–94, Scarman LJ said that the law had developed so that it is to be considered as correctly stated in the dissenting judgment of Lord Kingsdown. In Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 20, Lord Scott said that Ramsden v Dyson, despite the majority decision, was a straightforward case of proprietary estoppel ‘if viewed through the spectacles of the jurisprudence which has

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7.21  Proprietary Estoppel Lord ­Westbury in Dillwyn v Llewelyn, leads readily to the statement of certain of the main elements of proprietary estoppel, a representation or assurance made to a claimant, reliance on it by a claimant, and detriment to that claimant, as recently stated in the House of Lords.65 7.21  Ramsden v Dyson is usually cited for the above principle taken from the judgment of Lord Kingsdown but it is worth noting a reason why the other Members of the Court rejected the claim of one of the Plaintiffs to be granted a long lease. A reason as stated by Lord Wensleydale can be seen in the following passage: If a stranger build on my land, supposing it to be his own, and I, knowing it to be mine, do not interfere, but leave him to go on, equity considers it to be dishonest in me to remain passive and afterwards to interfere and take a profit. But if the stranger build knowingly upon my land, there is no principle of equity which prevents me from insisting on having back my land, with all the additional value which the occupier has imprudently added to it. If a tenant of mine does the same thing, he cannot insist on refusing to give up the estate at the end of his term. It was his own folly to build.66

If this view of the law had prevailed in these unequivocal terms there could be no proprietary estoppel when a person acted to his disadvantage, such as by building or doing other work on land which he knew was not his own. As the law has developed there can be such an estoppel when a person has laid out money on land which he knows he does not own but where there has been induced in him by the conduct of the landowner an expectation that he will obtain an interest in the land. The next decision to be examined, Plimmer v Mayor, etc, of Wellington,67 is such a case. In that case the landowner, the Crown or the Provincial Government in New Zealand, requested Mr Plimmer to make the improvements to the land to assist in the public purpose of receiving immigrants into the colony.68 Mr Plimmer knew at the time that he did not own the land which in fact appears to have been part of the foreshore or sea bed at Wellington. In a leading modern decision, Thorner v Major,69 a person for years carried out unpaid work on a farm which he knew was owned by a relative on an assurance that the farm would be left to him on the death of the relative and this was held to create a proprietary estoppel in his favour. The Claimant in this last case when he carried out the unpaid work did not act under an erroneous supposition that he then held any interest in the land. It can be seen, therefore, that the future development of proprietary estoppel into the principle as it stands today was dependent on the law as stated by Lord Kingsdown becoming established as the correct statement of the law. 7.22  The third of the trilogy of mid-Victorian decisions, Plimmer v Mayor, etc, of ­Wellington,70 was a decision of the Privy Council on appeal from the Supreme Court of New Zealand about 20 years later. Sir Arthur Hobhouse, delivering the judgment of the emerged since’, an observation which accepts that the view and decision of Lord Kingsdown correspond with, and indeed were powerful in forming, the modern conception of proprietary estoppel. 65 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 29. 66 Ramsden v Dyson (1866) LR 1 HL 129, 168. There is some support for the way in which the matter was put by Lord Wensleydale in what was said by Sir Dudley Grant MR in Tilling v Armitage (1805) 12 Ves Jun 78 as summarised in para 7.10. 67 (1884) 9 App Cas 699. 68 ibid, 712. 69 [2009] UKHL 18, [2009] 1 WLR 776. See para 7.39. 70 (1884) 9 App Cas 699.

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Introduction  7.23 Privy Council, derived guidance from Dillwyn v Llewelyn and Ramsden v Dyson. The case concerned Wellington Harbour on the southern edge of the North Island of New Zealand. Between 1848 and 1882 Mr Plimmer carried out a series of works in the harbour on land which was at all times owned by the Crown or by the Provincial Government. The work comprised the mooring of a hulk (called Noah’s Ark), the building, and later the construction of an extension, of a jetty into the sea, and the reclamation of land on which a warehouse was built. This was done without the consent of the Crown or the Government (although permission to occupy the land on which the hulk was moored was given by the then Governor of the Colony) but with no objection from them for 30 years. Indeed, the Government requested that a part of the work should be done. During a part of the period, the jetty and warehouse were used for the reception of immigrants into the then newly established colony.71 In 1880, the land became vested by statute in the Mayor, ­Commonalty and ­Citizens of the City of Wellington and compensation was payable by statute to any person who held ‘an estate or interest in, to or out of the land’. The issue was whether Mr Plimmer, or his successors in title, held such an interest in the land on which the works just described had been carried out. Sir Arthur Hobhouse quoted the passage from the ­judgment of Lord ­Kingsdown in Ramsden v Dyson set out above,72 and said that the facts fell within the principle stated by Lord Kingsdown as to expectations created or encouraged by the owner of land. In fact the Government had not only encouraged some of the expenditure by Mr Plimmer, but had taken the initiative in requesting it. 7.23  Again it is possible to see the elements of (a) an assurance or other conduct by the owner of land leading to an expectation that some other person shall have an interest or rights in that land, (b) actions to his detriment by that other person in reliance on that assurance and expectation, here the expenditure by Mr Plimmer on the works carried out, with the expectation and actions being known to the owner of the land, and (c) an injustice if no effect is given to that expectation.73 A particular question in Plimmer’s case was how effect should be given to the principle of equity applied in cases of the present nature. In Dillwyn v Llewelyn, a conveyance of the freehold was ordered. In Ramsden v Dyson, if the principle as stated by Lord Kingsdown had been applied, it is likely that an order would have been

71 The sovereignty of the British Crown in New Zealand is said to derive at any rate in part from the Treaty of Waitangi in 1840 made between representatives of the Crown and Maori Chiefs from the North Island of New Zealand. 72 See para 7.20. It is interesting that the Privy Council preferred to apply the law as stated in a single dissenting judgment to that as applied by the four other Members of the Court. If the principle as stated by Lord Wensleydale (see para 7.21) had been applied it may be that Mr Plimmer would have failed to establish that he had an interest in the land acquired by the Provincial Government since he was aware when he carried out works in the harbour that the land on which the works were carried out was owned by the Crown or by the Government. The Privy Council rejected the argument, based on what Lord Cranworth had said in Ramsden v Dyson, that some sort of unilateral mistake was necessary. 73 As Sir Arthur Hobhouse said at (1884) 9 App Cas 699, 712; ‘It would be in a high degree unjust that they should do so, and that the parties should have intended such a result is, in the absence of evidence, incredible’. Sir Arthur was referring to the proposition that Mr Plimmer could have been deprived summarily of the use of the jetty. In Canadian Pacific Railway Co v The King [1931] AC 414, 428 Lord Russell of Killowen, giving the decision of the Privy Council, regarded the decision in Plimmer’s case as resting on an inferred contract that a revocable licence should become irrevocable. Up until the 1960s what is now recognised as the separate principle of proprietary estoppel, one of the two forms of equitable estoppel, was sometimes treated in textbooks as mainly an aspect of the law of licences. The principle was also sometimes said to rest on an implied contract and thus as an application of the general law of contract.

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7.24  Proprietary Estoppel made for the grant of a long lease.74 The situation was not so straightforward in Plimmer’s case and the Court decided that the appropriate method of giving effect to the expectation was that Mr Plimmer was to be entitled to an irrevocable licence to occupy the land.75 This was considered to be a sufficient estate or interest in the land to create a right to compensation under the legislation providing for compensation.76 A further feature of the modern law of proprietary estoppel therefore emerges from these events in the colonial era in New Zealand which is that a court has a wide discretion on how to give effect to the equitable principle being applied. It was stated that the court will look at the circumstances in each case to decide in which way the equity can be satisfied.77

(vi)  The Second Phase: The Emergence of a Principle 7.24  Following the decision in Plimmer’s case in 1884 it was possible to see at least the outlines of a coherent principle of proprietary estoppel which had emerged and which encompassed the features of the modern principle as suggested above.78 (i) The starting situation is that A owns an interest in land.79 This was true of Llewelyn Dillwyn, the father in Dillwyn v Llewelyn, of Sir John Ramsden, who as the landowner entered into the informal leasehold arrangement in Ramsden v Dyson, and of the Crown or the New Zealand Provincial Government, which either stood by or encouraged Mr Plimmer to build the jetty, in Plimmer v Mayor, etc, of Wellington. (ii) Each of these persons acted expressly or impliedly so as to induce in B an expectation that he had or would obtain an interest in A’s land. Llewelyn Dillwyn presented 74 It appears that the order which would have been made by Vice-Chancellor Stuart in the court below was an order for the grant of a new lease: see Thornton and Dyson v Ramsden (1864) 4 Gif 519. 75 Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699, 714. The expedient of satisfying a proprietary estoppel by ordering the grant of a licence rather than a beneficial interest in property has been followed in modern cases concerning domestic property: see, eg, Matharu v Matharu (1994) 68 P & CR 93 (licence to a claimant to occupy a property for life or such shorter period as she might decide); Inwards v Baker [1965] 2 QB 29. 76 See s 4 of the Wellington Harbour Board and Corporation Land Act 1880. In the law today in England and Wales an ordinary licence to use or occupy land is not a proprietary interest: Ashburn-Anstalt v Arnold [1989] Ch  1 and does not entitle the licensee to compensation under the current legislation on compensation for the ­compulsory acquisition of land: Warr (Frank) and Co Ltd v London County Council [1904] 1 KB 713. (Although see today s 37 of the Land Compensation Act 1973 under which a person such as a licensee who is displaced from land and does not have a compensable interest may in certain circumstances be entitled to a disturbance payment.) The position may be different where there is an irrevocable licence, called by Sir Arthur Hobhouse something which was practically a perpetual right to the land in question for the purposes of the original licence. See para 7.200 et seq for a further discussion of the status under the law today of persons who are granted a right by way of a licence to occupy land in satisfaction of a proprietary estoppel. 77 It is not entirely clear from the report in the Appeal Cases what exact interest the Claimants for compensation held. It seems that Mr John Plimmer, who had carried out the works, sold his rights in the jetty, described as ‘a certain freehold wharf which had been duly legalised as a landing-place’, and that the purchaser had granted a lease to the persons who were the Claimants for the statutory compensation. The facts of this decision are more fully set out in the report of the proceedings in the court below in New Zealand in (1883) 1 NZLR 229. As can be seen from p 245 of the judgment of Prendergast CJ after considering extensive cited authority, the Court of Appeal of New Zealand concluded that the interest of Mr Plimmer was no more than a tenancy at will. 78 See para 7.23. An analysis of the three decisions and the way in which they contributed to the development of principles was carried out by Lord Walker in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, paras 49–65. 79 It is probable that today proprietary estoppel can be used to establish claims to rights in chattels and to rights where the subject matter is not corporeal property, such as intellectual property, a development not presaged in the early formation of the principle. This subject is discussed in part (H) of this chapter.

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Introduction  7.26 the land to his second son. Sir John Ramsden assured the tenant, or at least created a general understanding, that he could obtain a formal long lease. The Crown and the New Zealand Provincial Government by their encouragement of Mr Plimmer in his expenditure and work, at least impliedly assured him that he would obtain an interest in the jetty and in the sea bed of the harbour and could not simply be expelled from it at the whim of the Mayor and Commonalty and Citizens of Wellington. (iii) The recipient of the assurance, B, in each case acted to his detriment in reliance on the assurance, in Dillwyn v Llewelyn by the building of a house on the land, in Ramsden v Dyson by laying out money in building, and in Plimmer v Mayor, etc, of Wellington by the construction of the jetty and warehouse into and in Wellington Harbour. (iv) In each case A, Llewelyn Dillwyn as the father, Sir John Ramsden as the landowner, and the Crown or the Provincial Government at Wellington, knew of the actions of B, and of the expectation of B that he had or would obtain an interest in the land.80 (v) Nothing was done by A to remove the expectation of B. (vi) It was in each case just and equitable that B should obtain an interest in the land. (vii) The equity which arose was or would have been satisfied by the transfer of the freehold to the son, Llewelyn W Dillwyn, by the grant of a long lease to the tenant at will (if Lord Kingsdown’s principle had prevailed), and by the creation of an irrevocable licence in the land and structures in Wellington Harbour in favour of the successors in title of Mr John Plimmer. 7.25  It was not the custom in the older cases to state a principle by breaking it down into elements or components. An express or implied assurance of some nature by the person against whom the estoppel is claimed is a foundation of modern statements of principle. For instance, in Dann v Spurrier,81 Lord Eldon referred to a person knowingly encouraging another to pay out money and said that looking on, what today would be called acquiescence, was as strong as using terms of encouragement. In his formulation of principle in Ramsden v Dyson,82 Lord Kingsdown referred to a person creating or encouraging an expectation in another person. These requirements are what would today be called the giving of an assurance, whether express or implied from acquiescence, which can be seen as the first of the main elements of proprietary estoppel. In the same way unconscionability or injustice is not usually spelt out as a requirement but its existence can be seen as implicit in the statements of principle.

(vii)  The ‘Five Probanda’ 7.26  During the course of the trilogy of decisions in the second phase, Fry J in W ­ illmott v Barber83 provided his well-known ‘five probanda’ (five matters which have to be proved) if  a person is to be prevented from asserting his true legal rights in relation to land. 80 Knowledge by the person giving the assurance of the actions by the person to whom the assurance was given is often stated as one of the circumstances needed to exist if the estoppel is to be established. Such knowledge will usually be present but it is open to doubt in the modern application of the principle whether it is an essential ingredient of the estoppel in all cases. This point is discussed in para 7.162 et seq. 81 (1802) 7 Ves Jun 231. See para 7.9. 82 (1866) LR 1 HL 129. See the citation set out in para 7.20. 83 (1880) 15 Ch D 96, 105.

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7.27  Proprietary Estoppel A landlord let land on a 99-year lease with a covenant that the lease should not be assigned without his written consent. The tenant gave to the Plaintiff an option to purchase the lease and that option was exercised. Prior to the exercise of the option the purchaser was allowed into possession of a part of the land and spent labour and money in improving it. The landlord refused to give his consent to the assignment.84 It was contended by the purchaser that on equitable principles the landlord was bound to give his consent. 7.27  The Judge prefaced his statement of the requirements of the equitable principle to be applied by saying that a person was not to be deprived of his legal rights under any such principle unless he had acted in such a way as to make it fraudulent for him to set up those rights. He then stated his five probanda for the operation of the equitable principle which were as follows: (i) The claimant, the person who asserts the estoppel (or the loss of rights), must have made a mistake as to his legal rights. (ii) The claimant must have expended some money or must have done some act (not necessarily upon the land of the other party) on the faith of his mistaken belief. (iii) The defendant (the person with an interest in land against whom the estoppel or the equity is being asserted) must know of his own right which is inconsistent with that of the claimant. (iv) The defendant must know of the claimant’s mistaken belief of his own right. (v) The defendant must have encouraged the claimant in the expenditure of money or other acts which he has done either directly or by abstaining from asserting his legal right.85 7.28  Fry J did not explain the basis of decided authority from which he had derived his five probanda. Indeed, he cited no authority at all in his judgment. The decision in Ramsden v Dyson86 was cited to him as was Jackson v Cator87 referred to earlier. However, Sir Edward Fry was able to draw on his legal knowledge of equity and land law.88 His probanda were the first attempt to put together on a comprehensive basis aspects of what later became known as proprietary estoppel or estoppel by acquiescence. The five probanda have never subsequently enjoyed the status of a complete statement of the law of proprietary estoppel. For instance, it is doubtful whether the first and fourth of the probanda were satisfied on the facts of Plimmer v Mayor, etc, of Wellington89 where the principle was applied so as to create an irrevocable licence. The probanda have no express reference to the overriding requirement of unconscionability or the discretion of the court on how to give effect to the equity which arises. The probanda have had, certainly in more recent times, a mixed and not always enthusiastic reception as a guide to the essential elements of proprietary estoppel. It has been said in a more modern case that the relevant passage from the judgment of

84 This decision was of course prior to the enactment of s 19 of the Landlord and Tenant Act 1927 which provides that where consent to an assignment of a lease is required it is not to be unreasonably withheld. 85 Willmott v Barber (1880) 15 Ch D 96, 105. 86 (1866) LR 1 HL 129. See para 7.20. 87 (1800) 5 Ves Jun 688. See para 7.9. 88 It appears that the judgment of Fry J was not a reserved judgment. Sir Edward Fry had a long practice in ­chancery and company work before being appointed as a Judge of the Chancery Division in 1877. 89 (1884) 9 App Cas 699.

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Introduction  7.29 Fry J is a valuable guide to the matters which have to be established in order that a person may establish any potential equity.90 One view taken in a more recent case is that the five probanda may be applicable to proprietary estoppel but only where the estoppel is based on an assurance inferred from acquiescence as opposed to an assurance constituted by an express promise or representation.91 Fry J held that certain of his probanda were not satisfied on the facts before him (the second, third and fourth of the probanda were not satisfied) and it may be observed that if all the probanda had been satisfied, the result would not have been to create an interest in land in favour of the Plaintiff by virtue of the application of any separate principle, but only to prevent the Defendant from refusing consent to an ­assignment of a lease. 7.29  It seems that Willmott v Barber is properly to be regarded as leading the way towards a comprehensive statement of the modern principle of proprietary estoppel, but not as itself providing a comprehensive statement of that principle. In more recent times, there has been a more chequered approach to the usefulness of the probanda as a definitive guide to the availability of proprietary estoppel. Attempts are sometimes made with some difficulty to bring the facts of cases within the language of the probanda, but the view generally taken today is that Fry J was not trying to state principles applicable to equitable estoppel as a whole.92 Indeed, it has been suggested in a recent decision in the House of Lords that the five probanda have over the years provided something of a stumbling block in the development of proprietary estoppel as a form of equitable estoppel.93 Whatever may have been the usefulness of the five probanda in the past and in the development of proprietary estoppel, modern authority suggests that it is not normally useful today to assess whether the requirements of the estoppel are made out simply by applying the probanda. Certainly, a failure to satisfy one or more of the probanda is not now seen as being of itself a reason to deny the operation of the estoppel.94 The attraction of the probanda is that they provided a detailed framework within which the at one time somewhat diffuse matter of proprietary estoppel

90 Crabb v Arun District Council [1976] Ch 179, 194 (Scarman LJ). 91 Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 147. However, Oliver J in that case pointed out that there were judicial pronouncements of high authority which appeared to support the application of the probanda over a broader field of proprietary estoppel and cited what was said by Lord Diplock in Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, 884. See also Hopgood v Brown [1955] 1 WLR 213, 223, where Evershed MR regarded the probanda as confined to estoppel by acquiescence, what is now analysed as a species of proprietary estoppel. 92 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 57 (Lord Walker). On the other hand, a failure to establish one of the probanda has been used to justify the refusal to apply the principle of ‘acquiescence’ (perhaps equivalent to what would today be called proprietary estoppel) so as to create an interest in land: Armstrong v Sheppard & Short Ltd [1959] 2 QB 384, 396. The majority of the Court of Appeal in Matharu v Matharu (1994) 68 P & CR 93 reached their decision by the application of the five probanda. At the time of ­Willmott v Barber no distinction was drawn between what are now seen as the two forms of equitable estoppel, that is promissory estoppel and proprietary estoppel. The first general articulation of promissory estoppel was made three years before Willmott v Barber by Lord Cairns in Hughes v Metropolitan Rly Co (1877) 2 App Cas 439. The five probanda are clearly not applicable to what later became known as promissory estoppel. 93 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 56 (Lord Walker). Lord Walker considered that the position had been clarified by Oliver J in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n. 94 Electrolux Ltd v Electrix Ltd (No 2) (1953) 71 RPC 23, 33 (Sir Raymond Evershed MR); Shaw v Applegate [1977] 1 WLR 970, 977–78 (Buckley LJ). For example, it seems clear on a modern understanding of the essential elements of proprietary estoppel that the requirements of mistaken belief as stated in the first and fourth of the probanda are not universally essential requirements of an estoppel. See paras 7.158 and 7.169.

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7.30  Proprietary Estoppel could be evaluated in different factual circumstances, and the probanda have been used this way in modern decisions to justify the rejection of an estoppel.95 The main elements of proprietary estoppel, an assurance, reliance, detriment and unconscionability, can be seen expressly or impliedly within the probanda but not with the clarity, and certainty not with the exact elaboration, with which they are seen today. Whatever may have been the significance of the five probanda in the development of proprietary estoppel, it seems clearly preferable today that a claim to such an estoppel is evaluated by referring to the four essential elements of the estoppel which are (a) an assurance, (b) action in reliance on the assurance, (c) detriment, and (d) unconscionability.96 The five probanda are therefore best taken as a stage in the historical development of proprietary estoppel rather than as a ­statement of the law today on the essential elements of the estoppel.

(viii)  The Third Phase 7.30  As with promissory estoppel, the essential nature of proprietary estoppel had become established by the later part of the nineteenth century. Neither principle was then described as a form of estoppel and neither was articulated into a regular and coherent principle to be applied in courts and described in textbooks and academic writing. Both achieved this status in a series of decisions starting in the latter half of the twentieth century and this may be called the third phase in the development of proprietary estoppel.97 The law on the subject was not dormant in the intervening period. In a decision in 1916 an estoppel was successfully asserted against the Duke of Cornwall whose agents had remained passive when works were carried out to a house.98 Having established the foundation and the essential nature and elements of proprietary estoppel, the most useful method of describing its modern development is to categorise the essential elements of the estoppel and then to consider while examining each element how modern leading cases clarify and define those elements so leading to the details of the application of the modern principle.99 7.31  Even so, certain milestones in the modern development of the principle may first be noted. One is the decision of Oliver J in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd.100 The decision concerned whether purchasers of property, against whom an option 95 eg, it was so used in Coombes v Smith [1986] 1 WLR 808. See also Armstrong v Sheppard & Short Ltd [1959] 2 QB 384. 96 See para 7.101 for a discussion of the main elements of the principle as it is applied today. 97 A description of a similar process in the development and establishment of promissory estoppel, following the decision of Denning J in Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, is contained in ch 6, para 6.12 et seq. 98 Attorney General to the Prince of Wales v Collom [1916] 2 KB 193 (Atkin J). The Judge relied on a passage from the judgment of Lord Cranworth in Ramsden v Dyson (1866) LR 1 HL 129, 140, and relied on Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699, for the proposition that an estoppel can bind the Crown. Atkin J described the principle which he was applying as estoppel in pais. 99 Some of the most important decisions in the last 50 years or so are Inwards v Baker [1965] 2 QB 29; ER Ives Investment Ltd v High [1967] 2 QB 379; Crabb v Arun District Council [1976] Ch 179; Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n; Matharu v Matharu (1994) 68 P & CR 93; Gillett v Holt [2001] Ch 210; Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752; Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776; and Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764. This is of course far from a comprehensive list of the relevant authorities and others are mentioned as necessary in ensuing parts of this chapter. 100 [1982] QB 133n.

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Introduction  7.33 to renew a lease existed but had not been properly registered, were estopped from denying the enforceability of the option. The Judge analysed over 20 authorities decided over more than two centuries, and in the course of his judgment provided a statement of the main elements of proprietary estoppel which has to a considerable extent stood the test of time.101 The progress of proprietary estoppel became marked by a series of cases involving domestic property in some of which persons lived or worked together with various degrees of intimacy.102 Thereafter and about a decade ago, two cases came before the House of Lords which clarified the law and explained it as having the basis on which it stands today.103 7.32  The two decisions, Cobbe v Yeoman’s Row Management Ltd and Thorner v Major, which were decided in successive years are important for a number of reasons and deserve specific consideration before the main elements of proprietary estoppel are identified.104 The decisions, and particularly Thorner v Major, isolate the main elements of the estoppel, albeit with a warning against excessive rigidity of definition. The decisions also give useful guidance on the first and critical element which is an assurance which gives rise to the recipient of the assurance that he has or will have an entitlement to an interest or rights in the land of the person making the assurance. The decisions firmly reject the notion, which may perhaps have gained some tenure, that all that was necessary for the proponent of a proprietary estoppel was to show that it would be unconscionable or unjust for the other party to be able to assert his ordinary or strict legal rights. It is useful to compare the two decisions, since in the first of them the plea of proprietary estoppel failed in the context of a commercial arrangement and in the second the plea succeeded in the setting of a family arrangement.

(ix)  Two Recent Leading Cases: Cobbe’s Case 7.33  Cobbe v Yeoman’s Row Management Ltd105 was a decision concerning a commercial transaction relating to a piece of land. The third Defendant owned land comprising a number of flats and it was hoped to obtain planning permission to develop six town houses on the land which could then be sold. An oral arrangement was made with the Claimant whereby the Claimant would seek to obtain planning permission and then the Defendant would obtain vacant possession and sell the land to him. The Claimant was then to develop

101 The statement is set out in para 7.98. The judgment has been described as a watershed in the development of proprietary estoppel: Gillett v Holt [2001] Ch 210, 225 (Robert Walker LJ), citing the second edition (1993) of Gray, Elements of Land Law. Even so the emphasis which Oliver J placed on unconscionability as the ultimate ­justification of the estoppel at the possible expense of other essential elements may not be in accordance with the law as seen today: see para 7.34. 102 See, in particular, Inwards v Baker [1965] 2 QB 29; Pascoe v Turner [1979] 1 WLR 431; Windeler v Whitehall [1990] 2 FLR 505; Baker v Baker (1993) 25 HLR 408; Sledmore v Dalby (1996) 72 P & CR 196; Gillett v Holt [2001] Ch 210; Grundy v Ottey [2003] WTLR 1253; Jennings v Rice (2003) 1 P & CR 8; and Lissimore v Downing [2003] 2 FLR 308. 103 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752; and Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776. 104 The decision of the House of Lords in Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764, in which the operation of proprietary estoppel to musical copyright was an important issue, was decided a few months after Thorner v Major in 2009. 105 [2008] UKHL 55, [2008] 1 WLR 1752.

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7.34  Proprietary Estoppel the land and there was to be a sharing of the proceeds of the sale of the property in agreed proportions. Planning permission was obtained assisted by the efforts of the Claimant but the Defendant then refused to proceed with the transaction on the terms as discussed. The Claimant claimed that as a result of these events the Defendant was estopped from denying that the Claimant had such an interest in the premises as the court thought fit. The Claimant succeeded at first instance and in the Court of Appeal but failed in the House of Lords which held that there was no proprietary estoppel.106 There are four features of the decision which lead to or assist today’s understanding of the nature and elements of proprietary estoppel. These features led to the identification and statement of the main elements of proprietary estoppel and are examined in greater detail when these elements are described. 7.34  The first feature, already mentioned, is the rejection of the notion that it was enough to establish a proprietary estoppel that a party had in some way behaved unconscionably.107 An associated proposition sometimes suggested was that an estoppel could be established when a person failed to carry out duties which he was ‘in honour’ though not in law bound to observe. A general principle was said to have been laid down by the House of Lords in Ramsden v Dyson108 in 1866, and not doubted in subsequent cases, that conscious reliance on honour alone will not by itself give rise to an estoppel. This principle was confirmed as correct.109 7.35  The second feature is that Lord Scott, with whom three other Members of the Court agreed, stated the nature of proprietary estoppel in terms applicable to estoppel generally. In describing the nature of a proprietary estoppel he said that it had to contain an aspect of estoppel generally which is that it bound the person estopped from asserting some fact or facts or a mixture of fact and law that stood in the way of some right claimed by the person entitled to the benefit of the estoppel. He added that an estoppel with this general characteristic became a proprietary estoppel if the right claimed was a proprietary right, usually an interest in or over land.110 It seems doubtful whether proprietary estoppel as it has been developed and as it is stated today can be confined within this formulation. A critical aspect of this form of estoppel, and one which differentiates it from most if not all other forms of estoppel, is that the effect of the estoppel is that the court can order the vesting in a person with the benefit of the estoppel of an interest in land or order some other relief or recompense in favour of that person. This appears to go well beyond an inability to assert particular matters of fact or of mixed law and fact. In addition, the foundation of a proprietary estoppel may be an assurance in the nature of a promise and a promise is to be distinguished in its nature and effect from a statement of fact within the doctrine of estoppel generally. A representation of fact (and possibly today a representation of law) is the 106 The House of Lords also held that the facts did not give rise to a constructive trust but decided that the Claimant was entitled to recompense under the law of restitution in respect of the money and services which he had provided. 107 See para 17 of the decision; and see para 7.95 for a fuller discussion on unconscionability. It is doubtful whether the law had ever been overtly stated in this stark fashion but some previous observations come close to it. 108 (1866) LR 1 HL 129. See para 7.20. 109 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 81 (Lord Walker). Lord Walker added (at para 92) that the Claimant knew that the third Defendant was bound in honour only and so in the eyes of equity her conduct, although unattractive, was not unconscionable. 110 ibid, para 14. Lord Scott added that the principle was equally applicable to chattels or choses in action.

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Introduction  7.36 f­oundation of a common law estoppel by representation whereas a promise is the foundation of an equitable promissory estoppel.111 Lord Walker who delivered the other reasoned judgment in Cobbe’s case did not advance the same reasoning as Lord Scott on this point. It may be that what Lord Scott said on the present point is to be taken as indicating that a proprietary estoppel depends on a form of assurance having been given by the person estopped, whether that assurance takes the form of a representation of fact or a promise or is to be inferred from acquiescence, that is silence or inactivity. The second of the two successive decisions of the House of Lords, Thorner v Major, where a proprietary estoppel was held to exist, rests not on any statement of fact or an inability to deny the truth of a statement of fact, but on an assurance given that a person would obtain an interest in property under a will. Previous decisions in which a proprietary estoppel has been held to arise involve assurances in the nature of a promise.112 It is therefore very doubtful whether the strict and restrictive formulation of Lord Scott, itself a reaction against the diffuse view that unconscionability is alone enough to establish the estoppel, accurately describes the principle of proprietary estoppel today. This question is further discussed later in connection with an assurance as an essential element of the estoppel.113 7.36  The third feature is that which may be the most fundamental for any attempt to state the essential elements of, and the boundaries of, proprietary estoppel. Certain of the decisions which contributed to the development of the principle indicated that what was essential to the estoppel was an expectation induced by some form of assurance or conduct that a person was entitled to have, or did have, an interest in land. For instance, in Ramsden v Dyson114 Lord Kingsdown, whose statement of principle foreshadowed the decisions in later cases, saw the case as one of a common expectation of the right of the tenant to be granted a long lease on demand. A primary reason that the Claimant failed in Cobbe’s case was that he was never able to show an expectation that he would, if the planning application succeeded, become entitled to an interest in the land in question. His only expectation was that the parties or their legal advisers would sit down and agree the outstanding legal terms to be incorporated into a formal written contract.115 This reasoning explains why an 111 The distinction between representations of fact and promises is fundamental to the distinction between an estoppel by representation and a promissory estoppel and is considered in connection with estoppel by representation in ch 3, para 3.34; and in connection with promissory estoppel in ch 6, para 6.104 et seq. The extension in recent decisions of common law estoppel by representation to representations of law, as well as to representations of fact or of mixed law and fact, is examined in ch 3, para 3.18. 112 See, eg, Gillett v Holt [2001] Ch 210; Pascoe v Turner [1979] 1 WLR 431. 113 See para 7.105 et seq. The contrast between what was said by Lord Scott in Cobbe’s case and what was said in Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776 on the present point is referred to in para 7.41. 114 (1866) LR 1 HL 129. See para 7.20. The other two seminal Victorian cases which laid the foundations of proprietary estoppel are also cases of an expectation of an entitlement to an interest in land. In Dillwyn v Llewelyn (1862) 4 De GF & J 517 (see para 7.19) there was an expectation of the second son of the testator that he was or would become the owner of the land given to him by an imperfect gift and; in Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699 (see para 7.22) the decision of the Privy Council (at p 714) referred to the expectation that Mr P ­ limmer would not be deprived of his occupation of the land on which he had carried out works with the result that he was awarded an irrevocable licence in furtherance of the estoppel. Other significant decisions to the same effect are Attorney General of Hong Kong v Humphreys Estate (Queen’s Gardens) Ltd [1987] AC 114, 124 (Lord ­Templeman); Rochdale Canal Co v King (1853) 16 Beav 630, 633–34 (Sir John Romilly MR); and Taylor ­Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 144 (Oliver J). 115 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 20 (Lord Scott). Lord Scott (at para 21) described the expectation of the Claimant as being that of further negotiations leading to the hope and expectation of a formal contract.

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7.37  Proprietary Estoppel agreement which is subject to contract and so is not legally binding cannot normally give rise to a proprietary estoppel, since under such an agreement the only expectation of the parties is that they may be able subsequently to arrive at a legally binding contract perhaps after further negotiations.116 Thus, the reasoning in Cobbe’s case leads to the proposition that in order for a person to assert a proprietary estoppel he must, as a result of an express or implied assurance given to him, have an expectation that he has, or will have, an entitlement to an interest or rights in property. It will be seen from the subsequent decision in Thorner v Major that it was the expectation of an interest in property, and an expectation of an ­entitlement to that interest, which constitutes a decisive difference between the rejection of an estoppel in Cobbe’s case and the upholding of an estoppel in the later case. When the first and fundamental element of proprietary estoppel is described it will be emphasised that the creation of an expectation of an entitlement to an interest in land is a cardinal component of the assurance.117 7.37  The fourth feature to which to draw attention is the distinction drawn by Lord Walker between domestic arrangements and commercial arrangements.118 In a domestic or family situation, the typical person involved is not a business person in receipt of legal advice and the persons involved in a domestic situation may not know that some further legal transaction is necessary to create or perfect a title to land. In a commercial situation, the typical participant may have legal advice and business knowledge such as to make that person aware, for example that he cannot expect an entitlement to property unless an enforceable contract exists. The existence of the requisite assurance and of an expectation of an entitlement to an interest in property may therefore have to be judged to some extent differently in the two different sets of circumstances. Lord Walker went so far as to say that difficulties which the Judge at first instance, Etherton J, found in deciding how to exercise his discretion so as to give effect to the estoppel were a further indication of ‘the incongruity of trying to apply the doctrine of equitable estoppel to a complicated commercial negotiation’.119 There is, of course, no absolute bar or legal impediment to the operation of a proprietary estoppel in a commercial and non-domestic context, and the underlying rules are the same, but a person who in that context seeks to invoke a proprietary estoppel may find it significantly more difficult to do so than would someone in a domestic context particularly as regards the necessity of demonstrating an expectation on his part of an entitlement to an interest in property.120

116 See also Pridean Ltd v Forest Taverns Ltd (1998) 75 P & CR 447; and Kilcarne Holdings v Targetfollow [2005] 2 P & CR 8 for the proposition that an expectation that negotiations would ensue with what was hoped would be a successful result is not the type of expectation of an interest in land which can found a proprietary estoppel. The possibility that a subject to contract agreement could create an estoppel on the facts, albeit it was unlikely, was not ruled out by Lord Templeman in Attorney General of Hong Kong v Humphreys Estate (Queen’s Gardens) Ltd [1987] AC 114, 127–28. 117 See para 7.121 et seq. 118 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, paras 68, 82. 119 ibid, para 82. It may however be noted that in the trilogy of Victorian decisions (see paras 7.19–7.23) both Ramsden v Dyson (1866) LR 1 HL 129 and Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699 concerned commercial type transactions, the entitlement to a long lease and the building of a warehouse and a jetty into a harbour. Lord Walker (at para 54) described Mr Plimmer as a businessman of some substance but he (or his successors in title relying on his actions) succeeded in establishing a proprietary estoppel. 120 Important decisions where proprietary estoppel has been held to apply to situations other than in a domestic context are Crabb v Arun District Council [1976] Ch 179 (entitlement to a right of way) and Plimmer v Mayor, etc,

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Introduction  7.40 7.38  It was suggested in academic writing that the decision in Cobbe’s case either extinguished or at least radically truncated the principle and operation of proprietary estoppel which had been steadily developed for over three centuries.121 It is true that some of the observations of Lord Scott122 tended in this direction in that proprietary estoppel appeared on one reading to be downgraded to an offshoot of common law estoppel by representation. In truth the principle, if indeed it was in danger, has been revived and in important respects put on a firmer basis by the subsequent decision of the House of Lords in Thorner v Major.123 The most essential point in Cobbe’s case may be, as explained above, that the expectation engendered by the requisite assurance, which is the core of proprietary estoppel, has to be an expectation of an entitlement to an interest or rights in land and not a general expectation or hope of a success in future discussions relating to the land. This limitation does not so much truncate as follow and apply the central characteristics of earlier cases.

(x)  Two Recent Leading Cases: Thorner v Major 7.39  The facts of Thorner v Major were very different from those of Cobbe’s case and did involve what was in essence a family and not a commercial relationship. The Claimant had for many years worked for no ordinary pay or reward on a farm owned by his father and then on a farm owned by his father’s cousin. Various remarks were made to the Claimant which led him to expect that on the death of his father’s cousin he would inherit that person’s farm. The cousin made a will leaving the farm to the Claimant but later revoked the will because of a dispute with other beneficiaries and then died intestate. From time to time, the exact area of land farmed by the cousin varied as plots were sold or acquired. On the death of the cousin, the Claimant claimed against his personal representatives that he was entitled to the farm as it then stood by virtue of the principle of proprietary estoppel. His claim succeeded before the Court of first instance but failed in the Court of Appeal and was then restored and upheld in the House of Lords. The decision of the House is notable for four features which brought clarity and a degree of certainty to the nature and the operation of the principle of proprietary estoppel. The significance of Thorner v Major as a milestone in the development and clarification of proprietary estoppel will be seen from the need to cite again and again from what was said in the judgments delivered, especially those of Lord Walker and Lord Neuberger, when the essential elements of the principle are examined in detail later in this chapter. 7.40  The first feature is that, seemingly for the first time at the highest level, the Court articulated what were the main elements of the estoppel. It was explained that the main

of Wellington (1884) 9 App Cas 699 (entitlement to an irrevocable licence to occupy a jetty). In Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764, the possibility was discussed of applying a proprietary estoppel to an aspect of a claim concerning a musical copyright. A decision which may be on the borderline between a domestic and a commercial relationship is Pinisetty v Manikonda [2017] EWHC 838 (QB), [2017] All ER (D) 98, where there was an oral agreement to sell a property made between two persons who were in an intimate relationship. The agreement was unenforceable by reason of s 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 and no constructive trust or proprietary estoppel arose. 121 See, eg, B McFarlane and A Robertson ‘The Death of Proprietary Estoppel’ [2008] Lloyd’s Maritime and Commercial Law Quarterly 440. 122 See para 7.35. 123 [2009] UKHL 18, [2009] 1 WLR 776.

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7.41  Proprietary Estoppel elements could be summarised as being, in brief, assurance, reliance and detriment.124 This analysis is largely followed in the later explanation of the estoppel in this chapter. If the words ‘representation’ or ‘promise’ are substituted for the word ‘assurance’, the description of the main elements appears similar to that now generally accepted or needed for estoppel by representation and promissory estoppel. 7.41  The second feature is the explanation given of the nature and quality of the first of the elements, the assurance. The main judgments do not refer to the somewhat limited nature of the necessary statement of the person sought to be estopped as posited by Lord Scott in Cobbe’s case. Indeed, it is made clear that the necessary assurance can take a number of forms, including what was in substance a promise made by the owner of the farm against whose personal representatives the estoppel was asserted. Furthermore, mere standing by in silence, that is passive acquiescence, can in principle serve as an assurance. It was also pointed out that the estoppel could itself constitute a cause of action, ie, it could be used as a sword and not merely as a shield.125 The House refused to hold that the assurance had to be clear and unequivocal, which is the test applied to the alleged representation or promise for the purposes of estoppel by representation and promissory estoppel,126 and opted for the more relaxed test that the assurance must be ‘clear enough’ with the question of what constitutes sufficient clarity depending on the factual context of each particular case.127 A further aspect of the assurance considered was that the meaning of what was said or written by the person alleged to be estopped and the intention of that person had to be assessed by way of an objective approach.128 These clarifications make it much easier than it had previously been to isolate and describe those matters which must be established by anyone who seeks to assert an interest in or rights over land in reliance on the principle of proprietary estoppel. 7.42  The third feature is that the need for an expectation of an entitlement to an interest in a property, as stated in Cobbe’s case, was repeated. The assurance in Thorner v Major derived not from one specific statement at one time, but from a course of remarks and other events over the years during which the Claimant did unpaid work on the farm. One incident, the reference by the owner of the farm to a bonus notice under a life insurance policy indicating that the monies would be available to the Claimant on the owner’s death, was said to mark the transition from a hope by the Plaintiff of obtaining the land on the death of the owner to an expectation that he would do so.129 The need for an expectation of becoming entitled to an interest in land, although not itself identified as one of the main elements of the e­ stoppel,

124 ibid, para 29 (Lord Walker), para 72 (Lord Neuberger). 125 ibid, para 61 (Lord Walker). 126 See ch 3, para 3.38 (estoppel by representation); and ch 6, para 6.107 (promissory estoppel). 127 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 56 (Lord Walker). 128 ibid, paras 2–6 (Lord Hoffmann). It may be that in respect of an oral assurance the objective test of the meaning of the assurance is somewhat modified. See para 7.152. 129 ibid, para 60 (Lord Walker). It is this requirement, that the expectation must be of an entitlement to rights, which normally prevents a proprietary estoppel being based on what was stated as part of an agreement made ‘subject to contract’ or ‘in honour only’ or as ‘a gentleman’s agreement’, the reason being that the parties to such agreements expressly state and know that what they say and do is not to create any legal entitlement. See para 7.132 et seq.

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Introduction  7.44 was nonetheless reiterated as central to the operation of the principle. It is central to the concept of an assurance, the first main element of the estoppel, that the assurance, whatever form it takes, does create such an expectation. 7.43  The fourth feature concerns the property to which the assurance relates and which is the subject matter of the estoppel. In most cases, the relevant events which bring about the estoppel relate to a specific and easily identified property such as the jetty and warehouse in Plimmer v Mayor, etc, of Wellington.130 In Thorner v Major there were sales and acquisitions of parts of the land farmed from time to time during the decades in which the Claimant worked on the farm. A view put forward, supported particularly by certain observations of Lord Scott in Cobbe’s case, was that the precise extent of the property the subject of the alleged estoppel had to be strictly defined in every case, and perhaps at all stages, of the events which gave rise to the estoppel. Such a view was rejected by the House as requiring a degree of strictness inconsistent with the fundamental ideas of equity. A distinction was drawn between the moment when the equity came into existence (meaning the first time when the main elements of the estoppel, an assurance, reliance and detriment, were satisfied) and the time when the equity crystallised (meaning the time when effect was to be given to the estoppel). The property had to be conceptually identified at the first of these two times but its precise extent fell to be determined at the later time.131 Thus, the extent of the property to which the Claimant was entitled pursuant to the proprietary estoppel was the extent of the farm at the date of the death of its owner. 7.44  Later in this chapter it is stated that the law of proprietary estoppel is explained by reference to four main elements which follow closely the main elements identified in Thorner v Major, and that a more detailed examination of these main elements reveals 11 components (these being in most cases components of the four main elements) which generally have to be present if the estoppel is to be established.132 The decisions in Cobbe’s case and in Thorner v Major brought a welcome clarification to most of these elements and components and the main features of the two decisions are taken into the later ­explanation of the main elements. Before isolating and describing the main elements it is useful to examine the nature and status of the principle of proprietary estoppel and its relationship with other principles of law, such as the law of contract and the law of unjust enrichment.

130 (1884) 9 App Cas 699. 131 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 95 (Lord Neuberger), paras 61–65 (Lord Walker), para 9 (Lord Hoffmann). 132 See para 7.101 (four main elements) and para 7.100 (11 components). The three main elements referred to in the House of Lords were ‘a representation or assurance made to the Claimant; reliance on it by the Claimant; and detriment to the Claimant by reason of his (reasonable) reliance’: Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 29 (Lord Walker). In this chapter, the overriding requirement of unconscionability has been added as a fourth main element. It is a theme which runs throughout the description in this book of the four reliance-based estoppels, estoppel by representation, estoppel by convention, promissory estoppel and proprietary estoppel, that after the first essential element of the initial type of statement which founds the estoppel there are three further essential elements, namely action in reliance on the statement, detriment which would be caused to the person asserting the estoppel if no estoppel was operated, and the final overall but separate element of unconscionability. Unconscionability is further considered in part (G) of this chapter.

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7.45  Proprietary Estoppel

(B)  The Nature and Status of the Principle 1.  Description of the Principle 7.45  It is now usual to describe the principle explained in this chapter as proprietary estoppel and it is so described in courts and in academic writing.133 Other descriptions have been given to the principle in the past, such as estoppel by acquiescence134 and estoppel by encouragement,135 and it has been called ‘quasi-estoppel’.136 The principle can be traced to decisions in at least the early eighteenth century,137 yet its recognition by courts and lawyers as a separate form of estoppel has been fairly recent. There is, for instance, no reference to proprietary estoppel (or to any of its other names) as such in the second edition of a leading textbook on the law of real property, Megarry & Wade, published in 1959.138 Proprietary estoppel is certainly a creation of equity139 and is now properly regarded and described as a form of estoppel in its own right. In this book, it is treated as one of the two forms of equitable estoppel, the other being promissory estoppel, and there is high and recent judicial authority in support of this classification.140 7.46  It might be asked why this form of estoppel has been given the description ‘proprietary’. In legal parlance this adjective is often applied to interests in land, such as leases or easements, which are in principle capable of binding successors in title to the land over which the interest is exercisable.141 The development of proprietary estoppel was wholly 133 See, eg, Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 61 (Lord Walker). Leading modern ­textbooks use this description as headings of chapters, for example: Megarry & Wade, The Law of Real P ­ roperty, 9th edn (Sweet & Maxwell, 2019) ch 15; Snell’s Equity, 33rd edn (Sweet & Maxwell, 2015) ch 12; S Wilkin and K Ghaly, The Law of Waiver, Variation and Estoppel, 3rd edn (Oxford University Press, 2012) ch 12; Spencer Bower: Reliance-Based Estoppel, 5th edn (Bloomsbury, 2017) ch 12; and K Gray and SF Gray, Elements of Land Law, 5th edn (Oxford University Press, 2009). 134 Estoppel by acquiescence is described by Lord Steyn in Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878, 914, where it is treated as very close to estoppel by convention. The description of the principle of proprietary estoppel as estoppel by acquiescence presumably derives from the fact that one of the circumstances which may give rise to a proprietary estoppel is that a landowner stands by while works are done on his property by another person or while other events occur and so can be said to have acquiesced in what is done. The estoppel can of course derive from some promise or other positive statement or action which can constitute the necessary assurance. 135 In Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 151, Oliver J said that it was ­immaterial whether the Ramsden v Dyson principle was called proprietary estoppel, estoppel by acquiescence or estoppel by encouragement. In Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764, para 62, Lord Neuberger, citing Oliver J, said that he was not convinced that acquiescence added anything to estoppel and laches. He added that certain classic examples of proprietary estoppel could be characterised as acquiescence and that similarly laches could be characterised as acquiescence. The relationship between property estoppel and the doctrine of laches is described in para 7.55. 136 Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, 884 (Lord Diplock); J Willis & Son v Willis [1986] 1 EGLR 62 (Parker LJ). This description has not become popular. Lord Diplock described promissory estoppel as a quasi-estoppel and his description may have extended to what he saw as the rules stated by Fry J in Willmott v Barber (1880) 15 Ch D 96, 165, ie, the ‘five probanda’: see para 7.26 et seq. 137 See para 7.5 et seq. 138 The trilogy of cases, here described as the second phase of the development of proprietary estoppel, were referred to in this edition in connection with the nature of licences. 139 Its development in decisions of the former Court of Chancery is outlined in para 7.5 et seq. 140 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 61 (Lord Walker). 141 Today the enforceability of interests such as leases, and iura in re aliena such as easements (often called thirdparty rights), often depends on their protection by some form of registration under the Land Registration Act 2002 or the Land Charges Act 1972.

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The Nature and Status of the Principle  7.48 concerned with rights over land and the estoppel often resulted in a person being awarded by the court a proprietary interest in land. The description of the estoppel as proprietary is therefore not surprising. However, it seems likely today that the estoppel can operate in respect of rights over chattels and in respect of other rights which do not have property as their direct subject matter.142 Perhaps the best justification for the description is that the effect of the estoppel is often to create in a person an ownership or proprietorship of property or rights which, apart from the estoppel, that person would not have. The creation of the ownership of interests and rights, and the use of the estoppel as a cause of action to assert an interest or rights, are characteristics of proprietary estoppel not shared by other forms of estoppel. 7.47  In the interest of simplicity the description of proprietary estoppel and its elements and effect is here generally given by reference to interests in and rights over land. The main decisions on the principle from its inception to modern times have concerned land. The question of the application of the principle to other property and other rights is examined separately later in this chapter.143

2.  Possible Categories of the Principle 7.48  It has been doubted even today whether there is in truth a single principle of proprietary estoppel which can be described or formulated as encompassing the whole of the application of the estoppel.144 One suggestion is that the current law of what is described as proprietary estoppel in fact comprises three separate principles or strands which should not be confused or consolidated together. These three strands are an acquiescence-based principle, a representation-based principle and a promise-based principle. It is u ­ ndoubtedly the case that a proprietary estoppel may operate against a person where the conduct of that person which is the foundation of the estoppel is acquiescence as to what is done by another person or is a representation of an existing matter made to another person or is a promise made to another person. A succession of decisions which built up the principle provide examples of acquiescence and of promises.145 A representation of fact does not 142 See part (H) of this chapter. In addition, even where the assurance on which the estoppel is founded relates to an interest in land the relief ordered by the court may be wholly or partly something which is not an interest or right in, or a right to possession of, the land in question. For instance, in Gillett v Holt [2001] Ch 210 the assurance related to a farm and the relief granted was that the Claimant should have the freehold of the farmhouse and a sum of money as a recompense for not being awarded an interest in other parts of the farm. The reason why a monetary sum rather than an interest in land may be considered the appropriate relief is usually either that it would be impractical to vest an interest in land in a claimant or that such a vesting would be to confer a benefit which was wholly disproportionate to the detriment suffered by the claimant. 143 See part (H). 144 Snell’s Equity, 33rd edn (n 133) para 12.033 et seq; B McFarlane, The Law of Proprietary Estoppel (Oxford University Press, 2014). 145 See, eg, Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699 (see para 7.23: acquiescence or perhaps encouragement); Huning v Ferrers (1711) Gilb Rep 85 (see para 7.6: largely acquiescence); Ramsden v Dyson (1866) LR 1 HL 129 (see para 7.20: promise derived from a general understanding of persons involved). Proprietary estoppel is founded on an express or implied assurance made by the owner of land or other property or rights. The threefold division, or any other division, of the overall principle seems to be partly a matter of terminology. For instance, in Huning v Ferrers it may be equally apposite to say that the silence and acquiescence of the remainderman was an assurance that the lease for years would bind him when his interest under the settlement became an

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7.49  Proprietary Estoppel figure overtly in the same way in the history of the principle, perhaps because at the time when the principle was being developed estoppel by representation was or was becoming an accepted form of estoppel applied in both common law and Chancery courts.146 A similar suggestion has been made in respect of the other form of equitable estoppel, promissory estoppel, namely that this type of estoppel comprises two separate principles which are historically and conceptually different.147 7.49  The suggestion of three separate principles raises again the question of whether the various forms of estoppel which have developed in English law can be synthesised into a single and overarching principle of estoppel. This subject is discussed elsewhere since it is plainly relevant to a number of forms of estoppel.148 The view taken throughout this book is that a complete synthesis of estoppels (other than estoppel by record) is not practicable, but that wherever possible a formulation of each form of estoppel should be sought and applied and that so far as possible elements common to different forms of estoppel should be stated in identical terms and should be subject to the same rules.149 If forms of estoppel, such as promissory estoppel and proprietary estoppel, can each be stated in a single formulation then it seems an unnecessary, and perhaps a retrograde, step to divide those estoppels into different and separate principles or categories possibly with different descriptions and rules. English law has become replete with a catalogue of separate forms of estoppel and it seems unnecessary to push the process even further.150 A better view may be that proprietary estoppel contains as its first essential element a requirement that the person against whom the estoppel is asserted has by some form of conduct made an express or implied assurance which creates in another person an expectation of an entitlement to an interest in or rights over land. If this element is established, then other requirements such as actions carried out in reliance on the assurance also have to be satisfied before the assertion of the estoppel can succeed. These other requirements apply in the same way whatever the form of conduct which gives rise to the initial assurance. If this analysis is correct, and if a broad formulation of proprietary estoppel can be made in accordance with these requirements as is attempted elsewhere in this chapter,151 then there is nothing to be gained, and there is perhaps something to be lost, by dividing the overall principle into separate legal principles

interest in possession or that his silence was an assurance to the same effect constituted by an implied representation. It is clear that silence or inactivity, although normally of its nature equivocal, can in certain circumstances create an inferred representation of fact. This last subject is discussed in ch 3, para 3.50 et seq. 146 Estoppel by representation derives from the limited form of estoppel in pais which is one of the three forms of estoppel mentioned by Coke in his Commentaries on Littleton’s Tenures in 1628. 147 See ch 6, para 6.36. 148 See ch 2, part (G). 149 A major step along the road in this direction has been taken by Lord Neuberger in his broad-brush formulation of the essential requirements of estoppel by representation and promissory estoppel and by his formulation of the unconscionability element in estoppel by convention: see ch 3, para 3.107 (estoppel by representation); ch 6, para 6.176 (promissory estoppel); and ch 5, para 5.71 (estoppel by convention); See also, Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93; and PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994 (Ch), [2004] Ch 142, para 222. The further this process can reasonably be taken the more the law is simplified and clarified. This matter is discussed in detail in ch 2, part (G). 150 In support of this general thesis it is suggested elsewhere in this book that descriptions such as estoppel by contract, estoppel by negligence, estoppel by silence, and estoppel by conduct as separate forms of estoppel are unnecessary and perhaps confusing: see ch 6. See ch 1, para 1.6 for a list of the numerous and various descriptions which have been given to the same or different forms of estoppel. 151 See para 7.2 for the attempted overall formulation.

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The Nature and Status of the Principle  7.50 or compartments which depend on whether the assurance is derived from acquiescence or from a representation or from a promise.152 7.50  A specific mention may be made of the third suggested principle, or category, a representation-based proprietary estoppel.153 One suggestion is that this particular strand is no more than a repetition of the well-established principle of estoppel by representation.154 The making of a representation of an existing matter may, subject to the other requirements of estoppel by representation, give rise to an estoppel of this form with the result that the representor may be prevented in legal proceedings from denying the truth of his representation. The content of the representation may relate to the ownership of an interest in land so that the representor may be bound to the truth of a statement made on that matter. This is not necessarily the same in its effect as a proprietary estoppel founded on a representation. The differences are apparent. (a) An estoppel by representation depends on a statement of an existing matter. It had long been thought that the representation had to be one of fact or of mixed law and fact, but recent decisions suggest that a representation of pure law may found in an estoppel by representation. Whatever may be the exact law today on this subject, there is no such limitation on representations which may give rise to a proprietary estoppel where the representation may in principle be one of law. (b) An estoppel by representation cannot result in an order that an interest in land be transferred or created.155 The most it can do is prevent a representor from denying the truth of the matter represented. (c) Proprietary estoppel is extremely flexible in the remedies which the court will order. The exact degree of flexibility in the remedy or relief available following an estoppel by representation is not 152 A point of a similar nature to that here under discussion is made in Treitel, The Law of Contract, 14th edn (Sweet & Maxwell, 2015) para 3-119, where it is said not that there are separate principles but that the cases can be divided into two categories which are cases of acquiescence and cases of encouragement. It is useful to point out that the assurance made which underlies and initiates a proprietary estoppel may be an inference from silence or inactivity, and is then usually termed acquiescence, or may be constituted by some type of express encouragement, but in the final analysis both forms of conduct are varieties of the assurance which is the first of the main elements of proprietary estoppel as that principle is understood today. 153 It is possible to read a part of the judgment of Lord Scott in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2009] 1 WLR 776, para 14, as stating the nature of proprietary estoppel as little more than an example of estoppel by representation where the subject matter of the estoppel is an interest in land. This point is examined later in connection with the meaning of an assurance as the first main element of proprietary estoppel: see para 7.109 et seq. 154 Snell’s Equity, 33rd edn (Sweet & Maxwell, 2015) para 12.035. It was said in the third edition (1977) of Spencer Bower & Turner: Estoppel by Representation, para 290, that acquiescence in its true sense is merely an instance of estoppel by representation, something which, according to Oliver J in Taylor Fashions v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 147, derived some support from the decision of the Court of Appeal in De Bussche v Alt (1878) 8 Ch D 286, 314. See now ch 12 of the fifth edition of Spencer Bower: Reliance-Based Estoppel (­Bloomsbury, 2017). In the Taylor Fashions case (at 150) Oliver J said that the proprietary estoppel of the type envisaged in the proposition of Lord Kingsdown in Ramsden v Dyson (1866) LR 1 HL 129 was a branch of estoppel by representation. This last observation is not in accordance with the classification of estoppels normally favoured today. 155 An unsuccessful attempt to create a proprietary estoppel out of what was a simple representation of fact was made in Newport City Council v Charles [2009] 1 WLR 1884. An occupier of a Council flat concealed from the Council the death of his mother since he thought it would prevent his prospect of remaining in the flat if the truth was known to the Council. The Court rejected the assertion of a proprietary estoppel available to the Council who were simply seeking possession of the flat and were not claiming any interest in land. Any estoppel which could have arisen was no more than a common law estoppel by representation. This aspect of the decision is plainly correct but the decision may create some difficulty on the question of the extent to which an estoppel by representation can be used ‘as a shield but not a sword’, a matter discussed for estoppel generally in ch 2, part (B).

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7.51  Proprietary Estoppel entirely certain156 but it is most unlikely that it can extend to such matters as the creation of an irrevocable licence or the grant of a long lease or the making of a gift under a will. (d) The detailed requirements of the two estoppels are different. In estoppel by representation it is not necessary that the representor should know how the representee acted in reliance on the representation. In proprietary estoppel, whether based on a representation or not, there is probably a requirement that either the person making an assurance knew of the way in which the recipient of the assurance acted or at least that he could have reasonably ­anticipated action of that nature, and it is certainly a requirement that that person did know the expectation of rights which the recipient of the assurance held.157 (e) An estoppel by representation can be used in support of a cause of action or in resisting a cause of action but cannot constitute a separate cause of action in its own right. By contrast proprietary estoppel, alone among the forms of estoppel, may in and of itself constitute a separate cause of action. In short, the correct statement of law appears to be that a representation of an existing matter may form the initial foundation of a common law estoppel by representation or of a proprietary estoppel. Thereafter, the two forms of estoppel are different in parts of their requirements and certainty in their effect. Proprietary estoppel has here been contrasted with estoppel by representation in the context of the suggestion that proprietary estoppel is in part no more than the application of the principle of estoppel by representation. Later in this part of the chapter there is an account of the relationship between proprietary estoppel and promissory estoppel and the relationship of proprietary estoppel with other areas of the law, such as the law of contract and the need for consideration to support a contract and aspects of the law of unjust enrichment or restitution.158

3.  The Status of the Principle 7.51  A question sometimes asked in connection with the two forms of equitable estoppel is whether they are true estoppels.159 The question can appropriately be asked about proprietary estoppel.160 Obviously the answer depends on how an estoppel is defined. Leaving

156 See ch 3. The possible doubt centres on the question of whether in an appropriate case an estoppel by representation can operate ‘pro tanto’, that is so as to prevent a representor going back to an extent on the representation made but to allow him to go back on a different part of the representation. 157 The qualified language of this sentence derives from the possibility that for a proprietary estoppel which rests on an express assurance as opposed to mere passive acquiescence, there may be cases in which the estoppel can operate even though the giver of the assurance did not actually know of the action taken in reliance on the assurance by the person to whom the assurance was made. See ch 2, para 2.172 for a summary of the knowledge which must be available to the giver of an assurance if a proprietary estoppel is to be established against that person. 158 See paras 7.56–7.60. 159 This question is asked of the principle of promissory estoppel and has led to the suggestion that that principle is not a true form of estoppel. This matter is examined in ch 6, para 6.27 et seq. The reluctance which has sometimes been shown to recognise promissory and proprietary estoppels as true forms of estoppel may be due to the fact that two of the three forms of estoppel described in Coke, Commentaries on Littleton’s Tenures, estoppel in pais (now developed into estoppel by representation) and estoppel by deed, required as their foundation a statement of fact or of mixed law and fact such that any type of statement not falling within these categories, such as a promise, could not give rise to either of these ancient forms of estoppel. It may be that today estoppel by representation can extend to a representation of law but it clearly cannot extend to a statement about some future conduct of the representor. 160 In Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84 Robert Goff J at first instance examined equitable estoppel and its two forms, promissory and proprietary ­estoppel,

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The Nature and Status of the Principle  7.52 aside estoppel per rem iudicatam (cause of action estoppel and issue estoppel) which are of a separate character, the essence of an estoppel is that a person makes some express or implied statement of some character and another person acts to his detriment on the faith of that statement. Where it is just to do so the person making the statement will then be kept to it.161 The statement may be a statement of an existing matter or a promise or the communication of a shared assumption162 or may be an assurance that some other person has or will have some interest or rights in property, usually that of the person making the assurance. If this is what in general terms an estoppel means then proprietary estoppel, which depends on an assurance relating to property, falls squarely within the overall concept of estoppel. In the case of a proprietary estoppel the statement in question is the assurance which may be express, depending on an express promise or a representation, or may be an inference from conduct or an inference from acquiescence at events which are occurring or have occurred to the knowledge of the person who is acquiescing. The same elements of reliance, detriment and unconscionability are required to found a proprietary estoppel as they are to found other forms of estoppel, such as estoppel by representation and promissory estoppel. 7.52  If there is any doubt on the status of proprietary estoppel as a true form of estoppel, that doubt derives from a different aspect of the operation of the estoppel. With other forms of estoppel, the operation of the estoppel is simply that in legal proceedings the maker of the representation or the promise or the communicator of the shared assumption is held to what that person has stated. The legal proceedings in which the estoppel so operates are then brought to a conclusion on that basis. That process would not be sufficient in the case of a proprietary estoppel since, the assurance that a person has or will have an interest or rights in land can only be given full effect if the interest or rights in question are vested in that person or at any rate some other particular remedial action is ordered to give effect to the assurance. The operation of the estoppel therefore involves not just holding a person to the terms of what he has stated, but ordering that person to take positive action to give effect to his statement. It is because of this aspect of the operation of a proprietary estoppel that this form of estoppel can itself be used as an independent cause of action, a characteristic which is not shared by other forms of estoppel. A person may go to court with no cause of action except the existence of the estoppel and may on that basis alone seek a

and concluded that as a separate category proprietary estoppel might perhaps be regarded as ‘an amalgam of doubtful utility’. He was not surprised that the use of the term had been criticised such as in the then current third edition (1977) of Spencer Bower and Turner: Estoppel by Representation, para 308. The Amalgamated Investment case went to the Court of Appeal where it became a leading authority on estoppel by convention. Following later decisions, such as Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776 (see para 7.39) it now appears to be beyond doubt that proprietary estoppel is a form of estoppel in its own right, the main elements of which have been identified and concisely stated. 161 Estoppel by deed is an exception since under this form of estoppel there is no requirement of injustice or acting in reliance on the statement in the deed. The estoppel is justified without these requirements by the formal nature of the document in which it is contained. See ch 4. 162 The foundation of estoppel by convention is a shared assumption of fact or of law held by two or more parties to a previous transaction. Even so, a form of statement is required since it is a requirement of the estoppel that the assumption has ‘crossed the line’, which means that the parties have by some means communicated to each other the existence of the shared assumption: ‘All estoppels must involve some statement or conduct by the party alleged to be estopped on which the alleged representee was entitled to rely and did rely’: K Lokumal & Sons (London) Ltd v Lotte Shipping Co Pte Ltd (The August Leonhardt) [1985] 2 Lloyd’s Rep 28, 35 (Kerr LJ).

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7.53  Proprietary Estoppel remedy such as an order that the freehold of a piece of land is transferred to him. Whether this characteristic of proprietary estoppel prevents the estoppel being classified as an estoppel163 seems a fairly arid question. As with other forms of estoppel, a proprietary estoppel may be relied on by either a claimant or a defendant in legal proceedings. For instance, it may be used in support of a claim to receive a gift of property under a will,164 or an entitlement to compensation following the compulsory acquisition of land,165 or it may be used to resist a claim to the possession of land,166 or as a defence to a claim to the proceeds of a commercial enterprise.167 A crucial difference between proprietary estoppel and other forms of estoppel is that other forms may be used in support of or in resistance to some separate cause of action but proprietary estoppel, while it may perform this limited function, can itself constitute a cause of action. The sensible approach to classification may be to say that proprietary estoppel is indeed a form of estoppel but with the possibility that it may be used as an independent cause of action, a possibility not available with other forms of common law and equitable estoppel. The status of proprietary estoppel as a true form of estoppel may be further supported by the likelihood that in modern circumstances it can operate in relation to commercial and other rights as well as in relation to interests and rights in land.

4.  The Relationship between Proprietary Estoppel and Other Areas of Law 7.53  For a long period proprietary estoppel fought to gain recognition with a separate status and effect as a principle of law. Although the essence of the principle had been applied by courts of equity for centuries,168 it is only over the last few decades that the principle has been recognised in courts and legal textbooks as a separate form of estoppel. Both prior to that recognition and afterwards the principle was often referred to not as an estoppel but merely as ‘raising an equity’.169 This is primarily a matter of linguistics and ‘the equity’ is simply another name for the equitable rights created by the operation of the principle of

163 It may be that doubts of this sort led Lord Diplock to describe the principle as a ‘quasi-estoppel’ in Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, 883. (It appears that Lord Diplock may have been using this expression to describe both promissory and proprietary estoppel). As mentioned in para 7.45, up until about 60 years ago it is unlikely that the principle of proprietary estoppel would have been described as a form of estoppel in major textbooks or writings (indeed the principle is unlikely to have been recorded at all as a separate or comprehensive principle). As explained above (n 138) there was a tendency to explain results which would now be justified by the application of the principle of proprietary estoppel as justified by the implication of a contract or as an aspect of the law of licences. 164 Gillett v Holt [2001] Ch 210. 165 Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699. 166 Inwards v Baker [1965] 2 QB 29. 167 Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764. The assertion of the estoppel failed in this case due to the inability of the Defendants who asserted it to show detriment to them. 168 See the development of the principle from the beginning of the 18th century onwards summarised in para 7.5 et seq. 169 Crabb v Arun District Council [1976] Ch 179, 187 (Lord Denning MR). Today the rights of a person who can establish a proprietary estoppel are sometimes referred to as ‘the equity’: see, eg, Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 95 (Lord Neuberger). The operation of the principle and the order made by a court can be described as satisfying the equity.

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The Nature and Status of the Principle  7.54 proprietary estoppel. The rights are equitable because the principle of law which creates the rights was developed by the former Court of Chancery and because they override what would otherwise be the strict legal rights of the parties involved.170 The flexibility in the operation of the principle, and particularly in the remedies available to a court, are characteristic of equitable rights. Even when the principle came to be established in its own right it was once said that in solving the problem raised by a particular case putting the law into separate categories of promissory and proprietary estoppel was not of the slightest assistance.171 Even in the 1980s, the concept of proprietary estoppel was described as ‘an amalgam of doubtful utility’.172 Now that proprietary estoppel has been accepted as a separate form of estoppel with its own essential elements, it is appropriate to indicate the ways in which the principle is to be distinguished from the operation of other areas of law and a comparison is made with the doctrine of laches, with promissory estoppel, with the law of restitution or unjust enrichment, and with the law of contract generally and in ­particular with the doctrine of consideration.173 The distinction between proprietary estoppel and estoppel by representation has already been considered in connection with the proposition sometimes put forward that proprietary estoppel is at any rate in part no more than an aspect of the operation of estoppel by representation.174 On some occasions, the acquisition of rights over land in informal circumstances can be justified both by the application of the principle of proprietary estoppel and by the application of some other general principle, such as the principle that a party who takes the benefit of an agreement must also take the burden of it.175 7.54  There is a considerable potential overlap between the principle of proprietary estoppel and the law of constructive trusts where a constructive trust arises out of a joint venture property arrangement as established by a series of cases following Pallant v Morgan.176 The overlap is particularly important where there is a suggestion that a proprietary estoppel cannot operate because for it to do so would be in effect to enforce a contract for the sale or other disposition of an interest in land which would contradict the requirement in section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 that such a contract must be in writing. Constructive trusts are expressly excluded from the operation of section 2(1) by section 2(5) whereas there is no such express exclusion for proprietary estoppel. The relationship between section 2(1) of the 1989 Act and proprietary estoppel is an important question in its own right and is discussed separately later, an important point being that if an arrangement can be categorised as a type of constructive trust it can be enforced as such, so avoiding any possible conflict between proprietary estoppel and section 2 of the 1989 Act.177 170 eg, an early method of enforcing the rights recognised by the Court of Chancery was the grant of ‘the common injunction’ to prevent the giving effect to proceedings in common law courts: see above (n 27). 171 Crabb v Arun District Council [1976] Ch 179, 193 (Scarman LJ). 172 Amalgamated Investment and Property Co Ltd v Texas Commercial and International Bank Ltd [1982] QB 84, 103 (Robert Goff J). 173 There is a general discussion of the differences between proprietary estoppel and some other forms of estoppel by Hobhouse LJ in Sledmore v Dalby (1996) 72 P & CR 196, 207–08. 174 See para 7.50. 175 ER Ives Investment Ltd v High [1967] 2 QB 379, 394, applying the principle in Halsall v Brizell [1957] Ch 169. 176 Pallant v Morgan [1953] Ch 43. 177 See para 7.63 et seq. There is at present no clear and authoritative resolution of the possible conflict between s2(1) and proprietary estoppel. The subject of constructive trusts and their relationship to proprietary estoppel

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7.55  Proprietary Estoppel

(i) Laches 7.55  In addition to the comparisons examined next, proprietary estoppel can be compared to the equitable doctrine of laches. For many years statutes of limitation have restricted the enforcement of rights after a specific period, today generally six years following the accrual of a cause of action to assert the rights, and rights of one party over land may be gained and those of another party lost by long possession of land and long use under the law of adverse possession (although adverse possession no longer operates as regards land with registered title) and the law of prescription. Statutory limitation periods do not apply to equitable discretionary remedies such as injunctions. A further doctrine, that of laches, is an equitable doctrine of long standing under which a person may be refused an equitable remedy, such as an injunction or specific performance, by reason of his delay in asserting his rights. It is important to bear in mind that laches does not destroy a right and does not destroy all remedies but only bars the use of an equitable remedy to assert that right.178 The ability to assert the right by claiming a declaration as to its existence or by claiming damages may remain, since these are not equitable remedies.179 The doctrine of laches is therefore fundamentally different from the principle of proprietary estoppel. Laches removes the availability of certain remedies for the assertion of rights; proprietary estoppel creates rights, usually rights over land. Nonetheless, there are certain similarities between the two areas of law. Both are connected to the concept of acquiescence, that is standing by with the knowledge of the actions of others. It has been said that while acquiescence may be one foundation of a proprietary estoppel it is not something which in all cases adds anything to estoppel and laches.180 Detrimental reliance is an essential element or elements of proprietary estoppel and is usually an essential ingredient of laches.181 Proprietary estoppel was (and sometimes still is) described as estoppel by acquiescence.182

(ii)  Promissory Estoppel 7.56  There are significant similarities between proprietary estoppel and promissory estoppel which is what one would expect since both principles are forms of equitable estoppel within the overall doctrine of estoppel.183 Both principles share the fundamental characteristic that their operation is to prevent a person in certain circumstances from resiling from what that person has stated by way of a promise or an assurance. It is this ­characteristic

is discussed in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752 by Lord Scott and Lord Walker. There is particular discussion in this case of the decision in Holiday Inns Inc v Broadhead (1974) 232 EG 951. This is a decision where the result was reached by way of the imposition of a constructive trust but it appears that the facts may also have given rise to a proprietary estoppel: see Cobbe’s case, para 24 (Lord Scott). 178 Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764, para 3 et seq (Lord Hope). 179 The making of a declaration, although it is not an equitable remedy, is at the discretion of a court in the way that an award of common law damages is not. 180 Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764, para 62 (Lord Neuberger). 181 ibid, para 64 (Lord Neuberger), citing Lindsay Petroleum v Hurd (1874) LR 5 PC 221, 239–40 (Lord Selborne LC); Habberfield v Habberfield [2019] EWCA Civ 890, para 29 (Lewison LJ). 182 See para 7.45. 183 See ch 6, para 6.1 for a statement of the principle of promissory estoppel.

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The Nature and Status of the Principle  7.57 which results in both properties being varieties of estoppel.184 Both principles are of equitable origin although it appears that promissory estoppel may have been recognised in common law courts as well as in the former Court of Chancery.185 Other common features are that the person asserting either form of estoppel has to establish that he has relied on the assurance or promise made to him and that he would suffer detriment if the maker of the promise or assurance was permitted to resile from it. The overall requirement of unconscionability, which is generally satisfied by showing reliance and detriment, applies to both forms of estoppel. Given these characteristics, both forms of estoppel fall within the category of reliance-based estoppels. 7.57  On the other hand, the differences between proprietary and promissory estoppel are important and decisive and militate against any suggestion that the two forms of estoppel are identical or can be merged into each other. The differences can be easily and succinctly stated. (a) Proprietary estoppel operates in most cases in respect of interests in land even though it is likely that its operation can extend to chattels and choses in action.186 By contrast, promissory estoppel can extend to any rights exercisable under any form of contract or other transaction or legal relationship between parties. For example, it is applied in areas of general commercial law and family law. (b) Promissory estoppel is essentially negative in its nature in that it prevents a party who has legal rights from asserting, or fully asserting, those legal rights against another party by reason of a promise which that party has made not to assert the rights.187 Proprietary estoppel has nothing to do with this negative concept. It is positive in the sense that it rests on an assurance which a party has made as to existing or future rights and entitles the person with the benefit of the estoppel to assert those rights. This element of the difference is fundamental. Even so, proprietary estoppel can be used by way of a defence to proceedings such as when an assurance that a person can occupy a property is used as a defence to an action for possession brought by the giver of the a­ ssurance. (c) The operation of promissory estoppel depends on a clear and unequivocal promise made by a person who is entitled to legal rights that he will not enforce, or not fully enforce, those rights against some person who has correlative duties. Proprietary estoppel may also depend on a promise made, although it is not confined to such a situation, and is often dependent more on the content of an assurance of a positive nature rather than a promise of a negative nature not to enforce existing legal rights. (d) There is the difference that the promise which initiates a promissory estoppel has to be clear and unequivocal, whereas it is sufficient if the assurance which initiates a proprietary estoppel is ‘clear enough’.188 (e) A further fundamental difference between the two principles of estoppel is that a ­promissory estoppel can never in itself found a cause of action.189 By  way of contrast, a  proprietary

184 Despite this it has in the past sometimes been suggested that neither of the principles is truly an estoppel, something mentioned in para 7.51 as regards proprietary estoppel and in ch 6, para 6.27 et seq as regards promissory estoppel. 185 See ch 6, para 6.7. 186 See part (H) of this chapter. 187 In Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 61, Lord Walker observed that one of the main distinguishing features between promissory estoppel and proprietary estoppel, as the two varieties of equitable estoppel, was that promissory estoppel must be based on an existing legal relationship which was usually a contract but not necessarily a contract relating to land. 188 See para 7.141 et seq. 189 JT Developments v Quinn (1991) 62 P & CR 33, 45; Combe v Combe [1951] 2 KB 215.

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7.58  Proprietary Estoppel estoppel can in appropriate circumstances confer on a person a separate cause of action in the sense that he need plead nothing else in support of his cause of action, usually a claim for the vesting in him of a proprietary right in land, except the existence of the essential elements of the estoppel. It is difficult to see how a distinction more fundamental than this could be made between the two forms of estoppel. Proprietary estoppel is alone among the forms of estoppel in its capacity to constitute by itself a cause of action. Indeed, it is this characteristic which could raise some doubt on whether the principle should be classified as a form of estoppel.190 7.58  No further elaboration is needed and it is apparent that the two forms of estoppel, although they share certain similarities as do other forms of estoppel, have fundamental differences which make it impracticable to amalgamate them or to ignore the difference between them in different factual circumstances. The correct method of approach, whether taxonomical or practical, is therefore to examine the two forms of estoppel in their own right and with their own essential elements. That is the approach adopted in this book. A correct description, it is suggested, is that equitable principles have brought into being two forms of estoppel beyond those which were envisaged by and encompassed in the forms of common law estoppel and that it is these two separate forms of estoppel, with their own rules and their own utility in different circumstances, which are described as promissory estoppel and proprietary estoppel. This chapter deals with proprietary estoppel as one of these two separate and independent forms of estoppel.191

(iii)  Unjust Enrichment or Restitution 7.59  There is also a degree of similarity between the principle of proprietary estoppel and aspects of the law of restitution or unjust enrichment. In certain circumstances, a person who has paid a sum of money or performed services, for example under a contract which is void or where there is no enforceable contract because there is a total failure of ­consideration, may be able to recover the money paid, or obtain a fair recompense for the services, under the law of unjust enrichment. In the latter case the claim is said to be on a quantum meruit.192 It is a characteristic of this form of relief that a claimant has conferred 190 See para 7.52. 191 The importance of distinguishing between the two forms of estoppel was commented on by Megaw LJ in Western Fish Products Ltd v Penwith District Council [1981] 2 All ER 204, (1979) 38 P & CR 7, 26–27. This decision is discussed in ch 2, para 2.87, in connection with the possible operation of estoppel generally in the field of administrative law. The general question of the unification of the main forms of estoppel into a single general principle, or, more modestly, of the amalgamation together of two or more forms of estoppel, is discussed in ch 2, part (G). The requirements of reliance, detriment and unconscionability, which are common to proprietary and promissory estoppel, add force to the desirability of a degree of synthesis of certain of the essential elements of these two forms of estoppel as it does in regard to the same elements in estoppel by representation. The clear distinction between promissory and proprietary estoppel which now exists has not always found favour. It was at one time said that no assistance in deciding cases was to be gained from distinguishing between the two forms of equitable estoppel: Crabb v Arun District Council [1976] Ch 179, 193. The tendency in Australia and New Zealand is not to distinguish between the two forms of estoppel. For instance in a recent decision of the Court of Appeal of New Zealand, Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567, the essential requirements of an equitable estoppel and the principles which guided the form of relief were stated or examined without any distinction being drawn between the two forms of estoppel. 192 A Burrows, The Law of Restitution, 3rd edn (Oxford University Press, 2010). If the claim is for the value of services provided it is often called a quantum meruit. The benefit conferred may have been the transfer of some

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The Nature and Status of the Principle  7.60 a benefit by the payment of the money or the performance of the services. The establishment of a proprietary estoppel may also involve the conferment of a benefit by the person asserting the estoppel on the person sought to be estopped. For example, in one early case a person conferred a benefit on another person by erecting buildings on the latter person’s land in the belief that it was his own and this was held to create a right to some form of equitable relief, including possibly the grant to the first person of a lease of the land.193 Other examples are Plimmer v Mayor, etc, of Wellington,194 where the Plaintiff conferred a benefit on the Government by building facilities for the reception of immigrants to New Zealand on Government land and Thorner v Major,195 where the Claimant conferred a benefit on the owner of a farm by working on the land for no wages for decades. In such cases, the conferment of the benefit constitutes the detriment to the claimant which is one of the main elements of proprietary estoppel. 7.60  Despite these similarities, the two areas of law are fundamentally different in their elements and in their operation. Proprietary estoppel requires some form of assurance made by the person against whom the principle is invoked, whereas there is no such requirement on the part of a person against whom a claim in unjust enrichment is made. Proprietary estoppel may be relied on when there is no apparent benefit conferred on the person sought to be estopped. In one case, the owner of land held a right of way over adjoining land. When the owner of the adjoining land obstructed the right of way by improving a parking space on his land the owner of the right of way made no objection. It was held that by reason of the acquiescence, the owner of the right of way was estopped from asserting his right and had permanently lost it. If this is an instance of a proprietary estoppel, it is not one in which the person claiming the estoppel, the adjoining owner, conferred any benefit on the person estopped; indeed the person estopped suffered prejudice by losing his right of way.196 Of course, in many cases the person against whom a proprietary estoppel is alleged does receive a benefit, such as the provision of unpaid services and it is the provision of these services which may be the detriment to the person asserting the estoppel which is a main element or requirement of the estoppel. A claim in unjust enrichment leads to the recovery of a sum of money paid or the value of an asset or services provided, while proprietary estoppel often leads to the conferment of some interest or rights in land on the person asserting the estoppel. Because of their different elements and areas of operation, a claim in unjust enrichment for a sum of money as a recompense for services rendered may succeed where a claim based on proprietary estoppel for an interest in land fails.197 asset which cannot itself be recovered, but the value of which can be recovered, in which case the action is known as a quantum valebit. There are of course other categories of possible claims under the law of restitution. There is a more specific possible conflict between restitution and estoppel by representation when A pays money to B under a mistaken belief that the sum is due to B and then seeks to recover the sum in restitution as money paid under a mistake of law or of fact and B ripostes that the payment constitutes a representation that the sum was due to B. The problem raised by circumstances of this sort revolves around the question of whether an estoppel by representation can operate in part, or pro tanto, and is examined in ch 3, para 3.147 et seq. 193 Lord Cawdor v Lewis (1835) 1 Younger and Collyer 427. See para 7.11. 194 (1884) 9 App Cas 699. See para 7.22. 195 [2009] UKHL 18, [2009] 1 WLR 776. See para 7.39. 196 Lester v Woodgate [2010] EWCA Civ 199, [2010] 2 P & CR 21. The very early case of Huning v Ferrers (1711) Gilb Rep 85 also appears to be an example of when no benefit was conferred on the remainderman who was estopped from asserting the invalidity of a lease. See para 7.6. 197 An example is Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752. The claim based on unjust enrichment was described as a claim in personam.

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7.61  Proprietary Estoppel

(iv)  The Law of Contract 7.61  A right created by the operation of a proprietary estoppel is radically different from a contractual right. The law of contract is both simpler and more certain in its operation than the principle of proprietary estoppel. If a promise is made which is a part of a valid contract, ie, it is sufficiently certain and is backed by consideration (or is in a deed) and complies with any necessary formalities for the type of contract in question, then a court has no option except to enforce the contract by a remedy of either damages or, at its discretion, some equitable relief such as specific performance in place of or in addition to damages. The ambit of that which is enforced is the promise or promises made in the contract on their proper construction, and a court has no general power to adapt the promise or to enforce it in part only. Although it has in recent years gained in certainty (for instance, its main elements are now established) promissory estoppel is of its nature less certain and more diffuse in its operation than a contract. Even if the primary elements of the estoppel are established, usually an assurance, reliance and detriment,198 the court can consider whether it would or would still not be unconscionable for the person who made the assurance to be entitled to resile from it.199 In the law of contract, a court cannot refuse to enforce a contract because a party has acted unconscionably,200 and a person seeking to enforce a contract does not have to show that he has acted to his detriment in any way in connection with or in reliance on the contract.201 The enforceability and the ambit of a contract are fixed at the time when the contract is made, whereas for proprietary estoppel events after an initial assurance may be central to the decision on whether an estoppel is established. It is this distinction which was highlighted by Hoffmann LJ when he observed that a contract, subject to the narrow doctrine of frustration, must be performed come what may, whereas an equitable estoppel does not look forward into the future but looks backwards from the moment when the promise falls due to be performed and asks whether, in the circumstances which have actually happened, it would be unconscionable for the promise not to be kept.202 The only real point of contact between the two areas of law is that a promise may found liability in both cases. However, a contract always requires a promise. Proprietary estoppel may be founded on a promise, express or implied, and often is, but it may equally be founded on some other form of assurance including an assurance inferred from silence or inactivity which is often called acquiescence. There have been attempts to explain proprietary estoppel as relying on an implied contract.203 198 See para 7.101. 199 See the observations of Lord Walker in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 46, referred to in para 7.96. 200 A particular equitable remedy, such as specific performance or an injunction, may be refused in the discretion of the court if the party seeking the remedy has not come to the court with ‘clean hands’, ie, where that person has behaved unconscionably or badly in relation to the contract. 201 Of course, the quantification of damages for a breach of contract may be affected by any detriment which the aggrieved party has suffered. 202 Walton v Walton [1994] Court of Appeal Transcript No 479. In Giumelli v Giumelli (1999) 196 CLR 101 the High Court of Australia endorsed the distinction between equitable principles and the enforcement of contractual obligations explained by McPherson J in Riches v Hogben [1985] 2 QR 292, 300–01, namely that equitable principles apply when there is no binding promise, and where there is a binding contractual promise a party must have resort to the law of contract to enforce that promise. The function of equity is to supplement the law and not to replace it. 203 In Lala Beni Ram v Kundun Lall (1899) LR 26 IA 58, an appeal to the Privy Council from the High Court of Allahabad, landowners had stood by and allowed tenants to erect buildings on the land demised. It was held that

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The Nature and Status of the Principle  7.63 7.62  There is a possible conflict between the law of contract and the operation of a proprietary estoppel where the estoppel is based on a promise. A promise is not enforceable as a contract unless it is contained in a deed or is backed by valuable consideration which moves from the promisee. The operation of proprietary estoppel may in effect lead to the enforcement of a promise where there is no consideration. One category of consideration in the law of contract is a detriment to the promise, and there is an obvious similarity between consideration of this character and the detriment suffered in reliance on an assurance which is an essential element of a proprietary estoppel. Any possible conflict is more stark in connection with promissory estoppel. With both forms of estoppel, there is in a sense an exception to the principle that consideration is needed to support the enforcement of a promise but both forms of estoppel require important, although different, other matters to be established in addition to the promise before they can operate and do not therefore impinge directly on the basic rule that a promise by itself cannot be enforced unless it is in a deed or is backed by consideration.204 The question of whether a contract for the sale or other disposition of an interest in land, which is rendered void if not in writing by section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, can still in substance and effect be enforced by reason of a proprietary estoppel is an important question and is discussed next.

5.  Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 7.63  The relationship between the operation of an estoppel and statutory provisions is a general question and is a question which applies to most forms of estoppel. There is a ­possibility of conflict between an estoppel and any statutory provision or restriction but the  two forms of statutory restriction most likely to engender such a conflict are those which  limit the contractual rights of landowners against occupiers of their land and those which provide certain formalities which have to be observed before a particular transaction, such as a particular type of contract, is valid. This question is examined generally in chapter two where it is explained that the fundamental principle is that an estoppel cannot

the effect was that the tenancy was turned into ‘a perpetual right of occupation’. The basis of the decision was that the landowners had impliedly contracted to this effect. This decision was cited by Lord Russell in Canadian Pacific Railway Co v The King [1931] AC 414, 429, as showing that rights which would today be taken as arising by proprietary estoppel were dependent on an implied contract. One difficulty may be to see what is the consideration for the contractual obligation imposed as a result of the implied contract. A possible explanation is that the detriment to the person asserting the estoppel, a necessary requirement of the estoppel, can be regarded as the consideration which supports the obligations of a landowner under an implied contract. Detriment to the promisee is generally regarded as one possible form of consideration, the other being benefit to the promisor. See also the next paragraph on that matter. Such an analysis is not consistent with the law as it is understood and applied today. These decisions perhaps illustrate the former reluctance of the courts to recognise either equitable estoppel generally, or the particular form of it which is now known as proprietary estoppel, as a separate form or forms of estoppel and separate principles of law. A recent illustration of the rejection of any implied contract theory is that in Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 99, Lord Neuberger said that the facts of the case, which did give rise to a proprietary estoppel, did not have any contractual connection. There was therefore no possibility of an implied contract. 204 The possible conflict between estoppel and the doctrine of consideration is discussed more fully in ch 6, para 6.40 et seq on promissory estoppel.

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7.64  Proprietary Estoppel operate so as to contradict a statutory provision, and that an estoppel is likely to have that result if the operation of the estoppel would contradict an express provision of the statute or would contradict or frustrate the purpose of a statutory provision or would render the statute or some part of it a dead letter.205 The relationship between proprietary estoppel and section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 should be judged by the application of this fundamental principle. This particular relationship is examined here separately and in detail in part because it is a topic of recent and continuing importance and in part because it is a topic on which there is no present comprehensive answer, and in addition it is a topic which is perhaps more complicated than the application of the fundamental principle in other instances. In considering proprietary estoppel and section 2 of the 1989 Act it is necessary to examine the allied subject of constructive trusts.

(i)  The Background 7.64  It has been explained that a possible influence on the development of proprietary estoppel at any rate in its early days was the doctrine of part performance which attenuated the effect of section 4 of the Statute of Frauds 1677.206 The effect on proprietary estoppel of the statutory requirement of writing if a contract for the sale or other disposition of an interest in land is to be valid has now emerged in stark form. It is necessary first to summarise the history of provisions of this nature and to state the requirement in force today. 7.65  It was provided in section 4 of the Statute of Frauds 1677, and repeated in section 40 of the Law of Property Act 1925, that no action could be brought upon any contract for the sale or other disposition of land or any interest in land unless the contract, or a note or memorandum of it, was in writing signed by the party against whom it was to be enforced or his agent.207 The effect of these provisions was not to render the contract void but merely to make it unenforceable.208 The doctrine of part performance was to the effect that a party to the contract who had partly performed the contract could enforce it despite non-compliance with the requirements of the legislation.209 The operation of proprietary estoppel by an order for the transfer of an interest in land did not appear to have been impeded by these provisions between 1677 and 1989.210 Section 40 of the Law of Property Act 1925 was repealed by the Law of Property (Miscellaneous Provisions) Act 1989 and replaced by section 2(1) of that Act which provides that a contract for the sale or other disposition of an interest in land can only be made in writing and ‘only by incorporating all the terms which the parties have expressly agreed in one document or, where contracts are

205 See ch 2, part (F) and; see also para 7.15 et seq. 206 For a modern statement of the principle see Steadman v Steadman [1976] AC 536, 540 (Lord Reid). 207 The primary purpose of the Statute, as its name suggests, was to prevent fraud and it operated to impose requirements on other forms of contract as well as those for the disposal of land. The main author of the legislation was Lord Nottingham. The only type of contract which today remains governed by s 4 of the Statute of Frauds is contracts of guarantee. 208 Maddison v Alderson (1883) 8 App Cas 467; Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993. Certain consequences in law flowed from the distinction between a contract being void and a contract being ­unenforceable which it is not necessary here to explore. 209 See para 7.16. 210 See para 7.18.

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The Nature and Status of the Principle  7.70 exchanged, in each’. Today, a contract which does not comply with this requirement is void. There are certain exceptions to the requirement of writing, such as a contract made in the course of a public auction, and it is provided by section 2(5) that nothing in section 2 shall affect the operation of resulting or implied or constructive trusts.

(ii)  Constructive Trusts: Meaning 7.66  Since resulting and implied and constructive trusts are expressly excluded from the requirement of writing in section 2 of the 1989 Act, it is logical to refer first to the meaning of these trusts before coming to the overlap between constructive trusts and proprietary estoppel and before coming to the central issue of the relationship between section 2(1) and proprietary estoppel. 7.67  The law of trusts is a central component of the law of equity and it is an area of law in its own right which is dealt with in detail in separate textbooks.211 There is no overlap between express trusts and proprietary estoppel. Section 53(1)(b) of the Law of Property Act 1925 requires that a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will. By section 53(2) it is stated that this requirement does not affect the creation or operation of resulting, implied or constructive trusts, and section 2(5) of the 1989 Act appears to be modelled on this last provision. 7.68  There are two categories of trusts, other than express trusts, which are resulting and constructive trusts. It is possible to describe both as implied trusts in distinction to trusts expressly created, but an implied trust is usually taken as a name for a resulting trust and the latter meaning of an implied trust is today more usually applied. 7.69  A resulting trust arises from the presumed intention of the parties and is not imposed by the law against the intention of the parties but on the contrary is said to give effect to that presumed intention.212 An example of a resulting trust arises from an express trust where the whole of the beneficial interest in the subject matter of the trust is not disposed of. Thus, if a trust of property is created for a specified purpose and the purpose subsequently fails there will be a resulting trust in favour of the person who provided the property, that being the presumed intention behind the creation of the express trust. There is no particular connection between resulting trusts arising in these and other circumstances and proprietary estoppel. 7.70  Coming to constructive trusts the important question is the nature of constructive trusts and their relationship to proprietary estoppel. An initial problem is that there is no comprehensive and generally applicable definition of what precisely constitutes a constructive trust.213 Such a trust is imposed by operation of law and the best that can be done is

211 See, eg, Lewin on Trusts, 19th edn (Sweet & Maxwell, 2017). 212 Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669, 708. 213 In a leading textbook on the law of real property it is said: ‘There is no accepted definition of a constructive trust and no single principle which unifies the circumstances in which it may be imposed. It is a residual category of trusts’. See Megarry & Wade, The Law of Real Property, 9th edn (Sweet & Maxwell, 2019) para 10.017. This sentiment was repeated by Lord Scott in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 30, where he observed that it was impossible to define exclusively the circumstances sufficient to create

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7.71  Proprietary Estoppel to describe certain categories of circumstances which may give rise to a constructive trust. Some of these have no particular connection with proprietary estoppel. A well-known type of constructive trust is the relationship of trustee and beneficiary which arises between a vendor and a purchaser under a specifically enforceable but uncompleted contract for the sale of an interest in land. Other categories arise out of agreements to make mutual wills or where a trustee applies trust property for his own benefit or where a person procures a breach of trust. There are two categories of constructive trusts where there is a clear potential for an overlap between such a trust and proprietary estoppel. These particular categories are the Pallant v Morgan type of constructive trust, and constructive trusts which arise out of a common intention that persons should each have a beneficial interest in property. Both categories have generated an amount of authority and, especially the latter category, a degree of dispute on their exact application. A full discussion of these matters is outside the subject matter of this part of this chapter and reference should be made to specialist books on trusts and on real property. The following approach is in outline only and is designed to assist an understanding of the relationship between constructive trusts and proprietary estoppel.

(iii)  Constructive Trusts: Two Particular Categories 7.71  The first category is what can be called a joint venture trust. It has been said in a series of decisions following Pallant v Morgan214 that a joint venture constructive trust was established where a joint venture involves the acquisition by one of the joint venturers of a property for the purposes of the venture and the pursuit of the joint venture then becomes impracticable or impossible, with the result that the acquirer is not entitled to retain the property for his own benefit but must be taken to hold the property on trust for himself and the other joint venturers separately.215 In Pallant v Morgan, A and B agreed, prior to an auction of land at which both were considering bidding, that A alone would bid for the land and that if A was the successful bidder and so became the purchaser the land would be divided between them. A did acquire the land but he and B then failed to agree the terms of its division between them. The Court held that a trust came into existence such that A held the property on trust for himself and B jointly. A further illustration of a constructive trust was an arrangement whereby A acquired a site for the construction of a hotel and, if planning permission was obtained, A would construct the hotel and let it to B on agreed terms. Permission was obtained involving expenditure by B but A then resiled from the ­transaction

a constructive trust but that it was possible to recognise particular factual circumstances that would do so and also to recognise other factual circumstances that would not. 214 [1953] Ch 43. 215 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 24 (Lord Scott). A concise summary of the principle which underlies a Pallant v Morgan constructive trust or equity was given by Lewison J in Kilcarne Holdings v Targetfollow [2005] 2 P & CR 8 as follows: ‘Essentially, the principle is that (i) if A and B agree that A will acquire some specific property for the joint benefit of A and B, and (ii) B, in reliance on A’s agreement, refrains from attempting to acquire the property, then equity will not permit A, when he acquires the property, to keep it for his own benefit or to the exclusion of B’. This decision was upheld in the Court of Appeal: see [2005] EWCA Civ 1355. While this definition of the principle encompassed the type of arrangement before the Court it is apparent that a constructive trust can also arise from circumstances not precisely within the definition.

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The Nature and Status of the Principle  7.72 and let the hotel to a different company.216 As mentioned below, the circumstances as in this last case and similar circumstances may give rise to a constructive trust and to a proprietary estoppel.217 7.72  The essence of the second category of constructive trusts is that persons act with a common intention that they will each acquire or hold an interest in a particular­ property.218 A constructive trust may arise in a domestic or a commercial setting although, like proprietary estoppel, circumstances in which there is some personal relationship between the parties seem more likely to be productive of such a trust.219 A common intention may be express but the parties may have failed to formalise the arrangement for instance by way of a form of co-ownership such as a tenancy in common subject to the statutory trusts. Perhaps more usually the common intention that one person should have the legal title to property but another person (or persons) should have some beneficial interest in that property is inferred from the actions of the parties. The inference may be drawn from some initial act on the acquisition of the property, such as a contribution by one party to the purchase price of the property which is vested in another party,220 but can also be derived from the whole course of conduct between the parties in connection with the property in question.221 An obvious case in which there can be no inference of an intention that the provider of funds for the acquisition of a property was intended to have an interest in that property is where the provision was made by way of a gift (which negatives any such intent) or a secured or unsecured loan (where the intent is that the lender shall be able to recover the loan made under the ordinary law of contract).222 The course of conduct may include such matters as helping to pay off a mortgage on the property or carrying out improvements to the property. However, English law does not recognise a concept of family property whereby people who live together in a settled relationship ipso facto share the rights of ownership in the assets acquired and used for the purposes of their life.223 One area of dispute is whether there can be a constructive trust where there is no express reference to the creation of separate interests and no ordinary inference from the facts can be implied,

216 Holiday Inns Inc v Broadhead (1974) 232 EG 951. This decision was examined in detail by Lord Scott in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 24. Lord Scott said that it was an open question whether, if Holiday Inns had been able to act before the lease was granted to another company, an entitlement under the principle of proprietary estoppel would have been recognised by an order that a lease be granted to them on agreed terms. 217 See para 7.75 et seq. 218 Lloyds Bank v Rosset [1991] 1 AC 107, 132 (Lord Bridge). A recent example of a common interest constructive trust is Ely v Robson [2016] EWCA Civ 774, [2017] 1 FLR 1704, in which the owner of a property and someone with whom he had lived and who claimed a 50% interest in the property, met and agreed terms for a division of the interests and for immediate rights of occupation. This common intention was held to create a constructive trust. A declaration was made to give effect to the agreement. 219 Where the parties are in a marriage or civil partnership courts have a wide power to make orders regarding the ownership of property and the adjustment of ownership under the Matrimonial Causes Act 1973. The operation of a constructive trust based on a common intention may be most useful when parties live together in a property with various degrees of sharing and intimacy but are not married to each other and are not within a civil partnership. 220 It is possible that this type of case may create a resulting rather than a constructive trust. 221 Stack v Dowden [2007] UKHL 17, [2007] 2 AC 432. 222 Risch v McFee [1991] 1 FLR 105. 223 Grant v Edwards [1986] Ch 638, 651 (Mustill LJ).

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7.73  Proprietary Estoppel but nonetheless there can be ‘imputed’ such an intention so as to create a trust.224 A further distinction drawn in the law of constructive trust is between an institutional and a remedial constructive trust. An institutional constructive trust is one which arises by operation of law as from the date of the circumstances which give rise to it and where the function of the court is merely to declare that such a trust has arisen in the past. A remedial constructive trust is a judicial remedy giving rise to an enforceable equitable obligation and the extent to which it operates retrospectively to the prejudice of third parties lies in the discretion of the court.225 7.73  A common intention is not enough by itself to create a constructive trust. There must be some action to his detriment in reliance on the common intention by the person who asserts an equitable interest in property by reason of the constructive trust.226 Acts such as the paying off of instalments under a mortgage or carrying out substantial works to property are plainly acts to the detriment of the person involved. It seems that the acts constituting detriment need not relate specifically to the property involved and may constitute something such as the giving up of an opportunity to pursue a career in order to move to live in the property.227 The concept and meaning of detriment are here similar to those applied to detriment as an essential requirement of a proprietary estoppel and this again indicates the similarity between a constructive trust and a proprietary estoppel.228 7.74  Determining whether a constructive trust of property is established by reason of a common intention and detrimental action in reliance on it is only the first part of the task of a court. It is then necessary to decide what effect is to be given to the trust and its underlying common intention. Earlier cases suggest that the extent of the beneficial interest of the claimant should correspond to the contributions, for instance to the purchase price or to any improvements, made by the claimant as compared with the value of the property. Later authorities adopt a more flexible approach and suggest that the court should decide that which is fair having regard to the total course of conduct between the parties.229 224 There is a powerful dissenting judgment of Lord Neuberger in Stack v Dowden [2007] UKHL 17, [2007] 2 AC 432, to the effect that the imputation of a common intention in the absence of any actual express or implied intention is contrary to principle. However, the majority view appears to have been in favour of a possible imputed intention. What appears to be meant by an imputed intention is an intention which the parties did not actually have but which it is likely that they would have had if they had applied their minds to the matter. See also Grant v Edwards [1986] Ch 638, 652 (Mustill LJ). 225 Westdeutsche Landesbank Girozentrale v Islington LBC [1996] UKHL 12, [1996] AC 699. In Pinisetty v Manikonda [2017] EWHC 838 (QB), [2017] All ER (D) 98, a distinction was made by Counsel before the Court between ‘transactional cases’ in which an agreement which does not meet the requirements of s 2 of the Law of Property (Miscellaneous Provisions) Act 1989 might nevertheless be given effect in equity as creating a constructive trust and ‘factual cases’ in which promises or assurances have been made between occupants as to their future conduct such that, were the additional requirements of detriment and unconscionability satisfied, there can be a proprietary estoppel. In this case where there was an oral agreement for the sale of property it was held that the agreement was void under the 1989 Act and could not be rescued by a constructive trust or a proprietary estoppel. 226 Reference may be made to the well-known passage in Gissing v Gissing [1971] AC 886, 905, where Lord Diplock, having considered the general nature of a constructive trust, added: ‘And he [the owner of the property] will be held so to have conducted himself if by his words or conduct he has induced the cestui que trust [the alleged beneficiary] to act to his own detriment in the reasonable belief that by so acting he was acquiring a beneficial interest in the land’. 227 Ungurian v Lesnoff [1990] Ch 206. 228 See also para 7.75. 229 Jones v Kernott [2011] UKSC 53, [2012] 1 AC 776; Oxley v Hiscock [2005] Fam 211.

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The Nature and Status of the Principle  7.77

(iv)  Constructive Trusts: The Overlap 7.75  There is undoubtedly an overlap between the operation of a constructive trust and the operation of a proprietary estoppel. Holidays Inns Inc v Broadhead230 has been mentioned as an example of a joint venture constructive trust where the facts could have been analysed as giving rise to a proprietary estoppel. The potential overlap may be greater with common intention constructive trusts. The core of such trusts is that the legal owner of a property and some other person have an express or implied intention (or perhaps an imputed intention) that the other person shall have an interest in the property and the other person acts to his detriment in reliance on that common intention. This situation seems not far different from an express or implied assurance given by the legal owner of property that another person can expect an entitlement to an interest in the property with that other person acting to his detriment in reliance on that assurance and expectation. Where the factual circumstances can be analysed as giving rise to a constructive trust, the remedy ordered by the court can be much the same as would be ordered if there was a proprietary estoppel. For instance, in Yaxley v Gotts231 the Court ordered the grant to the Claimant of a 99-year lease of a flat as giving effect to a constructive trust and it is difficult to think that the remedy would have been any different had a proprietary estoppel been held to be established, as indeed it had by the trial Judge who made just this order. 7.76  The potential overlap is illustrated by the decision of the House of Lords in Thorner v Major232 in which four members of the Court rested their decision on a proprietary e­ stoppel, whereas Lord Scott preferred to regard the case as one of a constructive trust although he agreed that a proprietary estoppel was a principle of law which could be applied to the facts of the case to lead to the same result. An attempt to indicate the general boundary between the two principles of law was made in that decision by Lord Scott who thought that the cases in which the representation or promise relied on related to the acquisition by the representee or promisee of an immediate, or more or less immediate, interest in the property in question were cases in which proprietary estoppel was the obvious remedy. He considered that a constructive trust had nothing to offer in cases of that sort. He preferred to address cases where the representations or promises were of future benefits, and subject to qualification on account of unforeseen future events, via the principles of remedial constructive trusts.233 7.77  Since there is no agreed comprehensive definition of a proprietary estoppel and since no overall definition of a constructive trust, let alone of forms of constructive trust such as a joint venture or a common intention trust, exists it is difficult to pinpoint the exact differences between the two principles but, notwithstanding this difficulty and the

230 (1974) 232 Estates Gazette 951. See para 7.71. 231 Yaxley v Gotts [2000] Ch 162. See para 7.80 for this decision. 232 [2009] UKHL 18, [2009] 1 WLR 776. See para 7.39 et seq. 233 ibid, para 20. Lord Scott considered that what he called ‘important’ cases, such as Gillett v Holt [2001] Ch 210 and In Re Basham decd [1986] 1 WLR 1498, were more comfortably viewed as constructive trust cases. A difficulty with this analysis is that a proprietary estoppel can depend on a long deferred future benefit such as an assurance that a particular property will pass to a person under a will and on how the recipient of the assurance acts in the period between the making of the assurance and the death of the person who gave the assurance, both factors which were critical to the establishment of a proprietary estoppel in Thorner v Major.

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7.77  Proprietary Estoppel s­ imilarities and overlap between the principles, there are certain indications of whether one or another principle will be the more appropriate in any particular case. One attempt to state the general boundary between the two principles has been mentioned in the last paragraph. Other indications are as follows. Those mentioned are not intended to be an exhaustive list of the differences between the two principles. (a) A proprietary estoppel cannot arise unless there has been an assurance relating to and creating an expectation of an entitlement to an interest in property. While that assurance may be implied, need not derive from a single statement made at one particular time, and does not have to meet the standard of being clear and unequivocal, it does have to be ‘clear enough’.234 A constructive trust is more likely to be based on the inference of an intention drawn from the whole course of conduct between the parties in relation to the property. There is no rule permitting the imputation of an assurance as there appears to be permitting the imputation of a common intention for the purposes of a constructive trust. (b) A classic operation of a proprietary estoppel is passive acquiescence by a landowner at some action by another person in relation to his land which is contrary to his legal rights, with that acquiescence being the implied assurance needed to found a proprietary estoppel.235 Acquiescence in this sense does not play the same part in the formation of a constructive trust where the common intention is likely to be inferred from actions such as contributing to the purchase price of a property or paying instalments due under a mortgage of the property. (c) The assurance in a proprietary estoppel is that a person will have an expectation of an entitlement usually to an exclusive interest in property such as the freehold or a lease or an easement, whereas with a common intention constructive trust the usual intention is that the person with the benefit of the trust shall have some form of co-ownership in some proportion in the property together with the person with the legal title to that property. (d) The effect of a common intention constructive trust is often that the amount of the beneficial interest of the person claiming the trust is quantified and declared possibly by reference to the amount which that person has contributed to the property, whether initially or after its acquisition, or possibly by reference to the common intention. The form of relief available when a proprietary estoppel is established is more varied and may extend to a right to exclusive occupation of the property under a licence for a period, such as for life or in perpetuity, and may include the payment of a monetary sum in satisfaction of the equity.236 (e) A common intention constructive trust comes into existence when a person acts to his detriment in relation to the property where there is a common intention that that person shall have an interest in the property.237 With a proprietary estoppel, the estoppel comes into existence when its essential elements are satisfied and is said to ‘crystallise’ when a court gives effect to it by ordering some form of relief.238 In the period between the coming into existence of the estoppel and the subsequent order of the court, the exact rights of a claimant are inchoate and may depend on 234 See para 7.141 et seq. 235 See para 7.113 et seq. 236 The question of the appropriate relief is discussed in part (D) of this chapter. 237 The rule was put by Kerr LJ in Turton v Turton [1988] Ch 542, 554, as being ‘that, once the court had found the existence of a constructive or implied trust whereby the beneficial rights of the property belong to the parties in whatever shares the court determined, then the necessary consequence was the recognition by the court of rights which are proprietary in their nature and which lie wholly outside the exercise of any discretionary powers’. 238 See para 7.95 for the distinction between the two dates. See also para 7.72 for the distinction between institutional and remedial constructive trusts.

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The Nature and Status of the Principle  7.79 the circumstances when the court considers the matter and decides on the correct form of relief. Events during this period, such as changes in the exact extent of the property or in the ­financial ­circumstances of the parties, may affect the form of relief ordered. The exact status of the rights of a claimant for a proprietary estoppel during the period between the two dates, including the important question of the effect of the estoppel on a third party who acquires the land of the person who has made the assurance, is examined elsewhere.239 7.78  Perhaps inevitably, given the overlap between the two principles and their obvious similarities in some types of situation, it has been suggested that common intention constructive trusts and proprietary estoppel have come to be regarded as something which may properly be considered as part of a broader inquiry into whether the r­ epudiation of an assurance given was or was not reasonable in all the circumstances.240 Such an approach of looking only at whether it is reasonable in all the circumstances to allow or prevent the repudiation of an assurance, despite the desire of courts on occasions to revert to such simplifications, runs the risk of falling foul of the cogent observation of Lord Scott in Cobbe v Yeoman’s Row Management Ltd,241 relying on what had been said in the High Court of Australia as applicable to both constructive trusts and proprietary estoppel, that proprietary rights should fall to be governed by principles of law and not by some mix of judicial discretion, subjective views about which party ‘ought to win’, and ‘the formless void’ of individual moral opinion. Nor would any such assimilation of the principles be easy. In Plimmer v Mayor, etc, of Wellington,242 it would have been difficult to suppose that the Crown or the New Zealand Provincial Government intended that they should hold a part of the sea bed of Wellington Harbour as trustees for themselves and for Mr Plimmer jointly. Lord Walker has commented that after giving some support to a possible assimilation of the two principles in Yaxley v Gotts,243 he had become rather less enthusiastic about the notion that proprietary estoppel and common intention constructive trusts can or should be completely ­assimilated.244 At this point of time, it is therefore best to regard the two principles as conceptually and legally distinct although with a clear potential for some overlap.

(v)  The Issue and the Authorities 7.79  As the law now stands there is a significant overlap between the circumstances which can give rise to certain forms of constructive trust and the circumstances which can give rise to a proprietary estoppel. This is not surprising, since the root of both principles is to create out of the conduct and intention of those involved an interest in or rights over land which bind the legal owner of the land in the absence of any express creation in proper form of that interest or rights. The nature of litigation is such that persons asserting a claim to an interest

239 See ch 2, para 2.233 et seq. 240 De Bruyn v De Bruyn [2010] EWCA Civ 519, [2010] 2 FLR 1240, para 51 (Patten LJ). 241 [2008] UKHL 55, [2008] 1 WLR 1752, para 17, citing the words of Deane and Mason JJ in Muschinski v Dodds (1985) 160 CLR 558, 615–16. The passage from the decision of Deane J is set out in para 7.95. 242 (1884) 9 App Cas 699. The facts are set out in para 7.22. 243 [2000] Ch 162. 244 Stack v Dowden [2007] UKHL 17, [2007] 2 AC 432, para 37. The general question of the possible amalgamation of various forms of estoppel into a unified doctrine is discussed in ch 2, part (G).

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7.80  Proprietary Estoppel in land may sometimes assert that claim under both principles in the alternative. As far as any particular case is concerned, there are therefore three possible circumstances, assuming that the claim is to succeed at all, namely (a) that the facts give rise only to a constructive trust, (b) that the facts give rise only to a proprietary estoppel, and (c) that the facts give rise to both a constructive trust and a proprietary estoppel. The purpose of the present discussion is to establish the relationship between proprietary estoppel and the requirement in section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 that a contract for the sale or other disposition of an interest in land must be in writing. If the circumstances fall within the first of the above possibilities then there is no problem relating to section 2 of the 1989 Act since constructive trusts are expressly excluded from the ambit in section 2(1) of the requirement of writing. If the case falls into the third of the above possibilities, the sensible approach may often be to give effect to the constructive trust which can arise on the facts and therefore to avoid the difficulty of any conflict between the principle of proprietary estoppel and section 2(1). The same or a similar end result may be achieved by the operation of either principle. The difficulty arises in the second of the possibilities where only a proprietary estoppel can arise so that the possibility of a conflict between the principle of proprietary estoppel and section 2(1) is or may be unavoidable. Clearly there may be cases in which the facts lead to a proprietary estoppel, but not a constructive trust, so that this issue has to be faced.245 7.80  The question of whether a proprietary estoppel was precluded by section 2 of the 1989 Act and the possibility of a constructive trust were raised before the Court of Appeal in Yaxley v Gotts.246 The approach to the issue as just described was adopted. The owner of a house which he wished to convert into a number of flats entered into an oral arrangement with the Claimant, a builder, to the effect that the Claimant would carry out work on the conversion and in return would obtain a ground floor flat which he could convert into two flats. The Claimant carried out substantial works but the owner’s son refused to provide to him any interest in the ground floor. The Claimant sought to assert his claim by way of a proprietary estoppel, a claim which was upheld in the county court. On appeal, it was alleged that proprietary estoppel was precluded from operating by section 2(1) of the 1989 Act. The Court of Appeal held that although the Judge did not find that there was a constructive trust his findings of fact supported that conclusion. Accordingly, the Claimant succeeded under the plea of a constructive trust which was expressly excluded from the restriction in section 2(1) and it was not necessary to define the exact relationship between proprietary estoppel and section 2(1) of the 1989 Act. 7.81  The two fairly recent decisions of the House of Lords on proprietary estoppel offer only limited guidance on the question here under consideration. No proprietary estoppel was held to exist in Cobbe v Yeoman’s Row Management Ltd247 since any assurance given by the Defendants did not create an expectation of an entitlement to an interest in land on the

245 Yaxley v Gotts [2000] Ch 162, 176 (Robert Walker LJ); Kinane v Mackie-Conteh [2005] EWCA Civ 45, para 47 (Neuberger LJ). 246 [2000] Ch 162. A similar approach was followed by the Court of Appeal in Kinane v Mackie-Conteh [2005] EWCA Civ 45 where a constructive trust was held to exist so that there was no need to determine the exact limits of s 2(1) when a proprietary estoppel was all that could be asserted. 247 [2008] UKHL 55, [2008] 1 WLR 1752. The two decisions are discussed in detail in para 7.32 et seq.

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The Nature and Status of the Principle  7.83 part of the Claimant. Nor did the facts disclose a constructive trust. Any possible conflict between the principle of proprietary estoppel and section 2(1) of the 1989 Act therefore did not arise, but Lord Scott stated that his present view was ‘that proprietary estoppel cannot be prayed in aid in order to render enforceable an agreement that statute has declared to be void’.248 Few would dispute this as a general observation.249 Lord Walker said that he did not think it necessary or appropriate to consider the issue on section 2 of the 1989 Act. Some assistance can be gained from Thorner v Major250 where there was held to be a proprietary estoppel. Lord Neuberger referred to the observation of Lord Scott in Cobbe’s case. He considered that section 2 may have presented Mr Cobbe with a problem since Mr Cobbe was seeking to invoke an estoppel to produce a result which was in a sense contractual in nature. Lord Neuberger added that he did not think that section 2 had any impact upon a claim such as that before the Court in Thorner v Major which was a straightforward estoppel claim without any contractual connection.251 Nobody would have supposed that the relationship between Mr Thorner and his father and his father’s cousin was a contract for the sale or disposition of an interest in land. 7.82  While this last item of reasoning is to be welcomed it of course raises the question of what exactly is a sufficient contractual connection to prevent there being a proprietary estoppel because of the terms of section 2(1) of the 1989 Act.252 A similar question is when exactly are the rights brought about by a proprietary estoppel contractual in nature. The degree of connection with a contract may often depend on the type of assurance which creates the estoppel. An assurance in the nature of an express promise seems more likely to create a contractual nexus, and therefore be more likely to create a conflict with section 2(1), than an inferred assurance arising from inactivity and acquiescence. 7.83  It is proper when considering the effect of a modern statute to look at the content of a prior working paper of the Law Commission, which invites comments on suggestions, and at a subsequent report to Parliament by the Commission, where such documents are ­available.253 In its report to Parliament254 which led to the 1989 Act, the Commission made it clear that in seeking to eliminate the uncertainty in conveyancing caused by the old doctrine of part performance it was not intended to affect the availability of equitable remedies. Also there seems little logic in excluding constructive trusts (or any other type of trusts) from the ambit of section 2(1) but denying to proprietary estoppel, the effect of which is in some respects akin to that of constructive trusts, the protection of that excluding provision. It is perhaps unfortunate that proprietary estoppel was not added to the list

248 ibid, para 29. 249 See ch 2, part (F), for a discussion of the relationship between estoppel generally and statutory provisions including provisions which require certain formalities, before there can in some cases be a valid transaction. 250 [2009] UKHL 18, [2009] 1 WLR 776. 251 ibid, para 99. A recent decision in which there was an oral agreement to sell a property, so that there was a plain contractual intention, is Pinisetty v Manikonda [2017] EWHC 838 (QB), [2017] All ER (D) 98. The agreement was void under s 2 of the Law of Property (Miscellaneous Provisions) Act 1989 and could not be rendered enforceable by a constructive trust or a proprietary estoppel. 252 s 2(1) applies to a contract to devise a particular property by will: Taylor v Dickens [1998] 1 FLR 806, 819, so that giving effect to assurances of the character of that in Thorner v Major could in some circumstances engender a conflict with s 2(1). 253 Yaxley v Gotts [2000] Ch 162, 181 (Clarke LJ), 188 et seq (Beldam LJ). 254 Law Com No 164.

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7.84  Proprietary Estoppel in section 2(5) of principles of law not affected by section 2(1), but the intention of the Law Commission suggests that where possible the operation of proprietary estoppel should not be unduly constrained by section 2(1). A possible reason for proprietary estoppel not being included when section 2(5) was drafted is that section 2(5) follows wording used in the Law of Property Act 1925 where an exclusion from a requirement of formalities was inserted (see section 53(2) of the 1925 Act relating to the creation of trusts) and in 1925 proprietary estoppel was not generally recognised as a separate principle of law. In United Bank of Kuwait Plc v Sahib,255 Peter Gibson LJ drew attention to the fact that in its report the Law Commission contemplated that proprietary estoppel might be available to achieve justice where there was no writing such as was needed for compliance with section 2. This case concerned the deposit of title deeds and equitable charges over land and it was unnecessary for the court to make any decision on the exact relationship between section 2(1) and proprietary estoppel since any estoppel which could have been established would not have bound the Claimants. No court has held that proprietary estoppel in a case concerning interests in land is excluded in limine by section 2(1), whereas there are a number of statements to the effect that in such cases proprietary estoppel may have a part to play notwithstanding section 2(1). In Yaxley v Gotts,256 Robert Walker LJ said that the circumstances in which section 2 had to be complied with were so various, and the scope of the doctrine of estoppel was so flexible, that ‘any general assertion of section 2 as a “no-go area” for estoppel would be unsustainable’. There are other decisions to a similar effect.257 It should also be noted that where an estoppel has been rejected as a means of securing the enforcement of an oral contract of guarantee because of the requirement of writing in section 4 of the Statute of Frauds 1677, the possibility of an estoppel founded on further material or events was not ruled out by the House of Lords.258

(vi)  A Suggested Resolution 7.84  It has not proved necessary up to now in decisions before the courts to decide in any comprehensive fashion the basic question of how exactly any conflict between section 2(1) of the 1989 Act and the operation of the principle of proprietary estoppel is to be resolved. Two strands of thought have emerged from the authorities. It is apparent that if the facts before a court are such as to give rise to a form of constructive trust, then the constructive trust can be operated and there is no conflict between that and section 2(1). The other strand is that there may be cases where there is no sufficient contractual connection between the circumstances which give rise to a proprietary estoppel and the ordinary understanding of a contract to create any conflict between the estoppel and section 2(1). Neither of these strands of approach give a clear or comprehensive answer to the central question. In the

255 United Bank of Kuwait v Sahib [1997] Ch 107, 141. 256 [2000] Ch 162, 174. Walker LJ added that the doctrine of estoppel may operate to modify (and perhaps even counteract) the effect of s 2 of the 1989 Act. 257 See McCausland v Duncan Lawrie Ltd [1997] 1 WLR 38, 45 (Neill LJ), 50 (Morritt LJ), indicating that the availability of estoppel was at least arguable in a case where s 2 applied; Bankers Trust Co v Namdar [1997] (unreported); King v Jackson [1998] 1 EGLR 30. 258 Actionstrength Ltd v International Glass Engineering SpA [2003] UKHL 17, [2003] 2 AC 541. This decision is discussed in more detail in ch 2, para 2.141.

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The Nature and Status of the Principle  7.87 application of the first strand, there is a blurred boundary between that which creates a constructive trust and that which creates a proprietary estoppel, and in the second strand what is a sufficient contractual connection may be open to dispute. 7.85  The starting point in resolving the issue here being discussed must be the terms of section 2 of the Act and the policy behind it. Where there is a conflict between some principle of the common law or of equity and a statutory provision, the statutory provision must normally prevail.259 The general question of the relationship between the doctrine of estoppel and statutory prohibitions is discussed in chapter two.260 Under section 4 of the Statute of Frauds 1677 a contract of guarantee is unenforceable unless it or some memorandum or note of it is in writing. It has been held that an oral guarantee coupled with a belief by the parties that it was binding and some reliance on it is not sufficient to render the guarantee enforceable by reason of an estoppel by convention since that would be in effect to repeal section 4 of the Statute of Frauds.261 A contract to exclude statutory protection given to tenants of agricultural holdings under the Agricultural Holdings Act 1948 was held to be void as being contrary to the purpose of the statute. A common assumption between the parties that such an agreement was in fact valid could not render the contract enforceable by virtue of the operation of estoppel by convention since such a result would also be contrary to the purpose of the statute.262 7.86  A further initial point to bear in mind is that a contract to dispose of an interest in land and a proprietary estoppel are conceptually quite different areas of law.263 If there is an ordinary contract for the sale of land, that contract will generally be enforceable by specific performance and there is no scope for the invocation of a proprietary estoppel. In Banner Homes Plc v Luff Developments Ltd,264 Chadwick LJ examined the Pallant v Morgan type of constructive trust and stated that if there was an agreement which was enforceable as a contract it was unlikely that there would be any need to invoke the equitable rights which arose under a constructive trust. The same point applies to proprietary estoppel. If there is a valid and enforceable contract, there should be no requirement to consider proprietary estoppel unless there is the impediment that the contract, which would otherwise be valid, is rendered void by the absence of writing. 7.87  The issue may be further complicated by the fact that it is likely that proprietary estoppel can apply to interests in chattels and to interests and rights where the subject matter is not any corporeal entity at all. The requirement of writing in section 2(1) of the 1989 Act does not apply to any contracts except those for the sale or other disposition of an interest in land so that, if that provision has a wide effect and limits the operation of proprietary estoppel, it may be that the principle of proprietary estoppel has to apply differently to cases where the subject matter of the assurance is land, and cases where the subject matter of the assurance is some rights which have nothing to do with land.

259 Yaxley v Gotts [2000] Ch 162, 175 (Robert Walker LJ). This is of course a matter of basic constitutional theory involving the sovereignty of Parliament. 260 See ch 2, part (F). 261 Actionstrength Ltd v International Glass Engineering SpA [2003] UKHL 17, [2003] 2 AC 541. 262 Keen v Holland [1984] 1 WLR 251. 263 The main differences between proprietary estoppel and the law of contract are summarised in para 7.61. 264 Banner Homes Plc v Luff Developments Ltd [2000] 2 All ER 117.

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7.88  Proprietary Estoppel 7.88  A clear resolution of the issue under discussion may in due course be found in decisions of the courts but for the moment the following approach is tentatively suggested. It may be possible to approach the issue in three stages. 7.89  The first stage is to accept that if there is a clear conflict between a statutory provision and the operation of a form of estoppel, the statutory provision must prevail. If a statute prevents expressly or by implication or as a matter of policy derived from its provisions and purpose a particular agreement such as a contracting out of the provisions in the statute, then any agreement which purports to have that effect will be void. It must follow that in principle the operation of the law of estoppel equally cannot contradict the statute. Instances of this situation have already been mentioned. Since it was contrary to the policy of the Agricultural Holdings Act 1948 that parties should be able to contract out of the security of tenure conferred on certain tenants of agricultural holdings by that Act, it followed that the same effect as a contracting out, the removal of the statutory protection, could not be brought about by the operation of an estoppel by convention.265 Nor can the requirement of writing for an enforceable contract of guarantee as stated in section 4 of the Statute of Frauds 1677 be in effect removed by a similar estoppel.266 The law must therefore be that a contract for the sale or other disposition of an interest in land which would otherwise be valid but is rendered void by section 2(1) of the 1989 Act because of a lack of writing, cannot be rendered valid by the operation of an estoppel by convention, ie, a subsequent common assumption between the parties that the contract is valid, or by the operation of a ­proprietary estoppel, ie, subsequent actions to its detriment by a party to the contract in reliance on an assurance, contained in the contract itself or elsewhere, that the contract is valid. If it were otherwise, the effect of either form of estoppel would be to render valid a contract which statute had declared to be void.267 7.90  The second stage is to suggest that there are arrangements or agreements which are similar to a contract or which have a contractual connection, where a promissory estoppel may operate in a way which gives effect to a promise made as part of the agreement despite section 2(1) of the 1989 Act. The type of contract suggested is an agreement for the disposition of an interest in land which fails to constitute a valid contract for some reason other than that it is not in writing, for example because it lacks the certainty needed for a valid contract or because there is no consideration or because there is at the time no intention to create legal relations. If an assurance can be spelt out of the agreement, and if the other elements of proprietary estoppel are present, that is reliance, detriment and unconscionability, there

265 Keen v Holland [1984] 1 WLR 251. 266 Actionstrength Ltd v International Glass Engineering SpA [2003] UKHL 17, [2003] 2 AC 541. See para 7.85. In Chalmers v Pardoe [1963] 1 WLR 677 the Privy Council considered the effect on a claim to proprietary estoppel of s 12 of the Native Land Trust Ordinance of Fiji which provided that it should not be lawful for a lessee to alienate or deal with land comprised in a lease without the consent of the Native Land Trust Board. It was held that this provision prevented an order for a grant of a sub-lease or for the grant of a right of occupation to a person who had built on the land of a lessee in the expectation of an interest in the absence of a consent from the Board. Since the dealing was unlawful, equity could not lend its aid to it. 267 In Kinane v Mackie-Conteh [2005] EWCA Civ 45, para 46, Neuberger LJ referred to certain passages in the judgments of Robert Walker and Beldam LJJ in Yaxley v Gotts which suggested that a proprietary estoppel might operate so as to enable a claimant to avoid the rigours of s 2(1) and queried whether such a conclusion could survive the reasoning of the House of Lords in the Actionstrength decision. He cautioned (at para 40) against regarding s 2(5) with its references to trusts as providing an acceptable escape route from s 2(1).

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The Nature and Status of the Principle  7.92 seems to be nothing in section 2(1) which prevents effect being given to a proprietary estoppel by an order for the creation of some interest in land or by some other remedy. The reason for this conclusion is that what section 2(1) does is to render void a contract which is not in writing. If the arrangement or agreement is not in fact a contract, for one of the reasons just stated or for some other reason other than simply an absence of writing, section 2(1) is not engaged. The opening words of the sub-section are ‘A contract’ and the arrangement or agreement in question as here posited is not a contract. Consequently, the operation of the proprietary estoppel does not have the effect of rendering valid a contract declared void by statute; the estoppel, provided its essential elements are satisfied, simply gives some legal consequence or effect to an assurance which is not a contract or a part of a contract as stated in the statute at all. It does not matter for these purposes whether the arrangement or agreement from which the assurance or promise is derived is oral or in writing. This line of reasoning is not an evasion of the statutory provision, since ex hypothesi, the enforcement of the assurance by a proprietary estoppel is not the enforcement of a contract and is not the application of the law of contract; instead it is the operation of a different legal principle which depends on events subsequent to any initial arrangement, such as reliance and detriment and unconscionability, which are not important to the enforcement of an arrangement under the law of contract. 7.91  The third stage is perhaps of greater practical importance than the second and is that there may be many circumstances in which some form of assurance or promise relating to an interest in land is made which has no contractual connection so that no contract is involved and again for that reason section 2(1) is not engaged. The best examples of such circumstances are the facts of Gillett v Holt268 and Thorner v Major269 already discussed in this chapter. Both cases involved assurances that a person who worked on a farm would receive a gift of the farm in the will of the owner. To take Thorner v Major, it would be fanciful to suggest that the assurance given by the owner of the farm, gleaned from a series of oblique remarks over a period of time, had any close connection with or relationship to a contract. As Lord Neuberger observed, the claim was a straightforward estoppel claim without any contractual connection.270 This type of situation may arise in many cases. A man who assured a woman living with him that the house would be hers and everything in it would be hers,271 and a father who told his son who built a bungalow on the father’s land that the son could live there for life or as long as he wished,272 in a sense made an assurance or promise for the disposition of an interest in land but there was no intention to create a contract. In such cases, the assurance or promise can be the foundation of a proprietary estoppel since there is no sufficient connection to a contract to create any conflict with section 2(1). 7.92  A further possibility which needs at least to be mentioned is that section 2(1) may have no impact on proprietary estoppel when the effect of the estoppel is not an order for the disposition of an interest in land but is an order for some monetary payment or other ­different recompense to the person setting up the estoppel. It is doubtful if this c­ onsideration

268 [2001]

Ch 210. UKHL 18, [2009] 1 WLR 776. 270 ibid, para 99. 271 Pascoe v Turner [1979] 1 WLR 431. 272 Inwards v Baker [1965] 2 QB 29. 269 [2009]

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7.93  Proprietary Estoppel is of much assistance to the present issue. If there is an oral contract for the disposition of an interest in land which would be enforceable apart from section 2(1), and the other essentials of an estoppel, reliance, detriment and unconscionability, are present, and if a court upheld a plea of estoppel and gave effect to the estoppel not by ordering a disposition of an interest but by ordering some monetary payment in place of the disposition, the substance of the matter is that at least some legal effect would be given to the contract declared void by statute. An order for a monetary payment has similarities to an order for the payment of damages when a contract for sale is enforced but not by a decree of special performance. The difference is that an award of damages against a vendor is usually based on the loss of the bargain, the difference between the agreed price and the value of the land, whereas an order for the payment of a monetary sum to satisfy a proprietary estoppel is more likely to be of a sum equivalent to the value of the land since the person claiming the estoppel will often have acted to his detriment such as to entitle him to the land without further payment by him. The giving of relief by an order for a monetary payment in the circumstances described appears to amount to an overriding of the statutory restriction at any rate to some limited extent. 7.93  It may be that the resolution of the issue can be summarised at any rate in general terms by saying that there may be cases of a conflict between section 2(1) of the 1989 Act and the operation of a proprietary estoppel, but only in instances where the substance and effect of the estoppel would be to render valid and to enforce a contract which is made void under section 2(1) because it is not in writing and which would be a valid contract apart from the absence of writing and the effect of the statutory provision. Proprietary ­estoppel is an equitable principle and such a limited effect of section 2(1) on proprietary estoppel is supported by the intention of the Law Commission stated in the report which preceded the legislation that the legislation was not intended to affect the availability of equitable remedies.273 Such a limited effect would preserve the integrity and basic purpose of section 2(1) without emasculating the operation of proprietary estoppel.274

(vii) Conclusion 7.94  The precise relationship between section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 and the principle of proprietary estoppel awaits an authoritative decision about three decades after the enactment of section 2. In what is therefore essentially an uncertain state of the law it is suggested that the best view that can currently be taken may be summarised as follows: (a) The operation of a constructive trust is excluded from the ambit of the requirement of writing in section 2 by section 2(5) of the Act. A number of factual situations could give rise to a constructive trust (usually a joint venture or common intention constructive trust) or a promissory estoppel. It is apparent that in such cases where

273 See para 7.83. 274 Of course, the simplest and most satisfactory solution would be an amendment of s 2(5) of the 1989 Act so as expressly to exclude the operation of a proprietary estoppel from the restriction in s 2(1).

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The Nature and Status of the Principle  7.95

(b) (c)

(d)

(e)

(f)

a constructive trust can be operated it may achieve substantial justice without any constraint under the 1989 Act. The boundary between a constructive trust and a proprietary estoppel is not hard and fast and there are some situations where no trust is possible, whereas the main elements of proprietary estoppel are satisfied such that an estoppel can in principle apply. In such cases a proprietary estoppel cannot operate so as in substance to render valid a contract which would otherwise be valid but is prevented from being so solely by the absence of writing as required by section 2(1). If an estoppel were to operate in this way it would subvert the language and purpose of section 2(1). Nonetheless, and notwithstanding section 2(1) of the 1989 Act, the principle of proprietary estoppel may operate in at least two sets of circumstances. (a) The estoppel may operate where the assurance which is the first main element of the estoppel is a promise relating to an interest in land but is not a contractual promise, for example where there is no consideration for it or no certainty of terms, and subsequent events such as actions carried out in reliance on the assurance bring about the result that all the elements of proprietary estoppel are satisfied. In such cases section 2(1) has no relevance since quite apart from an absence of writing there is no contract upon which that provision can engage. (b) The initial assurance and the circumstances surrounding it and f­ ollowing it may have no connection with or similarity to a contract for the ­disposition of an interest in land so that section 2(1) of the 1989 Act is not engaged since that provision only relates to a contract. The effect of an estoppel may be that the court orders the transfer or the creation of an interest in land but that does not mean that there was ever a contract to that effect. The estoppel arises from factual circumstances which were never a contract whether in writing or otherwise. Viewed in this way section 2(1) prevents the operation of a proprietary estoppel only when there is an initial arrangement which would be a valid contract if it had been in writing but does not apply so as to prevent a proprietary estoppel in circumstances where the initial assurance is not a part of a valid contract for some reason other than that it is not in writing as required by section 2(1). On this basis, proprietary estoppel continues as an important and far-reaching principle by which justice can be achieved in many cases without there being any question of the enforcement of a contract or a term of a contract rendered void by statute.

6. Unconscionability275 7.95  An extreme form of approach to proprietary estoppel is the suggestion that all that need be proved by the person setting up the estoppel is some form of unconscionable behaviour relating to land on the part of the person alleged to be estopped. If this suggestion were correct as stated in its starkest form no time would need to be spent on 275 Unconscionability as a concept is important for the doctrine of estoppel as a whole and is discussed generally in ch 1, para 1.44 et seq. Its particular significance for proprietary estoppel is that it may have at one time been supposed that all that was required to establish the estoppel was some type of unconscionable behaviour relating to property by the person against whom the estoppel is asserted. It is explained in subsequent paragraphs that this view, if it ever prevailed, is not correct in law.

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7.96  Proprietary Estoppel establishing or examining the other main elements of the estoppel.276 Such an approach was decisively rejected by the House of Lords in Cobbe v Yeoman’s Row Management Ltd.277 Lord Scott stated that to treat a proprietary estoppel as requiring neither a proprietary claim by a claimant nor an estoppel against a defendant, but simply unconscionable behaviour, was a recipe for confusion. The following trenchant passage from the decision of Deane J, with which Mason J concurred, in the High Court of Australia, directed at constructive trusts but equally applicable to proprietary estoppel, was cited by Lord Scott: As an equitable remedy, it is available only when warranted by established equitable principles or by the legitimate processes of legal reasoning, by analogy, induction and deduction, from the starting point of a proper understanding of the conceptual foundations of such principles  … Under the law of this country (as, I venture to think, under the present law of England …) proprietary rights fall to be governed by principles of law and not by some mix of judicial discretion, subjective views about which party ‘ought to win’ … and ‘the formless void’ of individual moral opinion.278

Lord Scott considered that a finding of proprietary estoppel, based on the unconscionability of the behaviour of the person against whom the finding was made but without any coherent formulation of the content of the estoppel or of the proprietary interest that the estoppel was designed to protect, invited criticism of the sort stated in the Australian decision.279 7.96  It must therefore be taken to be the law today that a person claiming a proprietary estoppel in his favour must show against the defendant that the essential elements of the estoppel are satisfied, including the element that it would be unconscionable in all

276 Lord Scott in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 16, appears to suggest that this was how the matter was approached by Etherton J at first instance and by the Court of Appeal in that case. The decision of the Court of Appeal was reversed by the House of Lords. One expression of the dominant role said to be played by the concept of unconscionability is that of Oliver J in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 151–52, where, commenting on the five probanda of Fry J in Willmott v Barber (1880) 15 Ch D 96, he said that recent cases indicated that proprietary estoppel required a broad approach which is directed at ascertaining whether, in particular individual circumstances, it would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he had allowed or encouraged another to assume to his detriment and that this approach was preferable to that of enquiring whether the circumstances could be fitted within the confines of some preconceived formula serving as a universal yardstick for every form of unconscionable behaviour. In Shaw v Applegate [1977] 1 WLR 970 the assertion of a proprietary estoppel failed on appeal and Goff LJ said, commenting on the five probanda of Fry J, that the test was whether ‘in the circumstances, it had become unconscionable for the Plaintiff to rely upon his legal right’. See also the observations of Buckley LJ in the same decision (at 977–78). Perhaps a high-water mark of the elevation of unconscionability as the sole or dominant criterion for the establishment of a proprietary estoppel is the conclusion of Oliver J in Taylor’s case (at 155), after a long examination of the decided authorities, that the enquiry which he had to make was ‘simply whether, in all the circumstances of this case, it was unconscionable for the Defendants to seek to take advantage of the mistake which, at the material time, everybody shared’. There are observations in the judgment of Scarman LJ in Crabb v Arun District Council [1976] Ch 179 which suggest that unconscionability may be the sole criterion for the establishment of a proprietary estoppel (or for the establishment of a promissory estoppel which he considered to be much the same thing): see below (n 286). 277 [2008] UKHL 55, [2008] 1 WLR 1752, para 17. 278 Muschinski v Dodds (1985) 160 CLR 583, 615–18. 279 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 17. The observations of Lord Scott and those made in the High Court of Australia are also discussed in ch 2, part (G), in connection with the suggestion that there can be formulated one single proposition which encompasses the whole, or large parts, of estoppel as a doctrine.

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The Nature and Status of the Principle  7.97 the circumstances to leave the claimant without any remedy, but that unconscionability by itself is never sufficient. Much the same analysis was provided by Lord Walker where he said that unconscionable behaviour played a very important part in the doctrine of equitable estoppel, in unifying and confirming the other elements. The point is that if the other elements are present but the result does not shock the conscience of the court, ‘the analysis needs to be looked at again’. What this amounts to is saying that unconscionability is a separate element and, even if the other elements of proprietary estoppel are established, if unconscionability is not established the estoppel should fail.280 The same point was vividly put, again citing the decision of Deane J in the High Court of Australia, by Lord Walker where he said that as regards equitable estoppel the doctrine was not to be regarded as a sort of joker or wild card to be used whenever the court disapproves of the conduct of a litigant who seems to have the law on his side. Flexible though it is, the doctrine must be formulated and applied in a disciplined and principled way. Certainty is important in property transactions.281

7.97  The importance of unconscionability or injustice in the principle of proprietary estoppel has varied over the years of the development of the principle. In the earlier cases, unconscionability was not normally described as a consideration or test to be applied separately to the facts, although the unfairness which would ensue if there was no estoppel was sometimes mentioned and was plainly in the minds of the courts. In more recent times, unconscionability came to play a larger overt part in decisions which may have meant that limited consideration was given to an articulation of the other main and necessary elements of the principle with the result of creating uncertainty in property law which is against the interests of landowners and which does not assist property lawyers. Fortunately, recent vivid observations in the House of Lords have removed much of the uncertainty and have placed the principle of proprietary estoppel on a firmer and more principled basis. The place of unconscionability in the present area of law can be summarised tolerably clearly in two short propositions. (a) A proprietary estoppel cannot be established on the basis of unconscionable behaviour alone in the absence of proof of the other essential elements of an assurance and reliance and detriment. (b) Even if the other essential elements are proved, a court may refuse to apply an estoppel if it is not unconscionable to allow the maker of the assurance to resile from it.282

280 ibid, para 46. In Gillett v Holt [2001] Ch 210, 225, Lord Walker, as Robert Walker LJ, had observed that ‘the fundamental principle that equity is concerned to prevent unconscionable conduct permeates all the elements of the doctrine [of estoppel]’. 281 ibid, para 46. 282 An example of this last type of situation might be where benefits already obtained by the person claiming the estoppel, such as rent free occupation of a property, could outweigh the detriment suffered by that person. A different way of analysing such a situation would be to say that in such circumstances no detriment in overall terms was established. Another example must be where there was a sufficiently clear assurance followed by actions on it and detriment to the recipient of the assurance, but the overall unmeritorious conduct of the claimant disentitled him from obtaining the benefit of a proprietary estoppel. The rule that unconscionability cannot by itself create a proprietary estoppel was reiterated and applied in the High Court in Pinisetty v Manikonda [2017] EWHC 838 (QB), [2017] All ER (D) 98.

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7.98  Proprietary Estoppel

(C)  The Essential Elements of the Estoppel 1. Description 7.98  It has been said in the House of Lords that the three main elements of proprietary estoppel are a representation or assurance made to the claimant, reliance on it by the claimant, and detriment to the claimant on account of his reliance.283 With the omission of the word ‘assurance’ this seems very close to a statement of the main elements of estoppel by representation. If the word ‘promise’ is substituted for ‘representation or assurance’ it would be close to a summary of the main elements of promissory estoppel.284 Sometime earlier, and after a review of the authorities as they then stood, Oliver J suggested that as ­formulated by Counsel before him proprietary estoppel could be encapsulated in the following proposition: if A under an expectation created or encouraged by B that A shall have a certain interest in land, thereafter, on the faith of such expectation and with the knowledge of B and without objection by him, acts to his detriment in connection with such land, a Court of Equity will compel B to give effect to such expectation.285

Drawing on these statements and on the authorities as they stand today, it has been suggested earlier in this chapter that a general description of the principle is contained in the following statement: Where A owns an interest in land and by an express or implied assurance leads B reasonably to hold an expectation that B has become or will become entitled to an interest or rights in that land, and B acts reasonably and to his significant detriment in reliance on this assurance and expectation, with A both knowing of the expectation of B and doing nothing to remove that expectation, then when it would be just to do so A will be compelled to transfer to B an interest in A’s land or to make some other form of recognition of the rights of B or to make some other recompense to B.286

Parties to legal disputes and their advisers are entitled to know with reasonable certainty that which constitutes a major principle within the law of estoppel, the law of property and the law of equity. It is only by reference to such statements or propositions that they

283 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 29 (Lord Walker), para 72 (Lord Neuberger). 284 The main elements of estoppel by representation are summarised in ch 3, para 3.1; and the main elements of promissory estoppel are summarised in ch 6, para 6.1. It should be borne in mind that for the purposes of promissory estoppel the promise in question must be one to the effect that existing legal rights of the promisor will not be enforced or will not be fully enforced. 285 Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 144. This formulation of the principle has been applied in more recent decisions: see, eg, Clark v Clark [2006] EWHC 275 (Ch) para 28 (Blackburne J). A further statement of the principle made in In Re Basham decd [1986] 1 WLR 1498 is set out above (n 8). 286 See para 7.2. In Crabb v Arun District Council [1976] Ch 179, 193, Scarman LJ said that it was at the time of that  decision settled law that a court, having considered the conduct and relationship of the parties, had to answer three questions, the first being was there an equity established, the second being the extent of the equity, and the third being the relief appropriate to satisfy the equity. The difficulty with the first question is to know in what circumstances is ‘an equity established’. Little guidance on this critical question was given by Scarman LJ except to say that a court cannot find an equity established unless it would be unconscionable and unjust to allow a party to rely on its strict legal rights. Such a diffuse view which seems to regard unconscionability as itself enough to create the equity or the estoppel is not the present law: see para 7.95.

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The Essential Elements of the Estoppel  7.99 can evaluate their position and initiate or continue with or settle disputes. It should be understood that such a proposition, outside the area of statute law, can always be no more than a guide and may necessarily be subject to qualifications and refinements and perhaps­ exceptions.287 Any statement of the principle as a guide should not become a verbal straightjacket from which there can be no departure. Neither the present attempt to state a principle nor any other should be taken as a rigid checklist, each item of which has to be satisfied if there is to be an estoppel.288 As with other forms of estoppel, the existence of one essential element or requirement of proprietary estoppel may be much influenced by another element. An illustration of this important point is that an assumption has to create in the mind of the recipient an expectation of an entitlement to some interest or rights in property, but whether such an entitlement is engendered may be affected by what actions the recipient carries out in reliance on the assurance. A further benefit of any such non-statutory expression of principle is that it can be altered or adapted in the light of subsequent decisions. This is one of the benefits of common law principles and their development under the common law system of precedent. A further characteristic of common law principles is that there may be exceptions to parts of the principle or exceptional or unusual circumstances where an estoppel is justified even though the facts cannot readily be brought within the language of the principle.289 7.99  A further difficulty, and perhaps disadvantage, of any rigid demarcation of the various elements which lead to the final decision of a court is that certain factors relevant to that decision may be accommodated within more than one of the main elements. This comment is particularly apposite as regards the element of unconscionability and a decision on the appropriate form of relief if the elements of an estoppel are satisfied. An example is the amount or likelihood of any detriment suffered or which may be suffered by the person claiming the estoppel. This matter may be relevant to the requirement of detriment such that a small detriment, especially in comparison to benefits obtained by the claimant, may lead to the conclusion that the essential element of significant detriment has not been established, or may lead to the conclusion that although some significant detriment is established it is so small that there is no unconscionability in allowing the maker of an assurance to

287 A similar qualification was stated by Neuberger LJ in Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93, when he set out a broad-brush statement of the three classic requirements of estoppel by representation and ­promissory estoppel. 288 In earlier cases it was the practice to describe the principle of estoppel being applied with a single, and sometimes long or even convoluted, sentence, and examples of this process are found throughout parts of this book. The formulation of principle put forward in this paragraph could justifiably be described as being somewhat long and convoluted. In more modern times, the breakdown of a form of estoppel into its essential elements has become more popular. An example is Lord Wright in the Privy Council in Canada and Dominion Sugar Co Ltd v Canadian National (West Indies) Steamships Ltd [1947] AC 46, 56, where he described the essential elements of estoppel by representation as ‘The statement to be acted on, action on the face of it, resulting detriment to the actor’. There seems no reason why this beneficial process should not be applied to other more recently formulated forms of estoppel such as proprietary estoppel. The formulation of five probanda, that is of matters which have to be proved before a principle of equity can be applied in this area of law to override separate legal rights by Fry J in Willmott v Barber (1880) 15 Ch D 96, can be viewed as an early attempt to provide a checklist. It is an attempt which has not stood the test of time. See para 7.26 et seq for the five probanda. 289 An illustration is the facts of Salvation Army Trustee Co Ltd v West Yorkshire Metropolitan County Council (1980) 41 P & CR 179 in which the assurance given was that the party estopped would purchase a particular property under its powers of compulsory purchase with the compensation being payable on a particular basis. Obviously this decision does not fall within the principle of proprietary estoppel as here suggested.

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7.100  Proprietary Estoppel resile from it. In either case, no proprietary estoppel will be established. A final possibility is that even if an estoppel is established but the detriment is small, the relief ordered will for that reason be modest such as a small award of monetary compensation rather than a valuable interest in land. The reality is that textbook writers, and sometimes courts, are attracted to a tidy schematic analysis of a particular legal principle but the reality may sometimes be that within the multitude of different facts which arise in actual litigation, some important factual matters may straddle any tidy analysis and may impact on the final result – estoppel or no estoppel or the precise form of any remedy – in more than one way.

2.  The Eleven Components 7.100  An overall statement of the principle of proprietary estoppel as just suggested indicates, if it is accurate, that the principle and its main elements can be divided into a number of components, most of which are a component of the main elements as just identified. This process is again certainly not the creation of a rigid checklist and not every component will be relevant in every case. The process here carried out is at best a guide to those concerned to assert or to resist a proprietary estoppel. Eleven components of the principle can be identified. (a) The person against whom the estoppel is claimed, or a predecessor in title of that person, must have or have had some interest in land. Even this statement of a component of the principle is not comprehensive, since proprietary estoppel can probably operate in respect of interests in other types of property and in respect of rights which are not proprietary rights in the sense of that term as rights in land or chattels. (b) There must have been an express or implied assurance of some sort given by the person against whom the estoppel is claimed. The word ‘assurance’ is used here to denote some form of statement. The forms of assurance are acquiescence (treated as an implied assurance) or a representation or a promise (both of which may be express or implied). The assurance may therefore derive from acquiescence in the sense of passive silence or inaction but in many cases it depends on an express promise or representation.290 (c) The third component is the expectation of an entitlement to an interest in land on the part of the person to whom the assurance was made which results from the assurance. That person may, at the time of the assurance, have no interest in the land in question. Alternatively, that person may have only a limited interest in that land such that the expectation is one of an entitlement to a greater interest or other rights in the land. (d) The expectation must be one which in the light of the assurance is reasonably held. (e) The person giving the assurance must have intended that the assurance given should be taken seriously and that the person to whom it was given shall act on the assurance. (f) The person claiming the estoppel must have acted in some way in

290 Acquiescence in this area of the law can amount to an implied assurance despite statements that silence or ­inactivity are of their nature generally equivocal and cannot amount to an express or implied statement or promise: see Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890, 903 (Lord Wilberforce). Two of the three mid-Victorian cases which laid the foundations of proprietary estoppel involved a representation or promise: Dillwyn v  Llewelyn  (1862) 4 De GF & J 517 (see para 7.19); and Ramsden v Dyson (1866) LR 1 HL 129 (see para 7.20). The third decision, Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699 (see para 7.22), appears to have been a case partly of acquiescence and partly of positive encouragement that works should be carried out on the land of the owner.

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The Essential Elements of the Estoppel  7.101 reliance on the assurance. A frequent, though certainly not inevitable, form of action is that a person builds on or otherwise improves land that is not his or in which he has only a limited interest. The three mid-Victorian cases which set the pattern of proprietary estoppel all fell within this category. (g) The actions of the person claiming the estoppel must have been actions to the significant detriment of that person. (h) The mental state of the person against whom the estoppel is claimed is a crucial component. That person must have known at the relevant time following the assurance (or during the course of it where the assurance is inferred from a period of acquiescence) that the person to whom the assurance was made had the expectation in question. Whether it is always necessary that the person giving the assurance came to know of the subsequent actions of the person to whom the assurance was given is less certain. It is suggested later, when this matter is considered, that such knowledge is not essential in all cases.291 It is not necessary that the person giving the assurance knows or comes to know of the detriment to the recipient of the assurance although he will often do so. (i) The person giving the assurance can prevent a proprietary estoppel arising by acting so as to prevent the expectation arising, something which can occur by suitable language or as an inference from conduct. (j) As with other forms of estoppel, there is an overall requirement that it would be just that a proprietary estoppel should arise. This is the element of unconscionability which permeates the doctrine of estoppel as a whole. It is usually satisfied by the claimant having acted to his detriment in reliance on the assurance made to him. (k) Finally, there is the way in which the estoppel will operate, that is how effect will be given to the equity which arises. Here the court has a wide discretion, probably wider than for any other form of estoppel.292 The vesting in the claimant of an interest in land of the person who has given the assurance in accordance with the terms of the assurance is an obvious mode of operation of the estoppel but other forms of relief are possible, including an order for the payment of a monetary recompense or an order permitting the occupation of a property. A distinction must be drawn between giving effect to a proprietary estoppel by way of what is primarily a proprietary remedy based on the expectation held by the person asserting the estoppel, and a remedy in personam arising out of the same or similar circumstances as those which found the estoppel, such as the recovery of money paid or of expenses incurred under the law of restitution.293

3.  The Four Main Elements 7.101  Following this analysis, one method of describing proprietary estoppel and its operation in more detail would be to examine individually the various components of the principle as identified in the last paragraph. Proprietary estoppel is more complex in its

291 See para 7.162 et seq. 292 It may be that with promissory estoppel, the other of the two forms of equitable estoppel, a court also has a substantial discretion on how effect is to be given to the estoppel. 293 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 4 (Lord Scott). In this case no proprietary estoppel was established but the Claimant obtained a remedy under the law of restitution for his expenses and the time and trouble involved in seeking planning permission. Other possible remedies in personam relevant in the present context are damages in tort for a negligent misrepresentation or for deceit where a statement has been fraudulently made.

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7.102  Proprietary Estoppel application than estoppel by representation or promissory estoppel where the Court of Appeal has spoken of the ‘three classic requirements’ of those forms of estoppel,294 and where the description of the principle in other chapters has focused on a few main elements of each of the two estoppels, even though these elements have sometimes to be broken down into components. Nonetheless, a similar process is adopted here for proprietary estoppel and the explanation in the remainder of this chapter is organised around four main elements of the principle, namely (a) an assurance given by the owner of an interest in land which leads to the recipient of the assurance having an expectation that he has become or will become entitled to an interest or rights in the land, (b) conduct by the recipient carried out in reliance on that expectation, (c) detriment to the recipient caused by that conduct, and (d) the requirement of injustice or unconscionability which would ensue if there is no estoppel. After that, the important question is addressed of how effect is given to the estoppel if the essential elements are established. The main elements of the estoppel have been summarised in the House of Lords as being, in brief, assurance, reliance and detriment.295 The first three of these elements are repeated in the present description of the principle. The fourth main element of unconscionability is a main element of all forms of estoppel, save for estoppel by record and estoppel by deed. It is an element of estoppel by representation, promissory estoppel and estoppel by convention as well as of proprietary estoppel. Unconscionability is perhaps best regarded as an overarching requirement which is usually satisfied by the person asserting the estoppel establishing the earlier elements that he has acted in reliance on the assurance made to him such that he would suffer prejudice or detriment if the person who has made the assurance was permitted to resile from it. 7.102  A few initial observations may be made before these four elements of proprietary estoppel are examined in detail. First, the nature of the required assurance and its result in the expectation of an entitlement to an interest in property require the longest attention since they are the distinguishing marks of this form of estoppel. Secondly, the second, third and fourth elements are largely shared by estoppel by representation, promissory estoppel and estoppel by convention and the similarities with these other forms of estoppel are noted. Thirdly, an explanation of the first and second elements requires some consideration of the mental state, in terms of intention or of knowledge of events, of the person giving the assurance and of the person to whom the assurance is given. 7.103  A proprietary estoppel may operate against the Crown296 or against a public body such as a local authority297 where the actions of the body in question concern functions exercised as an ordinary landowner. Whether an proprietary or any other estoppel can operate against such a body when carrying out the discharge of its public functions, such as town planning functions, is a separate question which is examined for the purposes of estoppel generally in chapter two.298 294 Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93 (Neuberger LJ). The relevant passage is cited in ch 6, para 6.176. The three classic requirements of these forms of estoppel were said to be: (a) a representation or promise; (b) action taken in reliance on the representation or promise; and (c) the prospect of detriment to the representee or promisee if a resiling from the representation or promise occurred. 295 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 29 (Lord Walker), para 72 (Lord Neuberger). 296 Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699 (an estoppel against either the Crown as owner of the foreshore or the sea bed or against a Provincial Government in the then Colony of New Zealand). 297 Crabb v Arun District Council [1976] Ch 179 (order for a right of way over the land of the Defendant Council). 298 See ch 2, part (D).

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The First Element: The Assurance  7.105

(D)  The First Element: The Assurance 7.104  The first of the three main elements of proprietary estoppel, and the central feature of the estoppel, is the giving or making of an assurance by the party estopped to the party relying on the estoppel. A number of questions arise in connection with the necessary assurance, many of which are addressed in the two leading cases in the House of Lords on the subject about a decade ago.299 The questions are examined and so far as possible answered in this part of the chapter in the following general sequence. (a) The nature and types of the assurance and the form in which it is given are examined. (b) Separate consideration is given to an implied assurance derived from acquiescence, that is passive silence and inactivity in the face of some action or events. (c) Note is taken of the requirement that the maker of the assurance must intend that the assurance is taken seriously and may be relied on. (d) Next there is an examination of the crucial requirement that an assurance must give rise to a reasonable expectation on the part of the recipient of the assurance of an entitlement to an interest or rights over land. (e) The question of the necessary clarity of the meaning of the assurance is considered, the rule here being less strict than that which applies to the statement or promise which underpins other forms of estoppel. (f) It is explained that, as with most other forms of estoppel, matters such as the intention of the person making the assurance and the meaning of the assurance have to be assessed objectively. (g) There is a consideration of the knowledge of various matters which must be available to and held by the giver of the assurance at the time of the assurance or afterwards. (h) Lastly, there is an examination of certain remaining matters, namely the possibility of the revocation of an assurance after it is made, certainty in the area of land to which the assurance relates, and the burden of proof of establishing the assurance element of proprietary estoppel.

1.  Nature and Types of Assurance (i)  The Types of Assurance 7.105  The core of proprietary estoppel is an assurance given by the owner of an interest in land to the person who asserts the estoppel.300 There are various forms of possible assurance and there are other essential elements which have to be shown to exist before the estoppel can be established, but it is difficult to see how there could be a proprietary estoppel without an initial assurance of some sort. Other forms of estoppel require as their initial basis a particular and more specific kind of statement. Thus, an estoppel by representation requires a statement of some existing matter; a promissory estoppel requires a statement of future intended conduct; an estoppel by convention requires the communication of an assumed state of law or of fact. The word ‘assurance’301 is used as the first essential element 299 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752; Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776. See para 7.39 et seq for the facts and an examination of these decisions. 300 The assurance may have been given to a predecessor in title of the person asserting the estoppel. The ­question of  the benefit and the burden of estoppels running with land is considered for estoppels generally, and more specifically for proprietary estoppel, in ch 2, part (I). 301 There are minor differences in language in the judgments in Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, where the main elements of proprietary estoppel are stated. Lord Walker (at para 29) spoke of ‘a representation

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7.106  Proprietary Estoppel of proprietary estoppel because it encompasses the variety of statements which may found this type of estoppel. 7.106  The necessary assurance may be express or implied and may take a variety of forms. It may be written or oral. A number of examples may be given. The assurance in one leading case was a written memorandum purporting to make a gift of land which did not have effect as a valid gift because it was not a deed. The memorandum can be considered as an assurance that the proposed donee will become the owner of the land.302 In another case, a generally known understanding engendered by the landowner that persons who took tenancies at will from a large landowner in order to build a house on the land could call for a grant to them of a long lease constituted an assurance which founded a right to acquire the lease according to one formulation of the principle involved as stated in the House of Lords.303 A series of repeated oral promises that a person would succeed to a farmhouse in which he lived on the death of the owner of the farm on which he worked was held to be a sufficient assurance.304 The matter of how clear the assurance must be is explained later,305 but it is apparent that the language of an assurance may be of an informal nature. For instance, in a domestic situation in which a man lived in his house with his mistress his statement to her on a number of occasions that ‘The house is yours and everything in it’ was considered to be a sufficient assurance.306 An assurance may be spelt out of an informal oral statement or a statement in principle that a right would be granted, such as an easement of way over a road with an access to it at an agreed point, even though the creation of a legal easement would require further formal documentation.307 An encouragement given by a father to his son to build a bungalow on the father’s property gave rise to an assurance that the son would be allowed to live there for his life or for as long as he wished. The right of the son was said to arise by virtue of an equitable estoppel.308 In an appeal from Malaysia, the Privy Council held that the words ‘the tenancy shall be permanent’ were an assurance which created in favour of the recipient of the assurance an equity or equitable estoppel which protected his occupation of the property concerned for 30 years which was the longest period of a lease allowed by the local law in force.309

or assurance made to the claimant’ and Lord Hoffmann (at para 2) spoke of the claimant having ‘to prove a promise or assurance that he will acquire a proprietary interest in specified property’. 302 Dillwyn v Llewelyn (1862) 4 De GF & J 517. See para 7.19. 303 Ramsden v Dyson (1866) LR 1 HL 129, 132. In formulating the principle of law (at 170), a principle subsequently regarded as correct although in a dissenting judgment, Lord Kingsdown referred to ‘a verbal agreement with the landlord for a certain interest in land, or, what amounts to the same thing, under an expectation, created or encouraged by the landlord’. See para 7.20. A later decision in which ‘an understanding’ that a person would inherit property, created by general words such as that the Claimant ‘would lack nothing’, was held sufficient to found a promissory estoppel is In Re Basham decd [1986] 1 WLR 1498. 304 Gillett v Holt [2001] Ch 210; Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776 (where the assurance that the Claimant would receive property under a will was derived largely from oblique language). 305 See para 7.141 et seq. 306 Pascoe v Turner [1979] 1 WLR 431. 307 Crabb v Arun District Council [1976] Ch 179. The Judge at first instance had found that there could be no estoppel since there was ‘no definite assurance’, a finding that Scarman LJ considered was itself so imprecise that it could be disregarded. 308 Inwards v Baker [1965] 2 QB 29, 38 (Danckwerts LJ). See also In Re King’s Leasehold Estate (1873) LR 16 Eq 521; Kusel v Watson (1879) 11 Ch D 129. 309 Siew Soon Wah v Yong Tong Hong [1973] AC 836.

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The First Element: The Assurance  7.108 7.107  Many of the decided cases, and most of the above examples of an assurance, concern assurances in a variety of forms created by express oral or written words. It is beyond doubt that the assurance needed to found a proprietary estoppel may arise by implication from conduct or from words which are not themselves an overt and express assurance. In this, proprietary estoppel has the same characteristic as other main forms of estoppel such as estoppel by representation or promissory estoppel where the necessary statement of an existing matter or promise may be inferred from what has been done or said.310 A good example of an implied assurance is the recent leading case of Thorner v Major which has been described in some detail earlier.311 The assurance was that a farm would be left in the will of the owner of it to the Claimant. The conduct of the owner consisted of such matters as handing to the Claimant a life insurance policy notice of bonuses with the words ‘that’s for my death duties’ and other imprecise remarks which indicated that the Claimant was to inherit the farm on the death of the owner. It was held that conduct of this nature constituted an assurance to the Claimant that he would inherit the farm and that the assurance was ‘a matter of inference from indirect statements and conduct’.312 The nature of proprietary estoppel is that it often arises out of informal assurances creating an expectation of an entitlement to an interest in land. If there was to be a formal promise of an interest in land, it is likely that the promise would be regularised in a written contract or a deed of gift or in some other legally formal document. It is therefore likely, as is the case, that many instances of an entitlement to the estoppel will be based on the necessary assurance being derived from actions and oblique or perhaps inexact statements made by the owner of the land. It will be explained below that for the purposes of proprietary estoppel there does not need to be the same clear and unequivocal statement or promise which is required for the establishment of an estoppel by representation or an estoppel by deed or a promissory estoppel.313 7.108  A principal may be bound by an assurance given by his agent. The approach of equity in a field such as proprietary estoppel has been said to be very simple and to be that, within reasonable limits, those to whom a defendant entrusts the conduct of negotiations must be treated as having the authority which, within the course of the negotiations, they purport to exercise.314 It seems, therefore, possible that within whatever are the ‘reasonable limits’, a principal may be bound by an assurance given by his agent where the agent is purporting to be exercising his authority even though that agent has no actual express or implied or ostensible authority to give the assurance.315 Acquiescence can only arise so as to found an implied assertion if the person who passively acquiesces in the conduct of another person knows of that conduct. It appears that where the conduct in question is known to an

310 See ch 3, para 3.42 et seq (estoppel by representation); and ch 6, para 6.114 et seq (promissory estoppel). 311 [2009] UKHL 18, [2009] 1 WLR 776. See para 7.39. 312 ibid, para 2 (Lord Hoffmann). 313 See para 7.141 et seq for the rule on the necessary clarity of the assurance. 314 Crabb v Arun District Council [1976] Ch 179, 193 (Scarman LJ). See also ER Ives Investment Ltd v High [1967] 2 QB 379, 399; Moorgate Mercantile Co Ltd v Twitchings [1976] QB 225, 243; Attorney General to the Prince of Wales v Collom [1916] 2 KB 193, 203. 315 It is possible that Scarman LJ in Crabb v Arun District Council was confining his description of the circumstances of an assurance binding a principal when made by an agent to the established categories of express or implied actual agency and ostensible agency. There is no obvious reason why the general rules of the law of agency should be modified in their application to proprietary estoppel.

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7.109  Proprietary Estoppel agent in the course of his duties, knowledge of the conduct will be taken to be equivalent to the knowledge of the principal, that is imputed knowledge, such that acquiescence by the agent can amount to an acquiescence and thus an implied assurance by the principal.316

(ii)  A Possible Limitation 7.109  It is apparent from the examples of assurances in leading cases which have just been given and which have led to a proprietary estoppel that the assurance may take a wide number of forms and may give rise to an expectation of an entitlement to divergent interests and rights in land. The variation in the form of conduct which can constitute the assurance, such as express or implied promises or mere acquiescence and passivity, is a central feature of proprietary estoppel and something which distinguishes it from other forms of estoppel where something much more precise such as an unequivocal promise or an unambiguous statement of fact is needed. Some difficulty in regard to proprietary estoppel may derive from the passage in Cobbe v Yeoman’s Row Management Ltd317 in which Lord Scott said that an estoppel ‘bars the object of it from asserting some fact or facts, or, sometimes, something which is a mixture of fact and law, that stands in the way of some right claimed by the person entitled to the benefit of the estoppel’. Lord Scott added that an estoppel falling within this general definition only became a proprietary estoppel if the right claimed was a property right. This passage can be read as suggesting that a proprietary estoppel can only arise if the person said to be estopped (the ‘object’ of the estoppel) has made some statement or representation of fact or of mixed law and fact. It is possible that a proprietary estoppel can arise from such a statement,318 but it is more likely that the necessary assurance will arise from a promise or some other similar indication, including passive standing by, which creates an expectation of an entitlement to an interest in land. It would be difficult to describe the assurances which have given rise to a proprietary estoppel in several leading decisions as a statement of fact or of mixed law and fact.319 7.110  There are other difficulties in this particular passage from the judgment of Lord Scott. It is usual to regard proprietary estoppel as one of the two forms of equitable estoppel, the other being promissory estoppel, rather than as a sub-species of promissory estoppel as

316 Attorney General to the Prince of Wales v Collom [1916] 2 KB 193, 203. 317 [2008] UKHL 55, [2008] 1 WLR 1752, para 14. 318 eg, the memorandum executed by the father in favour of his second son in Dillwyn v Llewelyn (1862) 4 De GF & J 517 could be described as a statement of fact or of mixed law and fact, namely that the son was now the owner of the farm the subject of the memorandum. 319 Thus, as examples, in Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699 the assurance was in substance an implied promise that Mr Plimmer would not be disturbed in his occupation of land and in Crabb v Arun District Council [1976] Ch 179 there was an agreement in principle that the Plaintiff would have an access at a particular point to a road owned by the Council. In neither case does it seem apt to describe the assurance as a statement of fact or of mixed law and fact. Some support for the restrictive view as stated by Lord Scott can be found in decisions before proprietary estoppel was fully established as a separate form of estoppel. In Canadian Pacific Railway Co v The King [1931] AC 414, 429, Lord Russell considered that a result which would today be analysed as arising from the application of a proprietary estoppel as a form of equitable estoppel, could be explained as a statement of fact leading to an estoppel by representation or as arising from an inferred contract. There was a reluctance until comparatively modern times to accept that what could properly be categorised as an estoppel could arise unless there was a statement of fact.

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The First Element: The Assurance  7.111 Lord Scott stated later in the same passage.320 This last point may be no more than a matter of taxonomy, but more fundamentally, it is apparent that notwithstanding the passage cited in the last paragraph, estoppels of various forms go well beyond statements of fact or of mixed law and fact such as are usually the foundation of common law estoppel by representation; for instance, a promissory estoppel is founded on a promise which is to be distinguished from a statement of fact, and an estoppel by convention may arise from a common assumption of law held by two or more parties to a transaction. Even within the ambit of estoppel by representation, which indeed depends on a representation of an existing matter, the statement of Lord Scott may be too narrow. The effect of an estoppel by representation may be to prevent a person who is resisting the assertion of a right against him from relying on some factual matters which could provide a good defence, and in this case the estoppel assists a person claiming a right. Equally, the effect of the estoppel may be to prevent a person asserting a right from relying on some factual matter which must be proved if the right is to be asserted, and in this case the estoppel assists a person resisting a right claimed against him.321 Finally, to state proprietary estoppel in these narrow terms ignores both the capacity of this form of estoppel to be used as a cause of action in its own right and the wide discretion of the court over the order to be made to give effect to the estoppel or the equity. It may well be that the particular observation of Lord Scott here being discussed was not intended, and is not to be taken, to describe in comprehensive terms what constitutes estoppel generally or to constrain the type of assurance which can found a proprietary estoppel.322

(iii)  The Time of the Assurance 7.111  Statements of fact or promises such as may initiate other forms of estoppel generally occur at a specific time when the statement or promise is made. An assurance such as may initiate a proprietary estoppel can occur at a precise moment such as when the ­memorandum was executed by the father in Dillwyn v Llewelyn,323 or the time when the agreement in principle was reached for a new access to the Council’s road in Crabb v Arun District ­Council.324 By contrast, and particularly in cases involving family and d ­ omestic arrangements, the necessary assurance may be derived from words and actions over a substantial period of time. The facts of Thorner v Major are an illustration of this last process where the assurance that a property would be left to the Claimant by will on the death of the owner for whom the Claimant worked for no regular pay arose from no specific or express precise promise at any one time but from an understanding which had arisen

320 In Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 67, Lord Walker said that he had some difficulty with this classification of estoppels by Lord Scott. 321 This point raises again the ‘sword or shield’ argument relating to the operation of estoppels which is considered generally in ch 2, part (B). 322 In the following year, Lord Scott concurred in the view taken in Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, that a proprietary estoppel arose out of what was a series of statements and events which if anything were of the nature of a promise and which were certainly not a statement of fact or of mixed law and fact. 323 (1862) 4 De GF & J 517. 324 [1976] Ch 179.

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7.112  Proprietary Estoppel from various remarks made over two decades of the relationship.325 There was never what Counsel in Thorner v Major called a ‘signature event’ such as an announcement at a family wedding or ­christening.326 In Gillett v Holt,327 the necessary assurance was found to exist by reason of what was said and done over many years between a farm manager, who had lived in the farmhouse with his family for over 25 years, and an employer who was also his friend before the parties quarrelled and the manager was dismissed. The result of the estoppel found that the manager should have the freehold of the house with a sum of money to compensate him for his exclusion from the rest of the farming business.328 The period of the events from which the assurance is derived can be seen as the period during or at the end of which the equity comes into existence and the later date when the equity comes to be satisfied, and when its extent and the appropriate relief are determined, can be seen as the moment when the equity crystallises.329 It has been said to be unrealistic in cases of this sort to try to pinpoint a date at which the assurance becomes unequivocal and sufficient to constitute the first element of the proprietary estoppel.330 There may therefore be a period of time between the moment when the equity has come into existence and the moment when it comes to be satisfied by an order of the court, perhaps due to a disagreement between the parties.331 Fisher v Brooker332 is a decision in which, in connection with a dispute over a musical copyright, it was examined whether the alleged assurance could be derived from a form of acquiescence over nearly four decades although the claim based on proprietary estoppel failed because of the absence of reliance and detriment on the part of the parties who asserted it.

(iv)  An Assurance of Law 7.112  Estoppel by deed is confined to statements of fact or of mixed law and fact. Estoppel by representation was long thought to have this same limiting characteristic although most recent authority suggests that a representation of law may now be sufficient to create the estoppel. Estoppel by convention may be founded on a common assumption of fact or of law. There seems no reason why the assurance which initiates a proprietary estoppel should not constitute or contain a statement of law. It may be unusual to find an assurance which is a simple statement of a proposition of law but elements of law enter into

325 See para 7.39 for the full facts of Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, as recited in paras 37–43 of the decision (Lord Walker). 326 ibid, para 24. 327 [2001] Ch 210. 328 Other examples of an assurance derived from words and conduct over a substantial period of time can be given. In Pascoe v Turner [1979] 1 WLR 431 an estoppel arose when a man repeatedly told his mistress that the house in which they lived and everything in it were hers. In a more commercial context in Ramsden v Dyson (1866) LR 1 HL 129 the assurance that a tenant at will who built a house on a part of the land of a large landowner could call for the grant to him of a 60-year lease of the land arose because there was a general understanding in the locality which had arisen over the years that a person in his position was entitled to a long lease of the land and the house which he had built. 329 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 95 (Lord Neuberger in the context of certainty of the land the subject matter of the estoppel). 330 ibid, para 8 (Lord Hoffmann). 331 As in Gillett v Holt [2001] Ch 210. 332 [2009] UKHL 41, [2009] 1 WLR 1764.

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The First Element: The Assurance  7.113 examples of proprietary estoppel. In an early case, the acquiescence and other conduct of a ­remainderman under a settlement to the grant by the tenant for life of a lease for a term of years of the settled land to a tenant were said to result in the lease binding him when he took an interest in possession, notwithstanding the general principle of law at that time that a lease could not endure beyond the life of the tenant for life under the settlement who had granted the lease.333 In Ramsden v Dyson,334 the understanding, which was equivalent to an assurance such as today would found a proprietary estoppel, was at least in part one of law in that in the view of Lord Kingsdown it entitled a tenant at will to call for the grant to him of a 60-year lease if he so wished and so would have defeated an action for possession against him by the landowner.335 It has been said that the representation before the Privy Council is one case336 ‘was clearly one of law, or at least of private rights under the law’.337

2. Acquiescence 7.113  Acquiescence is a form of assurance. It is appropriate to consider it separately because of the central and unique part it plays in proprietary estoppel. Acquiescence by one person is directed at the conduct of another person and is passive in nature. It involves silence or inactivity and is often the absence of any protest at what is being done by the other person. The assurance which founds a proprietary estoppel may be some form of active conduct such as a promise but one way the law has been described is to say that ‘The classic example of proprietary estoppel, standing by while one’s neighbour builds on one’s land believing it to be his property, can be characterised as estoppel’.338 An assurance of some sort is an essential element in proprietary estoppel and usually initiates the subsequent events which bring about the estoppel. The word ‘assurance’ has a connotation of something active by way of an express statement or an inference from some active conduct. However, in the present context acquiescence despite its passive nature is a form of implied assurance. A landowner’s conduct in standing by serves as the element of assurance for the purposes of the estoppel.339 However, acquiescence by a minor who lacks the capacity to give an assurance will not give rise to an implied assurance.340

333 Huning v Ferrers (1711) Gilb Rep 85. See para 7.6. 334 (1866) LR 1 HL 129. See para 7.20. 335 In Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764, the plea of a proprietary estoppel failed because of the absence of detriment caused to the proponent of the estoppel, but if the estoppel had been established it would have removed the legal entitlement of the Claimant to a share in the proceeds of the exploitation of a song for which he had in part composed the music. 336 Sarat Chander Dey v Gopal Chander Laha (1892) 19 LR Ind App 203. 337 Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 150. 338 Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764, para 62 (Lord Neuberger), citing Oliver J in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 151. See Russell v Watts (1883) 25 Ch D 559, 576 (Cotton LJ), for a statement of the distinction between an assurance resting on active and on passive conduct. See (1884) 10 App Cas 590 for this case in the House of Lords. 339 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 55 (Lord Walker), citing Lord Eldon LC who said 200 years ago in Dann v Spurrier (1802) 7 Ves Jun 231, 235–36, that the circumstance of looking on was in many cases as strong as using terms of encouragement. 340 Duke of Leeds v Earl of Amhurst (1846) 2 Ph 117, 123. The possibility of an estoppel binding minors and persons of unsound mind is considered generally in ch 2, para 2.158.

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7.114  Proprietary Estoppel 7.114  Acquiescence in the sense of silence, lack of activity, and the lack of response to events, has an important part to play in areas of law beyond the principle of proprietary estoppel. A failure to take steps, including initiating legal proceedings, to assert an alleged right is central to the equitable doctrine of laches where the failure or delay may be a bar to a discretionary equitable remedy. There is recent authority on the similarities between laches and proprietary estoppel since both principles were argued as defences to a claim for a declaration of rights connected with a musical copyright, and the similarities between the two principles, involving acquiescence and unconscionability, were noted.341 Acquiescence plays a part in the law of prescription in that the acquisition of a prescriptive interest by long user under the Prescription Act 1832 may be prevented by an interruption to the period of the use and actions which are relied on as constituting an interruption can only have that status if they have been submitted to or acquiesced in for a year.342 If actions constitute a nuisance against the owner of an easement or are breaches of a restrictive covenant acquiescence in those actions for a long period, usually 20 years or more, may lead to an implied abandonment of the easement or the benefit of the covenant.343 The particular aspect of acquiescence as that concept applies to proprietary estoppel is that in most other situations acquiescence is used by someone who is pleading a defence to the assertion of a right, such as where the perpetrator of a breach of a restrictive covenant alleges as a defence that the benefit of the covenant has been abandoned by long acquiescence, whereas in the field of proprietary estoppel acquiescence may be used as the foundation of the creation of a right against the person who has acquiesced to some conduct in relation to his land. 7.115  Silence or inactivity also has a role to play in estoppel by representation where if a person with a duty to speak out remains silent this may be taken as an implied representation by that person. A good example is that a customer of a bank is under a duty to inform the bank if he has reason to believe that a cheque drawn on his account has been forged and his failure to comply with the duty may amount to an implied representation on his part that the cheque has been properly signed by him.344 Outside the ambit of a duty to speak out, it is less likely that silence could amount to an implied statement sufficient to underpin an estoppel by representation or a promissory estoppel since silence is generally and of its nature equivocal and so is not a clear representation or promise.345 In the case of proprietary estoppel, acquiescence in the sense of silence or inactivity is not conduct which may exceptionally provide the basis of an implied representation or promise which creates an estoppel, but is the central component of the implied assurance which in the classic circumstances of its operation creates the proprietary estoppel. 7.116  It should not be thought that there is an inflexible dividing line between an assurance derived from passive conduct and an assurance constituted by express words. There may be a combination of acquiescence and acts of positive encouragement on the part of the

341 Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764. See para 7.55 for a comment on the doctrine of laches. 342 Prescription Act 1832, s 4. 343 Attorney General of Hong Kong v Fairfax [1997] 1 WLR 149; Tehidy Minerals Ltd v Norman [1971] 2 QB 528. 344 Greenwood v Martins Bank Ltd [1933] AC 51. See ch 3, para 3.56. It is less likely that a promise such as would create a promissory estoppel can be derived from a failure to comply with some duty. See ch 6, part (E), section 5. 345 Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890, 903 (Lord Wilberforce).

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The First Element: The Assurance  7.118 person against whom the estoppel operates. For example, in Huning v Ferrers346 in 1711 the remainderman under a family settlement acquiesced in repair work carried out by the tenant under a 30-year lease granted by a tenant for life in that he never protested about or forbad the work and on one occasion wrote to the tenant asking him to take care of a part of the property. Taken together, the action and inaction of the remainderman constituted what would today be regarded as an assurance that the lease would bind him if it subsisted when he became entitled in possession to the land under the terms of the settlement. In Plimmer v Mayor, etc, of Wellington,347 Mr Plimmer built the jetty in Wellington Harbour in New Zealand without any objection being taken by the Crown but erected a warehouse on land which he had reclaimed for the accommodation of immigrants at the request of the Provincial Government. Here again, the assurance which led to Mr Plimmer or his successors in title being held to have an irrevocable licence to occupy the land depended on a mixture of acquiescence and express words.

3.  The Intention of the Giver of the Assurance 7.117  It is necessary to mention the mental state which must be proved to have existed on the part of the person who gave the assurance which leads to the estoppel against him. In the case of passive acquiescence, it will be inferred that the person who raises no objection or protest to what to his knowledge is being done intends some results such as that a person who carries out work on land is to have some form of interest in or rights over that land. The reasoning is that if this were not so there would have been an overt objection to what was being done. Where the assurance rests wholly or partly on express language or active conduct, it must appear that the person who acts or speaks or writes in a certain way intended that the person asserting the estoppel should understand what was being done or said or written as creating an expectation of an entitlement to an interest in land. An alternative way of putting the same point is to say that there must be an intention by the person actively making the assurance that the assurance is to be relied on by the person to whom it is made. Yet a further way of stating the same rule is to say that where the estoppel is founded on a promise, that promise must appear to have been intended to be taken seriously.348 7.118  The necessary intention of the person whose words or actions constitute the ­assurance can again be illustrated by Thorner v Major349 the facts of which have been summarised earlier. The assurance by the owner of the farm that it would be left in his will to the Claimant was gathered from a series of oblique remarks made by the owner. One question was whether the intention of the owner when making the remarks was to state what was no more than his then current intention, with the result that he intended to convey that that intention might change, or was to state that he intended definitely to leave the farm to

346 (1711) Gilb Rep 85. See para 7.6. 347 (1884) 9 App Cas 699. See para 7.22. 348 Walton v Walton [1994] Court of Appeal Transcript No 479, para 16; JT Developments v Quinn (1991) 62 P & CR 33, 46. 349 [2009] UKHL 18, [2009] 1 WLR 776. See para 7.39.

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7.119  Proprietary Estoppel the Claimant.350 It was said that the former state of mind of the owner would not have been sufficient to constitute the assurance necessary for an estoppel. If a person is doing no more than stating what is currently his intention, then it is inherent in what is written or said that that person is at liberty to change his mind and it is to be understood that any statement so made may be altered. In such a case, it is not a matter of revoking an assurance but rather it is a matter of no assurance having been made of a character which can give rise to a proprietary estoppel.351 That having been said, it is possible to exaggerate the degree to which a promise, such as a promise to leave property in a will to a specific person, must be expressly made irrevocable if it is to found an estoppel. Certainly in Thorner v Major, the promise derived from the oblique language used was never expressly made irrevocable. 7.119  The requirement that the intention of the person making the assurance was that it was to be taken seriously and relied on, as opposed to being merely a statement of a present intention which might be changed, is illuminated by the progress of the proceedings in Thorner v Major through the courts. After a thorough review of the evidence, the Deputy Judge at first instance said that he was satisfied that in making one remark, and in handing a life insurance bonus notice to the Claimant to keep, the owner of the farm was intending to indicate to the Claimant that he would be the successor of the farm on the death of the owner.352 The Court of Appeal held in connection with the bonus notice incident that the Judge did not in terms consider whether the implicit statement that the owner intended the Claimant to succeed to the farm on his death was intended to be relied on.353 In the House of Lords, it was held that a finding of what the owner intended when making his statement and taking the action which he did was an inference of fact made from the primary facts of what was said and done, that on a correct analysis of the judgment at first instance the Judge did find that the assurances of the owner, objectively assessed, were intended to be taken seriously and to be relied on, and that there was no sufficient reason for the Court of Appeal to have reversed his finding.354 7.120  What precisely the Judge at first instance found as a fact in Thorner v Major is of course only of relevance to the circumstances of that particular case, but a consideration of this matter does lead to the general principle of what has to be shown to be the precise mental state of the person making the assurance which brings about a proprietary estoppel. The rule of law is (a) that at the time of the making of the assurance, whether it is an express assurance or an assurance implied from some active conduct, the maker of the assurance must have intended that it should be taken seriously and relied on by the person to whom it was made, (b) that the existence or otherwise of the necessary intention is an inference of fact or finding of secondary fact reached from the primary facts of what was said or written or done by the maker of the assurance, and (c) that the existence or otherwise of the

350 ibid, para 2 (Lord Hoffmann). See also Lloyd v Sutcliffe [2007] EWCA Civ 153, para 38. 351 The question of the revocation or purported revocation of a definite assurance sufficient to give rise to a proprietary estoppel is considered in para 7.173 et seq. 352 [2008] WTLR 155, para 94 (Mr John Randall QC), cited by Lord Walker at [2009] UKHL 18, [2009] 1 WLR 776, para 42. 353 [2008] EWCA Civ 732, [2008] WTLR 1289, para 72 (Lloyd LJ, with Ward and Rimer LJJ concurring), cited by Lord Walker at [2009] UKHL 18, [2009] 1 WLR 776, para 51. 354 See [2009] UKHL 18, [2009] 1 WLR 776, para 81 (Lord Neuberger), para 60 (Lord Walker).

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The First Element: The Assurance  7.121 r­ equisite intention has to be objectively assessed.355 The rule as to an objective assessment applies at any rate in most instances to the determination of the meaning of an assurance as well as to the determination of the intention of the person making the assurance, and is considered separately below.356

4.  The Expectation Created (i)  Expectation of an Interest in Land 7.121  The assurance, and the expectation which it creates, must generally be of an interest in land or of rights in land. It is likely that proprietary estoppel can relate to rights other than rights in land, such as rights over chattels and rights where no corporeal assets are involved, but it is convenient to examine this question separately.357 Certainly, the primary application of the principle is to land. Rights whose subject matter is land may be divided into rights which constitute proprietary interests in land and other rights in or over land. Although the expression ‘proprietary interests’ is not often defined,358 a proprietary interest in land is generally taken to mean an interest which is in principle capable of binding successors in title of the land affected of the person who has initially created the interest.359 The assurance which leads to a proprietary estoppel usually concerns proprietary interests in land in this sense, such as a freehold estate or a lease or an easement or concerns the status of such an interest.360 Despite this, the equity which arises as a result of a proprietary estoppel may be satisfied by the creation of an interest in land which is not a proprietary interest, such as a licence to occupy land361 or by the order for the transfer of a freehold estate of a part of the land the subject of the assurance and the payment of a monetary sum as compensation for the fact that the remainder of the land within the assurance is not transferred.362 In some cases the equity may be satisfied simply by an order for the payment of a sum of money.363 The fact that the assurance whatever its form concerns land is not in itself enough to create a proprietary estoppel. In one case, a tenant of municipal housing from a local authority represented to the authority that his mother, who lived with him, 355 The statement of the law may have to be phrased a little differently where the necessary assurance is implied from purely passive acquiescence: see para 7.117. 356 See para 7.148 et seq. 357 See part (H) of this chapter. 358 The expression is used in areas of the law other than land law: see, eg, s 5(1) of the Theft Act 1968. 359 Whether in any particular case the interest in land binds successors in title (ie, ‘runs with the land’) may depend on factors such as what notice of the existence of the interest has been given to a purchaser of the land or whether the interest has been protected by registration under the Land Registration Act 2002 or the Land Charges Act 1972. 360 See, eg, Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776 (freehold land); Stiles v Cowper (1748) 3 Atk 692 (grant of a lease); Huning v Ferrers (1711) Gilb Rep 85 (validity of a lease); Crabb v Arun District Council [1976] Ch 179 (grant of an easement); Lovett v Fairclough (1990) 61 P & CR 385 (profit of fishing, although the claim for the creation of the profit by proprietary estoppel failed since no detriment was shown). 361 Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699. A licence is not generally a proprietary interest in land: Ashburn-Anstalt v Arnold [1989] Ch 1. 362 Gillett v Holt [2001] Ch 210. 363 Jennings v Rice (2003) 1 P & CR 8. The questions of the appropriate order and of the principle by which the appropriate order is to be determined are important questions which are separately explained later in this chapter in para 7.258 et seq.

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7.122  Proprietary Estoppel was alive when she had in fact died, his purpose being to avoid the authority asserting its right to end his tenancy and to move him to accommodation more suitable to his needs. Any estoppel which could have arisen from the conduct of the tenant was held not to be a proprietary estoppel since it did not relate to the creation or transfer of any interest in or rights over land.364 7.122  The most usual instances of the application of the estoppel are those in which the person to whom the assurance is made does not have at the time any interest in or rights over the land the subject of the assurance. That person may be in occupation of the land as an employee of the owner or he may be a licensee by virtue of some relationship to the owner whether of a personal or other nature. On the other hand, the recipient of the assurance may have an existing interest in the land such that the assurance is that the existing interest will be replaced or improved in some way.365 The principle is that the assurance, and thus the estoppel, may relate to land in which the person asserting the estoppel has at the time of the assurance no interest, or of which he is merely an occupier, or in which he has a subsisting interest. 7.123  The expectation created by the assurance will of its nature usually be an expectation of gaining an interest or rights over the land of some other person, that other person normally being the giver of the assurance. Even so in principle, the expectation may be that some other person will release a right exercisable against the person asserting the estoppel.366 7.124  Given that a proprietary estoppel usually relates to land and to interests in land, a further question is how certain the assurance and the expectation created must be as regards these matters. Two points arise, namely how certain must the assurance and the expectation be regarding the physical quantum of land which is its subject matter, and how certain must the assurance and the expectation be regarding an interest in the land which is its subject matter. Both matters are addressed later in this chapter.367

(ii)  The Nature of the Expectation: Entitlement 7.125  Given that the assurance relates to an interest in or rights over land, it is necessary for the person raising the estoppel to prove one further component of the first main element of the estoppel. That component is that the assurance creates in the person to whom it is made an expectation of that interest, either an expectation or belief that he has the interest

364 Newport City Council v Charles [2009] 1 WLR 1884. This decision of the Court of Appeal is important to the general question of when an estoppel, other than a proprietary estoppel, can be used to assist in establishing rather than in resisting a cause of action and is discussed in more detail in ch 2, part (B). 365 See, eg, a lease which becomes binding on a person against whom apart from the assurance it would not be binding: Huning v Ferrers (1711) Gilb Rep 85; the grant of a new lease in place of an existing inadequate lease: Stiles v Cooper (1748) 3 Atk 692; the grant of a right of way over a road in addition to an existing right of way: Crabb v Arun District Council [1976] Ch 179. 366 Chadwick v Abbotswood Properties Ltd [2005] 1 P & CR 10 (Lewison J): ‘However an estoppel can arise where, instead of expecting to acquire a right against someone else’s land, the person who acts to his detriment (A) expects that other person (B) to release a right over A’s land: Megarry & Wade, Real Property, 6th edn, (Sweet and Maxwell, 1999)’. 367 See para 7.183 et seq.

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The First Element: The Assurance  7.127 or, more usually, an expectation that he will obtain the interest. It is at this stage that the mental state of the recipient of the assurance, and thus of the person setting up the estoppel, becomes important. The earlier authorities refer to the need for an expectation of an interest in land before there can be an estoppel. In Rochdale Canal Co v King,368 Sir John Romilly MR said that if one man encouraged another to lay out money on land with the other man having ‘the obvious expectation that no obstacle would afterwards be interposed in the way of his enjoyment’ the court would not permit an interference with that enjoyment. In his well-known expression of principle in Ramsden v Dyson,369 Lord Kingsdown spoke of a person taking possession of land and laying out money on land ‘under an expectation, created or encouraged by the landlord, that he should have a certain interest’. In more recent times, Lord Templeman in the Privy Council in a case concerning negotiations for an exchange of valuable properties in Hong Kong, said that in order to found an estoppel the Government, who asserted the estoppel, had to ‘show that HKL [the other party to the negotiations] created or encouraged a belief or expectation on the part of the Government that HKL would not withdraw from the agreement in principle’.370 7.126  Whereas the need for an expectation of an interest created by an assurance in order to found the estoppel has been stated and accepted for well over a century, it is only recently that the nature of that expectation has been authoritatively clarified. The word ‘expectation’ can mean a number of states of mind. A person may expect to pass an examination or to be appointed to a particular post or to purchase a suitable house when he moves to a particular locality, but in none of these cases can that person ordinarily be said to be entitled to the result expected. A critical factor in proprietary estoppel is that the expectation, if it is to found the estoppel, must not be just an expectation of obtaining an interest in land but must be an expectation of an entitlement to obtain that interest. The importance of entitlement can be seen when the subject matter of an assurance is that property will be left to a particular person in a will. Such an assurance, when made repeatedly over a period and in unambiguous terms, may create a feeling of an entitlement in the person to whom the assurances are given,371 but in ordinary circumstances and in the absence of a specific promise, a normal person hearing a single statement of what someone intends to do in his will and no more would be less likely to regard this as creating any entitlement.372 7.127  This clarification, and the emphasis on the expectation being of an entitlement to an interest, were brought about by the decision of the House of Lords in Cobbe v Yeoman’s Row Management Ltd.373 The concept of entitlement was at least implicit in earlier decisions. Lord Walker in Cobbe’s case read what was said in the Privy Council in Plimmer v Mayor, etc, of Wellington as that it was regarded as an irresistible inference on the facts that Mr  Plimmer believed that the request to him to carry out works and his compliance with that request gave him a right to security of tenure even if that right was of

368 (1853) 16 Beav 630, 633–34. 369 (1866) LR 1 HL 129, 170. The full passage is set out in para 7.20. 370 Attorney General of Hong Kong v Humphreys Estate (Queen’s Gardens) Ltd [1987] AC 114, 124. 371 See Gillett v Holt [2001] Ch 210; Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776. 372 Such a normal person would not ‘count his chickens before they were hatched’: Taylor v Dickens [1998] 3 All ER 927, 929. 373 [2008] UKHL 55, [2008] 1 WLR 1752.

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7.128  Proprietary Estoppel ­ ncertain ­duration.374 Lord Walker also observed that a careful reading of Lord ­Kingsdown’s u summary of the facts in Ramsden v Dyson showed that Lord Kingsdown found that the tenant at will believed, although incorrectly, that he had a legal entitlement to a long lease.375 In a further, case the Claimant had spent years looking after an elderly widow, in the latter part of the period for no payment, and had received general assurances such as that he need not worry since ‘he would be alright’. The Court ordered that on the death of the lady the Claimant was entitled to a sum which was a modest proportion of the value of her estate on the basis of a proprietary estoppel founded by the assurances. Lord Walker, who as Robert Walker LJ had delivered a judgment in the case, subsequently said in Cobbe’s case that the Claimant believed that the assurance which he had relied on was binding and irrevocable.376 7.128  A requirement that the expectation is one of an entitlement to an interest or rights may have been implicit in earlier decisions on what would now be characterised as proprietary estoppel, but it was in Cobbe v Yeoman’s Row Management Ltd377 that the requirement was put expressly at the forefront of the ingredients of the estoppel and the failure to satisfy this requirement formed the main basis for a refusal of an estoppel on the facts of that case. The full facts have been set out earlier together with a summary of the main features of the decision.378 The requirement that the expectation is of an entitlement to an interest was the third of the main features of the decision noted earlier.379 Cobbe’s case concerned an oral agreement to develop a piece of land by the erection of flats and their subsequent sale. B owned the land and it was agreed that A would seek to obtain planning permission and that if it was obtained A would carry out the development and the proceeds of the sale of the completed development would be divided between A and B on a stated basis. A sought and obtained the necessary planning permission but B then refused to go on with the arrangement and suggested different terms. The House of Lords, overruling the decisions of the two lower courts, held that no estoppel was established as against B. 7.129  The critical question in the case was what exactly was the expectation induced in A. His expectation was that, if planning permission was obtained, he and B or their legal advisers would sit down and agree the outstanding contractual terms to be incorporated into a formal written agreement which would include the agreed core financial terms and that following this he would develop the property which would be sold and the proceeds divided. This was said to be an insufficient sort of expectation for the purposes of proprietary estoppel because it was not an expectation that, if planning permission was obtained, the claimant would become entitled to an interest in land. There is obviously a radical difference between an expectation that if a certain event happens a person will become entitled to have an interest in land, and an expectation that if that event happens there will be­

374 ibid, para 65, referring to Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699, 712. 375 ibid, para 64, referring to Ramsden v Dyson (1866) LR 1 HL 129, 172. 376 Jennings v Rice (2003) 1 P & CR 8, referred to by Lord Walker in Cobbe’s case (at para 66). Lord Walker considered that a number of decisions relating to domestic or family matters, from Inwards v Baker [1965] 2 QB 29 onwards, were decisions in which, where the estoppel was established, the claimant believed that the assurance on which he had relied was binding and irrevocable. 377 [2008] UKHL 55, [2008] 1 WLR 1752. 378 See para 7.33. 379 See para 7.36.

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The First Element: The Assurance  7.131 negotiations or further negotiations at the end of which there may be a binding agreement for that person to acquire an interest in land.380 A spent his money and time in obtaining planning permission not in the belief that the arrangement he had made was a legally complete and enforceable agreement, but with the awareness that there was no such­ agreement.381 The expectation of A, and the basis on which he applied for and obtained planning permission, were inherently speculative and contingent on the decisions of B regarding the incomplete agreement. It was this finding which prevented the existence of a constructive trust as well as prevented the establishment of a proprietary estoppel.382 7.130  Another way of putting much the same point is to say that a hope must be distinguished from an expectation. In Thorner v Major,383 Lord Walker spoke of a particular event in the relationship between the parties as marking the transition from hope to expectation on the part of the person asserting an estoppel. If language is used in this sense then a hope is a belief that some desirable future event may happen but without any belief on the part of the person having the hope that he is entitled to or has a right that the event will happen, whereas an expectation is a belief on the part of the person holding the expectation that he has a right or entitlement that the event will happen. It may be possible to avoid these fluctuating niceties of language if one simply states that it is now established that to found a proprietary estoppel the recipient of an assurance must expect that in certain circumstances or at a certain time he will obtain an interest in or rights over land in the sense that he holds the belief that given those circumstances he has an entitlement or right to that interest. It is also sufficient in some circumstances that following the relevant assurance and as a result of it a person believes that he then has an interest in land.384 7.131  It is here that in the law of proprietary estoppel the difference between assurances made in a domestic and in a commercial context takes on an importance. The rule is the same in that in both types of situation the assurance must create an expectation of an entitlement to an interest or rights in property if there is to be an estoppel, but the difference is that such an expectation may more readily be found to exist in a domestic situation. Where assurances are given in family discussions on subjects such as continuing to live in a house or the passing of property on a death of a family member, a person receiving such an assurance may readily conclude that he has, or in certain circumstances will come to have, an entitlement to what is promised without the need for legal formalities, such as a properly drawn document setting out all of the terms of the arrangement. In the context of commercial property transactions, persons are much more likely to be aware of the need for proper documentation or other formalities setting out all relevant details before there is an entitlement to anything.385 Such persons are therefore less likely than persons in domestic situations to come to entertain a belief that they are entitled to an interest in land as a result of general and informal assurances. It is for this reason that proprietary estoppel with its emphasis on an entitlement may often have a more fruitful operation in a domestic context



380 Cobbe

v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 20 (Lord Scott). para 27 (Lord Scott). 382 ibid, para 37 (Lord Scott). 383 [2009] UKHL 18, [2009] 1 WLR 776, para 60. 384 An example of this situation is Dillwyn v Llewelyn (1862) 4 De GF & J 517: see para 7.19. 385 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 68 (Lord Walker). 381 ibid,

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7.132  Proprietary Estoppel than in a commercial context even though there is no difference in the essential ingredients of the estoppel between the two types of situation.386

(iii)  Subject to Contract Agreements 7.132  The requirement that the expectation must amount to a belief that the person holding the expectation has an entitlement to an interest or rights over land leads to the result that two types of agreement are unlikely to bring about a proprietary estoppel. The first type of agreement is one which is ‘subject to contract’, a well-known legal phrase which means that no legally binding rights and obligations arise between the parties unless and until there is some later formal agreement.387 The essential nature of a subject to contract agreement is that the parties know and understand that neither of them has at that stage any entitlement or right to anything; all that they have is an expectation or hope that there may be a later and formal agreement which will confer on them enforceable rights which may or may not be exactly the same as those in the subject to contract agreement. It is apparent that the expectation of an entitlement to an interest such as is required to support a proprietary estoppel is very unlikely to arise from a subject to contract agreement since a party to such an agreement cannot expect that he has an entitlement to any rights. A leading decision to this effect is Attorney General of Hong Kong v Humphrey’s Estate (Queen’s Gardens) Ltd388 in which the Government of Hong Kong and a company had agreed an exchange of properties with the agreement expressed to be subject to contract. The Government was permitted to take possession of the property which it was to acquire under the agreement and the Government spent money on that property. When the company refused to proceed with the agreement the Government asserted an estoppel which would render enforceable the subject to contract agreement. The Government’s assertion failed since it had begun and elected to continue on terms that either party might change its mind and withdraw so that the Government had no expectation or belief that it was entitled to have the land exchange completed.389 The Privy Council accepted that the Government acted to its detriment in the hope that the company would not withdraw from the agreement,390 but in order for there to be an estoppel the Government would have had to go further and show that it believed that the company was not entitled to withdraw.

386 It is the need for an expectation of an entitlement to an interest in or rights over land which may indicate the closest connection between proprietary estoppel and the law of contract. A party to a contract may expect that in certain circumstances and by reason of the contract it is or will be entitled to an interest in or rights over land. This element of similarity between a contract and the nature of a proprietary estoppel may be important when the question arises of whether a claim to an interest by virtue of a proprietary estoppel is defeated because of the absence of writing which is required for there to be a valid contract for the sale or other disposition of an interest in land under s 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989. 387 Other similar words may be used so as to bring about the same result such as ‘subject to the preparation and agreement of a formal contract’ (Winn v Bull (1877) 7 Ch D 29) or ‘subject to details’ (The Junior K [1988] 2 Lloyd’s Rep 583). An unilateral action such as the grant of a consent necessary under a contract may be binding at once even though it is accompanied by some such words as ‘subject to licence’ or ‘subject to contract’ (Prudential Assurance Co Ltd v Mount Eden Land Co Ltd [1997] 1 EGLR 37). 388 [1987] AC 114. This decision was applied by the Court of Appeal in Haq v Island Homes Housing Association [2011] 2 P & CR 17 in the context of an agreement for a long lease of an extension to shop premises. 389 ibid, 128 (Lord Templeman). See also Gonthier v Orange Contract Scaffolding Ltd [2003] EWCA Civ 873. 390 ibid, 124 (Lord Templeman).

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The First Element: The Assurance  7.134 7.133  There need not be an express use of words such as ‘subject to contract’ for the same reason, absence of a belief in an entitlement, to prevent a proprietary estoppel.391 In a further decision, the Court of Appeal rejected an estoppel where parties had negotiated for the formation of a joint venture company to acquire and carry out work on property owned by one party. The other party had entered the property and carried out some work. The reason for rejecting the estoppel was that the other party had no expectation of an entitlement to acquire the property. The agreement between the parties was in essence no more than an agreement to agree which did not justify either party in believing that it had a legal right to enforce a transfer of the property.392 In Cobbe’s case, Lord Scott explained that the reason why in a ‘subject to contract’ case a proprietary estoppel cannot ordinarily arise is that the would-be purchaser’s expectation of acquiring an interest in the property in question is subject to a contingency that is entirely under the control of the other party to the negotiations.393 7.134  Estoppel in some form may still have a role to play in regard to subject to contract arrangements. The initial subject to contract arrangement cannot of itself create a proprietary estoppel even if a party has acted to his detriment in reliance on it, since the nature of the arrangement prevents the assertion by a party of an expectation or belief on its part that it has any rights under the arrangement. In Attorney General of Hong Kong v Humphreys Estate (Queen’s Gardens) Ltd, Lord Templeman said: It is possible but unlikely that in circumstances at present unforeseeable a party to negotiations expressed to be ‘subject to contract’ would be able to satisfy the court that the parties had subsequently agreed to convert the document into a contract or that some form of estoppel had arisen to prevent both parties from refusing to proceed with the transaction envisaged by the document.394

Following the initial arrangement, there might arise an estoppel by convention if both parties formed, and communicated to each other, a common intention that the arrangement, although initially not binding, had become binding.395 There could be a separate subsequent express or implied assurance given by one party that the arrangement had become

391 In JT Developments Ltd v Quinn (1991) 62 P & CR 33, 47, it was explained that the capacity of a person to withdraw from discussions might exist independently of the use of the particular phrase ‘subject to contract’. Each case depends on its own facts and in another case and in unusual circumstances it was held that the parties were bound to an agreement relating to the installation of a packaging line even though they had used the words ‘it shall not become effective until each party has executed a counterpart and exchanged it with the other’: RTS Flexible Systems Ltd v Molkerie Alois Muller GmbH & Co KG [2010] UKSC 14, [2010] 1 WLR 753. In Salvation Army Trustee Co Ltd v West Yorkshire Metropolitan County Council (1980) 41 P & CR 479 an estoppel was held to arise where parts of the relevant correspondence was marked ‘without prejudice’. The expressions ‘without prejudice’ and ‘subject to contract’ have quite different meanings in law. The marking of a document ‘without prejudice’ means that the content of the document cannot be used in subsequent legal proceedings and the document is privileged from disclosure. The marking of a document ‘subject to contract’ means that no legally binding obligation, such as that in a contract, can arise until there is some further formal agreement between the parties. It is of course possible to mark a document with both expressions. 392 Pridean v Forest Taverns (1998) 75 P & CR 447. See also British Steel Corporation v Cleveland Bridge and ­Engineering Co Ltd [1984] 1 All ER 504, 511 (Robert Goff J); London & Regional Investments Ltd v TBI Plc [2002] EWCA Civ 355, para 42 (Mummery LJ). 393 [2008] UKHL 55, [2008] 1 WLR 1752, para 25. 394 [1987] AC 114, 127–28. 395 See ch 5 for estoppel by convention.

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7.135  Proprietary Estoppel binding, and if the other party had acted to its detriment in reliance on this a­ ssurance a proprietary estoppel might arise which entitled the other party to assert rights under the arrangement. The parties to a subject to contract arrangement may if they so wish enter into a new and distinct agreement that the subject to contract status of the previous arrangement is to be removed396 and that the rights under their former arrangement shall become legally enforceable between them, and there seems no reason in principle why the same effect may not arise by reason of a subsequent shared assumption or subsequent assurance sufficient to create an estoppel by convention or a proprietary estoppel subject to the satisfaction of all of the elements of these two forms of estoppel.397

(iv)  Agreements ‘in Honour’ Only 7.135  A second consequence of the rule that the expectation must be one of an entitlement to an interest or right in land is that agreements which are said to be made ‘in honour only’ or are the subject of ‘a gentleman’s agreement’ or are qualified by similar words are unlikely to give rise to a proprietary estoppel even if one party has acted to his detriment in reliance on what has been agreed with this status. The principle of English law is that a promise is enforceable as a part of a contract if it was made for consideration (or is contained in a deed) and is intended to create legal relations, in the sense of enforceable rights and obligations, between the parties. A statement that the agreement is in honour only or is only a ­gentleman’s agreement indicates that there is no intention to create legal relations in the above sense.398 In what has been called ‘the great case’ of Ramsden v Dyson,399 Lord ­Cranworth said that when an agreement stated that the person to whom a promise was made must rely on the honour of the person who has made it, ‘this excludes the jurisdiction of courts of equity no less than courts of law’.400

(v)  Events Following an Assurance 7.136  A belief in an entitlement to an interest or rights in property induced by an assurance is therefore necessary if a proprietary estoppel is to arise. A person may act to his detriment in reliance on an assurance but that will avail him nothing in pleading an estoppel unless he has done so in the expectation of an entitlement. The gist of what has just been explained is that an expectation of future discussions, which may or may not lead to an entitlement to an interest or rights, is not enough and a proponent of a proprietary estoppel

396 Law v Jones [1974] Ch 112; Daulia Ltd v Four Millbank Nominees Ltd [1978] Ch 231, 250. 397 Where the initial arrangement is for the sale or other disposition of an interest in land there may be the further question of the operation of s 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 which requires that such an arrangement is to be in writing if it is to be a valid contract: see para 7.63 et seq for the relationship between this provision and proprietary estoppel. 398 The decision most usually cited in support of this rule is Rose & Frank Co v JR Crompton & Bros Ltd [1925] AC 600. In that case the agreement held to be unenforceable, an agency agreement, stated that it was not to be subject to the legal jurisdiction of the Law Courts but was a record of the purpose and intention of the parties concerned ‘to which they each honourably pledge themselves’. 399 (1866) LR 1 HL 129. This description of the case was given by Lord Walker in Cobbe’s case (at para 42). 400 ibid, 145–46. See also Lord Wensleydale (at 170).

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The First Element: The Assurance  7.137 who acts on only such an expectation will not be able to rely on an estoppel. That having been said, actions carried out in such circumstances may not be without a different legal effect. Such actions may convert the assurance into a binding agreement because they may demonstrate a further agreement on outstanding matters and so complete the requirements of a binding contract. An illustration of this process is a case in which there were discussions between a landowner and a railway company on an agreement to connect a private branch line to be connected to the main line of the railway company on reasonable terms which remained to be settled. At this stage there was plainly no right to connect to the main line since the agreement was not a contract but was at most an agreement to agree. If the landowner had acted on what had been stated and had constructed the branch line, that in itself could not have created in him any rights by virtue of an estoppel since his only expectation was not of an entitlement to make and use the connection but only of the prospect of further discussions which might have led to that entitlement. In fact, the landowner constructed the branch line, connected it to the main line, and for years paid tolls to the railway company for the use of that main line. No further agreement was ever executed. It was held that the landowner had a right to continue the connection and use of the main line since the conduct of the parties showed an agreement on the terms which had previously to be settled. As in other cases, a full contract came into existence by reason of an inference from events and actions. The basis of the rights of the landowner was rights not under an estoppel, but rights under what became a concluded contract.401 7.137  A question of a similar nature arose in Holiday Inns Inc v Broadhead,402 a decision sometimes cited in estoppel cases. A, a financier, agreed with B, a hotel company, that A would acquire a site near Heathrow Airport and when B had obtained planning permission for a hotel development a lease would be granted to B on agreed terms. B expended money in obtaining planning permission on a site which was identified, but A then resiled from the arrangement and granted a lease of the land to a different hotel organisation. In proceedings between A and B, it was held that a constructive trust had arisen as a consequence of a joint venture in reliance on cases following Pallant v Morgan.403 Since the land for the hotel had been identified, since B had obtained the necessary planning permission, and since the terms of the lease had been agreed, it is arguable that an agreement for a lease came into existence. It is also possible to see this decision as founded on a proprietary estoppel. There was an assurance by A that B would be entitled to an interest in land, namely a lease on the agreed terms, if a site was identified and B obtained planning permission for a hotel on that site. The site was identified and permission was obtained. Possibly the decision illustrates the similarity, and the closeness between, circumstances which can give rise to (a) a proprietary estoppel, (b) a constructive trust, and (c) an agreement which is not initially a binding contract but becomes binding due to events after it was first made.

401 Laird v Birkenhead Railway Co (1859) John 500. See the observations on this decision by Lord Scott in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 23. 402 (1974) 232 EG 951. This decision was referred to by Lord Templeman in Attorney General of Hong Kong v Humphreys Estate (Queen’s Gardens) Ltd [1987] AC 114, 122; and by Lord Scott in Cobbe’s case, para 24. 403 [1953] Ch 43.

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7.138  Proprietary Estoppel

(vi)  Reasonable Expectation 7.138  Whether the person asserting the estoppel has formed, on the basis of an assurance made, an expectation that he was or would become entitled to an interest in land is a ­question of fact. The necessary expectation is a state of a person’s mind at a particular time or times and states of mind are matters of fact. Statements of the law show that a claimant must prove not only that he had the necessary expectation or belief but also that it was reasonable of him to have formed that expectation or belief.404 Whether a claimant was reasonable will depend on all the relevant surrounding circumstances, but the most important matters are likely to be the period of the acquiescence or the language which constitutes the assurance, the relationship between the person making the assurance and the claimant, the subject matter of the assurance, and the general context in which the assurance was made. A single casual statement by an owner of a house that a newly employed live-in housekeeper need have no concerns if the house was sold would be different from repeated assurances by an elderly man to a woman who had lived with him for many years that on his death his property would be hers. In the first example it might be unreasonable for the housekeeper to form any expectation that she would be entitled to an interest in the house if it was sold, whereas in the second example the woman might reasonably form the belief that she would be entitled to the property on the death of its owner. As is often the case, it is statements of an intermediate sort which will create the difficulty in determining whether the formation of an expectation of an entitlement was reasonable. The matter of the burden of proof on an assurance and its ramifications is dealt with later, but if there is any dispute as to the reasonableness of an expectation formed by a claimant it would be usual for the claimant to give evidence of what was his state of mind at the relevant time.405 7.139  The reasonableness of an expectation held by the recipient of an assurance is closely related to that person placing reliance on the assurance and on the expectation created by the assurance and to the actions to his detriment which that person takes in reliance on the assurance and expectation. Reliance and detriment are the second and third main elements of proprietary estoppel and are considered below as separate subjects. It is usually said that the person asserting the estoppel, having shown that an assurance of some nature has been made, must go on to show (a) that his expectation derived from the assurance was reasonably held, (b) that his reliance on the assurance and the consequent expectation was reasonable, and (c) that the actions taken pursuant to that reliance were reasonable. Reasonableness, rather like unconscionability, appears to pervade most estoppels. In practice, the three requirements of reasonableness may stand or fall together. As a matter of analysis, if the proponent of the estoppel cannot show that the forming by him on the basis of the assurance of an expectation of being entitled to an interest or rights in land was reasonable, the estoppel must fail at that stage and it is unnecessary to go on to consider reliance and detriment as further elements which have to be proved. On the other hand, once a reasonable expectation of an entitlement to an interest or rights in land is demonstrated to have been created by the assurance, then the reasonableness of some reliance on



404 Thorner 405 See

v Major [2009] UKHL 18, [2009] 1 WLR 776, paras 29 (Lord Walker), paras 79, 81 (Lord Neuberger). para 7.195 for the burden of proof.

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The First Element: The Assurance  7.140 the assurance and the expectation is likely in most cases to be apparent and the same will often follow for the reasonableness of the particular conduct following from that reliance which leads to the detriment element of the estoppel. The three stages at which reasonableness is relevant can sometimes be merged together into a single finding by a court of first instance as in Thorner v Major where Lord Rodger observed that he saw no reason to doubt that the Judge was right when he found that ‘it was indeed reasonable for [the Claimant] to understand those remarks in that way and to rely on them by going on working, for nothing, for many years’.406 7.140  Reasonableness on the part of the person asserting the estoppel is relevant in estoppel by representation and promissory estoppel although not in exactly the same way as in proprietary estoppel. Proprietary estoppel depends on an expectation being reasonably formed by a person as a result of that person receiving an assurance. The assurance itself may be of a general or imprecise nature and may be an implied assurance derived from acquiescence and the assurance may be made in a family or personal relationship where the language used is imprecise or indirect. Such a situation contrasts with estoppel by representation where the statement of fact which creates the estoppel must be precise and unambiguous,407 and with promissory estoppel where the promise which creates the estoppel must be clear and unequivocal.408 Nor of course with these forms of estoppel is there any requirement that the representee or promisee forms an expectation of an interest in land. It is because with proprietary estoppel the assurance may be so imprecise and because there has to be an expectation of an entitlement to an interest or rights in land that reasonableness on the part of the recipient of an assurance plays a role which has no exact equivalent in the other two forms of estoppel. For instance, in Central London Property Trust Ltd v High Trees House Ltd,409 a decision often seen as the start of the resuscitation of promissory estoppel in the latter half of the last century, the tenants were expressly promised that their rent under the lease would be halved for a period. The tenants knew exactly what was meant by what was promised. The questions which arose were whether they acted in reliance on the promise and acted to their detriment where matters of reasonableness could arise. With the other forms of estoppel, the question of the reasonableness of the expectation being held may be replaced by a question of whether it was reasonable for the representee or promisee to act in a certain way in reliance on what was stated and a question of whether it was reasonably foreseeable to the representor or promisor that the person claiming the estoppel would act on it.410 One possibility raised in earlier chapters is that instead of the repetition of a requirement of reasonableness at successive stages of the elements of an estoppel, it might be simpler and preferable to deal with the question of reasonableness relating to various elements of the estoppel when it comes to the final consideration of whether it would be unconscionable that the person who has made a statement should be allowed to resile from it. The reasonableness of the behaviour of the parties during the course of the events which give rise to the estoppel could then be considered together with any other relevant matters in the final conclusion to be reached of whether

406 [2009]

UKHL 18, [2009] 1 WLR 776, para 27. v Bouverie [1891] 3 Ch 82. 408 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Manufacturing Co Ltd [1972] AC 741. 409 [1947] KB 130. 410 Steria Ltd v Hutchison [2006] EWCA Civ 1551. The relevant passage is set out in ch 6, para 6.176. 407 Low

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7.141  Proprietary Estoppel it would be unconscionable to allow the defendant to go back on what he had stated.411 Despite this possibility, the burden of the authorities on the forms of estoppel mentioned in this paragraph is that reasonableness has to be considered at several of the stages of the various components of the estoppel rather than simply being left for overall consideration as part of the final essential element of unconscionability.

5.  The Clarity of the Assurance (i)  The ‘Clear Enough’ Test 7.141  Estoppel by representation, based on a statement of fact, has existed as a part of English law since the time of Sir Edward Coke in the early seventeenth century and the equitable principle of promissory estoppel emerged as a separate principle from decisions of the House of Lords and the Court of Appeal in the latter part of the nineteenth century. A common feature which they share is that in each case the statement of fact or the promise which initiates the estoppel has to be ‘plain and unambiguous’412 or ‘clear and unequivocal’.413 There is no significant difference in meaning between these descriptions. The requirement of this high degree of clarity in promissory estoppel was derived from the similar requirement which had long been established as applicable to estoppel by representation. 7.142  There is some suggestion that assurances in a proprietary estoppel case have to be clear and unambiguous, the same requirement as for the statement of an existing fact or promise in other forms of estoppel.414 However, the preponderant view is that the assurance need not satisfy this high standard in a proprietary estoppel case provided it is ‘clear enough’. In Thorner v Major,415 Lord Walker stated that he would prefer to say ‘that to establish a proprietary estoppel the relevant assurance must be clear enough’. This is of course a very general test and when formulating it Lord Walker said that he was conscious that it was a thoroughly question-begging formulation.416 If a high standard of clarity and absence of ambiguity is not to be applied, it is difficult to see what standard or test there can be except one stated in such general terms. 7.143  It would often be impractical to require the same degree of clarity in the assurance which initiates a proprietary estoppel as is required for statements which initiate other 411 See ch 1, para 1.47. 412 Low v Bouverie [1891] 3 Ch 382. 413 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741. 414 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, paras 15, 18 (Lord Scott): ‘As to the requirement that a representation, if it is to found a claim based on proprietary estoppel, must be clear and unequivocal, a requirement that I certainly accept’. In the same decision (at para 84) Lord Neuberger said that he was not seeking to cast doubt on the proposition that there must be some sort of assurance which is clear and unequivocal but added that it would be quite wrong to be unrealistically rigorous when applying this test. He later referred to the situation where an assurance held two possible meanings as capable of creating an estoppel; it is not apparent how such an assurance could be clear and unequivocal. In JT Developments v Quinn (1991) 62 P & CR 33, 46, Ralph Gibson LJ said in discussing proprietary estoppel that a representation, if it is to be the basis of an estoppel, must be clear and unequivocal. 415 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 56. In Jones v Watkins [1987] (unreported), Court of Appeal Transcript No 1200, Slade LJ expressed the view that the ‘clear and unequivocal’ test did not apply to proprietary estoppel. 416 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 56.

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The First Element: The Assurance  7.144 forms of estoppel. One type of assurance is that implied from acquiescence, and it is difficult to apply descriptions such as clear and unambiguous to what is derived from passive inactivity. An estoppel by representation can arise from silence in limited circumstances, particularly where there is a duty on a party to speak, but the requirement of clarity of the implied representation which arises from silence can in these circumstances usually be satisfied by considering the content of the duty which has been broken.417 Where the assurance which brings about a proprietary estoppel is express written or oral language, the circumstances surrounding what is written or said may often be an informal or domestic or family relationship where remarks are made in a general way so as to indicate a general meaning or intent, and where the precision and clarity which often characterise what is said or written in a commercial relationship are rarely attained. If complete clarity and precision were demanded of assurances made in a domestic context it would often be impossible to establish a proprietary estoppel in that context. The flexibility in the form of relief given by a court where a proprietary estoppel is established is a further reason why a strict test of clarity would be inappropriate. With estoppel by representation and promissory estoppel the form of relief is normally that the representor or promisor is held to the terms of the representation or the promise.418 With proprietary estoppel the form of relief given may be tempered by any lack of clarity in the assurance.419

(ii)  Application of the Test 7.144  Such matters as the requirement that a representation is clear and unambiguous or that a provision in a contract is sufficiently certain must be judged in the context in which the representation is made or in which the contract is formed.420 The context or the surrounding circumstances may make clear the meaning of what is stated. Where the test is as general as the ‘clear enough’ test, the context and surrounding circumstances of the assurance may assume an even greater importance in determining whether the test is satisfied. It is easy to see that an assurance, which would not be clear enough in a business or legal discussion, could be clear enough if made during a discussion between relatives in the same family. The best example of the importance of context is Thorner v Major421 where an assurance was spelt out of words and actions between relatively private and taciturn persons related by family who had long worked together on a farm owned by one of them. Much can be inferred in such a context from words which to outsiders might be considered remarks which were oblique in character and lacking in any precision.422 A further reason

417 eg, if the duty is to inform a bank that a cheque has been forged the representation implied from silence may be a representation that there has been no forgery. 418 Even so a court which enforces a promise not to insist on a person’s right may order that the promise shall last for only a limited period or may be determined by notice and a court holding a person to a representation may order that there may be a partial resiling from the statement made. See ch 6, part (D); and ch 3, para 3.147 et seq. 419 See part (F) of this chapter for forms of relief or remedy. 420 See ch 6, part (E), section 4, for a discussion on the varying degrees of clarity required for a representation which operates as an estoppel by representation and for a contractual term. 421 [2009] UKHL 18, [2009] 1 WLR 776. The facts are set out in para 7.39. 422 The evidence of the Claimant of what occurred was that at one stage the owner of the farm, his father’s cousin, ‘made various noises that made me think that I might well inherit, but nothing very definite’: see [2008] WTLR 155, para 86.

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7.145  Proprietary Estoppel why words spoken in a commercial or legal context are less likely to give rise to a proprietary estoppel than words spoken in a family context is that in the former context the words in question are more likely to be put into some formal written form and the parties are more likely to realise that before there can be any binding obligation between them there may have to be some greater formality, with the result that whatever is said does not create that expectation of an entitlement to an interest or rights in land which is necessary if there is to be a proprietary estoppel.423 7.145  Given the relaxed nature of the clarity requirement for proprietary estoppel, it is possible that the assurance given could have more than one meaning but still rank as a sufficient assurance. In the case of an estoppel by representation or a promissory estoppel, it is likely that a statement with more than one reasonably possible meaning would fail the test of clarity and absence of ambiguity. In the case of a contractual term, provided that the ambiguity is not too extreme it is likely that a court would determine that meaning which is most likely to have represented the intention of the parties to the contract having regard not only to its language but also such matters as commercial good sense. It is plain that for the purposes of proprietary estoppel the possibility of an assurance having more than one meaning does not in principle prevent it being a sufficient assurance. It may be that a court would select the most likely meaning and frame its relief on that basis. A different suggestion is that where there is more than one possible meaning of an assurance, relief should be granted to the recipient of the assurance on the basis of the interpretation least beneficial to him.424 Such an approach emphasises the flexibility in the relief which may be granted to satisfy the equity and the role which unconscionability plays in proprietary estoppel. What is sometimes described as the minimum equity needed, both to give effect to the estoppel by avoiding detriment and to accord with the importance of unconscionability, could also suggest that the person asserting the estoppel should be confined to relief founded on the least beneficial interpretation to him of an assurance. 7.146  There is an interrelationship between the rule as to a relaxed requirement of clarity for an assurance and the rule as to the time of an assurance. As explained earlier, it is not necessary to pin down an assurance to a specific statement at a particular time. The assurance may be constituted by a series of events, written or oral statements and other actions or events, over a period of time. The result of this rule is that it may not be possible to isolate an exact moment at which it can be said that the assurance is made and clear enough. The limited degree of clarity necessary may have to be derived from events, linguistic and otherwise, which have taken place over a period of time. It may not be possible to pinpoint one moment of time or one ‘signature event’ at or by way of which the assurance is made.425 7.147  Numerous examples could be given of informal and imprecise statements or promises which amounted to an assurance sufficient to create an estoppel. In ER Ives Investment Ltd v High,426 there was an informal oral arrangement that the flats developed by one party slightly over the boundary of another party’s adjoining property could remain despite the



423 See

Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 53, [2008] 1 WLR 1752. v Major [2009] UKHL 18, [2009] 1 WLR 776, para 86 (Lord Neuberger). 425 ibid, para 8 (Lord Hoffmann), para 24 (Lord Rodger). 426 [1967] 2 QB 379. 424 Thorner

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The First Element: The Assurance  7.148 trespass when in return the other party was given a right of way over the property of the flat developer. The right of way was at most an equitable easement. It appears that the assurance of the existence of the right of way by the flat developer was sufficient to create what would today be seen as a proprietary estoppel and created a right of way which existed even without registration as required for an equitable easement under the Land Charges Act 1925. In Grundy v Ottey,427 the female live-in companion of an alcoholic man had cared for him and had been promised his property on his death. The promise arose from a letter written to a solicitor in Jamaica and general oral statements. This appeared to be a sufficient assurance from which a proprietary estoppel was held to arise. In Wayling v Jones,428 a young man who lived for years in a homosexual relationship with an older man and did work for him for only a small reward and who asked for more money and was told ‘It’ll all be yours one day’ successfully claimed an interest by way of a proprietary estoppel in property owned by the older man when on the death of that man he received only £375 in his will. This vague promise in the context of the relationship between the two persons involved was a part of an assurance. Even so, there may still be limits to the lack of clarity in the assurance not preventing an estoppel.429

6.  An Objective Test 7.148  Two of the requirements of an assurance which is to be the basis of a proprietary estoppel are that the person giving the assurance intended that it was to be taken seriously and acted upon, and that the meaning of the assurance shall be clear enough.430 Each of these requirements has to be judged objectively. What is meant by an objective judgement or approach is that the question of the intention of the person giving the assurance as to it being taken seriously and the question of the meaning of what was written or spoken or done, must be judged not by reference to what the giver of the assurance subjectively intended as to the seriousness of the assurance or subjectively meant the words or actions to mean, but by reference to what a reasonable person in the position and with the knowledge of the recipient of the assurance would conclude was the intention and the meaning. What is here under consideration is the intention of the giver of the assurance and the meaning of the words and actions of that person. These two questions, the intention of the  giver of an assurance that the assurance shall be taken seriously and the meaning of the assurance, are sometimes elided together in discussion of the estoppel partly because they have the common characteristic that they are both to be judged in an objective fashion. The state of mind of the person to whom the assurance is given when he subsequently acts in a

427 [2003] WTLR 1253. 428 (1993) 69 P & CR 170. See also Chun v Ho [2002] EWCA Civ 1075 (a promise made by a person in prison to set up a new life with someone on release held sufficient). 429 See Layton v Martin [1986] 2 FLR 227 where a promise to provide financial security for a mistress was held not to create an estoppel. 430 See para 7.141 et seq for the ‘clear enough’ test; and see para 7.149 et seq for the necessary intention. The intention required is expressed in various ways such as that the giver of the assurance intends the recipient of it to form an expectation of becoming entitled to an interest in land.

607

7.149  Proprietary Estoppel ­ articular way is a different question and is considered when the later elements of the estopp pel, reliance and actions to a person’s detriment, are examined.

(i)  The Intention of the Giver of the Assurance 7.149  An objective approach to matters of this sort runs through the law of estoppel. For example, an estoppel by representation can only be established if it is shown that the representor intended his statement of fact to be acted upon and this intention is to be judged objectively. Denning LJ said in this context that ‘a person must be taken to intend what a reasonable person would understand him to intend’.431 A similar rule applies to the intention of the promisor where a promissory estoppel is alleged.432 Not surprisingly, the same rule applies to the intention of the person giving an assurance when a proprietary estoppel is alleged. That this is the law was confirmed in Thorner v Major433 where the assurance was constituted by a series of oblique and indirect statements and conduct over a period of time. The Judge at first instance found that the words and acts of the owner of a farm were intended to be understood and acted on as an assurance that the Claimant, to whom the words and actions were directed, would inherit a farm on which he worked for no pay. The Court of Appeal said that the fact that the owner had actually intended the tenant to inherit the farm was irrelevant and that the question was whether the words and acts of the owner would reasonably have conveyed to the Claimant an assurance that he would do so.434 The House of Lords held that this was the correct objective approach. The decision of the Court of Appeal was reversed because in their detailed consideration of  the matter that Court departed from their objective approach as stated and required proof of the subjective intention by the owner of the farm as to the effect which his words would have on the Claimant.435 7.150  It is therefore well established that in the law of proprietary estoppel it has to be shown that the person giving the relevant assurance, whether the assurance is by words or other forms of action or by acquiescence, intended at the time that the assurance would be taken seriously and acted upon and that the existence of that intention is to be judged objectively in the sense that what is relevant is not what the giver of the assurance actually or subjectively intended, but rather what a reasonable person in the position of and with the knowledge of the recipient of the assurance would have concluded was intended.436 As well as being confirmed by Thorner v Major, this rule of law is supported by a consistent line of earlier authority.437

431 Sidney Bolsom Investment Trust Ltd v E Karmios & Co (London) Ltd [1956] 1 QB 529, 541. 432 See ch 6, para 6.136 et seq, where the justification for an objective approach to matters of the present kind is explained in detail. See also Suggitt v Suggitt [2011] EWHC 903 (Ch), para 42. 433 [2009] UKHL 18, [2009] 1 WLR 776. For the full facts of this decision see para 7.39. 434 ibid, para 3 (Lord Hoffmann), explaining the approach of the Court of Appeal. 435 ibid, para 5 (Lord Hoffmann). 436 ibid, para 78 where Lord Neuberger stated that ‘what [the giver of the assurance] intended is not really germane’. 437 See, eg, Sidney Bolsom Investment Trust Ltd v E Karmios & Co (London) Ltd [1956] 1 QB 529, 541; Crabb v Arun District Council [1976] Ch 179, 188; Moorgate Mercantile Co Ltd v Twitchings [1976] QB 225, 242; Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 151–52.

608

The First Element: The Assurance  7.152

(ii)  The Meaning of the Assurance 7.151  Where there is some doubt on the correct meaning of a document such as a contract or a notice the test of the meaning is usually an objective one. The basic principle as applicable to the interpretation of contracts has been stated by Lord Hoffmann as being: Interpretation is the ascertaining of the meaning which the document would convey to a reasonable person having all the knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.438

An objective approach is applied to the ascertainment of the meaning of the representation which founds an estoppel by representation.439 The same rule applies to the ascertainment of the meaning of a promise which founds a promissory estoppel.440 It might be thought that the same objective approach to the meaning of an assurance would be applied where the assurance is said to found a proprietary estoppel. There is of course a difference between a contract which normally casts obligations on two or more parties and a unilateral act such as the giving of a notice or the giving of an assurance which, although two parties are involved, often creates obligations only on one party. In the case of a contract, it is the knowledge available to both parties which is relevant to what a reasonable person would conclude was the meaning of the contract, whereas in the case of a notice or a written assurance, it is the knowledge available to the recipient of the notice or the assurance which is relevant in applying the objective test of meaning. 7.152  It seems that the usual objective test of meaning applies in proprietary estoppel where the assurance is made in writing. If a purely objective test is applied, the person giving the assurance should not be permitted to give evidence of what he subjectively meant by his written words. His subjective intention will be irrelevant since what matters is the meaning which would be attributed to the written assurance by a reasonable person in the position of the recipient of the assurance with the knowledge available to that person. However, the position may be different where the assurance is given orally. The interpretation of a document, such as a written contract, is a matter of law. It should therefore follow that the interpretation of a written assurance is also a matter of law, with the court applying an objective test in order to carry out its task of interpretation. An objective test of the meaning of an implied assurance drawn from acquiescence or some positive action other than a statement seems also to be appropriate. Yet recent authority suggests that the interpretation of a purely oral contract is a matter of fact.441 It is said that the ascertainment of what exactly was said is a matter of primary fact and that the ascertainment of the meaning of what was said is a matter of secondary fact, being an inference from the primary facts of what was said. The consequence of this dichotomy is said to be that where the contract is purely oral, the subjective understanding of the parties of the meaning of the agreement is admissible.442

438 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, 912. It is sometimes added that business common sense also plays an important part in the interpretation of commercial contracts: Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900, para 21. 439 Bremer Handelsgesellschaft v Vanden Avenne Izegem [1978] 2 Lloyd’s Rep 109, 126 (Lord Salmon). 440 Seechurn v Ace Insurance SA-NV [2002] EWCA Civ 67, para 54 (Ward LJ). 441 Carmichael v National Power Plc [1999] 1 WLR 2042, 2048–51. 442 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 82 (Lord Neuberger).

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7.153  Proprietary Estoppel There are a number of reasons which have been given for the dichotomy. One is that juries to whom issues of fact were widely entrusted in civil proceedings were often illiterate and so could not interpret written documents. It was therefore for the Judge to tell the jury what the document meant. Another reason suggested is that the dichotomy is cost effective and that to exclude evidence from the speaker of the subjectively understood meaning of what was said would be artificial and that memory is not reliable. Whatever the cogency of these reasons, and given that the dichotomy exists in the law of contract, it appears from recent authority that when it comes to determining the meaning of an oral assurance said to create a proprietary estoppel, a maker of the assurance who is able to do so may give evidence of his subjective understanding of the meaning of what he has said.443 7.153  Assuming that it exists, the dichotomy as to the approach to be applied, and as to the evidence which may be given, between oral and written assurances raises certain possible problems. The dichotomy is explained by Lord Neuberger in Thorner v Major.444 In his judgment in that case Lord Hoffmann referred to the Court of Appeal having at one point departed from their previously objective examination of the meaning which the words of the person giving the assurance would readily have conveyed, putting this as a primary reason for allowing the appeal.445 The assurance in Thorner v Major was constituted by a number of oblique oral remarks so that it is necessary to compare what Lord Hoffmann said with an overall subjective approach to the interpretation of such remarks. The speaker in that case was dead at the time of the litigation and so could not give evidence of what he meant and an objective approach to meaning was therefore inevitable. It may therefore be that in practice a subjective approach to the meaning of an assurance as that which initiates a proprietary estoppel applies only where the giver of the oral statement is available to give and does give evidence on what he intended the assurance to mean. A further matter is that it may not be easy to know on which side of the line of the dichotomy different types of assurance fall. A purely oral assurance may be judged as to its meaning by a subjective approach and a purely written assurance by an objective approach. On the other hand, some assurances are derived from passive acquiescence and some from a combination of words and actions. It may be that the subjective approach is to be confined to purely oral assurances as the subjective approach to contractual meaning is confined to purely oral contracts. A fourth point is that it may be that a subjective approach to interpretation for purely oral assurances in proprietary estoppel can or should be extended to purely oral representations of fact or promises which create other forms of estoppel. The question of the correct meaning of an oral statement may be more important for proprietary estoppel than for other forms of estoppel since the circumstances of a proprietary estoppel are more likely to be informal family arrangements depending on oral remarks or discussions whereas representations or promises said to create other forms of estoppel are more likely to occur in a more formal or commercial setting and are more likely to be in documentary form. 7.154  There may be danger in importing into the law of estoppel principles taken from the law of contract. Contracts and estoppels are conceptually different. In English law,



443 ibid,

paras 81–83 (Lord Neuberger).

445 ibid,

para 5.

444 ibid.

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The First Element: The Assurance  7.155 a contract is a bargain which normally involves the participation of two or more parties since without such a participation there may be no consensus on the essential terms of the contract or no consideration for a promise made such as is necessary for a contract. By contrast, an estoppel derives from a unilateral act by a person who makes a representation or a promise or an assurance. The statement in an estoppel case must of course be made to some other person or class of persons. That person or persons need not participate in the making of the statement in the same way that a person who enters into a contract usually participates in the formation of the contract. The principle to be applied in deriving the meaning of what the single maker of a statement asserted need not necessarily be the same as the principle to be applied in deciding what two persons together agreed on by the ­bilateral interchange which normally underlies a contract.

(iii)  Summary of the Objective Test 7.155  The previous paragraphs have been under the sub-heading of an objective approach to the ascertainment of certain matters. It may conduce to clarity if the matter is examined in stages. (a) The first stage is the ascertainment of what was written or spoken or done such that it may constitute an assurance. Where the assurance is in writing there can rarely be any doubt as to the words written. Oral statements or particular actions or absence of action may admit of more doubt and require evidence if disputed. At this stage the determination of what was stated in whatever form will generally be a question of primary fact. (b) The second stage is that it must be shown that the maker of the assurance intended the assurance to be taken seriously and to be acted upon. This is an inference of secondary fact derived from the primary facts of what was written or said or done and from the circumstances surrounding the statement or action. The requisite intention is to be inferred by an objective test and so is a test of what would be concluded as to the intention of the person giving the assurance by a reasonable person in the position of and with the knowledge of the person who receives the assurance. (c) The third stage is the meaning of the assurance made. Where the assurance is made by express words the meaning of that which has been stated will normally be ascertained by an objective test which requires that the meaning is that which would be conveyed to a reasonable person in the position of and with the knowledge of the person who receives the assurance. Where the assurance is inferred from the action or inaction of the maker of it the content and meaning of the inferred assurance will again normally be determined objectively. There is nonetheless some authority for saying that where the assurance is given orally, and the giver is available to give evidence of what he intended it to mean, the test of its meaning becomes subjective in the sense that what is to be ascertained is what the giver of the assurance actually and subjectively meant, with the result that where it is possible that person can give evidence of his meaning.446 Further questions can arise as to the understanding of the recipient of the assurance when he acts on the assurance and this matter is dealt with later.447



446 See 447 See

para 7.152. para 7.212.

611

7.156  Proprietary Estoppel

7.  The Knowledge of the Giver of the Assurance (i) Introduction 7.156  It is traditional to say that before there can be a proprietary estoppel a giver of the assurance which initiates the estoppel must know of the actions of the person to whom the assurance was given taken in reliance on that assurance. The importance of this knowledge on the part of the person against whom the estoppel is asserted has been apparent from early decisions. For example, in Steed v Whitaker in 1740 a woman who had an interest in land under a marriage settlement was held to be entitled to resist proceedings for possession brought by a mortgagee of the land on the ground that the mortgagee had ‘laid by and let [the purchaser of the land, her husband] go on and build upon the Premises, without giving him Notice of the Mortgage’.448 In his well-known statement of legal principle in Ramsden v Dyson,449 Lord Kingsdown referred to the tenant at will having laid out money on the land upon the faith of an expectation created by the landlord and ‘with the knowledge of the landlord, and without objection by him’. The well-known formation of the principle of proprietary estoppel in Taylor Fashions v Liverpool Victoria Trustees Co Ltd referred to the person in whom an expectation of an interest in land had been induced acting on the faith of the expectation with the knowledge of his actions by the person who created the expectation.450 7.157  However, the present law may not be as straightforward as these expressions of principle suggest. It is necessary to consider five aspects of the knowledge of the person giving the assurance at the time of the assurance or at a subsequent time. These aspects are (a) knowledge by the giver of the assurance of his own rights, (b) knowledge by the giver of the assurance of the expectation created on the part of the person to whom the assurance was given, (c) knowledge by the giver of the assurance of the action taken by that person in reliance on the assurance, (d) knowledge by the giver of the assurance that the person to whom the assurance was given has acted under a mistake, and (e) knowledge by the giver of the assurance of detriment suffered by the person to whom the assurance was given. These aspects of the matter are now examined and at the end a summary of the law is given.451

(ii)  Knowledge by the Giver of the Assurance of His Rights 7.158  The assurance which forms the estoppel is an assurance by A that B is or will become entitled to an interest or rights in A’s land. The question is whether it is essential if there is to be an estoppel that A at the time of the assurance knew of his own interest or rights in the land which would be removed or altered or reduced if effect were in some way given to the assurance. Put another way, the question is whether when he gives the assurance A knows that the rights of B which are the subject matter of the assurance and which



448 (1740)

Barn Chancery 220, 221 (Lord Hardwicke LC). See para 7.7. LR 1 HL 129, 170. See para 7.20. 450 [1982] QB 133n, 144. 451 For the summary see para 7.172. 449 (1866)

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The First Element: The Assurance  7.160 are created by the assurance are or will be inconsistent with his own rights. The answer and the rule is that before there can be a proprietary estoppel against him, the person who gives the assurance must have known at the time of the assurance of his rights which are affected by the assurance. It is useful to consider this rule by dividing the types of assurance which may be given into, first, an express assurance given by a written or oral statement and, secondly, an implied assurance, usually derived from passive acquiescence but in some cases possibly derived as an inference from positive actions other than the making of a statement. 7.159  In the first type of case it is unlikely that circumstances will arise in which A will assure B that B has or will have a right over A’s land unless A knows that he has rights in the land which enable him to confer the right assured and which will be affected by that right. The issue of the knowledge of his rights by the maker of an express assurance is therefore unlikely to arise. Even so, unusual circumstances could arise in which A assured B that B was or would become entitled to carry out some actions on A’s land which were inconsistent with A’s rights in the land although at the time A was not aware of his own rights in the land. An obvious example would be where A did not at the time of the assurance know that he was the owner of the relevant land but later found out that he was the owner and then objected to B’s actions carried out in reliance on the assurance. Circumstances of this nature arose in a decision of the Court of Appeal. The Plaintiff owned a piece of land with a strip at its rear. The Defendants were nearby owners who wished to construct a sewer across the strip to convey effluent from their premises. The Plaintiff was not aware that he was the owner of the strip and told the Defendants that he had no objection to their ­proposals. The case was therefore not one of mere passive acquiescence but involved an express, albeit guarded, statement or assurance. The Court held that the Plaintiff was not bound by his statement by virtue of an estoppel since at the time when he made it he was not aware of his own rights in the strip which were inconsistent with the construction of a sewer across it.452 The principle as stated by Lord Evershed MR was that a proprietor will not be disbarred from asserting his legal rights against someone who is shown to have infringed them on the ground of acquiescence unless it is also clear that, at the time he did so acquiesce, that person was aware of his proprietary rights.453 7.160  The position in the second type of case, mere passive inactivity or acquiescence creating an implied assurance, is even more clear. Some assistance may here be gained from the probanda set out in Willmott v Barber454 since under the third probandum what is required is that the person against whom the estoppel is asserted as the possessor of legal rights must know of the existence of his own right which is inconsistent with the right claimed by the person asserting the estoppel or equitable right. Willmott v Barber is today regarded as at most providing general guidance rather than as imposing as essential compliance with all of the probanda and may be confined to cases of proprietary­ 452 Armstrong v Sheppard & Short Ltd [1959] 2 QB 384. 453 ibid, 396. Lord Evershed referred to the principles as stated in Ramsden v Dyson (1866) LR 1 HL 129 and ­Willmott v Barber (1880) 15 Ch D 96. It seems clear that Lord Evershed, when referring to acquiescence, was referring to more than mere passive acquiescence since the Plaintiff was held to have made an express statement that there was no objection to the sewer works. However in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n Oliver J (at 147) did appear to regard this decision as one of mere passivity. 454 (1880) 15 Ch D 96.

613

7.161  Proprietary Estoppel estoppel founded on purely passive acquiescence.455 Oliver J in Taylor Fashions Ltd v ­Liverpool ­Victoria ­Trustees Co Ltd456 certainly considered that in a case of mere passivity a duty to speak, and thus a breach of that duty by a failure to speak, cannot create an ­estoppel in the absence of knowledge, or at least a suspicion, of the true position on the part of the person who fails to speak. Such a rule seems soundly based, since there cannot reasonably be said to be any unconscionability involved where A lies back and watches B carry out works in contravention of A’s rights without any protest if A is unaware of the existence of his rights.

(iii)  Knowledge of the Expectation 7.161  It is undoubtedly the case that for an estoppel to exist the person alleged to be estopped must have known that the assurance created an expectation of an entitlement to an interest or rights in land on the part of the person to whom the assurance was given.457 In Dillwyn v Llewelyn,458 the father had made an imperfect gift of land to his second son and watched while that son built a house on the land. Lord Westbury observed that the father must have known the expectation of the son that he was entitled to a fee simple freehold of the land since no one built a house for his own life only.459 In P ­ limmer v Mayor, etc, of Wellington,460 where Mr Plimmer built a wharf and a jetty on the sea bed owned by the Crown or the Provincial Government, Sir Arthur Hobhouse in the Privy Council said: It is difficult to suppose that a person who is so using the sea-bed, and the Government who are its owners, can go on dealing with one another in the way stated, in this case for a series of years, except with a sense in the minds of both that the occupant has something more than a merely precarious tenure.461

In other words, the owners of the sea bed must have known that Mr Plimmer believed that he had some interest in the sea bed greater than a licence revocable at will.462 Timing is here a matter of significance. An assurance may be a single statement made at one time or may arise from a series of remarks and actions over a period of time.463 In the same way, both the expectation of the person alleging the estoppel and the knowledge of the

455 See para 7.26 et seq. 456 [1982] QB 133n, 147. Oliver J said that for a remainderman not to protest at a lease granted by a tenant for life which he believes he has no right to challenge does not create an estoppel, citing Svenson v Payne (1945) 72 CLR 531. 457 It is for this reason that the definition of proprietary estoppel attempted in this chapter contains the requirement that the person against whom the estoppel is asserted must have known of the expectation of the claimant. See para 7.2 for the definition. 458 (1862) 4 De GF & J 517. 459 ibid, 522. 460 (1884) 9 App Cas 699. 461 ibid, 712. 462 In Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 147–48, Oliver J said that it was clear from the early cases that the party estopped must have known of the other party’s belief. On the other hand in Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305, 327, Isaacs J said that the law of estoppel looks chiefly at the person claiming the estoppel and that as a consequence the knowledge of the person sought to be estopped is immaterial. See [1922] 2 AC 541 for this case on appeal to the Privy Council. 463 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776.

614

The First Element: The Assurance  7.163 person giving the assurance of the existence of the expectation, may arise from the actions of the recipient of the assurance over a period of time, an example being the various actions of Mr  ­Plimmer over the years in erecting structures on the sea bed of Wellington Harbour. The rule therefore appears to be that at the time when the equity is alleged to come into existence, the giver of the assurance must have known that the recipient of the assurance had by then formed an expectation of an entitlement to an interest or rights in land.464 The knowledge required is knowledge by one person of the mental state of another person and it is probable that constructive knowledge of the expectation is enough, that is the knowledge which would have been available to a person acting prudently and reasonably.

(iv)  Knowledge by the Giver of the Assurance of the Actions of the Claimant 7.162  Descriptions of principle by courts in the early authorities sometimes state that the actions of the person to whom an assurance has been made must have been known or have become known by the person giving the assurance if the estoppel is to operate.465 Academic and textbook descriptions of the principle sometimes refer to knowledge of the actions of the recipient of the assurance by the giver of the assurance as a necessary ingredient of the estoppel.466 Where the estoppel is based on its classic form of passive acquiescence amounting to an implied assurance, this requirement of knowledge on the part of the person who stands by and acquiesces is clearly necessary. While such knowledge will very often be present when the estoppel is based on a positive assurance of some form, it is possible today to query whether as a matter of theory or on the authorities, such knowledge is essential in all cases for the establishment of the estoppel. As with the question of the knowledge by the person giving the assurance of his own rights, the question of the knowledge by that person of the actions of the person to whom the assurance is given may be approached in two different sets of circumstances, the first being an assurance constituted by passive inactivity or acquiescence and the second being an assurance constituted by some positive statement. 7.163  Where the assurance is constituted by passive acquiescence on the part of the giver of the assurance in some action by the person claiming the estoppel, it is not so much a matter of knowledge by the giver of the assurance of the actions of the other person being a separate requirement of the estoppel, as a case of acquiescence itself necessarily­ 464 See para 7.187 for a distinction between the time when the equity comes into existence (ie, when its essential elements are satisfied) and the time when the equity crystallises (ie, when effect is given to the equity by an order of the court). 465 Examples are given in para 7.156. A modern expression of the same principle is in JT Developments v Quinn (1991) 62 P & CR 33, 46, a case involving the expectation of a new tenancy of land induced by a statement made by the landlord, where the critical question was said to be whether the prospective tenant had ‘with [the landlord’s] knowledge acted to his detriment in reliance upon the statement made by the [landlord’s surveyor]’. 466 For instance, para 397 of vol 47 of the 5th edn of Halsbury’s Laws (LexisNexis, 2014) states ‘that the traditional formulation of proprietary estoppel was based on the principle that, where the owner of land (A) knowingly allowed his rights to be infringed by another (B) who expended money on the land in the mistaken belief that it belonged to B, A could not afterwards be allowed to assert his own title to the land’, with the judgment of Lord Cranworth in Ramsden v Dyson (1866) LR 1 HL 129, 140–41, cited as the authority in support of the formulation. It may be that this formulation applies only where the estoppel is founded on passive acquiescence by the owner of rights. See the next paragraph.

615

7.164  Proprietary Estoppel involving knowledge of the actions of the other person. Without such knowledge there can be no acquiescence. Acquiescence is a concept used in various parts of the law. An instance is the rule in section 4 of the Prescription Act 1832 which provides that an action shall not be taken to be an interruption to the access of natural light to a property unless it has been acquiesced in for at least a year ‘after the person interrupted shall have had or shall have notice thereof ’. The essence of acquiescence is that something is done without a protest being made at what is done.467 A person can hardly protest at something which he does not know is happening or has happened. 7.164  Turning to an assurance constituted by a positive statement of some nature, the giver of the assurance will usually know whether the recipient of the assurance has acted on the assurance. One reason is that with proprietary estoppel, the persons involved are often in a close relationship or in close physical proximity to each other. This is of course particularly so where the assurance is given in the setting of a family or domestic relationship. If two persons are living together or working together at the same property and one gives an assurance to the other relating to an interest or rights in the property, it would be unusual for the giver of the assurance not to know whether the assurance had been acted upon. In addition, it is a requirement of the estoppel that the giver of the assurance intended that it was to be taken seriously and to be acted upon, something which may make it that much more likely that the giver will know whether and how the assurance has been acted upon. That having been said, there could be exceptional circumstances in which the giver of the positive assurance did not know that action had been taken in reliance on it. The question of whether such a situation prevents an estoppel arising can be looked at both as a matter of principle and as a matter of authority. Since the actions of the recipient of the assurance have to be taken in reliance on the assurance and so follow the assurance, the question will usually be whether the maker of the assurance came to know of those actions. In some cases, an assurance may derive from a series of statements and events over a period of time, and a course of action by the person claiming the estoppel may also be over a partly overlapping period of time such that the knowledge of the maker of the assurance will exist at least in part during the time over which the assurance is given. 7.165  It is not apparent why there should be an inflexible requirement that in every case of proprietary estoppel the giver of the assurance knew or came to know of the actions taken in reliance on that assurance. A better rule in principle appears to be that what has to be shown is that at the time of the positive assurance the giver of it could reasonably foresee that it would be acted upon by the person to whom the assurance was given. If there was such reasonable foreseeability then it should not prevent the arising of the estoppel that the giver of the assurance did not actually know of the actions of the recipient of the assurance. This approach has been said to be the required test for the purposes of estoppel by representation and as regards the representation of fact which is the foundation of that form of estoppel.468 There seems no reason why the same requirement or test should not apply to the assurance in proprietary estoppel. It is not difficult to think of circumstances, albeit

467 Glover v Coleman (1874) LR 10 CP 108 (protests at an interruption to light preventing there being acquiescence in the interruption). 468 Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93. The relevant passage from the judgment of Neuberger LJ in this case is set out in ch 3, para 3.111.

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The First Element: The Assurance  7.166 perhaps unusual, where an owner of property has given an assurance that a person will have an interest in the property and that person acts on the assurance but the owner does not know or come to know of those actions. Provided that the assurance was intended to be acted upon, and it was reasonably foreseeable that it would be acted upon, there seems no reason of principle why an estoppel cannot arise even though the giver of the assurance did not know that it had in fact been acted upon. It is possible to imagine circumstances such as in Dillwyn v Llewelyn469 where an area of land was given as a gift to a person with the intention that there should be some building work on the land but the person making the intended gift did not know that that work had actually been done. In a more recent case,470 a tenant of business premises failed to apply to the court for a new tenancy within the time stipulated by Part II of the Landlord and Tenant Act 1954 but the landlords assured him that he would be granted a new tenancy, and on the faith of this the tenant carried out kitchen works to the property. There was held to be a proprietary estoppel. In fact the landlords knew through their surveyors that the tenant had carried out the works but the unconscionability in refusing to grant a new tenancy to the tenant would be much the same if it was reasonably foreseeable to the landlords that works of this nature would be carried out by the tenant following their assurance even though they did not actually know that the works had been carried out. It would seem an unnecessarily harsh result that if the circumstances had been as here hypothesised, that is no actual or imputed knowledge by the landlord of the works, there could have been no estoppel. A requirement in all cases of knowledge by the maker of an assurance of actions taken in reliance on it would be even more unsatisfactory if every such action had to become known to the person giving the assurance. For instance, a person may stay at home looking after an elderly and infirm relative in reliance on an assurance given by the relative and it would be strange that there could be no proprietary estoppel if the elderly person did not know that the relative had foregone opportunities to take a job or to receive training. 7.166  The supposed rule that the giver of a positive assurance must in all cases have known of the actions taken in reliance on that assurance is shown by the authorities not to be as rigid as it might appear. The decision in Crabb v Arun District Council,471 ­ something of a landmark in the development of proprietary estoppel, concerned an agreement in principle to grant an access and right of way to the Plaintiff over a roadway owned by the Council. In reliance on the agreement in principle, the Plaintiff sold a part of his land which had a different access leaving his retained land dependent on the new access which had been agreed. The Council did not know of the sale of the separate part of the land but did know that the Plaintiff intended to sell it. Lord Denning MR held that knowledge of the intent was sufficient, saying seeing that they [the Council] knew of his intention – and they did nothing to disabuse him but rather confirmed it by erecting gates at point B – it was their conduct which led him to act as he did: and this raises an equity in his favour against them.472

469 (1862) De GF & J 517. 470 JT Developments v Quinn (1991) 62 P & CR 33. 471 [1976] Ch 179. 472 ibid, 189. Logic and fairness suggest that the estoppel should still have been established following the sale of the separate part of the Plaintiff ’s land even if the Council had not known of the intention to sell it.

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7.167  Proprietary Estoppel 7.167  A helpful test as to the necessary knowledge by the giver of an assurance of the actions of a claimant may be that stated by Woolf J in Salvation Army Trustee Co Ltd v West Yorkshire Metropolitan County Council.473 A District Council wished to acquire a Salvation Army hall for road widening purposes. In discussions it was agreed that the hall would be transferred to the Council and a new site was identified which the Salvation Army would acquire and on which they could construct a new building. It was agreed that the compensation for the acquisition of the old building would be on an ‘equivalent reinstatement’ basis.474 The Salvation Army acquired the new land and built a new hall on it. Following local government reorganization, highway functions passed to the County Council and they decided that they did not wish to proceed at the time with the acquisition of the old hall. There was no contract for sale of the building but it was held that by reason of a proprietary estoppel the County Council were bound to acquire the old hall at a price equal to equivalent reinstatement compensation. It was not clear what knowledge the local authorities had of the expenditure on the acquisition of land and the building of the new hall by the Salvation Army but the Judge held that the County Council either knew or ought to have known of that expenditure.475 The test of what ought to have been known is not far different from the test of reasonable foreseeability of actions by a representee considered sufficient to support an estoppel by representation.476 To the extent that knowledge of the actions of the person receiving the assurance must be known to the person making the assurance does appear the constructive knowledge, in the sense of that which a person acting prudently and reasonably would have known, is sufficient knowledge. Imputed knowledge, that is knowledge of an employer through knowledge of an employee or agent, is also sufficient.477 7.168  It is therefore suggested that for reasons both of principle and of authority there is no absolute rule that the giver of an assurance must have known of the actions taken in reliance on the assurance, but that it is sufficient if the giver of the assurance either knew or came to know of the actions which were taken in reliance on it or at least at the time of the assurance could reasonably have expected that the actions of the type in question would be taken in reliance on it. It follows that there could be circumstances in which no estoppel would bind the maker of an assurance because he could not reasonably have expected that claimant to have acted on the assurance in the way in which it was in fact acted upon. This may be the case even if the claimant was in fact reasonable in relying on the assurance.478

473 (1980) 41 P & CR 179. 474 ie, the cost of acquiring land and constructing a new building as provided by rule (5) of s 5 of the Land Compensation Act 1961. This is a method of assessing compensation which in the limited circumstances in which it applies may be more favourable to a landowner than the open market value basis of compensation which usually applies under rule (2) of s 5 of the Act. 475 (1980) 41 P & CR 179, 196. 476 See ch 3, para 3.92 et seq. 477 JT Developments v Quinn (1991) 62 P & CR 33. The operation of agency in this area of the law was stated by Scarman LJ in Crabb v Arun District Council [1976] Ch 179, 193. 478 The matter was stated in this way by Lord Neuberger in Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 78. It seems unlikely that such a concatenation of circumstances would often occur and Lord Neuberger commented that such circumstances would be rare.

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The First Element: The Assurance  7.171

(v)  Knowledge of Mistake of the Claimant 7.169  It is not necessary, in order to establish a proprietary estoppel, to show that the giver of the express or implied assurance knew of a mistake as to his rights by the person who acted in reliance on the assurance. Indeed, a person acting on an assurance may not know of his strict legal rights and may act purely by reason of an expectation of an entitlement to an interest. If the giver of the assurance does not know of the actions taken in reliance on it, then clearly he cannot know of any mistake made by the recipient of the assurance which led to those actions. Even in the more usual case of where the giver of the assurance knew of the actions of the recipient, he does not have to have known whether or not those actions were carried out under a mistake as to his rights by the recipient of the assurance who has reasonably formed an expectation of an entitlement to an interest in land.479 One of the consequences of this rule is that the fourth of the five probanda in Willmott v Barber480 is not a requirement of general or universal application.

(vi)  Knowledge of Detriment 7.170  It has not been held or suggested that knowledge by the giver of an assurance of detriment or likely detriment to the recipient of the assurance is an essential component of proprietary estoppel. Detriment or potential detriment is certainly an essential element of the estoppel and is considered as such later in this chapter.481 However, if it is not essential that the giver of the assurance must in all cases know of the actions taken in reliance on the assurance it cannot be a rule that the giver must in all cases know of the detriment or potential detriment caused by those actions. In practice, the giver of the assurance will usually know of the actions of the recipient of the assurance, and it has been pointed out that where the assurance is sought to be implied from passive inaction or lack of protests to certain actions, the necessary acquiescence in its nature cannot exist without knowledge of those actions by the person allegedly acquiescing.482 In most cases it will in practice be obvious that the person giving an assurance, whether of the nature of encouragement or by acquiescence, who knows of the actions of the person who acts upon the assurance, such as by incurring expenditure or performing services or in any other way, will also know that there will be detriment to that person if the assurance is not fulfilled.

(vii)  Nature of the Necessary Knowledge 7.171  When knowledge of some matter, such as the existence of a right or of the actions or mental state of another person, is relevant to a legal rule there are sometimes ancillary 479 See Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699; Stiles v Cowper (1748) 3 Atk 692; Jackson v Cator (1800) 5 Ves Jun 688; Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305; In Re Eaves [1940] Ch 169; ER Ives Investment Ltd v High [1967] 2 QB 379. Having reviewed the above and other authorities Oliver J in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 152, concluded that: ‘So regarded, knowledge of the true position by the party alleged to be estopped, becomes merely one of the relevant factors – it may even not be a determining factor in certain cases – in the overall enquiry’. 480 (1880) 15 Ch D 96, 105. See para 7.26. 481 See para 7.228. 482 See para 7.163.

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7.172  Proprietary Estoppel questions which arise as to the exact nature of the necessary knowledge. In the present context, it is probably sufficient if the person giving the assurance had at least a reasonable suspicion of his own rights, as opposed to a certainty of those rights, at the time of the­ assurance.483 To the extent that knowledge by the person giving the assurance of the expectation of an interest or rights in land created by the assurance and of the actions taken in reliance on the assurance is required, it is probably enough if there is constructive knowledge by that person, ie, knowledge that would have been ascertained by a reasonable and prudent person in his position.484 Knowledge of the actions of the recipient of the assurance so far as it may be relevant is also sufficient if it is imputed knowledge, ie, knowledge by an agent or employee with a duty to pass that knowledge to the principal or the employer.485

(viii)  Summary of the Necessary Knowledge 7.172  The law on exactly what knowledge on the part of the giver of an assurance is necessary if a proprietary estoppel is to be established is not entirely clear. The best summary that can be given is that the giver of the assurance (a) must have known at the time of the assurance of his own rights which are affected by the assurance, and (b) must at that time be aware of the expectation of an entitlement to an interest or other rights in land generated by the assurance in the person to whom the assurance was given. The giver of the assurance will usually know of the action taken by the recipient of the assurance in reliance on it, and this will necessarily be so in the case of an assurance implied from inactivity, ie, acquiescence, but it is suggested that there is no absolute rule that such knowledge is necessary in all types of assurance. It is not necessary that the giver of the assurance knew either (a) that the recipient of the assurance acted under a mistake made by that recipient, or (b) the activities of the recipient of the assurance which constitute the necessary detriment to that person. Where knowledge of a particular matter is necessary, it seems likely that constructive or imputed knowledge of that matter by the giver of the assurance is sufficient.

8. Revocation (i) Introduction 7.173  If an assurance of an interest in land is given but is expressly made revocable at the time it is given it is unlikely that the assurance will rank as something which can give rise to a proprietary estoppel. The very word ‘assurance’, with the meaning of some type of statement or conduct which creates an expectation of an interest in land, suggests an irrevocable statement. If the person making the statement indicates that he retains the right

483 See the observation of Oliver J in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n, 147. 484 See para 7.165. 485 See para 7.165. Where knowledge of matters by parties to a contract is important for ascertaining the meaning of the contract by an objective test the knowledge is that which ‘would reasonably have been available to the parties’: see Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, 912 (Lord Hoffmann). The passage is cited in para 7.151.

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The First Element: The Assurance  7.175 to change his mind that which is stated is not in truth an assurance of anything at all. The person to whom the statement is made cannot be assured of anything. The most he can hope for is that the maker of the statement will not change his mind. Thus, while it is not necessary that the statement made is clear and unambiguous486 it is nonetheless necessary that it is not made expressly or implicitly revocable if it is to constitute an assurance which can be the foundation of a proprietary estoppel. The distinction is between a statement which is a definite assurance and a statement which is no more than an expression of a current intention which may change. A definite assurance is needed for there to be a proprietary estoppel.487 It is in part because of the law as summarised in this paragraph that the definition of proprietary estoppel as attempted in this chapter refers to the person who by his assurance has created the expectation of an entitlement to an interest or rights in his land not having done anything to remove that expectation. A statement that the assurance is revocable, or some similar expression, will either prevent the recipient of the assurance from reasonably forming an expectation of an interest or rights or will at least prevent the assurance being sufficiently definite to constitute a necessary element of the estoppel.488 7.174  The more difficult question to be answered is what is the effect in law if an assurance, given in a definite and irrevocable form, is in fact later revoked. It seems apparent that the answer depends largely on the time of the revocation. It is one thing to revoke an assurance that the recipient will become entitled to an interest in land before the recipient has carried out any action in reliance on the assurance. It is another thing to revoke an assurance after the recipient has acted to his detriment for years in reliance on the assurance. On this point, assistance may be gained from the law of estoppel by representation and the law of promissory estoppel. There the principle has emerged that a representation may be altered and that this will mean that the representor will be held to the truth of the original representation but usually only as regards actions taken in reliance on the representation up to the date of the alteration.489 A promissory estoppel, that is a promise not to enforce a person’s full legal rights, is not necessarily – indeed may not be usually – of permanent effect and may sometimes be revoked by the promisor giving notice so as to entitle him to return in the future to his full legal rights against the promisee.490 7.175  With these rules in mind, it may be useful for the purposes of proprietary estoppel to divide the effect of a revocation of an initially irrevocable assurance into (a) a revocation made before the person to whom the assurance is made has acted in reliance on it at all, (b) a revocation made during the course of a series of actions over periods of time by the person to whom the assurance was made which if continued will mean that the essential elements of the estoppel are satisfied, and (c) a revocation made after the person to whom the assurance was made has acted to his detriment on the faith of the assurance such that the essential elements of the estoppel are by that time satisfied. As well as this temporal approach to the matter of revocation, it is sometimes pertinent to consider whether



486 See

para 7.141 et seq for the law on the clarity of the assurance. v Major [2009] UKHL 18, [2009] 1 WLR 776, para 2 (Lord Hoffmann). 488 For the attempted definition, see para 7.2. 489 See ch 3, para 3.65 et seq. 490 See ch 6, para 6.112 et seq. 487 Thorner

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7.176  Proprietary Estoppel there has been a change in circumstances which has brought about the revocation, and to consider what is to happen if the person making the assurance of an interest in land which is to pass to the recipient of the assurance subsequently transfers that interest to a different party before effect is given to the assurance. It is in connection with these last two possible events that the concept of unconscionability, an essential element of a proprietary estoppel, plays a part as does the flexibility of the remedies available to give effect to the assurance, a flexibility which may not be available at any rate to the same extent with other forms of estoppel.

(ii)  The Time of the Revocation 7.176  As regards the first type of case just identified, it seems obvious that if an assurance is made but is revoked before the person to whom it is made has acted on it in any significant way, the revocation will have effect such that no estoppel can be established. In the first place, a person cannot be said to have acted in reliance on an assurance which has been clearly revoked at the time of the action so that the essential elements of reliance and detriment cannot be established. Furthermore, it will usually not be unconscionable for a person to revoke an assurance made before any action has been taken on the assurance. To allow estoppel in such circumstances would be contrary to the nature of most estoppels, including estoppel by representation, promissory estoppel and estoppel by convention. For example, in Crabb v Arun District Council,491 there was an agreement in principle amounting to an assurance entered into by the Defendant Council that the Plaintiff should have an access onto and a right of way over a road owned by the Council. The action to his detriment in reliance on the assurance by the Plaintiff was that he sold a part of his land which provided an alternative access so leaving him dependent on the access the subject of the assurance. If the Council had made it clear before the disposal of the part of the Plaintiff ’s land that he was not to rely on or regard as binding the assurance in question, it seems unlikely that the estoppel could have been established. An assurance given by an agent may bind a principal even, it appears, if given in excess of the instructions of the agent.492 An example of an effective revocation in this first type of case has been said to be where an assurance is made by an agent in excess of his instructions but the recipient of the assurance is informed that the agent has exceeded his instructions before that person has acted to his detriment in reliance on what the agent has said or done.493 7.177  Moving to the second type of case, it should be noted that representations and promises which lead to an estoppel by representation or a promissory estoppel are often clear and unequivocal single statements, whereas the assurance which leads to a proprietary estoppel may be constituted by a series of remarks and actions over an extended period of time. In the same way with proprietary estoppel, the action in reliance on the assurance needed to establish the estoppel may extend over a considerable period of time. The best example of this last type of situation is Thorner v Major494 in which the Claimant worked on



491 [1976]

Ch 179. para 7.108. 493 Crabb v Arun District Council [1976] Ch 179, 193 (Scarman LJ). 494 [2009] UKHL 18, [2009] 1 WLR 776. 492 See

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The First Element: The Assurance  7.179 a farm for about 20 years during which time a number of oblique statements were made to him indicating that he would inherit the farm on the death of the owner. It may be that in the early part of the period the owner of the farm could have revoked any assurance he was in the process of giving by his remarks so that no estoppel would arise, whereas in the later part of the period a revocation would not have had that effect. It is difficult to pinpoint an exact moment when the statements and the actions of the parties came to satisfy the necessary ingredients of a proprietary estoppel. These matters were of importance for the purpose of identifying the property which was the subject of the estoppel since the exact areas within the farm fluctuated from time to time. It may be possible in such a case to find a time when the criteria for the existence of the estoppel became satisfied, described as the time at which there was a transition from a hope of inheriting the farm to an expectation of an entitlement to inherit the farm.495 It seems as a matter of logic that such a moment may also mark the time before which a revocation of an inchoate assurance could operate to prevent any estoppel from arising. However, where an assurance derives from a course of words and conduct each case depends on its individual facts by reference to which the time at which the assurance has become sufficiently certain and at which there has been sufficient action taken in reliance on it to prevent effective revocation must be determined. 7.178  Moving to the third type of case identified earlier, it seems clear that once the elements of the estoppel, assurance, reliance and detriment, have been satisfied the maker of the assurance cannot avoid the estoppel and the granting of some relief to satisfy the estoppel by simply purporting to revoke the assurance. A court would be entitled to regard a revocation made in this way and with no other relevant special facts as of no effect and as leaving the court with power to give full effect to the estoppel. If it were otherwise, proprietary estoppel could be deprived of a good deal of its efficacy by a purported revocation of an assurance long after it had been acted upon.

(iii)  Other Circumstances 7.179  On the other hand, there may be circumstances which result in a revocation of the assurance having an effect even if made after the person claiming the estoppel has acted to his detriment upon an assurance made. For example, it could have occurred in the circumstances of Thorner v Major496 that the owner of the farm sold the farm or a large part of it or mortgaged the farm because he unexpectedly needed the proceeds, perhaps to meet medical expenses or to deal with some unanticipated emergency. A court might then conclude that the owner had not behaved unconscionably and that the assurance had to be confined to the remainder of the farm or had to focus on other assets of the owner.497 Indeed, it is possible that the farm was sold and the proceeds used or dissipated prior to the decision 495 ibid, para 60 (Lord Walker). See also para 95 (Lord Neuberger). cf the view of Lord Hoffmann (at para 8) that in cases of this sort it would be unrealistic to pinpoint the date on which the assurance became unequivocal. 496 [2009] UKHL 18, [2009] 1 WLR 776. 497 ibid, para 89 (Lord Neuberger). In Uglow v Uglow [2004] WTLR 1183 the testator had induced the Claimant to enter into a farm partnership with him by an assurance that the Claimant would inherit the farm on his death. After a time the partnership was abandoned and the Claimant was granted a tenancy of a substantial part of the farmland. It was held that this was in effect an effective revocation of the terms of the original assurance. Another way of looking at the matter is to say that the original assurance was implicitly qualified by the prospect of its alteration in unforeseen changed circumstances.

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7.180  Proprietary Estoppel of the court. Leaving aside the question of when an equitable right created by estoppel can bind a successor in title of the person making the assurance,498 a court in some circumstances might have no way in which to satisfy the equity. A different situation might be that in which the subject of a proprietary estoppel was disposed of by the owner so that a satisfactory effect could not in practice be given to the estoppel by vesting the interest in the person entitled to the estoppel, but that that person could be awarded a part of the proceeds of the disposal in satisfaction of the estoppel. Something of this nature occurred in Gillett v Holt499 where the person bound by the estoppel had disposed of a part of a farm which he had promised to leave in his will to the Claimant and the Court gave effect to the estoppel by ordering that the farmhouse which had been retained should be vested in the Claimant and that a monetary sum should be paid to the Claimant as a recompense for his not being able to enjoy the remainder of the property. A further matter which might render it not unconscionable for the maker of an assurance to revoke it would be if the person to whom the assurance was given had acted improperly in relation to the subject matter of the assurance or in his relations with the maker of the assurance. What is underscored by these considerations is the flexibility of the remedy or relief which a court can order so as to give a fair effect to the equity which has arisen and to reach a result which avoids unconscionability.500 7.180  The statement of the principle of proprietary estoppel as proposed in this chapter refers to an assurance given which creates an expectation of an entitlement to an interest or rights in land with the giver of the assurance knowing of the expectation and doing nothing to remove it.501 The removal of the expectation may be effected in various ways. One way is by an express revocation of the assurance as considered above. Whether such a revocation and the resultant removal of an expectation will have effect in law to prevent an estoppel depends largely on the timing of the revocation, and depends sometimes on other circumstances, as just explained. What may in some cases be envisaged by the removal of the expectation by the giver of an assurance is the correction of a mistake made by the person to whom the assurance is given. If A owns a piece of land and sees B encroaching over his boundary by erecting a part of a building and A, knowing of his true boundary and of B’s mistake, makes no protest and takes no action to correct the mistake of B, then a

498 See ch 2, part (I). The view generally taken is that the inchoate rights created in favour of the recipient of an assurance between the time when the elements of a proprietary estoppel come into existence and the time when the estoppel crystallises by an order of a court can constitute an equitable proprietary interest in the land the subject of the assurance and so can in principle bind a successor in title of that land. Therefore if there is a purported revocation of the assurance in these circumstances it appears that the questions which a court may have to consider are: (a) whether at the time of the revocation all of the essential elements of the estoppel have been satisfied; (b) whether the inchoate rights created have been protected such as by notice on the register where that is necessary under the Land Registration Act 2002; (c) if both these questions are answered in the affirmative, whether it would be unconscionable to allow the successors in title to depart from the assurance; and (d) if the answers to the second and third questions are that the successors in title are not to be bound by the assurance, whether the equity can be satisfied by some order against the original giver of the assurance such as by an order for the payment of money by that person to the claimant. See also para 7.182 for a general summary of the questions which may arise in connection with revocation. 499 [2001] Ch 210. The proceedings were heard and the order made during the lifetime of the Defendant. 500 The wide range of forms of relief, or combinations of forms of relief, available in satisfying a proprietary estoppel is examined in para 7.277 et seq. 501 See para 7.2.

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The First Element: The Assurance  7.182 classic case of a proprietary estoppel is likely to arise. If A at once points out the true situation to B, no estoppel can arise since there is no assurance, express or implied, by A. If A sits back and watches until B has largely completed the building and then points out the mistake of B, the situation can be analysed as an implied assurance by A brought about by his initial acquiescence in B’s conduct and then a purported later revocation of that implied assurance. Whether the later revocation has effect to prevent an estoppel arising depends on the principles as just explained. Where the pointing out of the mistake of B occurs after B has proceeded some way with the construction of his building on the basis of his mistake, then the revocation may have no effect on the estoppel which has then come into existence.

(iv) Conclusion 7.181  Before any question of the effect of a revocation arises it must of course be apparent that the assurance has been revoked or purportedly revoked. If there is any doubt on the matter, the test is likely to be the same as that for the making of an assurance; it must be ‘clear enough’ that a revocation has taken place. Where the alleged assurance is said to be constituted by a series of events, such as a sequence of remarks or a period of acquiescence, it may be that the effect of a denial of an assurance or of its effect is not strictly a revocation of an assurance made but something which, when done early enough, prevents an assurance ever arising. 7.182  Therefore, when there is a revocation or a purported revocation of an assurance there will often be two questions to be considered. The first question is whether the revocation or withdrawal of the assurance is made early enough to prevent an estoppel arising. A revocation will generally have the effect of preventing an estoppel arising if it is made before the recipient of the assurance has acted in a significant way to his detriment in reliance on the assurance. If the revocation so made prevents an estoppel from arising, there is no more to be said. The second question is what is the effect of a purported revocation of an assurance after the estoppel has come into existence by reason of sufficient acts carried out in reliance on the assurance. When full effect can be given to the terms of the assurance, such as by the transfer of an interest in land, then the purported revocation can normally have no effect in law. If at the time of the purported revocation or prior to that time events have occurred which make an order for the satisfaction of the assurance in its exact terms impracticable, the court may order some alternative relief, such as giving a partial effect to that which was assured or ordering some monetary compensation to be paid in lieu of that which was assured.502 Finally, it must always be remembered that the fourth main element of proprietary estoppel is unconscionability. It is possible that due to a change of circumstances, or due to the conduct of the person asserting the estoppel, a revocation of an assurance is made even after the essential elements of an estoppel, an assurance, reliance

502 It is suggested in para 7.270 that in principle there are two main circumstances in which a court will order some monetary compensation rather than the enforcement of the terms of the assurance as the appropriate means of satisfying the equity, namely: (a) when giving effect to the exact terms of the assurance is impractical; and (b) where giving effect to those terms would confer on the person claiming the estoppel a benefit out of all ­proportion to the detriment suffered by that person.

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7.183  Proprietary Estoppel and detriment, have occurred but because of these matters or some other change of circumstances it would not be unconscionable to allow the maker of the assurance to resile, wholly or partly, from the terms of his assurance. In such circumstances a revocation, even if made at a late time, could have a legal effect.

9.  Certainty of Land and Certainty of Interest (i) Introduction 7.183  The formulation of the principle of proprietary estoppel proposed in this chapter starts with the words ‘Where A owns an interest in land’. These words go to the foundation of proprietary estoppel which is at any rate primarily concerned with land and interests in land and the creation of interests in and rights over land.503 Lord Walker has put the point as being that it is a necessary element of proprietary estoppel that the assurance given should relate to identified property owned (or, perhaps, about to be owned) by the person against whom the estoppel is to operate.504 There seems no reason why the estoppel should not in exceptional circumstances operate against a person with a contractual right to acquire an interest in land, or even against a person with an expectation of acquiring an interest in land, provided that in due course the interest which is the subject matter of the assurance is acquired by that person. It appears to be important in the concept of proprietary estoppel, at least in cases which concern land,505 that the rights the subject of the assurance, and thus the rights created if effect is given to the assurance,506 shall be rights over the land of the maker of the assurance.507 7.184  A question which has arisen is: how certain does the area of land to which the assurance relates have to be? An associated question is: how certain does the interest in land, which the person receiving the assurance expects to acquire or to hold, have to be? Some authorities suggest that for both purposes certainty is required. In his well-known

503 The question of whether proprietary estoppel can operate as regards rights over chattels and other rights is discussed in part (H) of this chapter. 504 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 61. 505 It is probable that proprietary estoppel can operate as regard rights other than rights in land where of course different considerations will apply. This subject is examined in part (H) of this chapter. 506 The relief ordered by a court when a proprietary estoppel is established in respect of land may be an order for the payment of a sum of money to the claimant as opposed to an order for rights over land, for instance where the conferring of rights over land such as were the subject of the assurance would be wholly disproportionate to the detriment suffered by the claimant: see para 7.270 et seq. 507 See Western Fish Products Ltd v Penwith District Council [1981] 2 All ER 204, (1979) 38 P & CR 7, 27 (Megaw LJ). Normally of course a person may act as he wishes on his own land and has no need to acquire a right against another person to enable him to do so. A promissory estoppel might operate so as to enable a person to carry out activities on his own land, such as a promise by a neighbour not to enforce a restrictive covenant, or a promise by a landowner not to enforce a covenant in a lease which prohibits alterations. In addition, a proprietary estoppel has been held to operate so as to enable a landowner to compel the acquisition of his land on certain terms as to the price by a local authority: Salvation Army Trustee Co Ltd v West Yorkshire Metropolitan County Council (1980) 41 P & CR 179 (see para 7.167). The Western Fish decision concerned an alleged assurance by a local planning authority and is important for the possible operation of estoppel generally in the field of administrative law as discussed in ch 2, part (D). See also Newport City Council v Charles [2009] 1 WLR 1884 in which there was held to be no proprietary estoppel when a tenant of a council made a false representation that his mother had not died in order to prevent the tenancy being determined.

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The First Element: The Assurance  7.186 statement of principle in Ramsden v Dyson, which became a pillar of the developing law of this form of estoppel, Lord Kingsdown said: ‘If a man, under a verbal agreement with the landlord for a certain interest in land, or, what amounts to the same thing, under an expectation, created or encouraged by the landlord, that he shall have a certain interest’.508 Oliver J in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd509 commenced his well-known proposition of the meaning of proprietary estoppel by the words ‘if under an expectation created or encouraged by B that A shall have a certain interest in land’. Such statements have led to the suggestion that for an assurance relating to land to bring about a proprietary estoppel the land and the interest in land which are the subject matter of the assurance must be certain. Certainty in this context may mean rather different things. Certainty in the sense of the geographical and physical extent of a piece of land is in the end a matter of description and cartography. Certainty as regards an interest in land usually refers to both the nature of the interest (freehold, leasehold, an easement, etc) and to the incidents of the interest (for example, the terms of a lease and type of easement such as an easement on foot or on foot and by vehicles). No doubt for there to be a valid contract to dispose of an interest in land or a valid disposal of this interest, the physical extent of the land must be precisely delineated and certain important attributes of a particular interest must be clearly stated; thus a lease must encompass an exact area of demised land and be granted for a term certain running from a stated date or be granted as a periodic tenancy.510 7.185  Technical rules have been developed on some of these aspects of conveyancing and to import such rules as regards assurances creating a proprietary estoppel would be to truncate the utility of this form of estoppel especially where the assurance is given in informal and family circumstances. References in decided authorities as mentioned in the last paragraph to a certain interest in land mean no more than that particular land and a particular interest must be involved. They do not, when read in their context, suggest that the degree of certainty such as is required in formal conveyancing documents is required if a proprietary estoppel is to be brought into existence. Nonetheless, a certain degree of particularity is required as regards the subject matter of an assurance and the matter may be considered by reference to, first, the physical extent of the land involved and, secondly, the nature and attributes of any interest in the land involved.

(ii)  Certainty of Extent: The Time of the Assurance 7.186  For the purposes of the necessary certainty of the physical extent of the land the subject of the estoppel, it is convenient to discuss first the test of certainty at the time of the assurance, and then to discuss the question of the impact of variations in the area following the making of the assurance but before effect is given to the estoppel by an order of the court. Prior to Thorner v Major,511 there was little clear guidance on how certain or specific

508 (1866) LR 1 HL 129, 162. The full proposition is set out in para 7.20. 509 [1982] QB 133n, 144. 510 See Eastwood v Ashton [1915] AC 900 (description of ‘parcels’ in a lease); Bishop of Bath’s Case (1605) 6 Co Rep 34a (certainty of commencement date in a lease). 511 [2009] UKHL 18, [2009] 1 WLR 776.

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7.187  Proprietary Estoppel an assurance had to be on the identity of the property involved. In Layton v Martin,512 a man invited his younger mistress to come to live with him and wrote to her offering ‘what emotional security I can give, plus financial security during my life and financial security after my death’. Years later the couple parted and no financial provision was made for the former mistress in the man’s will. On his death the mistress made a claim founded partly on proprietary estoppel. It was held by Scott J that no proprietary estoppel could arise since no specific assets the subject of the assurance could be identified. In Re Basham decd,513 a woman had helped her mother’s husband in ways such as buying carpets for his house and preparing meals for him and received general assurances such as that the house was hers and that she was to have his house. When the owner of the house died intestate, it was held that the woman was entitled to his property including the house by virtue of a proprietary estoppel. In Thorner v Major,514 Lord Walker observed that he preferred to express no view on whether Re Basham was correctly decided so far as it extended to the residuary estate, and that the Deputy Judge had relied largely on authorities about mutual wills which were arguably a special case. 7.187  Guidance of a general nature on the degree of certainty of the extent of the property the subject of an assurance was given in Thorner v Major. Lord Walker stated that the assurance had to relate to ‘identified property’ owned by the maker of the assurance.515 Lord Neuberger considered that the beneficial effect of proprietary estoppel would be artificially fettered if the precise extent of the property the subject of the alleged estoppel had to be strictly defined at every stage.516 In Thorner v Major, the extent of the property the subject of the assurance was a named farm of about 350 acres of freehold low-lying pasture and rough grazing owned by the maker of the assurance and on which the Claimant worked at the time of the events which constituted the assurance. This was held to be sufficiently certain to create an estoppel. Lord Neuberger distinguished between the time when the equity came into existence, which is the time when its essential elements were satisfied, and the time when the equity crystallised, which is the time when effect came to be given to it by an order of the court. He said that it was enough if the property the subject of the equity could be ‘conceptually identified’ at the earlier time.517 The principle therefore appears to be that at the time the assurance is made, such that the assurance element of the estoppel

512 [1986] 2 FLR 227. 513 [1986] 1 WLR 1498. 514 [2009] UKHL 18, [2009] 1 WLR 776, para 63. 515 ibid, para 61. 516 ibid, para 98. 517 ibid, para 95. ‘Conceptual identification’ of the area of land may not be difficult where the estoppel arises from a single and definite written or oral assurance followed by a definite act, or the commencement of a series of acts, in reliance on the assurance. Identification of the area may be more difficult when the estoppel depends on a series of statements made or other conduct by the person alleged to have made the assurance over a period of time and the land the subject of the assurance fluctuates significantly in extent over this period. The time for a determination of the question of a conceptual identification in such circumstances is probably the time at which what has been written or said or done itself becomes clear enough to constitute an assurance. Further essential elements after the assurance may need to be satisfied before the estoppel comes into existence, notably actions in reliance on the assurance by the person to whom the assurance was made but it may be that variations in the area of land concerned during the period of these actions are best considered as later fluctuations in area as discussed in the next few paragraphs and do not prevent the satisfaction of the need for a sufficiently definite initial conceptual identification of the area of land.

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The First Element: The Assurance  7.189 comes into existence, the property concerned must be reasonably clear and certain in terms of its general identity and extent but that a strict and exact definition with exact boundaries such as would characterise a conveyance of land or a lease is not always required. Any disputed case must be looked at on its own facts with this general principle in mind. A reference to a named property such as ‘X Farm’, the general extent of which at the relevant time can be ascertained from external facts and plans and records, is likely to be certain enough as a conceptual identification but an imprecise description of property such as ‘a fair part of my land’ or ‘the less valuable areas of my property’ may not be certain enough.518

(iii)  Certainty of Extent: Later Fluctuations in Area 7.188  The next question which arises is what rule is to be applied if the extent of the property of the maker of the assurance alters between the time when an assurance relating to a sufficiently identified area has been made and the time when the estoppel crystallises, such as at the death of the maker of the assurance, when the court must give effect to the estoppel. This can readily happen with a commercial property such as a farm and can happen with a domestic property where, for instance, the garden is extended by the acquisition of further land or a cottage adjoining the main house and owned with it is sold off. The maker of the assurance can hardly be prevented from disposing of his property as he wishes from time to time, but it seems unacceptable that later fluctuations in the extent of the property after an estoppel has come into existence can prevent any effect being given to the estoppel. 7.189  The boundaries of an area of land are usually defined in two dimensions on the surface of the earth. In the absence of some express limitation, the owner of the land is taken in law to own the ground below the surface and the airspace above the surface to such an extent as is needed for the exploitation of the land by activities such as mining or the building of structures on the land.519 Accordingly, the law as here discussed concerns alterations in the boundaries of the ownership of land in two dimensions. The physical nature of the land can of course be changed after the relevant assurance by building on it or by altering existing buildings. Also, subordinate interests in the land, such as tenancies or mortgages, may be created or terminated. Such alterations should not alter the principle of the continuation of a proprietary estoppel after the relevant assurance but it may affect the ultimate question of the operation of the estoppel. For instance, the building on a piece of land may have been so extensive and may have so enhanced the value of the land that it would be disproportionate to satisfy the estoppel by vesting the enhanced property in the

518 The question of the certainty of the land the subject of the representation is not dissimilar to the more general question of the necessary clarity of the assurance as discussed in para 7.141 et seq. While assurances which have a considerable degree of vagueness within them have been held sufficient to initiate a proprietary estoppel, some statements have been said to be too vague such as an assurance of the provision of ‘financial security’ for a mistress: Layton v Martin [1986] 2 FLR 227. 519 The principle, which derives from the truncated latin maxim ‘usque ad inferos, usque ad coelum’ and which can be translated as ‘as far as the depths of the earth and as far as the sky’, is found in a gloss by the Principal Glossator of Bologna on Justinian’s Digest, as explained by Lord Hope in the Supreme Court in Bocardo SA v Star Energy UK Onshore Ltd [2011] 1 AC 380.

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7.190  Proprietary Estoppel person entitled to the estoppel, and it may be more satisfactory to satisfy the equity created by the estoppel and the expectation of an interest by an order for the payment of a sum of money.520 7.190  The situation of a change in boundaries and ownership following the making of the assurance as here under discussion arose in Gillett v Holt.521 The subject of the estoppel was a farmhouse in which the Plaintiff lived as a farm manager and an area of farmland. The assurance was that the Plaintiff would receive the property on the death of the owner. There was a disagreement between the parties and the maker of the assurance as the owner of the land dismissed the Plaintiff, disposed of much of the land but not the farmhouse, and made a will leaving nothing to the Plaintiff in his will. The question was how effect was to be given to the estoppel in these circumstances when it crystallised by the bringing of court proceedings at a date prior to the death of the owner. It was held that the Plaintiff should have the freehold of the farmhouse and a sum of £100,000 as compensation for his exclusion from the rest of the farming business the subject of the assurance. Rather different circumstances and a different situation occurred in Thorner v Major.522 As mentioned earlier, at the time the estoppel came into existence the farm comprised 350 acres of freehold land. In the 15 years between that time and the date of the death of the owner the area of the farm fluctuated from time to time with an area sold for development, other land acquired, and land let out on tenancies. The subject matter of the assurance in terms of the land as it stood at the date of the assurance could be identified as mentioned earlier, but in a different sense the subject matter of the assurance could be described as the farm as it existed from time to time.523 While changes in the extent of the property before the estoppel crystallised were relevant to the relief to be granted (as in Gillett v Holt) effect could be given to the assurance and the estoppel by an order for the vesting of the farm property in the Claimant as it stood at the time of the order where there was still an identifiable property at that time.524 7.191  Some fairly clear rules on what is to be done in the event of a significant alteration in the ownership or extent of the property the subject of the estoppel between the date on which the assurance was made and the date when the estoppel crystallised can be derived from these decisions. An initial point is that such alterations do not prevent effect being given to the estoppel, whether the alterations are in the ordinary course of property management or are made in order to prejudice the person with the benefit of the estoppel. Following the alterations in area there are then two broad possibilities. One possibility is that due to the history and nature of the property it was contemplated at the time of the assurance that there would be some alterations in the future in the ownership and extent of a defined property such that the character of the assurance was that it was to relate to the property as that property would stand when the time came for the assurance and the estoppel to be put into effect. This was the situation in Thorner v Major and, provided that at the time of the putting into effect of the estoppel there was still a property which was 520 See part (F) of this chapter for an examination of the principle of the appropriate remedy for the satisfaction of a proprietary estoppel. 521 [2001] Ch 10. 522 [2009] UKHL 18, [2009] 1 WLR 776. 523 ibid, para 95 (Lord Neuberger). 524 ibid, para 9 (Lord Hoffmann). See also Suggitt v Suggitt [2011] EWHC 903 (Ch).

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The First Element: The Assurance  7.192 identifiable as the property the subject of the assurance, effect will be given to the estoppel by ordering the property as it stood at the date of the crystallisation to be vested in the person with the benefit of the estoppel in satisfaction of the estoppel. The second possibility is that the solution as just described cannot be achieved, either because the assurance clearly related to the property as it stood at the time of the assurance and was not subject to any later fluctuations in its extent, or because the later fluctuations were so extensive that there was no longer an entity which could be identified as the property the subject of the assurance available to be vested in the claimant in satisfaction of the estoppel. In that event some different solution has to be found. An assurance which is so precise that it brings about this situation may not often arise, certainly in a domestic situation. Two possible solutions under the second possibility appear to be either the vesting of what remains of the property the subject of the assurance in the claimant with a monetary sum payable in addition to him as compensation for that part of the property which cannot be vested in him or, where there is no part of the property which can be vested in the claimant, a simple monetary payment in compensation. It should be emphasised that there is no rigidity in the relief which may be ordered with a view to giving effect to a proprietary estoppel and in the case of alterations in the property other solutions, or combinations of solutions, may be appropriate on the particular facts of any case.525

(iv)  Certainty of Interest 7.192  In many cases, the physical extent of the property the subject of the equitable right may not be in any doubt. The question will then be what interest in that property is to be awarded to a claimant in satisfaction of his equitable rights. What is to be ordered depends on the terms of the assurance, the terms of the expectation created, and any relevant surrounding circumstances. While the need for certainty requires that the physical extent of the property must be at least conceptually identifiable at the time of the assurance no such precision, even of a general nature, is required as to the interest in the identified property which is the subject of the assurance. The related rule that for the purposes of proprietary estoppel the assurance need only be ‘clear enough’ means that general indications of the interest or rights which the claimant is to have in the property are sufficient to give rise to an estoppel; for example, general expressions such as that a house will be a person’s home as long as he lives or as long as he wants it are likely to create an estoppel subject to other essential elements being satisfied.526 Any deficiency in certainty is cured by the ability of a court to formulate a remedy in satisfying the estoppel which will do justice. For instance, the vesting in a claimant of a right by way of a licence to live in a property for the remainder of the life of the claimant may be the conferment of an interest or rights in the property which 525 A further possibility is that the area of an entity, such as a farm, has grown very substantially between the making of the assurance and the time when the estoppel crystallises, such as on the death of the owner. Unless it is clear that the assurance was to embrace even the prospect of an area substantially extended beyond the area identifiable at the time of the assurance, a possible solution in such a situation, given the flexibility in remedies available to satisfy the equity, would be to order the vesting of the originally identified land in the claimant and to allow the additional area to pass under the will or intestacy of the person who made the assurance. Everything depends of course on the facts of each individual case and on that which the court considers will best achieve fairness and avoid unconscionability. 526 See Inwards v Baker [1965] 2 QB 29.

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7.193  Proprietary Estoppel do justice to the likely intention of the giver of the assurance and which cures any uncertainty in the rights intended to be granted. 7.193  The primary consideration may in many cases be the terms of the expectation of an entitlement engendered by the assurance and the main purpose of an order will in many cases be to give effect so far as practicable to this expectation.527 Another, and perhaps in some cases contrary, consideration is the view that the relief ordered by the court should be the minimum needed to satisfy the equity and to do justice, and in particular to avoid detriment to the claimant.528 Considerations of this nature are best discussed in detail in connection with the general subject of the appropriate relief in proprietary estoppel,529 but instances may here be given of the variety of interests in or rights over land which have been vested in a claimant as a result of a proprietary estoppel. The most drastic remedy is that the freehold of an area of land has been taken from the maker of the assurance and given to the claimant.530 A long lease may be awarded to a claimant if that is what he was led to expect.531 The status of a lease may be altered in favour of a claimant so that it becomes binding and enforceable against the maker of an assurance when it would not otherwise be so enforceable,532 and a lease may be ordered to be granted on terms which at the time would have been appropriate in a building lease.533 An easement such as a right of way may be granted where that was the subject of the assurance.534 It may arise that the only expectation engendered in a claimant by an assurance given to him is of an interest on terms to be agreed. A refusal of a proprietary estoppel in such a case may be rationalised on the ground that the expected interest is too uncertain,535 but the best reason for refusal would today be the established role that in such a case the claimant does not have an expectation of an entitlement to any interest but only an expectation of future discussions which may or may not lead to a contractual entitlement to an interest. The later type of expectation is insufficient to create a proprietary estoppel.536 7.194  In some instances the assurance, and the expectation created by it, concern rights over land which cannot be readily categorised as legal or equitable proprietary interests in the land. An obvious right of this nature is a right of occupation. The court may still make an order which gives effect to the expectation. The best example of such a process

cf Bankart v Tennant (1870) LR 10 Eq 141. 527 Sledmore v Dalby (1996) 72 P & CR 196, 208. 528 See, eg, Crabb v Arun District Council [1976] Ch 179, 198–99; Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394 (Brennan J). A survey of Australian and New Zealand decisions on this matter is contained in the decision of the Court of Appeal of New Zealand in Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567. 529 Both the general purpose of the relief and the varieties of orders which may be made are examined in part (I) of this chapter. 530 Dillwyn v Llewelyn (1862) 4 De GF & J 517; Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776. 531 It appears that in Ramsden v Dyson (1866) LR 1 HL 129 this is what would have been done by the Court if the principle as explained by Lord Kingsdown had been applied. 532 Huning v Ferrers (1711) Gilb Rep 85. 533 Stiles v Cowper (1748) 3 Atk 692. 534 Crabb v Arun District Council [1976] Ch 179. 535 Willis v Hoare (1998) 77 P & CR D 42 when the assurance was of a new sub-lease but no assurance was given on the terms of the lease. 536 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752. The need for an expectation of an entitlement to an interest is explained in para 7.125 et seq.

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The First Element: The Assurance  7.195 is Plimmer v Mayor, etc, of Wellington537 where the predecessor in title of the Plaintiff had built structures in Wellington Harbour in New Zealand in the expectation that he would not be disturbed in possession of the land. The fact that the interest to be secured had not been expressly indicated to the builder of the structures did not prevent an estoppel and it was ordered that the Plaintiff should have an irrevocable licence in the land.538 A similar situation arose in Inwards v Baker,539 where a son had built a bungalow on his father’s land in the expectation that he would be able to live in it as long as he wished, and the order of the court was that he should have a right to do just that. Relief of this sort raises questions, not always discussed in the decisions, such as whether what is created is an equitable life interest which is a proprietary interest in land or a licence which normally does not have this status, whether the rights are personal to the claimant or are transferable, and whether the rights can bind third parties such as the purchaser of land burdened by the rights. These questions are considered in the context of the general subject of the relief appropriate to satisfy a proprietary estoppel.540 Questions of this nature were not of direct or immediate significance in Plimmer’s case since the land had been acquired by the Wellington Corporation and the important question was whether the interest vested in the Plaintiff was sufficient to entitle him to compensation for the acquisition of that interest. Lastly, if no interest or rights in or over land can be ordered in favour of the Claimant sufficient to give full effect to the estoppel, the court may award him monetary compensation either by itself or in addition to some interest in land awarded.541 The overall theme which arises from the decisions is that the interest in land, or the incidents of that interest, do not have to be even ‘conceptually’ identified at the time of the assurance and that a court has a wide discretion in terms of interests and rights when deciding how best to satisfy the equity created by a proprietary estoppel.

10.  The Burden of Proof (i)  The Burden and Standard of Proof 7.195  The person who asserts the existence of a proprietary estoppel, whether he is the claimant or defendant in legal proceedings, has the burden of proving the existence of all those factual matters necessary to establish the estoppel. There is an exception or possible

537 (1884) 9 App Cas 699. 538 ibid, 713–14. 539 [1965] 2 QB 29. 540 The question of the enforcement of an estoppel by or against successors in title of the original parties to the estoppel is discussed generally in ch 2, part (I). Older authority suggests that a right, the subject of an assurance and an expectation, may be too vague to be an equitable right which can arise by virtue of a proprietary estoppel: Bankart v Tennant (1870) LR 10 Eq 141 (alleged right to take superfluous water from a canal for commercial purposes while the Claimant remained a good customer of the owner of the canal). The general principle is that when a legal or equitable proprietary interest in land is ordered to be vested in a claimant in satisfaction of a proprietary estoppel, the interest should be transferred or created, and where necessary registered, in the same way as would apply to any property transaction of the character involved. The new transaction will then bind other persons according to the ordinary principles of the law of real property. Any doubt relates to lesser rights, such as licences, and this matter is discussed in para 7.298 et seq. 541 See para 7.269.

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7.196  Proprietary Estoppel exception to the application of this rule where it concerns proof of activities in reliance on an estoppel,542 but there can be no doubt on its application to the necessary assurance which is the first main element of the principle of proprietary estoppel. The rule follows the general principle of common sense that the burden of proving a matter is on the person who asserts that matter.543 The same rule applies to the proof of the representation or promise which founds an estoppel by representation.544 As in civil litigation generally, the standard of proof required is on the balance of probability. The factual matters necessary to constitute the assurance may be proved by admission or by adducing evidence or by making inferences of fact (sometimes called findings of secondary fact) from the primary facts as established by direct evidence or by admission. The person asserting the estoppel will normally be required to plead by way of a particulars of claim or a defence the matters said to give rise to the assurance.545 There is no burden of proof or evidence on questions of law, such as the meaning of a document said to contain the assurance, and such matters of law are simply for the decision of the court.

(ii)  Summary of Matters Requiring Proof 7.196  It is useful to conclude this part of the chapter, dealing with the assurance which is the first of the four main elements of proprietary estoppel, by summarising the matters which a claimant for an estoppel must establish, usually by evidence or admission, if he is to succeed in establishing the estoppel. There are eight components of the assurance which must be established, and these are summarised in the eight succeeding paragraphs. 7.197  First, and obviously, the existence and content of the assurance must be proved. A written assurance proves itself. If the assurance is oral, evidence of what was said and in what circumstances it was said will need to be adduced. An implied assurance constituted by passive acquiescence is proved by evidence of the actions of the claimant and the fact that the other party offered no protest at what was done. Where the assurance is said to be inferred from positive actions of a person other than the making of a statement, those actions and their circumstances must be proved. Naturally the meaning and clarity of an assurance may depend on the circumstances in which it was given or on events leading up to it or on matters known to the parties at the time of the assurance and, to the extent that such factual matters may be relevant, the burden of proving them is on the person asserting the estoppel. 7.198  The next matter is that the assurance must relate to an identified area of land. While the area must be identified, such as by reference to a named farm, it is not necessary to show that same precise description of the land such as is shown by exact boundaries or by a precise acreage or by reference to a plan as would be done in a conveyance or lease of the land. The interest or rights in the land the subject of the assurance should also be identified,

542 See para 7.216 et seq for a consideration of this question. 543 Constantine Line v Imperial Smelting Corporation [1942] AC 154, 174 (Lord Maugham). 544 See ch 3, para 3.83. 545 If the proceedings have been commenced under Part 8 of the Civil Procedure Rules (CPR) because no substantial issue of fact is involved there will not be pleadings, and any necessary evidence will be by way of witness statements.

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The First Element: The Assurance  7.204 although this will usually be apparent from the terms of the assurance and will sometimes be in a very general form. 7.199  It must be shown that when he made the assurance the maker of it intended it to be taken seriously and to be acted upon so that, if the assurance is of the nature of a promise, it must be definite and not merely a statement of a present intention which is revocable and which may be changed at any time. Although intention is a mental state of the person making the assurance, and thus of the person alleged to be estopped, the burden of proving the intention is on the person alleging the estoppel. Since the existence of the requisite intention has to be assessed objectively, that is by reference to what a reasonable person in the position of and with the knowledge of the recipient of the assurance would conclude was intended, the proof of intention may not be unduly difficult. It is of the nature of an objective test that the maker of the assurance is not normally entitled to give evidence of what he actually and subjectively intended since that is irrelevant. 7.200  It must also be shown that the person who made the assurance was aware at the time of the assurance of his own rights which are affected by the assurance. This component is in a sense derived from the fourth main element of the estoppel which is unconscionability, since it cannot be unconscionable for a person to fail to assert or not to insist upon a right of which he is unaware. The necessary knowledge is again an aspect of the mental state of the person making the assurance but it is something which can often be inferred as a fact from relevant circumstances. It is of course open to the person who has made an assurance, whether by acquiescence or by express language, to give evidence that at the relevant time he did not know of his true rights. 7.201  It is usually the case that the maker of the assurance well knew at the time of the assurance or subsequently of the actions of the other party taken in reliance on the assurance, that is of the actions which constitute the second main element of the estoppel. This will necessarily be so if the assurance is to be derived from acquiescence, since acquiescence to some action of its nature depends on the person acquiescing being aware of that action. In cases of a positive assurance, it is probably not necessary in all cases to show that the maker of the assurance was or became aware of the action taken in reliance on it by the person to whom it was made. 7.202  The person claiming the estoppel must show that, as a result of the assurance, he formed an expectation of an interest in land and that that expectation was of an entitlement to the interest and was not just a hope of obtaining the interest or an expectation of being able to negotiate for an entitlement to obtain the interest. The claimant must also show that the expectation which he formed was reasonably formed in the circumstances. 7.203  The next matter is that it must be shown that the maker of the assurance was or became aware of the expectation of the other party of an interest in land brought about by the assurance. This is a further instance of the mental state of the maker of the assurance which has to be proved by the person claiming the estoppel, but again it is something which can often be inferred from the content and circumstances of the assurance. It is again open to the maker of the assurance to state in evidence that he had no knowledge of any such expectation if he is alive and able to do so. 7.204  The last matter is the meaning of the assurance, the rule being that assurance and its meaning have to be ‘clear enough’. Where the assurance is in documentary form its 635

7.205  Proprietary Estoppel meaning, like the meaning of any document, is a matter of law and there is no burden or standard of proof on matters of law. There is some authority for saying that the meaning of words spoken as part of an oral contract is a matter of secondary fact to be derived from the primary facts of what was said, and that in such a case the subjective understanding of a party to the contract of the meaning of words which he has spoken can be heard in evidence. If this principle is correct, and can be extended to apply to oral assurances, then the maker of the assurance will be entitled to give evidence of what he meant by his spoken words. Possibly in such circumstances the recipient of the assurance may be entitled to give evidence of what he understood the spoken words to mean.546

(E)  The Second Element: Reliance 1.  The Need for Reliance 7.205  The core of an estoppel, and its very nature as a doctrine, is that a person is bound to what he has stated even though the result is that that person loses the full legal rights which he would otherwise have. The moral basis of the doctrine, often expressed by the word ‘unconscionability’, requires that before the result of a statement can be as just stated, the person who receives that statement must have both acted upon it and acted to his detriment in the sense that if the maker of the statement is able to go back on it that person would suffer detriment or prejudice. It is for this reason that reliance and detriment are the second and third main elements of proprietary estoppel. The two concepts of reliance and detriment are often interlinked in that if a person behaves in a certain way in reliance on an assurance it may be obvious that if the assurance is not honoured that person will suffer detriment. Despite this it is still useful to examine the two elements separately. Because the need for reliance is inherent in the general nature and justification for an ­estoppel,547 it is an essential element of the other three forms of reliance-based estoppel, estoppel by representation, promissory estoppel, and estoppel by convention, and it is examined in relation to those estoppels.548 7.206  There is abundant authority that reliance on the assurance by some form of conduct on the part of the person to whom the assurance is given is an essential element of proprietary estoppel. The requirement is treated as a separate element in two of the main modern statements of the principle, one being the decision of Oliver J in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd549 and the other being the decision of the House of Lords in Thorner v Major.550 The rule is often expressed as being that what is required is reliance

546 See para 7.152 for a discussion of this matter. 547 Reliance and detriment are not essential elements of estoppel by deed, an ancient form of estoppel where the formal nature of the deed is considered sufficient to justify the estoppel. Nor do reliance and detriment play any part in estoppel by record where no statement or assurance is involved. 548 For reliance in estoppel by representation, see ch 3, part (E), section 2; for reliance in promissory estoppel, see ch 6, part (G), section 2; for reliance in estoppel by convention, see ch 5, part (F), section 2. 549 [1982] QB 133n, 144. 550 [2009] UKHL 18, [2009] 1 WLR 776, para 29 (Lord Walker), para 72 (Lord Neuberger). An older authority to the same effect is Bankart v Tennant (1870) LR 10 Eq 141, 148, in which the Plaintiffs claimed an equitable right to

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The Second Element: Reliance  7.208 on the assurance but a fuller and more accurate description might be a need for reliance on the expectation of becoming entitled to an interest in or rights over land which is itself created by the assurance.551 The necessary conduct in reliance on an assurance can, of course, be passive in nature such as a decision not to leave a particular position or post or property.552 7.207  Compared with the first main element of proprietary estoppel, the assurance, the element of reliance is fairly easy to explain. The person claiming the estoppel must have acted in reliance on a reasonably formed expectation of an entitlement to an interest or rights in land but that person does not have to show that he was under a mistake as to his legal rights at the time when the actions were carried out. He may or may not have acted under such a mistake.553 The chief questions which arise and which require explanation in connection with reliance are (a) the exact meaning of reliance, (b) the time of the conduct which constitutes reliance, (c) the reasonableness of the conduct of a person who acts on an assurance, and (d) the burden of proof of reliance. Since reliance is a requirement common to the four forms of reliance-based estoppel it is to be expected, and is certainly desirable, that any detailed rules as to reliance should so far as possible be the same for proprietary estoppel as they are for the other forms of estoppel where reliance is important. It may sometimes be useful to divide the elements of reliance into its two components which are that the person asserting the estoppel has acted in a certain way, and that the assurance was at least one of the factors which induced that action. The division may be important when it comes to the incidence of the burden of proof on reliance.554 It is perhaps unfortunate that so much time has to be devoted to the burden of proof but that is due to the uncertainty which still surrounds this topic.

2.  The Meaning of Reliance 7.208  Linguistically there are various ways in which the connection between an assurance and the conduct of the recipient of the assurance can be expressed. The conduct could be said to be ‘caused by’ or ‘carried out on the faith of ’ or simply ‘in reliance on’ or ‘on the basis of ’ the assurance and other similar varieties of expression such as ‘proximate cause’ or ‘dominant cause’ could be used. It is doubtful whether there is much distinction in law between some of these phrases.555 The essential question is what exactly is the causative link which has to be shown between the assurance and the conduct of the person to which the assurance is made. The exact meaning of reliance has been discussed in connection

take superfluous water from a canal for commercial purposes as long as they remained a customer of the Defendant canal owner. One of the reasons given by Sir WM James V-C for rejecting the claim was that the Plaintiffs never acted upon the notion that they were ever to get a binding equitable or legal agreement to abstract the water. 551 See para 7.125 for the requirement that the assurance must create such an expectation. 552 Wayling v Jones (1993) 69 P & CR 170. 553 The first of the five probanda in Willmott v Barber (1880) 15 Ch D 96, 105, is therefore not a test of universal application on this matter. See para 7.29. 554 The matter of the burden of proof is discussed in para 7.216 et seq. 555 The use of the adjective ‘dominant’ may be inaccurate as explained in the remainder of this paragraph. It is difficult to know what exactly is meant by ‘proximate’ cause.

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7.209  Proprietary Estoppel with the other of the two forms of equitable assurance which is promissory estoppel.556 It is there suggested that there are certain rules resting on guidance from the authorities to be applied to this matter. The first rule is that the promisee is not required to show that the only factor which induced his conduct was the promise made to him. Nor is the promisee required to show that he would not have acted as he did apart from the promise.557 It is enough if the promise was at least one of the factors which motivated the conduct of the promisee so that it had at least some influence on that conduct. It is suggested that the same principle should apply to the need for reliance which is a part of estoppel by representation.558 7.209  The same test should be, and is, applied in proprietary estoppel. It is a rule based on common sense and it avoids placing an unnecessarily high burden on the person claiming the estoppel. There is authority to the effect that the same test does apply.559 It seems desirable that where requirements are common to different forms of estoppel the same test for compliance with the requirement should wherever possible be applied in each case. In a domestic or family situation in which proprietary estoppel can often operate, a person who acts to his detriment by performing services for another person sometimes acts out of sympathy for the other person and the needs of that other person or because of the natural affection which may exist between people who are related or who live closely with each other. The person performing the services might have acted as he did quite apart from any assurance of a future benefit such as a gift in the will of the person for whom the services are provided. Provided that the assurance had some effect on the person who performed the services, it would be harsh to deprive that person of a possibility of relying on an estoppel on the sole ground that that person might or would have acted in the charitable or beneficial way in which that person did act even apart from the specific assurance of a future interest or right in property. 7.210  A general theme put forward in this book as regards the various forms of estoppel where some requirement can be considered in terms of degree, such as the amount or risk of detriment, is that the requirement is only satisfied if the matter in question is at least significant; for instance, the amount of detriment must be at least significant. It is suggested that a similar test should be applied in the degree or influence of an assurance on the actions of the person to whom the assurance was silent. Without a significant degree of influence a proprietary estoppel should not be capable of arising. The need for at least a significant influence can then be regarded as a threshold test to be satisfied.560 7.211  Although it is enough for the establishment of an estoppel that it should appear that the assurance had at least some effect (or, in accordance with what has just been stated, 556 See ch 6, para 6.182 et seq. The main authority is the formulation of principle, applicable to both promissory estoppel and estoppel by representation, by Neuberger LJ in Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 117. 557 Such a requirement is sometimes called the ‘but for’ test, the reasoning being that the conduct would not have happened but for the assurance or promise or representation made. 558 See ch 3, para 3.114 et seq. 559 Wayling v Jones (1993) 69 P & CR 170, 173, where Balcombe LJ stated the rule, citing in support what had been said by Goff J in Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 105. 560 See ch 1, para 1.55 et seq for a general discussion of the need for substantiality or significance as regards ­various requirements of certain forms of estoppel.

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The Second Element: Reliance  7.213 some significant effect) on the actions of the person to whom it was made, it does not follow that the degree of influence of the assurance is irrelevant to the claim for an estoppel as a whole. There could be circumstances in which the small influence that the assurance had on the conduct of the person to whom it was made, and the other reason or reasons which that person had for acting as he did, might mean that it was not unconscionable for the giver of the assurance to go back on what he had stated. Since the broad test of unconscionability must always be established if a proprietary estoppel is to operate, the limited influence of any assurance on the conduct of the person to whom it was made might be relevant to that general test and could prevent the establishment of the estoppel. Equally, since the court has a wide discretion on how to give effect to the estoppel the limited influence which the assurance had on the conduct of the person to whom it was given might be a factor which led the court to limit the extent of the relief which is granted in satisfaction of the equity. 7.212  The existence of actions performed in reliance on an assurance may be bound up with the terms of the assurance. The test for the clarity of an assurance in proprietary estoppel is a relaxed test. It is enough that the assurance should be ‘clear enough’.561 If the language and circumstances of an alleged assurance are oblique or skimpy in nature, it may be that much more difficult to establish that any action was carried out in reliance on that assurance. In the Taylor Fashions case,562 the Plaintiffs had an option to renew a lease dependent on their installing a lift in the demised premises. The lift was installed but the Plaintiffs had omitted to register their option as a land charge under the Land Charges Act 1925. The Defendants, as successors in title to the original landlords who had granted the option, refused to accept that the option was binding on them. The Defendants had entered into discussions on the siting of the lift when it was to be installed but no more. It was held that the conduct of the Plaintiffs was carried out in reliance on advice from their solicitors that the option was valid and enforceable. Assuming that there was some form of assurance to be gleaned from the discussions it was not relied on by the Plaintiffs, and for that reason their claim for an estoppel failed. The Judge summarised the point by saying that when the lift works were carried out they were done ‘in the belief ’ that the option was valid but not ‘on the faith of that belief ’.563

3.  The Time of the Reliance 7.213  If an action has to be taken in reliance on an assurance it would seem as a matter of logic that the only conduct which can count as action in reliance on the assurance must be conduct after the assurance has been made.564 In most cases this is no doubt correct. 561 See para 7.141 et seq. 562 [1982] QB 133n. 563 ibid, 156. The Second Plaintiffs in the case did succeed in establishing an estoppel based on an assurance given to them when they took the lease that the option granted to the First Plaintiffs was valid and enforceable. The Second Plaintiffs were dependent on the validity and enforceability of the option vested in the First Plaintiffs if they were to avoid their lease being prematurely determined by the exercise by the landlords of a break clause. The Second Plaintiffs succeeded in their plea of an estoppel. 564 The application of the law is not always as logical as here suggested. In Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 2 AC 111 it was held by a majority in the Privy Council that loss or damage ‘due to’

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7.214  Proprietary Estoppel However, the making of an assurance is not necessarily a single and specific statement made at one time and it is possible that actions in reliance on what in due course becomes an assurance may occur both before and after the time when what is said is sufficiently clear to constitute an assurance. The assurance in Thorner v Major565 was derived from a series of informal and oblique oral remarks over a period of time and on one view it was not realistic to pinpoint the date on which the assurance became clear enough to lead to a proprietary estoppel.566 In such a case, it may be sensible to regard actions taken by a person claiming an estoppel as taken in reliance on the assurance even though taken at a time when the assurance was in an incomplete or inchoate form.

4. Reasonableness 7.214  It has been mentioned that reasonableness and unconscionability are two concepts which permeate the law of estoppel and the judgements involved in dealing with these concepts add an amount of flexibility and discretion to the operation of most forms of estoppel. Reasonableness is relevant to the actions of the person to whom an assurance is made in two ways, both of which are relevant to the element of reliance. The two aspects of relevance were touched on by Lord Neuberger in Thorner v Major where he said that the Judge of first instance found that statements made to the Claimant were reasonably understood by him to indicate a certain matter and were reasonably relied on by him as having that effect.567 7.215  As to the first aspect, actions taken in reliance on an assurance can only be so relied on on the basis of what the person receiving the assurance understood it to mean. It has been explained earlier that the meaning of an assurance in the law of proprietary estoppel need only be ‘clear enough’ and that generally the meaning is to be assessed objectively as that which a reasonable person would attribute to the assurance and which is therefore not necessarily the same as the meaning which a claimant subjectively attributed to the ­assurance.568 It seems that the reasonable understanding of the Claimant in Thorner v Major of the informal and oblique statements made to him said to be necessary by Lord Neuberger means that there can only be reliance on a meaning of an assurance which a reasonable person in the position and with the knowledge of a claimant would reasonably attribute to the assurance. No new rule or component of the estoppel is added by this element of the reasonableness requirement. The requirement, as regards the understanding of an assurance, reinforces the objective test which is generally applied to the mental state of either party in most forms of estoppel, for example in assessing the component of intention which is necessary on the part of the maker of a representation or a promise or an assurance if there is to be an estoppel by representation or a promissory or proprietary estoppel.569 the resumption (compulsory acquisition) of land could be suffered by way of events which occurred before the date of the resumption notwithstanding the above phrase used in s10 of the Crown Lands Resumption Ordinance in Hong Kong. 565 [2009] UKHL 18, [2009] 1 WLR 776. 566 ibid, para 8 (Lord Hoffmann). 567 [2009] UKHL 18, [2009] 1 WLR 776, para 77. 568 See para 7.148 et seq. 569 See ch 3, para 3.87 et seq (estoppel by representation) and para 6.141 et seq (promissory estoppel).

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The Second Element: Reliance  7.217 7.216  The second aspect of reasonableness is that the actions taken in reliance on the assurance must be reasonably so taken.570 This requirement does add a further rule or component to the element of reliance within the estoppel. The authorities do not provide examples of actions taken in reliance on an assurance which were held to have been unreasonably so taken (and there was no question of such unreasonableness in Thorner v Major), but it is possible to imagine circumstances in which unreasonable action was taken and it seems that in such circumstances there would be no proprietary estoppel.571 Another possible way of looking at the same matter is to say that if actions, though taken in reliance on the assurance, were unreasonable it would not be unconscionable to allow the maker of the assurance to resile from it. A similar question on the reasonableness of actions taken arises in estoppel by representation and promissory estoppel as regards actions taken in reliance on a representation or a promise.572 As with other forms of reliance-based estoppel, it may on occasions be useful to break down the issue of reasonableness of actions into two questions, one being whether it was reasonable to take an action at all in reliance on the assurance and the other being whether it was reasonable to take the specific actions which were taken. If actions taken in response to the assurance were unreasonable in extent this, even if it did not in itself prevent the operation of an estoppel, could be relevant to the overall question of unconscionability or to the form of relief ordered by a court.

5.  The Burden of Proof 7.217  In the civil law of England and Wales there is an obvious general principle that a person who asserts a proposition, whether in support of a cause of action or in opposition to a cause of action, has the legal burden of proof of proving all facts essential to the establishment of that proposition.573 A consequence of this principle is that a person who asserts a proprietary estoppel must generally prove the facts which underlie the essential elements of that estoppel. It has been explained that the burden of proof on establishing the assurance is on the person asserting the estoppel, and in this instance it is difficult to see how there could be any other rule.574 One of the essential elements of proprietary estoppel is that the person asserting the estoppel has acted in reliance on the assurance which creates the estoppel. It might therefore be expected that in accordance with the general principle, the person asserting the estoppel had the burden of proving as a matter of fact all aspects of the necessary element of reliance. There is unfortunately a degree of doubt on this matter and the matter must be examined. It is not often that the resolution of a factual issue depends on the

570 See Lord Neuberger in Thorner v Major at paras 78 and 79. There is the same requirement of reasonable reliance on an assurance in New Zealand: Gold Star Insurance Co Ltd v Gaunt [1998] 3 NZLR 80, 86 (Holland J). The law in Australia is also to the same effect: Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394 (see ch 6, para 6.19 for the facts of this decision of the High Court of Australia). 571 eg, a person who formed an expectation of acquiring an interest in valuable property which he could then sell might have incurred reckless gambling debts in reliance on the assurance and the expectation and so would have acted to his detriment but his actions could properly be stigmatised as not reasonable. 572 See ch 3, para 3.115 et seq, and ch 6, para 6.185 et seq. 573 See para 7.195. 574 See para 7.195.

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7.218  Proprietary Estoppel incidence of the burden of proof and it may be that this matter has received more attention than it merits. The question of where the burden of proof lies is perhaps the only now legally contentious aspect of the element of reliance in proprietary estoppel. 7.218  It should be made clear that any doubt on the burden of proof relates only to the mental element of reliance on the assurance as a motivating factor for actions taken by the recipient of the assurance. There is no doubt that the burden of proof of showing that some action was taken (or omitted to be taken) following the assurance is on the person who received the assurance and who asserts the estoppel.

(i)  The Authorities 7.219  Authority shows that such an expectation that the burden of proof rests on the person asserting the estoppel may be incorrect. The leading case usually cited on the incidence of the burden of proof on the matter of reliance is the decision of the Court of Appeal in Greasley v Cooke.575 That case concerned an action for possession by the owners of a house against a woman who had lived there, cohabited with one member of the family and looked after another, for no wage and had been encouraged by members of the family to believe that she could live in the house for the remainder of her life. The Judge of first instance held that there had been an assurance sufficient to found a proprietary estoppel but that the Defendant failed in the end because she could not prove that she had acted in reliance on the assurance, the burden of proof to do so being on her. The Court of Appeal reversed the decision, holding in unequivocal terms that the burden of proof on reliance was not that of the proponent of the estoppel.576 In effect, once it had been shown that the proponent of the estoppel had acted in a certain way following an assurance the burden was on the maker of the assurance to show that that action had not been carried out in reliance on the assurance. A further decision to a similar effect, in which Greasley v Cooke was cited, is Wayling v Jones where Balcombe LJ, setting out some of the principles of proprietary estoppel, said that once it had been established that promises or an assurance were made, and ‘that there had been conduct by the plaintiff of such a nature that inducement may be inferred, then the burden of proof shifts to the defendant to establish that he did not rely on the promises’.577 7.220  There does appear to be a degree of ambiguity in some statements on the burden of proof concerning reliance. Undoubtedly, a claimant has to show that an assurance which was clear enough has been made to him and that he acted in a certain way. Lord Denning in Greasley v Cooke578 was clear on what happens when these matters have been proved. The fact that the conduct was in reliance on the assurance is an essential element in s­ howing an

575 [1980] 1 WLR 1306. 576 ibid, 1311 (Lord Denning MR), 1314 (Dunn LJ). 577 (1993) 69 P & CR 170, 173. Leggatt and Hoffmann LJJ agreed. Much the same was said by Sir Nicolas BrowneWilkinson V-C in Grant v Edwards [1986] Ch 638, 657, citing Greasley v Cooke, where he stated: ‘Accordingly, in the absence of evidence to the contrary, the right inference is that the claimant acted in reliance on such holding out and the burden lies on the legal owner to show that she did not do so’. See also In Re Basham decd [1986] 1 WLR 1498; and Hammersmith and Fulham LBC v Top Shop Centres Ltd [1990] Ch 237, 262. 578 [1980] 1 WLR 1306.

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The Second Element: Reliance  7.221 estoppel, but that element will be taken to exist unless the maker of the assurance proves the contrary. The person claiming the estoppel therefore need do nothing on this matter once he has proved the assurance and proved his actions unless there is evidence to the contrary that his conduct was not in reliance on the assurance in question. It is only if there is such contrary evidence, adduced by the maker of the assurance, that the claimant must rebut that evidence. Other statements of the rule are qualified and less clear and suggest that the burden of showing that acts carried out were not taken in reliance on the assurance falls on the maker of the assurance only when the nature of the assurance and the subsequent actions give rise to an inference that the actions were taken in reliance on the assurance.579 7.221  With respect to those who have advanced this qualified statement of the incidence of the burden of proof, those statements may fail fully to accord with how a burden of proof in civil proceedings on a factual issue is sometimes discharged. The question of reliance is a question of fact of the mental state of the person who carried out certain acts (or omitted to carry out certain acts) at a particular time. The necessary fact may be established in two ways. The person who acted in a certain way may give evidence that his actions were carried out in reliance of the assurance (here called positive evidence) and that evidence, if accepted, will discharge any burden of proof on that person. The other way of discharging the burden is to show to the court that, given the assurance and given the subsequent actions, it is a reasonable inference that the actions were carried out in reliance on the assurance such that the burden of proving reliance on the balance of probability is discharged by reason of that inference.580 Of course, both forms of proof may be adduced. One is positive evidence and the other is the application of ordinary processes of reasoning. If the circumstances of the assurance and the subsequent actions lead to the inference that on the balance of probability the actions were carried out in reliance on the assurance, the burden of proof has been discharged. In the absence of evidence to the contrary, there is no more to be said. The burden of proof does not then pass. Of course, the maker of the assurance may adduce evidence to show that the prima facie inference is incorrect. That situation, if the evidence as called is cogent, does not change the incidence of the burden of proof but simply shows that on the totality of the evidence before the court, positive evidence and inferences, the person asserting the estoppel has not discharged his burden of proof on one of the essential elements of the estoppel, the element of reliance. Therefore, on this qualified description of the burden of proof what it comes to is that the burden of showing the necessary element of reliance is on, and always remains on, the person asserting the estoppel but (a) that burden may be discharged by reasonable inference as well as by positive evidence, and (b) the maker of the assurance may show by evidence that any inference in support of reliance (and indeed

579 See, eg, Balcombe LJ in Wayling v Jones as mentioned in para 7.219. 580 In Lim v Ang [1992] 1 WLR 113 an issue was whether a person with a half share in land as a co-owner had built upon it in reliance on an assurance by the other co-owner that on payment of compensation he would become the single owner of the land. The Privy Council held that a proprietary estoppel was established and gave effect to the assurance stating that although no direct evidence of reliance had been given there was an inevitable inference that the party claiming the estoppel had built on the land in reliance on the assurance as to future ownership. This may be an admirably precise explanation of the correct application of the burden of proof and of how matters may be proved or disproved.

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7.222  Proprietary Estoppel any positive evidence in support of it) does not discharge the burden by himself bringing before a court further evidence on the matter.

(ii) Discussion 7.222  The question of the burden of proof on reliance within the principle of proprietary estoppel is in a sense a loose end and an anomaly within that principle and within the doctrine of estoppel as a whole. It is suggested that the law would be more satisfactory if the burden of proof on this matter followed that generally applicable in estoppel and rested on the person asserting the estoppel. A number of reasons support this suggestion. 7.223  First, the general principle in civil law is that he who asserts a matter must prove that matter.581 No particular reason has ever been given for the reversal of this sensible rule in the case of reliance on an assurance as an element of proprietary estoppel. 7.224  Secondly, this reversal of the general rule, supposed to apply to one aspect of proprietary estoppel, is out of accord with the law on the subject for estoppel generally. The fundamental nature of most estoppels is a statement of fact or a promise or an assurance intended to be acted on by the recipient and some consequent action by the recipient. The duty of proving all these matters falls on the party who contends that there is an appropriate form of estoppel. For example, there is authority for saying that in the law of promissory estoppel the burden of proving that the promisee’s actions following the promise were taken in reliance on the promise is on the promisee who asserts the estoppel.582 There appears to be no reason for taking a different view of the law as that to apply to one similar aspect of proprietary estoppel. One of the ways in which the sometimes confusing law relating to the various different forms of estoppel can be simplified and clarified, is if elements or components common to various estoppels are treated in the same way and in accordance with the same legal rules. A single approach to the incidence of the burden of proof where reliance is such an element or component of an estoppel is therefore to be desired. 7.225  Thirdly, there should in most circumstances be no particular difficulty in a person proving that the actions of that person following an assurance were taken in reliance on the assurance. The reason is that the fact that some course of action was carried out in reliance on an assurance will often be readily inferred as being apparent from the circumstances and from the nature of the assurance and the conduct. Such an inference will discharge the burden of proof. It is only where such an inference cannot reasonably be drawn or the person who gave the assurance puts forward some evidence or reason to suggest that the motivation of the conduct in question was other than the assurance that some other or further form of evidence is needed from the person claiming the estoppel. It has also to be borne in mind that the person claiming the estoppel does not have to show that the assurance was the only, or even the dominant, cause of the actions taken by that person and it is enough to show that the assurance was at least a significant factor in the decision of



581 See 582 See

para 7.195. Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 117 (Neuberger LJ).

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The Second Element: Reliance  7.228 the person to whom the assurance was made to carry out the actions in question. This of course makes discharge of the burden of proof that much easier and more obvious in many cases. The rejection of the ‘but for’ test as the criterion of reliance means that even if a court concludes that the claimant would have acted in a certain way, such as providing money or services, in the absence of the assurance the reliance element can still be established if the assurance was at least one of the factors and a factor of some significance which motivated the conduct.583 7.226  Fourthly, one possible reason put forward as the basis of the burden of proof on reliance being on the giver of the assurance is that it avoids difficult speculation.584 Actions such as making payments towards the housekeeping expenses of a property may all be referable to the mutual love and affection of the parties involved and not specifically referable to a claimant’s belief that he has an interest in or will have an interest in the property.585 In fact, as long as reliance is an essential element of proprietary estoppel it is impossible to avoid situations in which there may be some speculation on the motives of a person for carrying out certain actions. Even if the maker of the assurance is obliged to introduce evidence in order to rebut a presumption that actions taken were in reliance on the assurance, that evidence itself may lead to speculation. The concept of a person acting in reliance on an assurance inevitably and of its nature means that there may be some speculation as to how a person would have behaved in the absence of the assurance and on whether the assurance was at any rate a factor of some significance which motivated the conduct. 7.227  If indeed the burden of proof on this one particular factual matter is reversed so that it is on the giver of the assurance, and thus the person against whom an estoppel is asserted, in relation to the matter of reliance for the purposes of proprietary estoppel that reversal does not apply in the same way to the next essential element of the proprietary estoppel which is detriment.586

(iii) Conclusion 7.228  The best conclusion that can be at present put forward on this subject is that on one view, supported by the authorities, where an assurance and subsequent conduct by the person to whom the assurance was given are proved by the person alleging a proprietary estoppel, the fact that the actions were carried out by that person in reliance on the assurance will always and automatically be established in the absence of evidence to the contrary advanced by the maker of the assurance. There is in effect on this view a presumption of fact though a rebuttable presumption. At least this view, which appears to be the established law, is clear in its effect and operation. A second view which can be drawn from

583 See para 7.210. 584 See Grant v Edwards [1986] Ch 638, 657. 585 ibid. 586 In Coombes v Smith [1986] 1 WLR 808, 821, Mr Jonathan Parker QC, sitting as a Deputy Judge of the Chancery Division, pertinently pointed out that the statement of Lord Denning MR in Greasley v Cooke [1980] 1 WLR 1306 was concerned with the element of reliance and not detriment in isolation.

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7.229  Proprietary Estoppel the authorities is that this presumption of fact arises only if it can reasonably be inferred from the circumstances that the actions in question were taken in reliance on the assurance. As suggested earlier, this second view may lead to uncertainty on the nature of proof and the burden of proof. There are, it is suggested, a number of sound reasons why the most satisfactory view is that it is incumbent on a person asserting a proprietary estoppel to show that that person acted in reliance on the assurance in a certain way but with the understanding that that burden of proof can in many cases readily be discharged because the element of reliance will in many cases readily be able to be inferred from the circumstances of the assurance and the actions. The ordinary principles of the law of evidence on the burden of proof will then apply and a satisfactory situation will be reached without any confusion.

(F)  The Third Element: Detriment 1.  The Need for Detriment 7.229  Detriment is the third of the four main elements of proprietary estoppel and proof of detriment is essential to the establishment of the estoppel.587 Three decades ago the contrary was stated in unequivocal terms by Lord Denning MR in Greasley v Cooke.588 The modern law of estoppel, and particularly promissory estoppel, owes a great debt to Lord Denning who consistently argued against detriment being an essential element in the various forms of estoppel.589 On this aspect of the law of proprietary estoppel, the law is not as stated in Greasley v Cooke as is shown by what was said in the House of Lords in Thorner v Major.590 The leading modern exposition of the requirements of estoppel by representation and promissory estoppel also states that unconscionability is an essential element of these forms of estoppel, and that normally it will only be unconscionable to allow a representor or promisor to depart from a statement or promise made if the representee or promisee has acted to his detriment on the faith of what was stated or promised.591 A further statement

587 In Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 29, Lord Walker described the third main element of the estoppel, after an assurance and reliance on it, as ‘detriment to the claimant in consequence of the (reasonable) reliance’. See also Lord Neuberger (at para 72); and see Gillett v Holt [2001] Ch 210 (Robert Walker LJ); Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764, para 63 (Lord Neuberger); Greasley v Cooke [1980] 1 WLR 1306, 1318 (Dunn LJ); Lovett v Fairclough (1990) 61 P & CR 385 (claim for an estoppel to create a profit of fishery in a part of the river Trent which failed in the absence of detriment); Watts v Storey (1984) 134 NLJ 631 (Dunn LJ), cited in Gillett v Holt; Grundt v Great Boulder Pty Gold Mine Ltd (1937) 59 CLR 641, 674–75 (Dixon J in the High Court of Australia), also cited in Gillett v Holt; Clark v Clark [2006] EWHC 275 (Ch). 588 [1980] 1 WLR 1306, 1311. 589 See his article in (1952) 15 MLR 1. 590 See below (n 599). It was said in the Court of Appeal in Gillett v Holt [2001] Ch 210, 232 (Robert Walker LJ), that the overwhelming weight of authority shows that detriment is required in proprietary estoppel. 591 Steria Ltd v Hutchison [2006] EWCA Civ 1551, para 93 (Neuberger LJ) (the full passage which refers to both estoppel by representation and promissory estoppel is set out in ch 3, para 3.111); Tai Hing Cotton Mill Ltd v Liu Cheng Hing Bank [1986] AC 80, 110 (Lord Scarman) (on estoppel by representation). New Zealand authority also specifies the need for detriment: Gold Star Insurance Co Ltd v Gaunt [1998] 3 NZLR 80, 86 (Holland J).

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The Third Element: Detriment  7.231 by Lord Denning in Greasley v Cooke on the incidence of the burden of proof in reliance as an element to proprietary estoppel may also be open to some query today.592 There are a number of matters which need to be explained in connection with the element of detriment, but there is no doubt today that it is an essential element in proprietary estoppel. 7.230  Detriment as the third main element of proprietary estoppel and unconscionability as the fourth main element of the estoppel, are to a degree interlinked. It is probably impossible for the claimant to establish unconscionability unless he can show that some detriment will ensue to him if the assurance is not honoured, whereas there may be exceptional cases where reliance on an assurance and detriment are shown but it is still not unconscionable to allow the maker of the assurance to go back on it, such as where the conduct of the claimant has been so unworthy that no unconscionability is involved in allowing the assurance to be dishonoured. Detriment and unconscionability are therefore treated in this chapter as separate, although usually factually linked, elements of proprietary estoppel. The concentration on the general nature of detriment and on its particular aspects in relation to proprietary estoppel means that the final element of unconscionability can be covered comparatively quickly in the next part of the chapter. The course now taken is to examine the general concept of detriment in relation to proprietary estoppel, then to draw attention to certain particular aspects of detriment, such as how substantial the detriment or risk of detriment must be, who must suffer the detriment, and loss of opportunity as a form of detriment. 7.231  The opposite of detriment is benefit. It is an obvious corollary of the rule that a person claiming a proprietary estoppel must show detriment to him as a result of an assurance that if the claimant has received a benefit from the assurance he cannot assert the estoppel. This proposition is illustrated by Fisher v Brooker593 where any assurance given that a musical copyright interest would not be asserted benefited the party seeking to set up an estoppel since it released that party from having to account for any part of the copyright interest for almost 40 years with the result that detriment could not be shown. This was a primary reason why in that case no estoppel could be established.

592 See para 7.216 et seq. 593 [2009] UKHL 41, [2009] 1 WLR 1764, paras 68, 71 (Lord Neuberger). As the matter was put at first instance ‘it would be a wholly extravagant and unjust result to deprive (the Claimant) of his interest in the work’s musical copyright on the basis of estoppels that have been pleaded … when for almost forty years the [Defendants] have enjoyed the fruits of that copyright interest without the need to account for any part of them to [the Claimant]’: [2007] FSR 255, para 81 (Blackburne J). A further reason for rejecting the estoppel was that there had been no investigation of how the Defendants would have been prejudiced as a result of a claim being raised only after many years. Other decisions show that a claimant may have received benefits which outweigh any detriment suffered such as by the provision of services. In such cases it can either be concluded that in overall terms there is no detriment or that any equity created by an assurance followed by detriment has been fully satisfied by the benefits conferred. In Bostock v Bryant (1991) 61 P & CR 23 there was held to be no detriment when persons were allowed the benefit of occupying a house rent free and did no more than pay certain utility bills. In Sledmore v Dalby (1996) 72 P & CR 196 the Claimant failed to obtain relief since he had obtained a sufficient benefit from 15 years of rent free accommodation of property and a similar conclusion was reached as a result of rent free occupation in Clarke v Swaby [2007] UKPC 1, (2007) 2 P & CR 2. In Uglow v Uglow [2004] EWCA Civ 987 the expectation created was that of inheriting a farm of a relative and it was held that any equity created was satisfied under a tenancy granted by the relative under which no rent was paid to the relative.

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7.232  Proprietary Estoppel

2.  The General Nature of Detriment (i)  General Nature 7.232  It is said that detriment is an established element of proprietary estoppel as it is of other estoppels. While this statement certainly encapsulates the rule it does not state overtly the two separate but important aspects of the concept of detriment in the present context. The first aspect of detriment which follows the assurance is typically something such as unpaid services provided by the person to whom the assurance is given to the giver of the assurance. This is the most obvious example of detriment and many other examples exist not all of which confer a benefit on the giver of the assurance. Examples of the different types of possible benefit conferred and possible limitations on what is detriment in the present sense are given later. The second aspect of detriment is the loss which the recipient of the assurance will suffer if the expectation of an entitlement to an interest or a right in land is not fulfilled. This aspect is therefore a particular detriment which can be avoided if the court orders some action by the giver of the assurance. That action may be one for the fulfilment of the expectation created by the assurance or may be some other recompense for the non-fulfilment of that expectation. The way in which proprietary estoppel works is that the claimant suffers a detriment through his conduct induced by the assurance, but that that detriment is eliminated or is reduced by an order of the court with the order sometimes drafted so far as possible to achieve that aim. Consequently, the word detriment is used in discussions on proprietary estoppel (and sometimes on other forms of estoppel) in two associated senses, one being the burdensome actions carried out by a person to whom an assurance is given, such as carrying out unpaid work, and the other being the loss which that person will suffer if effect is not given to the assurance, such as by ordering that an interest in land is vested in that person. The context generally makes it plain in which sense the word is being used. It is plainly possible that a person may enjoy a benefit and suffer an actual or potential detriment at the same time. In such a case, the benefit already enjoyed when the matter comes before the court, for instance a long period of rent-free occupation of property, may be so great that it outweighs any detriment, such as expenditure on improvements to the property, with the result that the court may not think it appropriate to make any order to give effect to an expectation of some further interest in the property.594 7.233  Another form of phraseology sometimes used is that the person claiming the estoppel must have altered his position in reliance on the detriment.595 This form of language does not affect the concept involved which is that the claimant has, in reliance on the

594 Sledmore v Dalby (1996) 72 P & CR 196. 595 See, eg, Lloyds Bank v Rosset [1991] AC 107, 132 (Lord Bridge), referring in the context of a constructive trust to a significant alteration in position; and see Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641, 674 (Dixon J); Hammersmith and Fulham LBC v Top Shop Centres Ltd [1990] Ch 237, 262 (Warner J). This phraseology is of some antiquity. In Heane v Rogers (1829) 9 B & C 577, 586, it was said that for there to be an estoppel it was necessary that the representee had been induced to ‘alter his condition’. In Suggitt v Suggitt [2012] EWCA Civ 1140, [2012] WTLR 1607, para 40, Arden LJ observed that the Judge had treated change of position as an alternative to detriment. It seems preferable to describe the required element of the estoppel as detriment since a change of position following an assurance may be to the benefit rather than to the detriment of the person to whom the assurance was given.

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The Third Element: Detriment  7.235 assurance, acted or failed to act in some way which has or will constitute a disadvantage or burden unless effect is given in some way to the assurance.

(ii)  The Risk and the Amount of Detriment 7.234  Detriment is a necessary element of estoppel by representation and of promissory estoppel as it is of proprietary estoppel. With the other two forms of estoppel, a situation can arise in which at the time the matter comes before a court there may be a risk but no certainty that the claimant has suffered or will suffer detriment if no effect is given to the estoppel. This situation can arise where the result of the representation or promise is the loss by the representee or promisee of a chance of recovering a sum of money, for example a loss of a chance of recovering money due by action to recover the money due from a person who a little later becomes bankrupt when that action was not taken because of the representation which had been made to the creditor.596 The answer given to this type of problem is suggested as being that it is sufficient if the representee or promisee can show a significant risk that he has suffered or would suffer detriment unless the representation or promise is honoured. The same question seems less likely to arise in connection with proprietary estoppel where a person to whom an assurance of an interest or rights in land is made, and who then acts usually by conferring some benefit on the maker of the assurance, will nearly always be certain to suffer a detriment if he does not acquire the interest assured or receive some other recompense. The nature of the initial detrimental acts, such as the provision of unpaid services or the conferment of some economic benefit on the maker of the assurance, normally means that there will be a certain and ultimate detriment to the claimant if he is denied the interest promised to him and is denied any other form of recompense such as the payment to him of a sum of money. 7.235  To the extent that any question of the risk of detriment becomes relevant in proprietary estoppel, it is likely that any significant risk of detriment will be sufficient to establish the estoppel. Hammersmith and Fulham LBC v Top Shop Centres Ltd597 is a case which concerned the status of sub-tenants where the headlease had been forfeited. A sub-lease determines automatically on the forfeiture of the headlease out of which it is created subject to the right of the sub-tenant to apply for relief against forfeiture. It was held that the conduct of the head landlords was such as to encourage a belief by the sub-tenants that their sub-leases continued and that an estoppel operated to this effect. The decision was said to be founded on an equitable estoppel and may be best categorised as a promissory estoppel, in that the head landlords promised that they would not enforce against the sub-tenants their right to treat those sub-tenants as trespassers, but may be considered a proprietary estoppel in that the sub-tenants were assured that they had a subsisting interest in land which they did not in fact have. In either event, an issue was whether the sub-tenants had acted to their detriment. It was held that one way in which they had acted to their detriment was by not applying for relief against forfeiture even though such an application may or may not have succeeded. A further way in which they were held to have acted to their detriment was the granting by them of a sub-underlease with a risk of dispute and

596 Knights 597 [1990]

v Wiffen (1870) LR 5 QB 660. Ch 237, 261–62, where Warner J applied what was said in Knights v Wiffen.

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7.236  Proprietary Estoppel l­ itigation with the sub-underlessees.598 In both cases there was a risk rather than a certainty of detriment. 7.236  The question of how substantial the detriment has to be if a proprietary estoppel is to be established has not been carefully considered or precisely answered in decided cases. The same is true for other forms of estoppel where detriment is required as an element of the estoppel. There are some suggestions that slight detriment is insufficient. It has been said that for the purposes of proprietary estoppel the detriment has to be ‘something substantial’.599 In connection with estoppel by convention, it has been said that the party claiming the estoppel must show that ‘real detriment’ will be suffered by it if the other party or parties to the convention are not kept to it.600 In a claim for a constructive trust based on a common intention that the Claimant should hold an interest in what had been her matrimonial home, the claim failed, one reason being that the monetary value of the Claimant’s work to the property expressed as a contribution to the £70,000 cost of acquiring the property (mainly some decorating and advisory work as a skilled painter and decorator) was ‘almost de minimis’.601 The general suggestion made in this book is that when it comes to matters of substantiality in regard to components of reliance-based estoppels, such as the amount or risk of detriment, a twofold approach may be appropriate. First, there may be a threshold test so that the detriment or the risk of it must be at least significant before there can be any question of an estoppel. Secondly, provided the threshold test is satisfied so that in principle an estoppel may be established, the amount of detriment or the degree of the risk of detriment is something to be considered in connection with the final element of unconscionability when the higher the amount, or the higher the degree of the risk, of the detriment the more likely it is that unconscionability will be established.602

3.  Particular Aspects of Detriment 7.237  There is no limit either in principle or in practice to the type of conduct which can constitute detriment sufficient to support a proprietary estoppel. The most obvious examples are the provision of unpaid work or the performance of personal services other than for reward or the incurring of expenditure on the property of a landowner.603 A less

598 See also on this last matter Keith v R Gancia & Co Ltd [1904] 1 Ch 774. 599 Gillett v Holt [2001] Ch 210, 232 (Robert Walker LJ). In Sledmore v Dalby (1996) 72 P & CR 196, 207 (Hobhouse LJ) it was said that in proprietary estoppel the detriment must be ‘distinct and substantial’ and a distinction was drawn between this requirement and the requirement in estoppel by representation and promissory estoppel where it was said that the detriment could be more limited. The reason for the distinction is not apparent. 600 PW & Co v Milton Gate Investments Ltd [2003] EWHC 1994 (Ch), [2004] Ch 142, para 222 (Neuberger J). In Suggitt v Suggitt [2012] EWCA Civ 1140, [2012] WTLR 1607 Arden LJ stated the question as being whether there had been a ‘real change of position’ by the Claimant. 601 Lloyds Bank v Rosset [1991] 1 AC 107, 131 (Lord Bridge). 602 In Beale v Harvey [2004] 2 P & CR 18, para 37, it was said that if the period of any detriment was too insubstantial to make it unconscionable that there should be no estoppel. The question of substantiality as regards various requirements of the different forms of estoppel is described generally in ch 1, para 1.55 et seq. 603 In Gillett v Holt [2001] Ch 210, 232, Robert Walker LJ said that detriment was not a narrow or technical concept and need not consist of the expenditure of money or other quantifiable financial detriment so long as it was something substantial.

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The Third Element: Detriment  7.240 obvious example is the making in one case of a loan to the owner of a house by a person living there with him and then a further payment to enable the paying off of a part of the mortgage held by the owner. In this case, the maker of what started a loan made the further payment but never sought repayment of, or interest on, the sum loaned. This conduct taken together was held to be sufficient detriment.604 Another, perhaps unusual, example is the payment of premiums due on someone else’s insurance policy.605 There is little purpose in a long multiplication of instances of detriment where there is no limitation on the categories of possible detriment, and attention is here now focused on decisions and circumstances which raise some point of principle in the present context.

(i)  Benefit to the Maker of the Assurance 7.238  Benefit and detriment are in many cases interlinked. In many cases a detriment by A confers a benefit on B such as A doing unpaid work on B’s property. Some ­leading decisions  on proprietary estoppel fall into this format where the detriment and the ­corresponding benefit have been motivated on the part of the claimant for the estoppel by an assurance of an interest in land in relation to which the benefit is conferred.606 The obvious rule that the person acting on the assurance must have incurred a detriment and not a benefit from his actions has been explained.607 Two further facets of benefit and burden may here be mentioned. 7.239  First, there is no rule that a benefit has to have been conferred on the maker of the assurance. The focus is on detriment caused to the recipient of an assurance and this will support the estoppel even though there is no benefit to the maker of the assurance which flows from the actions of the person carried out in reliance on the assurance. This situation is illustrated by Crabb v Arun District Council608 in which a person who had been assured of an access to and a right of way over a private road sold other land which had an alternative access so making himself dependent on the access the subject of the assurance. An estoppel was established against the owners of the road even though there was no benefit to them brought about by the sale of the other land. A claimant may have incurred a detriment, such as having foregone an opportunity for training or education as a result of an assurance made, which does not directly and of itself confer any benefit to the maker of the assurance but may indirectly do so since it allows time to provide care or domestic services to the maker of the assurance. 7.240  The second facet is that the actions of the claimant which are consequent on the assurance may contain what is for that person a mixture of detriment and benefit. Such a situation can arise where the claimant is in occupation of a property, particularly domestic property, which is the subject of the assurance. For instance, a grown-up son who is allowed to live in his parents’ house free of rent may think it incumbent on him to perform certain tasks such as minor decoration or work in the garden but this detriment is outweighed by



604 Risch

v McFee (1991) 61 P & CR 42. Foster, Hudson v Foster (No 2) [1938] 3 All ER 610. 606 Gillett v Holt [2001] Ch 210; Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776. 607 Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764. 608 [1976] Ch 179. 605 Re

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7.241  Proprietary Estoppel the benefit of living in the property free of rent and would be unlikely by itself to constitute the detriment which would render enforceable by estoppel an assurance that he would inherit the property. Such circumstances can be compared with those where a daughter lives with an elderly mother rent free for many years and looks after the house, looks after the personal needs of the mother, and loses the opportunity to make a career of her own. Here the detriment might well support the enforceability by estoppel of a promise that she would inherit the property. 7.241  Perhaps the high-water mark of the rejection of a proprietary estoppel because of an absence of detriment in situations of the type here considered is Coombes v Smith.609 The Plaintiff had left her husband and gone into occupation of a house owned by the Defendant where she had a child by him. As well as providing the rent-free occupation of the house the Defendant paid all bills and mortgage instalments, visited the Plaintiff and the child regularly, and paid her a small allowance. The main elements of detriment relied on were the carrying out of some work to the house by the Plaintiff and the fact that the Plaintiff did not seek a job. This situation continued for about 10 years and the Plaintiff was told that she would always be provided for and would always have a roof over her head. Both elements were rejected as being insufficient to satisfy the necessary element of detriment.610 The pregnancy of the Plaintiff and the birth of a daughter were also rejected as detriment. 7.242  Each case of this character involves what in administrative law is often called a matter of fact and degree. Plainly benefits obtained by a claimant must be taken into account. The existence of such benefits and their extent may lead to the conclusion that in overall terms there has been no detriment to a claimant or may lead to the reasoning that, although services voluntarily provided by a claimant may be a detriment, when the final element of unconscionability comes to be considered the balance of benefit and detriment is such that it is not unconscionable to allow the maker of an assurance to depart from it. A further possibility is that when it comes to remedies, any element of unconscionability is removed if the claimant is not given the whole property the subject of the assurance but is given a sum of money, or a right to continue to occupy the property for a time as a licensee, in compensation for the detriment. It may be that situations of this kind illustrate the fact that proprietary estoppel, in contrast to some other forms of estoppel, is often not a concise principle either in its operation or in its effect.

(ii)  The Person Suffering the Detriment 7.243  In most instances the person who suffers the detriment and the person who forms an expectation that he is or will be entitled to an interest in land is the same person. In exceptional cases two other circumstances can arise, (a) where the assurance is given to one person and the detriment is suffered by a different person, and (b) where the ­assurance

609 [1986] 1 WLR 808. The Judge approached his consideration of the facts on the basis of the five probanda of Fry J in Willmott v Barber (1880) 15 Ch D 96. 610 One of the reasons for rejecting a failure to seek a job as a sufficient detriment was that there was no evidence that this had occurred in reliance on any promises made. See also Henry v Henry [2010] UKPC 3, [2010] 1 All ER 988, in which it was held in the Privy Council that the detriment which the Claimant had suffered from not

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The Third Element: Detriment  7.244 is given to one person who suffers the detriment but the assurance is that an interest in property will arise in a different person. The connecting factor between the two sets of circumstances is that there is some reasonably close relationship, whether of a personal or other character, between the two different persons involved. The first type of situation came before the Court of Appeal in Matharu v Matharu.611 The Plaintiff allowed the Defendant and her husband to occupy a house and the husband carried out major improvements to the property at his own expense. The Defendant was encouraged to form the expectation that she could remain at the property for her life. When the Defendant, after the breakdown of her marriage and the death of her husband, asserted a proprietary estoppel to confer on her an interest or rights in the property, one question was whether she could rely as the necessary detriment on the work done by her deceased husband and the detriment to him caused by those works. Despite the claim being by one person and the detriment having been suffered by another person, the Court held that an estoppel claim could be sustained by the Plaintiff and she was given in satisfaction of the estoppel a licence to occupy the property for life or as long as she wished.612 If there is a rule that the detriment must necessarily and in all cases be suffered by the person who receives the assurance and claims the estoppel this decision may still be explained by the possibility that the Plaintiff did suffer detriment, in that the expenditure by the husband on improvements resulted in a lesser sum being available for her benefit.613 It is suggested that there is no need to have recourse to such rationalisations and that the most satisfactory rule is that when an assurance is made to A of an interest in land and B acts to his detriment in reliance on this assurance A can rely on the detriment for the proposes of establishing a proprietary estoppel and obtaining appropriate relief provided that there is a sufficiently close connection, whether of a personal or other nature, between A and B. Given such a connection the estoppel should be flexible enough to embrace situations of this kind. 7.244  The second type of relevant situation is where A assures B that an interest in A’s property will be given to C and B in reliance on the assurance carries out services to A and so suffers detriment. The question is whether B is entitled, by virtue of a proprietary estoppel, to insist that A keeps to the assurance for the benefit of C. It is not difficult to imagine circumstances of this kind. A might be old and frail and in need of care while living in his property and B, his daughter, spends years caring for him on the assurance that on A’s death the property will pass to C, B’s son, who needs a house of his own. It would seem harsh if, on the death of A, B could not compel the fulfilment of the assurance for the benefit of her son by way of an estoppel. Again a sufficient connection of some nature between B and C may be necessary for an estoppel to operate in this type of situation. If an estoppel is available

being able to seek opportunities in life elsewhere was not outweighed by the benefit which he obtained from being allowed to remain on land with the result that a proprietary estoppel did arise. 611 (1994) 68 P & CR 93. 612 Dillon LJ dissented. The majority approached the decision by way of the application of the five probanda in Willmott v Barber (1880) 15 Ch D 96. For the probanda, see para 7.26. See Habberfield v Habberfield [2019] EWCA Civ 890, paras 52–53, for an argument that the Judge of first instance had erred in not taking into account the detriment suffered by the claimant by reason of underpaid work carried out on a farm by her husband with the alleged consequence that the husband contributed less than he would otherwise have done to household expenses and childcare. The Court of Appeal held that it could not have made any difference to the order made by the Judge whether the underpayments made to the husband were taken into account or not. 613 ibid, 101 (Roche LJ).

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7.245  Proprietary Estoppel in such circumstances it seems, as in the first type of case, a tribute to the flexibility of the principle of proprietary estoppel.

(iii)  Work or Services for Reward 7.245  A person to whom an assurance regarding property is given may perform works or services on the faith of that assurance but may do so for a full payment or other full consideration. It is axiomatic that in such circumstances no proprietary estoppel can arise since the person in question suffers no detriment; that person merely provides services for a full reward which causes no more detriment to him than to anyone else who performs services for a full reward. It may be that the services would not have been provided even for full payment apart from the assurance but that would not be enough to create an estoppel. The provision of services in this way will normally be part of an ordinary contract. In one case, a person who expended £550 in improving fishing occupied by someone else and then got the benefit of the works by enjoying 12 years’ fishing, was held to have had value for money and not to have suffered detriment such as would support a proprietary estoppel.614 7.246  An intermediate situation between the provision of services for no reward and the provision of services for a full commercial consideration is where in reliance on an assurance a person provides services at what is plainly an undervalue. There seems no reason in principle why this situation should not constitute a detriment to the provider of the services and so found a proprietary estoppel. Each case will depend on its own facts, such as the size of the difference between the reward and a full consideration. Some services, such as personal attention paid to an elderly relative, may be difficult to quantify in monetary terms. If the gift element in services provided is small, the result may be that no proprietary estoppel is demonstrated because any detriment is so small as to be insignificant or unconscionability cannot be established or, even if an estoppel is available in principle, the giving of effect to it may be that only modest rights are ordered to be conferred on the claimant.

(iv)  The Time and Location of the Detriment 7.247  The possibility that where there is a long course of an informal relationship between the parties, the actions which constitute the assurance and the actions taken in reliance on the assurance may both span a significant period and may to a degree be contemporaneous has been considered.615 As to timing of the detriment, it follows that the detriment may also occur over a period of time during which a series of remarks and other actions may amount to an assurance which is clear enough. As to location, it is not necessary that the detrimental actions of the claimant relate to the property to which the assurance relates.616

614 Lovett v Fairclough (1990) 61 P & CR 385. 615 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, discussed in para 7.39 et seq, is an example of this type of situation. 616 Grant v Edwards [1986] Ch 638, 657; Pascoe v Turner [1979] 1 WLR 431; Jones v Jones [1977] 1 WLR 438.

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The Third Element: Detriment  7.248 An obvious example is where a person looks after or improves one property lived in by a dependent relative on an assurance of an interest in other property held by the dependant as an investment. There can be no objection to the assurance being enforced in respect of the investment property. In the unusual circumstances revealed in one decision, the detriment was the purchase of a new property in reliance on the assurance of a local authority that existing property of the Claimants would be acquired by the authority with the compensation or price of it determined on the favourable basis of the cost of equivalent reinstatement as provided by rule (5) of section 5 of the Land Compensation Act 1961.617 Here the detrimental acts concerned a property which was different from the existing property which was the subject of the assurance. The assurance was also unusual in that it related not to the conferment of an interest on the Claimants but to the acquisition, on favourable terms to them, of an interest from the Claimants.

(v)  Loss of Opportunity 7.248  Loss of opportunity and the risk of detriment are allied concepts. An opportunity of its nature may be unsuccessful and not achieve the hoped for benefit so that there is only a risk of detriment, ie, if the opportunity had succeeded, but no certainty of detriment, ie, the opportunity might have been unsuccessful even if taken so that nothing is lost by the claimant in not being able to take the opportunity. This point has already been discussed and it has been explained that, as with other forms of estoppel, the risk of detriment is enough to found a proprietary estoppel provided it is a significant risk.618 The consequence is that a loss of an opportunity to obtain some benefit is a sufficient detriment even though there is a possibility that the opportunity, even if it had been available and had been taken, would not have resulted in a benefit.619 An example of such a loss of opportunity which constitutes a detriment is where a person devotes himself to looking after an elderly relative and so loses the opportunity to pursue a productive career. If the opportunity had been available it might not have succeeded so as to confer a benefit on the claimant but the loss of the opportunity is enough. One particular loss of opportunity which has been mentioned earlier is the loss of an opportunity by a sub-tenant to apply for relief against forfeiture when the headlease out of which his interest has been carved is itself terminated by forfeiture.620 It follows that inaction or the failure to take some possible or contemplated action may for present purposes be as much a detriment as the taking of positive action.

617 Salvation Army Trustee Co Ltd v West Yorkshire Metropolitan County Council (1980) 41 P & CR 179. Compensation based on the cost of equivalent reinstatement is available only in limited circumstances where there is no general market for land devoted to a particular purpose and in these circumstances is usually higher than the open market value of land which is the normal basis of compensation. 618 See para 7.233. 619 The claimant therefore does not have to show either that he would have taken the opportunity or that if he had taken the opportunity it would have been successful: Suggitt v Suggitt [2012] EWCA Civ 1140, [2012] WTLR 1607. 620 Hammersmith and Fulham LBC v Top Shop Centres Ltd [1990] Ch 237: see para 7.233. In a case best regarded as one of promissory estoppel a loss of an opportunity to oppose the grant of planning permission by a tenant of agricultural land, so losing the opportunity to prevent the termination of his tenancy, was held to be a sufficient detriment: John v George (1996) 71 P & CR 375.

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7.249  Proprietary Estoppel

4.  The Burden of Proof 7.249  The general rule in estoppel, and in civil litigation generally, is that the burden of proof on all factual items needed to establish an assertion is on the maker of that assertion. The only exception to this rule within the law of estoppel concerns the element of reliance in proprietary estoppel where there is considerable authority in support of the proposition that for the purposes of proprietary estoppel the burden of proof on reliance is on the person against whom the estoppel is asserted, the maker of an assurance, who therefore has to prove that actions taken by the proponent of the estoppel were not taken in reliance on the assurance if he is to defeat the establishment of the estoppel by reference to this matter.621 Whatever may be the exceptional rule as regards the element of reliance, certainly as regards that element in proprietary estoppel, there is no logical need to extend any exceptional reversal of the normal burden of proof to the element of detriment. There is authority for saying that as regards the requirement of detriment in proprietary estoppel the burden of proof both that the actions carried out were detrimental to the person raising the estoppel and that that person would suffer detriment if no estoppel were enforced is on the person who raises the estoppel.622 On this matter the rule in proprietary estoppel on the basis of proof is brought into accord with that in other forms of estoppel and in the civil law generally.

(G)  The Fourth Element: Unconscionability 7.250  It has become usual to describe the main elements of proprietary estoppel as ‘a representation or assurance made to the claimant, reliance on it by the claimant; and detriment to the claimant in consequence of his (reasonable) reliance’.623 This statement does not mention unconscionability as a further separate element of the estoppel. Nonetheless, unconscionability is considered to be an element of the other main forms of common law and equitable estoppel, estoppel by representation, estoppel by convention and promissory estoppel,624 and is said to permeate the law of estoppel.625 It appears justifiable to treat it as a necessary and separate main element in proprietary estoppel. The concept of unconscionability has been considered earlier as a foundation of proprietary estoppel626 and its

621 The main authority for this exceptional rule is the judgment of Lord Denning MR, concurred in on this point by Dunn LJ, in Greasley v Cooke [1980] 1 WLR 1306. This matter is also bound up with the making of inferences as to reliance and is discussed in para 7.217 et seq. Some suggestion has also been made that for the purposes of promissory estoppel the burden of proof may also be on the person against whom the estoppel is claimed: see ch 6, para 6.187. 622 Coombes v Smith [1986] 1 WLR 808, 821 (Jonathan Parker QC, sitting as a Deputy Judge of the Chancery Division). The Judge considered Greasley v Cooke and pointed out that what was said in that case by Lord Denning concerned the element of reliance and not the separate element of detriment. 623 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 29 (Lord Walker), citing four major textbooks on the law of real property and of equity. 624 See ch 3, part (E) for estoppel by representation; ch 5, part (F) for estoppel by convention; and ch 6, part (G) for promissory estoppel. Unconscionability plays no part in estoppel by deed or in estoppel by record. 625 Gillett v Holt [2001] Ch 210, 223 (Robert Walker LJ). 626 See para 7.95 et seq.

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The Fourth Element: Unconscionability  7.252 place in estoppel generally has been examined in the introductory chapter of this book.627­ Unconscionability is of course of relevance beyond the confines of the law of estoppel although, notwithstanding that it is a cornerstone of equity, it has never been comprehensively defined and judges have differed on its application as a description of particular conduct, but two elegant descriptions by eminent Chancery judges which certainly give the flavour of the meaning are that unconscionability is that which is in some way morally reprehensible628 or that which shocks the conscience of the court.629 In the light of this previous treatment of the matter it is necessary to make only three brief comments on unconscionability in connection with proprietary estoppel. Before doing so it is appropriate to draw attention again to the possible drawbacks inherent in any strict demarcation between the essential elements of proprietary estoppel, and this point is particularly true when it comes to unconscionability. Considerations such as the amount of the risk of detriment or the strength of the expectation of an entitlement to an interest in land are treated in the preceding parts of this chapter as relevant to the elements of an assurance or of detriment, but could be considered as also relevant to the element of unconscionability. Equally, unconscionability may be highly relevant to the determination of the appropriate form of relief to satisfy an estoppel. 7.251  The first matter is that unconscionable behaviour in relation to land does not by itself create a proprietary estoppel. To suggest otherwise, if this has ever been suggested, would be an unprincipled approach and would introduce unacceptable uncertainty into the law of estoppel and into areas of the land law. This matter has been considered and explained earlier.630 7.252  The second matter is that the requirement of unconscionability as an essential element of proprietary estoppel brings this form of estoppel, with its ancient origins but modern flowering, into accord with estoppel generally. It is explained in Steria Ltd v ­Hutchison,631 in connection with both estoppel by representation and promissory estoppel, that the classic requirements of the estoppel are a statement or promise followed by reliance and detriment. If reliance and detriment are established, this will generally be sufficient to render it unconscionable if the person who made the statement or promise is allowed to resile from what has been stated or promised. There may be exceptional cases where, despite the presence of these three classic requirements, it would still not be unconscionable that a resiling from the statement or promise should be allowed. An example would be unmeritorious conduct by the person raising the estoppel (see, for example, D & C B ­ uilders Ltd v Rees,632 per Lord Denning MR, a decision on promissory estoppel) and an adverse effect on third parties (see, for example, Trustee Solutions Ltd v Dubery,633 per Lewison J, a decision on estoppel by convention to which the same principles apply).634 627 See ch 1, para 1.44 et seq. 628 Multiservice Bookbinding v Marden [1979] Ch 84, 110 (Browne-Wilkinson J). 629 Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 92 (Lord Walker). 630 See para 7.95 et seq. 631 [2006] EWCA Civ 1551. 632 D & C Builders Ltd v Rees [1966] 2 QB 617. 633 Trustee Solutions Ltd v Dubery [2006] EWHC 1426 (Ch), [2007] 1 All ER 308. 634 A further type of situation in which there may be no unconscionability in allowing the resiling from an assurance is where the claimant has suffered some detriment in reliance on the assurance but has also received a substantial benefit such as rent free accommodation in property. It is possible to rationalise this situation as one

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7.253  Proprietary Estoppel All common sense suggests that the same legal reasoning and approach should be applied to proprietary e­ stoppel with the same consequences in law as regards unconscionability as just described. The point was put succinctly, and it is suggested accurately, in Murphy v Burrows, where it was said: In short it is clear from the judgment of the Court of Appeal in Gillett v Holt that, while I need to consider whether the essential elements of an estoppel are made out, I also need to look at the matter ‘in the round’ as part of a broader inquiry as to whether the overarching requirement of unconscionability is satisfied.635

7.253  The third matter is to summarise the effect of unconscionability on proprietary estoppel. (a) The existence of unconscionability in the behaviour of a person in relation to land and his dealings with other persons does not in itself provide a sufficient basis for the existence of a proprietary estoppel. (b) Nonetheless, unconscionability is an essential element of proprietary estoppel in that unless unconscionability, usually represented by reliance and detriment, is shown it seems scarcely possible that the estoppel can be established. (c) Unconscionability may play other roles within the estoppel, such as that a small detriment or a small risk of detriment may mean that the unconscionability element is not established, and the criterion of unconscionability, as explained later, may play an important part in the decision of courts on the appropriate remedy or relief ordered to give effect to the estoppel.

(H)  Property Other Than Land 1. Introduction 7.254  The previous narrative has examined proprietary estoppel, its nature and its essential elements, as it applies to land and to interests in land. This approach recognises the origins of the principle in decisions in mid-Victorian times and at earlier times.636 The principle has been applied to a variety of corporeal and incorporeal interests in land, from freehold fee simple estates to iura in re aliena such as a right of way or a profit of fishery.637 It is clear that the principle can extend to the creation, in satisfaction of the estoppel, of licences which are usually regarded as personal rights and not proprietary interests in land in the sense of interests which can bind third parties.638 The earlier decisions do not suggest where the balance of detriment and benefit is such that in overall terms there is no estoppel because the essential element of detriment is not established: see para 7.240. 635 Murphy v Burrows [2004] EWHC 1900 (Ch) para 33 (Richard Sheldon QC sitting as a Deputy Judge of the Chancery Division). 636 See para 7.3 et seq for the history and development of proprietary estoppel. 637 Crabb v Arun District Council [1976] Ch 179; Lovett v Fairclough (1990) 61 P & CR 385. 638 In an early case in the development of the principle, Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699, the estoppel was satisfied by the creation of an irrevocable licence to occupy structures erected on the sea-bed, and in more recent cases, such as Matharu v Matharu (1994) 68 P & CR 93, a licence was ordered to be granted to the Claimant to occupy a domestic property for her life or as long as she wished. A licence is regarded in law as not being a proprietary interest in the sense that it does not bind successors in title of the land of the licensor: ­Ashburn-Anstalt v Arnold [1989] Ch 1. The assignability of the benefit of licences ordered to be granted and the question of the binding effect of such licences on successors in title of the person against whom the estoppel operates and who is therefore the licensor are discussed in ch 2, part (I).

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Property Other Than Land  7.256 that the estoppel can extend to interests where the subject matter is anything except land. The question inevitably arises today of whether the principle can apply to interests in chattels as well as in land and can apply to rights such as intellectual property rights which do not have as their subject matter any physical or corporeal property.639 7.255  There does not appear to be any compelling reason in principle why proprietary estoppel should not apply to rights which are not interests in land. An assurance can be given in respect of such rights. The other essential elements of the estoppel, reliance on the assurance, detriment and unconscionability, can without undue difficulty be applied to rights in chattels or to other rights. The effect of the estoppel, such as vesting rights in the person claiming the estoppel or giving to that person some other recompense, can operate as regards other rights as it can as regards interests in land. The development of the land law is that certain rights or categories of rights having land as their subject matter have come to be regarded by the common law courts or equity as interests in land and proprietary rights capable of transmission and of ‘running with the land’ with the result that they are capable of binding persons other than the grantor of the rights who comes to own the land affected. As a result, a primary difference between interests in land and other rights is that other rights are often contractual rights and do not bind persons other than the other contracting party who bears the correlative obligation. This fundamental difference is not a reason for restricting the operation of proprietary estoppel to interests in land. 7.256  There may be no major difficulty, and there is certainly no compelling difficulty, in applying proprietary estoppel as a matter of principle to rights beyond interests in land but, as compared with interests in land, there may be certain practical problems in doing so. Land is immovable and largely unchangeable. Once the subject matter of an assurance as an interest in land is defined, the land cannot change (although its ownership can of course change).640 If the subject matter of an assurance is defined as some asset such as a portfolio of investments or securities, the content is much more likely to change by the sale or acquisition of particular investments and this could cause difficulty when the time comes for effect to be given to the estoppel. The ownership of land can change between the time when the components of the assurance are satisfied and the time when effect is to be given to the assurance, such as on the death of the person making the assurance (the later time denoting the ‘crystallisation’ of the estoppel).641 There is an equal and perhaps greater prospect of the subject matter and ownership of other rights changing and this also may create difficulties as to how effect is to be given to the estoppel. When the assurance relates to a defined area of land, the necessary actions in reliance on the assurance and the necessary detriment often, though not necessarily, relate to that land by way of work performed on the land or services provided to persons on the land. These circumstances are less likely to prevail in assurances given in respect of other rights. The rule that there are no tight limitations on the type of

639 Technically leasehold interests are for historical reasons personalty rather than realty and are classified as ‘chattels real’: see Smith v Baker (1737) 1 Atk 385. There is of course no doubt that proprietary estoppel can apply to leasehold interests. 640 The certainty in the land the subject matter of the assurance is considered in para 7.186 et seq. The exact area of a named piece of land, such as a particular farm, may change from time to time with the sale and acquisition of parts of the land which from time to time constitute the farm. Naturally, the use and the physical state of an area of land may change over time. 641 See para 7.187 and see Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776.

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7.257  Proprietary Estoppel action taken in reliance on the assurance and on the type of detriment suffered may ease the application of the estoppel to non-land circumstances.

2.  The Authorities 7.257  There is no extensive consideration in the authorities of the principle of applying proprietary estoppel to rights beyond interests in land or to any practical problems of doing so of the sort just mentioned, but such authority as exists supports the extension of the estoppel to such other rights. In a leading modern decision, Cobbe v Yeoman’s Row ­Management Ltd,642 Lord Scott said that an estoppel became a proprietary estoppel ‘if the right claimed is a proprietary right, usually a right to or over land but, in principle, equally available in relation to chattels or choses in action’. It seems that by ‘a proprietary right’ what was meant was the ownership of or a right over any asset which is capable of ownership. In Moorgate Mercantile Co Ltd v Twitchings in the Court of Appeal, Lord Denning, after a general description of estoppel, referred to the principle being that the true owner of goods or land may have made a statement concerning those assets on which he is not allowed to go back: ‘So much so that his own title to the property, be it land or goods, has been held to be limited or extinguished, and new rights and interests have been created therein’.643 The assurance may relate to land together with other assets. In one case where there were general assurances made from time to time over the years to the Plaintiff, the Plaintiff was held to be entitled by virtue of an estoppel to a house and to the furniture and other assets of the person who had given the assurances on the death of that person.644 Similarly, in another case it was accepted that a proprietary estoppel could apply to property and to investments although the application of the principle could differ in relation to the two different types of asset.645 Where a commercial enterprise is the subject of an estoppel, it may comprise land and other physical assets which are part of the enterprise. The satisfaction of the estoppel may then require a sale of all of the assets and the payment of the proceeds to the person claiming the estoppel.646 7.258  The authorities and judicial statements last mentioned have in the main concerned physical assets, whether land or other assets. There is also authority to support the view that proprietary estoppel can apply to assets where no direct physical entity is involved. In Re Vandervell’s Trusts (No 2), Lord Denning was prepared to hold that an equitable estoppel applied in respect of the ownership of shares.647 In another case, a promissory 642 [2008] UKHL 55, [2008] 1 WLR 1752, para 14. See para 7.39 for a discussion of the general importance of this decision. 643 [1976] QB 225, 242. See also Baird Textile Holdings Ltd v Marks & Spencer Plc [2001] EWCA Civ 274, [2002] 1 All ER (Comm) 737, para 97 (Mance LJ). 644 In Re Basham decd [1986] 1 WLR 1498. 645 Murphy v Rayner [2011] EWHC 1 (Ch), [2011] All ER (D) 125. 646 Wayling v Jones (1993) 69 P & Cr 170, concerning an assurance given by one homosexual man to his companion and the proceeds of sale of a hotel business. 647 Re Vandervell’s Trusts (No 2) [1974] Ch 269. It may be that Lord Denning was referring to a promissory rather than a proprietary estoppel since he gave as his main authority in support of his proposition Hughes v Metropolitan Rly Co (1877) 2 App Cas 439 which is generally regarded as the first clear statement of what is now the developed doctrine of promissory estoppel. There is no suggestion that promissory estoppel is confined to interests or rights in land. Lord Denning was not eager to categorise estoppels into particular forms. It was said by Megaw LJ in

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Form of Relief or Remedy  7.260 estoppel was applied to the proceeds of a life insurance policy.648 Possibly the most important indication of the wide potential effect of the proprietary estoppel principle, including its application to rights not related to any physical asset, was its attempted application in relation to intellectual property, a musical copyright interest, in Fisher v Brooker in the House of Lords.649 The fact advanced in support of the alleged estoppel in that case was an omission for about 40 years to assert rights to payments under a musical copyright relating to a popular song. Reliance on the estoppel failed since the omission benefited rather than caused a detriment to the parties asserting the estoppel, but it appears to have been accepted without query that proprietary estoppel could in principle and on appropriate facts apply to rights in this area of the law. The necessary implied assurance in that case was presumably the acquiescence for a long period by the Claimant in a situation in which no payment under the terms of the copyright agreement was ever made to him.

3. Conclusion 7.259  There is no substantial discussion in the appellate courts of the desirability in principle or possible practical difficulties of extending the originally land-based principle of proprietary estoppel to assets and rights outside the ambit of land. It may be that in due course this question will have to be considered in detail and the limits of the extension of the principle, if there are such limits, clearly stated. For the moment it should be assumed that the principle applies to physical assets, such as goods and other chattels and to rights not founded on physical assets, or of course to combinations of various rights, first, because there is no compelling reason to limit the principle to interests and rights in land and, secondly, because there is no authority in support of that limitation and there are significant judicial observations against it. However, the operation of and giving effect to the principle may operate in different ways as regards different categories of rights.

(I)  Form of Relief or Remedy 1. Introduction 7.260  As with promissory estoppel, the grant of any relief or remedy when a proprietary estoppel is established is in the discretion of the court.650 Not only the grant of relief but also the form of that relief is discretionary. Equitable remedies such as specific performance,

Western Fish Products Ltd v Penwith District Council [1981] 2 All ER 204, (1979) 38 P & CR 7, 27, that no case had been cited to the Court in which proprietary estoppel had been applied other than to rights and interests created in or over land. It was said that it might extend to other property but that there was no good reason for extending it further. It is doubtful whether these observations remain the law today, three decades later, in view of the authorities referred to in this part of the chapter. 648 Strover v Strover [2005] EWHC 860 (Ch). 649 [2009] UKHL 41, [2009] 1 WLR 1764. 650 As mentioned in the next paragraph the discretion on whether to allow an estoppel is mainly directed to the requirement of unconscionability which is an element of the forms of estoppel mentioned.

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7.261  Proprietary Estoppel an injunction and rectification, are discretionary and this discretion certainly extends to proprietary estoppel as a form of equitable estoppel.651 There is a wide variety of forms of relief available to give effect to a proprietary estoppel and it appears that no form of relief is ruled out in principle given an appropriate state of facts. 7.261  The significance of discretion in the question of whether or not to grant any relief is reduced by the requirement of unconscionability as an element of proprietary estoppel. If for some reason the criterion of unconscionability is not satisfied, even though the other main elements of the estoppel are satisfied, there is no reason for the court to prevent a person who has given an assurance resiling from that assurance and there is no question of a proprietary estoppel. Conversely, if all of the other main elements of the estoppel are satisfied and it is unconscionable that the maker of the assurance should resile from it, then it seems unlikely that the court will in its discretion refuse any relief at all to a claimant. For this reason the question of a discretionary refusal of any relief despite all four main elements of the proprietary estoppel being satisfied seems more notional than real.652 The other aspect of discretion as regards relief, the form of the relief to be ordered, remains important and is discussed in this part of the chapter. 7.262  A consideration to be borne in mind when an appropriate remedy is discussed is that a proprietary estoppel, alone among forms of estoppel, may be used as a cause of action in the sense that it may alone and in itself provide the justification and reasons for a remedy. As with other forms of estoppel, a proprietary estoppel can be deployed by a claimant or a defendant in legal proceedings. Thus, a proprietary estoppel can be set up by way of defence (or counterclaim) to a claim for possession of land.653 In principle, the question of which party is the claimant in proceedings should not affect the decision of the court on what remedy to grant to a party who can establish the estoppel. For instance, in Crabb v Arun District Council,654 the person who claimed a right of access to, and a right of way over, a private road brought proceedings for a declaration and an injunction in support of his alleged rights and succeeded in this claim. The availability of the proprietary estoppel creating the rights claimed should have been judged on the same principles if the Defendants had sought an injunction to prevent the Plaintiff from trespassing on their road. Purely procedural matters should not affect substantive rights. 7.263  Since the range of remedies potentially available is so wide, and since there are few limits on the considerations which can be taken into account by a court in deciding how to exercise its discretion in a particular case, it is difficult to lay down any general principles to guide parties on how the discretion may be exercised in any individual instance. In these circumstances, the best that can be done is (a) to consider the general purpose of proprietary estoppel which may be a guide to the appropriate remedy in a particular case, (b) to itemise a number of the remedies or forms of relief available, (c) to examine the various

651 The point was put by Lord Browne-Wilkinson in Roebuck v Mungovin [1994] 2 AC 224 as follows: ‘If an equitable estoppel is raised the court’s function is to determine what, if anything, is necessary to satisfy that equity in all the circumstances of the case’. 652 See para 7.308 where the refusal of any relief is discussed. 653 As, eg, in Inwards v Baker [1965] 2 QB 29. 654 [1976] Ch 179.

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Form of Relief or Remedy  7.266 considerations or factors which are likely to weigh in particular cases in deciding the form of relief, and (d) to consider certain general matters relevant to the form and effect of the relief ordered.

2.  The Purpose of the Estoppel 7.264  The underlying purpose of all estoppels is to prevent a person who has made a statement of some kind, a representation or a promise or an assurance, from going back on it usually when the person to whom it was made has acted to his detriment in reliance on the statement. The obvious method of achieving this purpose is to compel the maker of the statement to treat as correct and as binding that which has been stated. Any cause of action or rights between the parties are adjudicated upon with this compulsion applied. In broad principle, the same purpose and method of application should apply to proprietary estoppel but with the added complication that what the maker of an assurance is required to do is to give effect to the assurance relating to some interest or rights over his land, and this can often only be achieved by compelling the maker of the assurance to carry out some positive act such as transferring an interest in land to another person. It is the requirement that the maker of a statement which is in the nature of an assurance shall carry out some positive action in compliance with the statement, as opposed to merely observing the truth of the statement, which is a unique characteristic of proprietary estoppel and that which distinguishes it from other forms of estoppel and gives rise to the wide span of types of relief available. 7.265  With these general matters in mind, the authorities suggest that there are three possible overall purposes of a proprietary estoppel. The first is the obvious purpose, as just stated, of compelling the maker of an assurance relating to land to adhere to and implement the terms of the particular assurance made. This approach focuses on the exact terms of the assurance. The second possible purpose is to avoid the detriment which the person to whom the assurance is made would suffer if the assurance was not honoured. This purpose can of course be achieved by compelling the maker of the assurance to give effect to its precise terms but may in some cases be achieved by some different order. The third possible purpose is to provide for ‘the minimum equity’. What is meant is that the order of the court is framed so as to require the minimum to be done which would achieve justice between the parties. In many cases where the choice is between compelling strict adherence to the assurance and compelling the maker of the assurance to take some other action, such as paying a sum of money, in place of strict adherence to the assurance the concept behind the minimum equity is the same as, or very similar to, the concept of avoiding detriment to the person to whom the assurance was given. It is this concept which is often the justification for the court refusing to give full and exact effect to an assurance of an interest in land. There are significant arguments in favour of all of these approaches.

(i)  Giving Effect to the Assurance 7.266  There is a substantial argument and some judicial support in support of the view that when it is practical to do so an order giving effect to the assurance is the correct and 663

7.267  Proprietary Estoppel most satisfactory method of enforcing a proprietary estoppel.655 The older cases during the development of proprietary estoppel do not generally suggest that some lesser recompense for a failure to fulfil the assurance would be appropriate.656 For instance, there is no suggestion in Plimmer v Mayor, etc, of Wellington657 that the Plaintiff should have been paid a sum of money to compensate him for the loss of expectation that he could permanently retain the structures in the sea bed, and instead he was granted an irrevocable licence to do so. In Inwards v Baker,658 an early case within the modern development of proprietary estoppel applying the principle drawn from the Victorian cases, there was no examination of whether a person who had been assured that he could live in a property as long as he wished should have some monetary or other recompense in place of an order which entitled him to have that which was his reasonable expectation. 7.267  There are other solid reasons for concluding that an order for the fulfilment of an assurance given, or of the expectation created by that assurance, should generally be the remedy selected by a court. There is an understandable moral feeling that when someone has given an assurance intending it to be taken seriously and to be acted on, and it is acted on, that person should generally be held to the assurance without any minute examination of what the other person has lost by his actions in reliance on the assurance. 7.268  Such an approach also assists clarity and certainty in the operation of proprietary estoppel, not something to be discarded lightly where a principle is of its nature to an extent uncertain in its operation. It might assist landowners and those seeking to rely on (or even those seeking to resist) the operation of the principle if it was generally understood that once the elements of the estoppel had been established the normal, although not of course the inevitable, result was that the maker of the assurance will be held to the terms of the assurance and an order made to bring about this result. 7.269  There is a further way in which an order giving effect to the assurance as the normal remedy when a proprietary estoppel is established leads to clarity and certainty. The main alternative form of relief is to assess the detriment suffered by the claimant and to provide some monetary or other recompense to the claimant for the detriment. The difficulty may be to determine what exactly is the detriment and how compensation for it is to be determined. The detriment may sometimes be the provision of services of a personal nature to the owner of property for no reward or for a small monetary reward. It is difficult to evaluate in monetary terms the value of such services especially as they may have been performed over a long period. The detriment may be the foregoing of some personal opportunity by

655 See the observation of Robert Walker LJ in Jennings v Rice (2003) 1 P & CR 8, para 50, that this is the natural response of a court. It does seem that, save in the most exceptional circumstances, it cannot be equitable to award to a claimant more than that which was assured and expected: Watson v Goldsborough [1986] 1 EGLR 265; Baker v Baker (1993) 25 HLR 408; Wormall v Wormall [2004] EWCA Civ 1643, para 32; Habberfield v Habberfield [2019] EWCA Civ 890, para 70. 656 See however Lord Cawdor v Lewis (1835) 1 Younger and Collyer 427 where Chief Baron Abiwger suggested that an allowance by way of compensation might be an appropriate remedy: see para 7.11. 657 (1884) 9 App Cas 699. The Plaintiff did in due course receive a sum of money calculated in this way since the proceedings arose out of a proposal to acquire compulsorily his rights in the public interest made by the Corporation of Wellington and the issue whether his rights were of a nature which entitled him to statutory compensation. See para 7.22. 658 [1965] 2 QB 29.

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Form of Relief or Remedy  7.271 the claimant such as to pursue a career or to form relationships in which case the difficulties of assessment become even more difficult.659 In addition, persons who perform services for others at a property may have received the benefit of rent-free accommodation at that property and this factor should be brought into the overall assessment of any net detriment. It may be that the easiest form of detriment to assess is the cost to a claimant of carrying out improvements to a property, but even here there is a possible uncertainty since it would have to be determined whether the detriment is to be measured by calculating the cost of the improvements, that is what it would have cost to employ a contractor to do them, or by calculating the addition to the value of the property brought about by the improvements, and in the latter case as at what date that increase in value is to be assessed. In one case where the assurance was of a right to occupy property with other members of the family for the remainder of the life of a 75-year-old man, the monetary award was the annual value of that right capitalised over the period of life expectancy of the Claimant.660 Such calculations can readily be carried out by experts but must involve uncertain factors such as life expectancies and the appropriate capitalisation rate. These difficulties and uncertainties can be avoided if the remedy given by the court is simply an order to give effect to the content of the assurance without any assessment of the exact detriment and benefit to the claimant.

(ii)  Compensation for Detriment 7.270  The alternative to a remedy by way of an order giving effect to the terms of the assurance is an order that some other recompense is provided to the claimant by the defendant, or by the personal representatives of the defendant if the assurance was only to take effect at the death of the person making it, that recompense being for the detriment suffered by the claimant in reliance on the assurance. The recompense may take various forms, although the most obvious forms are the payment of a sum of money to the claimant or the conferring on the claimant of rights in the property, such as a right of occupation as long as the claimant wishes, which is less than that stated in the assurance. There are broadly two types of situation in which the making of a compensatory order of the nature here discussed is either inevitable or is at least attractive. 7.271  The first situation is where it is impractical to give effect, or to give full effect, to the terms of the assurance. The best example of this situation is where the assurance is of a property on the happening of a certain event or on the death of the person making the assurance, but where there has been a disposal of the property or a substantial part of it before the death of that person or other event which triggers the giving of effect to

659 eg, in Habberfield v Habberfield [2019] EWCA Civ 890, para 47, the Claimant was said to have ‘positioned her working life on assurances covering a farm given to her by her parents’ and this was said to be a detriment which was ‘incapable of reduction to pounds and pence’. A similar difficulty occurs in assessing damages for a breach of contract and the law does not shy away from a crude assessment of damages for a loss of opportunity; eg, in Chaplin v Hicks [1911] 2 KB 786 damages of £100 were awarded for the loss of a contractual opportunity to participate in a form of beauty contest. 660 Baker v Baker (1993) 25 HLR 408. For the details of this decision see para 7.292.

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7.272  Proprietary Estoppel the assurance.661 To make an order vesting the whole of the property in the claimant could cause difficulty to an innocent purchaser who had no knowledge of the personal assurance given to the claimant or could cause an unacceptable situation of persons thrown together unwillingly into a shared enterprise or even forced to live together.662 A court will seek to avoid such difficulties and the possible future personal or economic friction which could ensue.663 A good example of a situation where giving full effect to the assurance was not practical is Gillett v Holt664 in which the Claimant worked for years as a farm manager on an assurance made by the owner of the farm that he would inherit the land and the business. After a dispute between the parties, the owner disposed of some of the property and made no provision in his will for the Claimant. It was held that the estoppel was best satisfied in these circumstances by vesting in the Claimant the farmhouse and some other land within the farm which was tenanted and by ordering the payment to the Claimant of £100,000 to compensate him from his exclusion from the remainder of the farm business. This decision illustrates the situation in which partial effect is given to the terms of the assurance where that is practicable and a monetary sum awarded as compensation for the detriment which was not adequately compensated by the partial fulfilment of the assurance. There may be other circumstances which make it impractical to give effect to the terms of the assurance, such as where cohabitation by the parties in the same property would lead to personal ­friction.665 It is possible that in some situations a claimant would prefer not to assert any claim to a right of ownership or occupation of property but would prefer to receive a sum of money equivalent to that right.666 7.272  The second situation is where to give full effect to the assurance would be to confer on the claimant a benefit out of all proportion to the detriment suffered by that person. This situation is illustrated by the decision of the Court of Appeal in Jennings v Rice,667 where the Claimant had provided personal services and care for no payment to an ill person unable to care for herself for many years in reliance on a vague assurance that all of that person’s property would be for the benefit of the Claimant one day. The whole of the estate of the person who gave the assurance was worth over £1 million at her death. It was held that an order for the payment of £200,000 out of the estate gave proper effect to the estoppel, a sum based on an estimate of the cost of the provision of the services over the years if they had had

661 The date of the occurrence of such a triggering event is sometimes called the date on which the estoppel ‘crystallises’: see para 7.187. One reason which may make it impossible to enforce the rights of the claimant against a successor in title of the land is that a purchaser of the land has acquired a title registered under the Land Registration Act 2002 where the rights of the claimant under the estoppel were not protected by notice in the register and cannot take effect as an overriding interest. This matter is discussed in part (I) of this chapter. 662 The matter of the effect of a proprietary estoppel on successors in title to the land of the person making the assurance is considered in connection with the general question of the binding nature of an estoppel on third parties in ch 2, part (I). 663 Pascoe v Turner [1979] 1 WLR 431, 438–39. 664 [2001] Ch 210, 235–38 (Robert Walker LJ). See also Giumelli v Giumelli (1999) 196 CLR 101 in the High Court of Australia in which the Court ordered that the Plaintiff should be paid a monetary sum equal to the value of land which he had been promised, an order which it was thought did justice between the parties to the proceedings as well as any relevant third parties. 665 This may occur because of some previous dispute between the parties and because of some close family or personal relationship. 666 An example is Baker v Baker (1993) 25 HLR 408 discussed in para 7.292. 667 (2003) 1 P & CR 8.

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Form of Relief or Remedy  7.273 to be purchased. The reasoning was that if the expectation of a property created in a claimant by an assurance was ‘out of all proportion to the detriment’ suffered by the claimant, the equity was best satisfied by a more limited order than that requiring the exact fulfilment of the assurance.668 This decision should not be read as suggesting that there has to be an exact numerical proportion between the detriment suffered and the relief granted. The rule is that the relief should not be grossly disproportionate to the detriment.669

(iii)  The Minimum Equity 7.273  An expression which has gained some prominence is that where the court has a discretion on how to give effect to an equitable estoppel the guiding principle as to the form of relief should be an order tailored to achieve ‘the minimum equity’ to do justice. This was the expression used by Scarman LJ in Crabb v Arun District Council670 where, following an assurance of an easement, it was said that the minimum equity was that the person given the assurance should have an easement or licence on terms to be agreed, with the court being able to determine the terms if not agreed, presumably in the main the payment of a sum of money. Since Scarman LJ did not think it necessary or even useful to distinguish between promissory and proprietary estoppel, he must have meant his observation to apply to the proper result of either form of equitable estoppel. This description of the correct principle has been taken up with some enthusiasm in judgments in later cases in the High Court of Australia.671

668 ibid, para 50 (Robert Walker LJ). See also Sledmore v Dalby (1996) 72 P & CR 196, 204 (Roche LJ), 208 (Hobhouse LJ). 669 See Suggitt v Suggitt [2012] EWCA Civ 1140, [2012] WTLR 1607. In Beale v Harvey [2004] 2 P & CR 18, para 37, it was concluded that the remedy sought, the permanent enlargement of a garden, was so disproportionate to the short period of detriment suffered that there was no unconscionability and thus no proprietary estoppel. In Henry v Henry [2010] UKPC 3, [2010] 1 All ER 988, it was held by the Privy Council that proportionality between the detriment suffered and the order giving effect to a proprietary estoppel required that the ownership of one half of the land in question should be vested in the Claimant rather than the whole of the land as directed by the court below. Decisions to this effect were reviewed by the Court of Appeal in Habberfield v Habberfield [2019] EWCA Civ 890 in which it was said that when considering proportionality the correct comparison was between the relief awarded and the detriment suffered. It was said (at para 37) that the extempore judgment of Arden LJ in Suggitt v Suggitt may not have wholly represented the correct law on this point. 670 [1976] Ch 179, 198. See also Pascoe v Turner [1979] 1 WLR 431, 438 (Cumming-Bruce LJ); Liden v Burton [2016] EWCA Civ 275, para 35; Duke of Devonshire v Eglin (1851) 14 Beav 530 where compensation was ordered to be paid for the grant of an easement with the amount to be determined by a Master. In New Zealand the minimum equity as the theoretical foundation of the relief granted for an equitable estoppel has been described as ‘that which is necessary to cure the unconscionable conduct: nothing more, nothing less’: Stratulatos v Stratulatos [1988] 2 NZLR 424, 438. 671 See Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 404–05 (Mason CJ and Wilson J); and Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394 (Brennan J). In Verwayen, Mason CJ (at 333) referred to there being one doctrine of estoppel and added that there must be proportionality between the remedy and the determination that ‘it would be wholly inequitable and unjust to insist upon a disproportionate making good of the relevant assumption’. In a recent decision, the Court of Appeal of New Zealand revived the English, Australian and New Zealand authorities and concluded that while some authorities continued to refer to relief as being the minimum necessary to satisfy the equity, the emphasis in more recent cases had been on a broad consideration of the relief necessary to achieve a just and proportionate outcome: Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567, para 117. This decision involved a promissory estoppel in which the promisor was held to the full terms of his promise by way of what was called ‘expectation-based relief ’.

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7.274  Proprietary Estoppel 7.274  The concept of the minimum equity is not much different from a rule that the effect of a proprietary estoppel should be to prevent detriment so far as possible and no more. The minimum equity could hardly be less than the removal of the detriment suffered by the claimant as a result of actions reasonably taken in reliance on an assurance. The issue has mainly been examined in cases where giving effect to the terms of the assurance would give to the claimant a benefit much greater than that necessary to avoid a detriment to him. It is possible to imagine cases in which giving full effect to the assurance, such as by an order for the creation or transfer of an interest in land, would not adequately compensate the claimant for something such as a long period of devoted service for no reward. If the maker of the assurance has no other assets except the land the subject of the assurance, there is nothing the court can do except to direct the transfer of the land to the claimant. Even if the person making the assurance has other substantial assets it seems doubtful whether in such circumstances a court would go beyond enforcing the terms of the assurance on the basis of which the claimant has acted. It must be remembered that the fundamental purpose of proprietary estoppel is not to do some abstract justice for past events by ordering a wholesale rearrangement of property and monetary assets between the parties, but rather to give effect to a reasonably clear assurance which has been given and acted upon. 7.275  It should be noted that the minimum equity approach may result in an order for relief which is less than giving full effect to the terms of the assurance. It need not do so and the giving of full effect to what has been assured by the creation of transfer of an interest in property may be the only way of giving effect to the minimum equity.672 7.276  There is a valuable survey of the principles which govern the choice between remedies, and of the main authorities on this subject in this country, in New Zealand, and in Australia, in the decision of the Court of Appeal of New Zealand in Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd.673 The owners of a right of first refusal to purchase property promised not to enforce their rights when the landowner sold and then repurchased the property in order to obtain immediate finance. The property owner incurred the costs of consultants and a non-refundable loan fee of NZ $500,000. The owners of the right of first refusal then purported to exercise their rights in order to obtain the property for a sum substantially less than its market value. In these circumstances, their arose what would be described in this country as a promissory rather than a proprietary estoppel but the Court of Appeal applied principles said to be applicable to both forms of equitable estoppel. 7.277  The main issue before the Court was whether there should be an expectation-based or a reliance-based remedy for the estoppel which arose. An expectation-based remedy meant that the property owner could enforce the expectation created by the promise so that the right of first refusal could not be exercised. A reliance-based remedy meant that the right of first refusal could be enforced but only on terms that the property owner was reimbursed for his abortive expenditure. Having reviewed the authorities, the Court of Appeal 672 Crabb v Arun District Council [1976] Ch 179, in which Scarman LJ spoke of the minimum equity approach, was itself a decision in which the minimum equity required an order for the creation of the interest the subject of the assurance, a right of way over a road. 673 [2014] 3 NZLR 567.

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Form of Relief or Remedy  7.278 concluded that there was no presumption in favour of either form of remedy. The Court awarded an expectation-based remedy having regard to what it considered were the three main relevant circumstances, namely (a) the clarity and nature of the assurance which gave rise to the expectation, (b) the extent and nature of the detrimental reliance by the property owner on the promise or assurance, and (c) the need for the property owner to show that it was unconscionable for the promisor to depart from the promise or assurance given. The principle applied was that the greater the clarity of the promise and the greater the extent of the detrimental reliance, the more appropriate it was that an expectation-based remedy should be awarded.

(iv) Conclusion 7.278  A proprietary estoppel can only arise where a person with an interest in property has given to another person an assurance creating an expectation on the part of that other person, reasonably held, of an entitlement to an interest or rights in identified property, with the maker of the assurance intending that the assurance shall be acted upon and with the person given the assurance acting upon it to his detriment. It does seem both just and reasonable that in such circumstances the court should seek to give effect both to the clear wish of the giver of the assurance and to the reasonable expectation of the person given the assurance by ordering the fulfilment of the assurance in the terms and to the extent to which that assurance is given. At least that should be, as it has been put in the Court of Appeal, ‘the court’s natural response’.674 To do otherwise would be to override both the clear intention of one party and the reasonably held expectation of the other party, two matters which are fundamental to the nature and existence of a proprietary estoppel. Yet there are certainly judicial observations which express the matter and the purpose of the estoppel in a substantially different fashion, indicating that the purpose of the principle is not to secure fulfilment of the wish of the giver of the assurance but rather to avoid detriment and to avoid a disproportionate making good of the assurance.675 This latter view has been expressed succinctly by Mason CJ in the High Court of Australia in Commonwealth v Verwayen (Voyager Case): A central element of that doctrine [estoppel generally including proprietary estoppel] is that there must be proportionality between the remedy and the detriment which is its purpose to avoid. It would be wholly inequitable and unjust to insist on a disproportionate making good of the relevant assumption.676

674 Jennings v Rice (2003) 1 P & CR 8, para 50 (Robert Walker LJ). In Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394 Deane J, one of the majority upholding an estoppel, said: ‘Prima facie the operation of an estoppel by conduct is to preclude departure from the assumed state of affairs. It is only when relief frame, on the basis of that assumed state of affairs would be inequitably harsh, that some lesser form of relief should be awarded’. This statement was applied in general terms by the High Court in Giumelli v Giumelli (1999) 196 CLR 101. See also in the High Court of Australia, Sidhu v Van Dyke (2014) 308 ALR 232. The relevant authorities are reviewed in careful detail by Handley AJA in Delaforce v Simpson-Cook [2010] NSWCA 84. 675 See, eg, Sledmore v Dalby (1996) 72 P & CR 196; Jennings v Rice (2003) 1 P & CR 8. For academic discussion of the subject, see A Robertson: ‘The Reliance Basis of Proprietary Estoppel Remedies’ [2008] Conv 295; and B McFarlane and P Sales: ‘Promises, Detriment and Liability: Lessons from Proprietary Estoppel’ [2015] LQR 610. 676 (1990) 170 CLR 394, para 36. For a recent discussion of the objective of a court in satisfying the equity raised by a proprietary estoppel see the judgment of Lewison LJ in Davies v Davies [2016] EWCA Civ 463.

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7.279  Proprietary Estoppel This somewhat rigid approach to the appropriate relief in proprietary estoppel, focusing as it appears to on detriment as being the only criterion for the form of relief, has not found favour in this country. It is only necessary to refer again to Jennings v Rice677 where Robert Walker LJ stated that the recognition of detriment as a criterion for relief in some cases, particularly where to give full effect to the assurance would be out of all proportion to the detriment, does not mean that the court should in all cases abandon expectations completely and look to the detriment suffered by the claimant as defining the appropriate measure of relief. 7.279  Given different judicial statements on the correct approach, and with no statement of principle of an overall binding nature, it is difficult to state in exact terms what is the overall purpose behind the selection of the appropriate relief in proprietary estoppel. In particular, there remains the tension between a natural wish to give full effect to an assurance seriously given and acted upon and the avoidance of relief wholly disproportionate to the detriment suffered by a claimant in acting upon the assurance. One of the weaknesses of proprietary estoppel as a principle of law may be that, while the main elements of the principle and the components of those elements can be summarised reasonably clearly and concisely as a result of more recent decisions,678 uncertainty in the appropriate remedy makes it difficult to predict an exact result of the operation of the principle and so may encourage rather than discourage litigation. Perhaps the best working rule is to say that the generally available relief following the establishment of the elements of a proprietary estoppel is an order giving full effect to the terms and content of the assurance which initiates the estoppel (and this will particularly be so where specific acts are requested and are carried out in return for a specific assurance of an interest in land) but with the important caveats that other, and sometimes more limited, relief may be appropriate especially (a) when it is not practicable to give full effect to the assurance, and (b) when there is a clearly substantial disproportion between the result of ordering full compliance with the assurance, and the detriment which a claimant has suffered as a result of his actions taken in reliance on the assurance.

3.  Forms of Order 7.280  Courts have available a wide range of orders and forms of relief which may be used in civil litigation generally and it seems that in principle no form of order is excluded from those which may be used to satisfy the equity which arises when a proprietary estoppel is established. It would serve no purpose to seek to provide an exhaustive list of the forms of relief which have been granted in the many types of factual situation which may arise in connection with a proprietary estoppel. This is all the more so if, as seems likely, proprietary estoppel may in principle operate as regards rights not connected with land.679 The unifying 677 (2003) 1 P & CR 8, para 50. The most recent authority on the subject, Habberfield v Habberfield [2019] EWCA Civ 890, para 68, suggests that there is a broad spectrum of proprietary estoppel claims and that the nearer the case comes to the performance of requested acts the stronger will be the case for an award based on the expectation created by the assurance: if you get what you asked for you should get what you offered. Such cases may come close to the enforcement of a contract. 678 An attempt to summarise the relevant principle is made in para 7.2. 679 See para 7.254 et seq.

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Form of Relief or Remedy  7.281 factor is that the aim of the remedy will be to give effect to the assurance given or to avoid or reduce detriment to the claimant or both. The forms of relief may be divided into (a) an order for the creation, transfer or variation of a proprietary interest in land, (b) an order permitting the continued occupation of land, and (c) some other form of order normally involving a monetary payment. Naturally different forms of order may be combined so as to provide the appropriate relief. The making of an order usually arises out of an action brought to establish a proprietary estoppel and obtain relief, something which can be done because proprietary estoppel, alone in this among the forms of estoppel, can itself be used as a cause of action entitling a claimant to relief. On the other hand, the estoppel can be used as a defensive weapon (used as ‘a shield not a sword’ as it is sometimes put). An example would be where a defendant in an action for possession of property asserts that by reason of an estoppel an order for possession should be refused and he should be entitled to remain in occupation of the property.680

(i)  Proprietary Interests 7.281  Both the older cases and modern decisions provide examples of the creation or transfer of proprietary interests in land.681 In Dillwyn v Llewelyn682 in 1862, the Court ordered the vesting in the Claimant of the freehold of land with a house on it. In Thorner v Major683 in 2009, the freehold of an area of farmland and farming assets was vested in the Claimant. The order may be for the vesting in the Claimant of freehold land which is subject to a subsisting tenancy.684 Ramsden v Dyson685 in 1866 was a decision in which a long lease in favour of the Claimant of the estoppel would have been ordered if the estoppel had been made out (as it probably would be under the principle of proprietary estoppel as applied today). In a modern case, one of the grounds for the order for the grant of an underlease was a proprietary estoppel.686 In Crabb v Arun District Council,687 the order was for the grant of an easement of way over a roadway. In Lim v Ang,688 the order was for the transfer of a one-half undivided share in property to the other co-owner so as to leave him the sole owner. The status or terms of a lease may be ordered to be altered such as that a lease was ordered to become binding upon a remainderman holding a future

680 Examples are Inwards v Baker [1965] 2 QB 29; and Sledmore v Dalby (1996) 72 P & CR 196. 681 By a proprietary interest is meant one of the two legal estates which may exist in land, the freehold fee simple absolute in possession and a leasehold term of years absolute, any other interest or charge which may exist at law, such as an easement, and the other interests in land which may take effect in equity, such as a right under a trust: see s 1(1)–(3) of the Law of Property Act 1925. The common characteristic of such proprietary interests is that they are in principle capable of running with the land and so binding successors in title of the land affected. 682 (1862) 4 De GF & J 517. See also Voyce v Voyce (1991) 62 P & CR 290. 683 [2009] UKHL 18, [2009] 1 WLR 776. 684 Gillett v Holt [2001] Ch 210. 685 (1866) LR 1 HL 129. 686 Toogood v Farrell [1988] 2 EGLR 233. 687 [1976] Ch 179. Lord Denning MR was content simply to make a declaration that an easement existed in favour of the Plaintiff. In Clark v Clark [2006] EWHC 275 (Ch) as a result of an estoppel being established an order was made for the use by a party of an access to land over a strip no more than 30 feet in width to endure for as long as a business was carried out on the land which the access served. In Duke of Devonshire v Eglin (1851) 14 Beav 530 an easement was ordered to use a watercourse over the land of the Defendant. 688 Lim v Ang [1992] 1 WLR 113. See also Jones v Jones [1977] 1 WLR 438 (a one-quarter equitable interest in land ordered to have effect).

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7.282  Proprietary Estoppel entailed interest in the freehold by reason of an estoppel in circumstances where it would not otherwise have been so binding,689 and in another case a new lease was ordered to be granted on terms appropriate to a building lease.690 In a more recent case, an order that a landlord’s right to determine the lease was not operable was made because of a proprietary ­estoppel.691 A sum of money ordered to be granted by reason of an estoppel may be secured by ordering that it be charged on a property.692 An order voting an interest in a person may be made on terms that that person shall pay compensation to the person who is divested of his interest.693 7.282  A decision of some interest which shows the scope of an order which may be made by a court relating to property was the decision of Woolf J in Salvation Army Trustee Co Ltd v West Yorkshire Metropolitan County Council694 in that it related not to land being vested in the Claimant but rather to the giver of the assurance being required to acquire land from the Claimant on certain terms as to the price to be paid. The assurance was that property would be acquired from its owners at a price appropriate to compensation for compulsory acquisition as assessed on a specified legal basis. The order of the Court was that on the execution and delivery of a transfer of the property by the Claimant, the local authority in question, should pay the agreed compensation (less a small deduction). There seems no reason why as in this case an order should not be made to give effect to an equity by way of a direction for the divesting of an interest in property of a claimant for a compensatory sum (in effect a compulsory acquisition of it by the object of the estoppel) as well as by a direction for the vesting of a property in a claimant.

(ii)  Right to Occupy Land 7.283  Moving to the second type of order, the conferment of a right to occupy land, it is useful to point out that in law a right to occupy a specific area of land with exclusive possession of that land will usually constitute a tenancy of the land, provided that the right is for a term certain or on a periodic basis (for example, an annual tenancy determinable at the end of each year).695 A right of occupation less than a right to exclusive possession may exist as a licence rather than as a lease, and in exceptional cases a right to exclusive possession may be only a licence. The question of the status in law of rights of occupation created as a result of a promissory estoppel is considered later,696 but there is no doubt that the conferment of 689 Huning v Ferrers (1711) Gilb Rep 85. See para 7.6. 690 Stiles v Cowper (1748) 3 Atk 692. See para 7.8. 691 Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133n. 692 Campbell v Griffin [2001] EWCA Civ 990, (2001) 82 P & CR DG23. See also Unity Joint Stock Mutual Banking Association v King (1858) 25 Beav 72 (lien over land). 693 Lim v Ang [1992] 1 WLR 113. The court may order an inquiry into the value of an interest in land in order that the amount of the compensation can be determined. The order in Duke of Devonshire v Eglin (1851) 14 Beav 530, 534, was that compensation was to be paid for the grant ordered of an easement with the amount to be determined by a Master. 694 (1980) 41 P & CR 179. 695 Street v Mountford [1985] AC 809. The conferment of a right to occupy residential property was at one time sometimes described by the parties as a licence in order to seek to avoid the impact of the Rent Acts which applied to leases but not to licences. The court looks to the substance and nature of the transaction as a matter of law rather than to the label which the parties choose to attach to their relationship. 696 See para 7.294 et seq. It is there suggested that rights of occupation created in this way are best regarded as licences.

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Form of Relief or Remedy  7.285 a right of such a character to remain in a property is a possible, and not infrequent, remedy in proprietary estoppel. It is possible that the rights conferred by an order should be subject to the payment of sums in the nature of rent by the person permitted to exercise the right.697 Whether such payments are ordered may depend on the expectation induced in the claimant by the assurance made and on the previous practice of the parties.698 7.284  Both the older and the modern authorities provide examples of a remedy by way of a licence to occupy land. In Plimmer v Mayor, etc, of Wellington699 the remedy was that the Plaintiff was to have an irrevocable licence to maintain structures which had been built into the sea bed of a harbour. The reasoning of the Privy Council was that the Government had created a reasonable expectation that the occupation would not be disturbed and that the proper way to fulfil that expectation was by an irrevocable licence, described as ‘practically a perpetual right’.700 The licence ordered will usually be more limited than one to exist in perpetuity. In Inwards v Baker,701 a son had been encouraged to build a bungalow on his father’s land in the expectation that he would be entitled to remain there for as long as he wished. The remedy as stated by Lord Denning MR was that the son, against whom proceedings for possession had been brought by trustees of the will of the father, ‘can remain there as long as he desires to as his home’.702 The terms of a licence or right of occupation could be tailored in other ways to reflect that which was just. A possibility is a licence for a stated limited period only or a licence on terms that the occupier properly maintained the property. The licence may be made terminable on the occurrence of a condition or event.703

(iii)  Payment of a Sum of Money 7.285  The third type of relief arises when no proprietary right in land or right to occupy land is ordered. The obvious alternative order is that a sum of money is paid to a claimant as satisfaction of his equitable rights. This is not a form of relief generally considered in the older authorities, but a recent example of its use is Jennings v Rice704 in which the equity 697 Clark v Clark [2006] EWHC 275 (Ch). In this case no payment was ordered to be made for a right of access granted. 698 ibid, para 45. 699 (1884) 9 App Cas 699. 700 ibid, 714. Presumably the licence was transmissible. The value of the licence was that it gave the Plaintiff a right to compensation when his occupation was disturbed under statutory powers. See para 7.22. A further example of a remedy of this nature is the decision of the Privy Council in Lala Beni Ram v Kundun Lall (1899) LR 26 IA 58 where a ‘perpetual right of occupation’ was ordered to be granted to tenants who had erected buildings on the demised land and the landowner had stood by and allowed this to happen. The justification for the order was an inferred contract between the parties but today the case would be better analysed as one of proprietary estoppel. See also Canadian Pacific Railway Co v The King [1931] AC 414, 429–30 (Lord Russell) on the explanation of proprietary estoppel being an implied contract, an explanation not in accordance with the law as applied today. 701 [1965] 2 QB 29. 702 ibid, 37. See also Sledmore v Dalby (1996) 72 P & CR 196 in which a similar order was made at first instance but was altered by the Court of Appeal because the claimant had already occupied the property rent free for 18 years and this was determined to be sufficient to satisfy the equity. 703 Williams v Staite [1979] Ch 291, 300 (Goff LJ). 704 (2003) 1 P & CR 8. This decision illustrates the concept of proportionality in the relief ordered. Where the assurance and the expectation created by it relate to land or the occupation of land and no relief connected with the land is granted, it is difficult to see what relief there could be except the order for the payment of a sum of money. If proprietary estoppel is available in connection with rights other than rights in land then it may be that as future

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7.286  Proprietary Estoppel appropriate to someone who had provided personal services and care to an elderly person in her house, which was worth over £1 million on her death of that person, was a payment of £200,000 out of the estate. The difficulty in fixing the sum is to make it proportional to the detriment suffered so that, so far as money may do so, detriment is avoided. In a case such as that just mentioned, the cost of the personal services if they had had to be purchased in the market offered an obvious guide. Other forms of detriment such as a loss of an opportunity to take a job or receive training are more difficult to quantify. 7.286  Of course, forms of relief may be combined. Thus, in Gillett v Holt,705 the ideal way of satisfying the equity would have been to vest in the Claimant an interest in the whole of a farming enterprise but as part of the land had been disposed of before the estoppel crystallised it was thought appropriate that the farmhouse and some other land should be vested in the Claimant and that he should be paid £100,000 in compensation for the loss of the rights which he would otherwise have obtained over the remainder of the farming enterprise. A monetary sum may be ordered to be paid combined with a charge over property as security for the payment.706 In an early decision, sons had laid out money in building on the land of their father. It was held that the intention of the father was not that the sons should become owners of the land and the order of the court was that the sons should have a lien on the property for the amount of their expenditure.707

4.  Relevant Considerations 7.287  Since the form of relief which a court may order to satisfy the equity created by proprietary estoppel is discretionary, and is not limited, it follows that in any individual case all relevant circumstances should be taken into account in deciding the appropriate and exact remedy. Plainly, the central considerations are likely to be the context of the assurance given and the expectation created in the person to whom it is given and the desideratum of avoiding detriment to that person. In this situation it is not possible to seek to draw up a list of all potentially relevant considerations since every different factual situation will generate or determine that which is relevant in a particular case. The most that can usefully be done is to look at the matters which courts have generally found to be relevant or irrelevant for the present purpose. Equally, it would be purposeless to try to indicate what weight in any particular case should be given to any consideration which is regarded as relevant. The weight of any such consideration will inevitably differ, and perhaps greatly differ, from case to case and situation to situation.

(i)  Effect on Third Parties 7.288  While the primary considerations may be those just mentioned, the nature of the expectation created and the avoidance of detriment, it seems wrong and over rigid cases consider this extended ambit of the principle, relief in different forms will be seen to be appropriate. The possibility of relief by way of compensation was raised in an early case by Lord Abinger in Lord Cawdor v Lewis (1835) 1 Younger and Collyer 427, 433. See para 7.11. 705 [2001] Ch 210. 706 Campbell v Griffin [2001] EWCA Civ 990. The sum ordered to be paid was £35,000. 707 Unity Joint Stock Mutual Banking Association v King (1858) 25 Beav 72, 78–79.

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Form of Relief or Remedy  7.289 to ignore the effect of an order on parties other than the maker and the recipient of an assurance. To take an example of the type of situation which arises when proprietary estoppel is asserted in a domestic context, a neighbour, not owning property of her own, of an elderly person who owned a house, may have provided devoted services to that person over the years and have done so upon the type of general assurance which may sometimes be sufficient for the purposes of the estoppel such as that the person providing the services will be ‘seen all right above my house’ but the elderly person by her will leaves her house, her only major asset, to an equally elderly but impecunious close relative. If there had been no such relative in these circumstances, equity might be done by the vesting of the property in the person who had provided the services, but it would seem wrong in such a situation to ignore the testamentary wishes of the elderly person and the needs of the relative, so that some division of the value of the house might seem the best way of providing reasonable satisfaction of the equity and doing justice between all those concerned. Another example might be that, where a person, not a family member, has lived with a family providing unpaid care to an elderly parent of a family, and where to allow that person to remain in occupation of a part of the property in accordance with an assurance given by the parent might cause friction with other members of the family living there, a monetary payment might be a more satisfactory means of giving effect to the equity so as to avoid future trouble.

(ii)  Financial Position and Needs of the Parties 7.289  If the purpose of proprietary estoppel is in certain circumstances to give effect to an expectation of an entitlement to an interest or rights in property, or to avoid detriment to the person who had formed that expectation, or both, there is a logical case for arguing that the financial position and the financial and other practical needs of the parties is not a relevant consideration. The financial or other practical position or needs of one or other of the parties do not affect either the nature of the expectation or the nature and amount of the detriment. As against this strict logic there are many areas of law where personal circumstances are taken into account even though they do not affect the underlying purpose of the legal rule involved. To take obvious examples, the financial position of a defendant is relevant in setting a fine for a criminal offence even though the nature of the crime and the harm to others caused by it are unaffected by the monetary needs of the defendant, and in planning law, which is designed to regulate in the public interest the use and development of land, the personal circumstances of an applicant for planning permission may be relevant in exceptional circumstances even though the use or the development of land is unaffected. In proprietary estoppel, there is a further justification for having regard to financial circumstances, that reason being the necessary element of unconscionability. That which is unconscionable as between two parties may vary according to the relative means and needs of the parties. Other obvious needs besides purely financial needs are similarly relevant, the most obvious need being that of a property in which to live where the needs of the two parties may conflict. The health and age of the parties may be relevant. There are of course other areas of the law where the financial position of a person against whom a claim is made is not relevant. An instance would be the assessment of damages for a breach of contract where the financial position of the defendant unconnected with the contract is unlikely to have any relevance to the assessment. 675

7.290  Proprietary Estoppel 7.290  Both the principle of taking account of the financial and other needs of the parties and the effect of these matters on the relief granted are illustrated by the decision of the Court of Appeal in Sledmore v Dalby.708 The Defendant in those proceedings had lived rent free for many years in a house owned and lived in by his parents-in-law and had carried out substantial improvements to the property in the reasonable expectation induced in him that he would be able to occupy the house rent free for his life. His mother-in-law living in the house was left widowed and was dependent on welfare benefits and a widow’s pension and had a substantial mortgage and mortgage arrears to pay. She sought an order for possession against the Defendant. The Court of Appeal held that the equity which arose in favour of the Defendant from his expectation and the works he had carried out had been satisfied by the 18 years of rent-free occupation which he had enjoyed and made an order for possession against him. It is possible that if the financial circumstances of the widow had been different, for instance if she had been of substantial wealth or had somewhere else to live, the court might have upheld the decision made by the county court Judge who had declared that the Defendant should be entitled to a personal licence to occupy the house rent free for as long as he wished.

(iii)  Social Security Benefits 7.291  There is some divergence of opinion on whether the receipt of social security benefits by a person claiming a proprietary estoppel should be taken into account in determining the correct relief. It seems correct in principle that if the financial position and means of a defendant are germane to the determination of the form of the relief, then the fact that a claimant is entitled to and receives social security benefits, such as free accommodation from a local housing authority, should in principle be a relevant consideration since this entitlement clearly impinges on the financial position of a claimant. Welfare benefits are a statutory entitlement and are to be distinguished from charitable support to which there is no statutory or contractual entitlement. An analogous case is the assessment of damages for a physical injury where the availability of free medical treatment under the National Health Service, also a statutory entitlement, is taken into account. 7.292 In Baker v Baker,709 the Claimant had contributed a sum of money towards the purchase of a house by his son and daughter-in-law on the understanding that he was to be able to live in a part of the house rent free for the rest of his life. The relationship within the family broke down when accusations, later found to be incorrect, were made that the Claimant had sexually molested his granddaughter, and the Claimant left the house and was provided with Council accommodation and received housing benefit to pay his rent. The Court of Appeal held that the appropriate form of relief was that the Claimant should

708 (1996) 72 P & CR 196. See also Baker v Baker (1993) 25 HLR 408, 412, where Dillon LJ cited the judgment of Russell LJ in Dodsworth v Dodsworth [1993] 228 EG 1115 in support of the proposition that the court must take into account the circumstances of the defendant so as not to produce an order that would be oppressive to the defendant. In Baker v Baker Roch LJ (at 419) stated that in the exercise of making good the equity so far as may fairly be done between the parties: ‘The court must bear in mind the needs of the plaintiff and the capacity of the defendant to pay compensation’. 709 (1993) 25 HLR 408.

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Form of Relief or Remedy  7.293 be paid by the Defendants a sum of money consistent with the loss of his entitlement to rent-free accommodation in the house for the remainder of his life. A question which arose was whether the sum so assessed should be reduced by reason of the receipt of public benefits by the Claimant. The view of Dillon LJ was that there should be a reduction for this factor. Beldam LJ considered that it was contrary to current conceptions of public policy that account should be taken of the welfare benefits in assessing the sum to be paid. Roch LJ agreed with Beldam LJ. The point is plainly arguable but there is much to be said for the approach of Dillon LJ. It may be that before he left the house the Claimant had an expectation of a benefit of £x per year, which was the value of the rent-free accommodation, for the remainder of the period of his life expectancy (he was 75 when he left the house). He was not of course entitled to housing benefit while he exercised his entitlement to live in the house. If, after leaving the house, the Claimant became entitled to, say, 40 per cent of £x per year by way of housing benefit there is on the face of it nothing to prevent this new benefit being taken into account in assessing the total detriment he suffered from leaving the rent free accommodation. Probably the observations of the majority in Baker v Baker should not be taken as laying down a binding rule that in all circumstances no account is to be taken of the receipt of public welfare benefits in assessing the form of relief or the assessment of any sum which constitutes the relief.710

(iv)  Taxation and Company Law 7.293  Where the assurance and the expectation concern modest properties matters of taxation are unlikely to be of the greatest significance. If the property concerned is more valuable there may be taxation considerations, such as capital gains tax and inheritance tax and corporation tax, which will become significant following an order of the court. Every person is entitled to take legitimate means to reduce the incidence of taxation. Where corporate bodies are concerned matters of company law may also be a relevant consideration. It is clear that such matters are relevant to the decision of the court and the way in which the order is framed. In Gillett v Holt,711 Robert Walker LJ observed in connection with the order to be made concerning a substantial farming enterprise that ‘it is necessary to take account of taxation and the constraints of company law’. It appears that in that case the Defendant, the owner of the farmland and the maker of the assurance, had made some

710 One difficulty in this decision is that the question of the appropriate relief was approached by focusing on the second and third questions posed by Scarman LJ in Crabb v Arun District Council [1976] Ch 179, 193, which were: ‘What is the extent of the equity?’ and, when that has been determined, ‘what is the relief appropriate to satisfy the equity in the circumstances which have occurred?’ An approach which may be more in accord with the modern conception of proprietary estoppel may be to ask first whether the four essential elements of the estoppel are satisfied and then, if they are satisfied, to ask what is the appropriate form of relief or remedy. The latter question will usually be whether the appropriate order is that requiring the fulfilment of the assurance creating an expectation of an interest or rights over land or an order for payment of a sum of money to avoid detriment. If the second form of order is appropriate, as it obviously was in Baker v Baker, then there is the additional question of how exactly the assessment of the detriment is to be carried out. It seems reasonable that at every part of the determination of the form of relief, including the quantification of a sum to compensate for any detriment, all potentially relevant matters, including such matters as an entitlement to welfare benefits by either party, should in principle be capable of being taken into account and not excluded by any rigid rule of law, although the weight to be attached to any particular consideration may vary greatly according to the circumstances of each individual case. 711 [2001] Ch 210, 235. See also Moore v Moore [2018] EWCA Civ 2669.

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7.294  Proprietary Estoppel very substantial gifts involving complex manoeuvres (inspired by legitimate tax planning) after the commencement of the proceedings.712

(v)  The Conduct of the Parties 7.294  Proprietary estoppel is an equitable principle and its remedies, as with equitable remedies generally, are in the discretion of the court. The estoppel is therefore subject to the general requirement of equity that a person who seeks the assistance of the court must exhibit suitable conduct or, as it is sometimes described, come to the court with ‘clean hands’. What is relevant is not the general character of a party but his conduct in connection with the subject matter of the proceedings before the court.713 It is clear that a court considering a claim to a proprietary estoppel will take into account the meritoriousness or otherwise of the conduct of each party in matters relevant to the estoppel in at least two stages in the proceedings. The giving of an assurance, an intention that the assurance be taken seriously, reliance on the assurance and detriment suffered, are all questions of fact. The fourth essential element of the estoppel, unconscionability, which involves the exercise of a discretion, may require a more careful consideration of how the parties have behaved. Therefore, sufficiently unmeritorious conduct by a claimant may lead the court to conclude that it would not be unconscionable to allow the maker of an assurance to resile from it. For example, a father might be justified in resiling from a promise to leave a house to his son, even if the son had acted to his detriment by carrying out improvements to the house, if the son had thereafter damaged the property and used it for an illegal or unlawful purpose.714 The other stage at which unmeritorious conduct becomes relevant is in the determination of the correct order for giving effect to the equity. In Baker v Baker,715 Roch LJ said that in deciding the appropriate remedy ‘the court must look at the conduct of the parties as well as the extent of the equity’. In that case a grandfather, who had been assured that he could live for life within the family home of his son and daughter-in-law, was wrongly accused (though without deliberate wrongful intent) of sexually molesting his granddaughter, something which justified him in leaving the property and which led the Court to decide that the appropriate means of satisfying the equity was that the grandfather should be compensated

712 Gillett v Holt [2001] Ch 210, 235. 713 For instance, the fact that a spouse has committed adultery during a marriage will not prevent him or her subsequently obtaining an injunction to prevent breaches of confidentiality relating to events during the marriage: Duchess of Argyll v Duke of Argyll [1967] Ch 302. By parity of reasoning, the unmeritorious conduct of one or other of the parties to a claim for proprietary estoppel will probably not influence a court in deciding what is unconscionable or in determining the appropriate relief if it has no connection with the actions of the parties concerning the requirements of the estoppel. A further matter is the honesty of a party in the giving of evidence and in the disclosure of all relevant and admissible documents. One view of this matter is that a lack of frankness and honesty may dispose a court against a party in the exercise of its discretion on matters such as unconscionability and the form of the remedy. For an example of where the Claimant was an unreliable witness in what was in substance a family dispute see Suggitt v Suggitt [2011] EWHC 903 (Ch) para 38, although the absence of frank evidence by the Claimant does not appear to have truncated the remedy given to him to satisfy the proprietary estoppel. 714 See J Willis & Son v Willis [1986] 1 EGLR 62 (claim relating to improvements made when improvements never carried out). 715 (1993) 25 HLR 408, 419. A recent decision in which the Judge scaled down the order which might otherwise have been made in favour of a claimant because the claimant and her husband had refused an offer made to them by the owner of a farm property was Habberfield v Habberfield [2019] EWCA Civ 890. The Court of Appeal refused to alter the decision of the Judge.

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Form of Relief or Remedy  7.297 by a sum equivalent to the annual value of his right of occupation capitalised over the likely expected period of his life. Such an order might not have been made if the grandfather had simply left the house for no good reason. 7.295  The law as regards the conduct of the claimant for an estoppel was stated by Goff LJ in Williams v Staite716 in connection with an equitable licence to occupy a cottage: On the contrary, I take the view – and am fortified by the analysis and result in Dodsworth v Dodsworth 228 EG 1115 – that the true analysis is that, when the plaintiff comes to court to enforce his legal rights, the defendant is then entitled to submit that in equity the plaintiff should not be allowed to enforce those rights and that the defendant, raising that equity, must then bring into play all the relevant maxims of equity so that the court is entitled then on the facts to look at the circumstances and decide what order should be made, if any, to satisfy the equity.

This decision was cited more recently by Robert Walker LJ in Jennings v Rice717 who stated that one of the factors relevant to the exercise of the court’s discretion in a case of proprietary estoppel was misconduct of the claimant. In principle, delay by a claimant in claiming an estoppel should be a factor to be put into the overall balance but such delay, known as laches where the claim is for equitable relief, may be attributable to a party resting on his perceived entitlement and may not therefore be held against him. The relationship between laches, acquiescence and proprietary estoppel has been mentioned earlier.718 7.296  A similar comment is true as regards the conduct of the person against whom an estoppel is alleged. Unmeritorious conduct by that person may indicate or confirm that the element of unconscionability is satisfied such that effect may be given to the assurance and such conduct may be relevant to the form of relief granted.719

5.  Other Matters (i)  Events After the Order 7.297  In general, once a court has made an order it is functus officio and the order cannot be altered except as a result of an appeal. Accidental slips or omissions, such as the insertion of a wrong date in the order, may be corrected at any time under the ‘slip rule’,720 but this does not permit a substantive variation of the order. In addition, a court has an inherent power to reconsider any matter after judgment has been given but before the order is drawn up and sealed and at that stage to amend its judgment.721 An order giving effect to

716 [1979] Ch 291. 717 (2003) 1 P & CR 8, para 52. 718 See Voyce v Voyce (1991) 62 P & CR 290, 293–94 Dillon LJ). See para 7.55 for laches and proprietary estoppel. 719 An example is Pascoe v Tuner [1979] 1 WLR 431 in which the owner of the property involved was minded to take all steps to secure the removal of the Defendant and the Court was mindful of the need to protect her in the future when ordering that there should be a conveyance of the property to her. Presumably an attempt to frustrate the putting into effect of an assurance, such as letting a property to a tenant, would be considered unmeritorious conduct which could weigh against a person against whom a proprietary estoppel was claimed. 720 CPR, Part 40.12. 721 Charlesworth v Relay Roads Ltd [2000] 1 WLR 230; Stewart v Engel [2000] 1 WLR 2268.

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7.298  Proprietary Estoppel an estoppel may itself contain a condition that the rights of a claimant shall terminate or be varied on the occurrence of some stated event. Subject to these possibilities, a court has no jurisdiction to reconsider or alter the rights granted to a claimant by reason of the conduct of the claimant or by reason of other events after the order has been made. In Williams v Staite,722 an order was made allowing a married couple to occupy a cottage as long as they wished. Following the order, the couple behaved in a reprehensible fashion to the owner of the cottage who also owned adjoining property and two years later the owner sought an order for possession alleging that the licence should be terminated by reason of the conduct of the couple. It was held in the Court of Appeal that once an unconditional order had been made so as to satisfy the equity the court had no further power to terminate or vary the rights granted by the order. The remedy of the owner was proceedings for nuisance or trespass or under some other cause of action available under the general law.723 It therefore seems that changes in the financial or other circumstances of a claimant, for example the unexpected acquisition of a large sum of money after the making of an order, cannot lead to a change in the rights granted to that claimant. Plainly, if a change in the financial or other circumstances of a party after the making of an order to satisfy a proprietary estoppel could lead to a court considering the termination or alteration of the order, the result would be continuing uncertainty and the prospect of recurring litigation. However, where a right such as a right of access is ordered to be granted and the right is needed for a particular purpose, the order may framed in such a way that if the achievement of the purpose becomes impossible the right ordered to be granted will end. In such a case the effect of a possible change of circumstances is embodied in the order of the court.724

(ii)  The Nature of Rights of Occupation: The Three Possibilities 7.298  As explained, one form of order which may be made to satisfy the equity created by a proprietary estoppel is that the claimant shall have a right to occupy property for a specified period or on specified terms.725 This form of remedy goes back to Plimmer v Mayor, etc, of Wellington726 in which a perpetual licence to retain structures on property was ordered. The right of occupation may be more limited in its terms, such as a licence to occupy a property for life or a licence for a person to occupy a house ‘as long as he desires to as his home’.727 A question which arises is the status in law of a licence granted in such circumstances.

722 [1979] Ch 291. 723 ibid, 300 (Goff LJ). Lord Denning MR said that there could be extremely reprehensible conduct by a claimant which would justify the revocation of a licence but such conduct was not proved in the case before the Court. This observation is not consistent with the judgments of the two other members of the Court and the view of Lord Denning raises the questions (a) what exactly is meant by extremely reprehensible conduct in situations of this kind and (b) whether there could be cases in which some other form of order satisfying the equity as well as the grant of a licence to occupy property could be altered or terminated by conduct or events after the order had been made. 724 Clark v Clark [2006] EWHC 275 (Ch) where a right of access to land was ordered to be granted but to endure only as long as the land was used for a particular purpose. 725 See para 7.284. 726 (1884) 9 App Cas 699. 727 Inwards v Baker [1965] 2 QB 29.

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Form of Relief or Remedy  7.302 7.299  In principle the right of occupation ordered to be conferred on a claimant may be (a) a life interest, (b) a lease, or (c) a licence.

(iii)  The First Possibility: A Life Interest 7.300  If a person is given a right to occupy a property for life it may seem natural to conclude that that person is granted a life interest. Even if the right is subject to some condition which could bring about its termination before the death of the holder of the right, the right may still be a life interest.728 A life interest was one of the freehold estates in land which existed from the origins of the common law in feudal tenures.729 Originally an interest in land for life could exist as a legal estate, but since the Law of Property Act 1925 it can exist only as an equitable interest.730 Under the Settled Land Act 1925 the grant of a life interest created a settlement (ie, a succession of interests in land since there must be a reversion or remainder to take effect on the cessation of the life interest) such that the holder of the life interest held the powers of a tenant for life under the Act which entitled that person to sell the fee simple in the land with all interests in the land being ‘overreached’, that is turned into interests in the price received for the land. This situation was altered by the Trusts of Land and Appointment of Trustees Act 1996. A life interest remains as an equitable interest behind a trust but the power of sale of the fee simple is not exercisable by the holder of that interest. 7.301  Even though the prospect of a person granted a right to occupy property for life having himself the power to dispose of the fee simple and turn all interests in the land into interests in money has now disappeared, it seems unlikely that the effect of a right of occupation ordered as a result of a proprietary estoppel will create a freehold equitable life interest in the land. This seems unlikely to be the intention of a court unless it is expressly so stated.

(iv)  The Second Possibility: A Lease 7.302  A lease may be granted for life. If it is so granted at a rent or in consideration of a fine (a premium) it takes effect as a lease for 90 years determinable on the death of the original lessee.731 In principle, the equity created by proprietary estoppel may be satisfied

728 Brandon v Robinson (1811) 18 Ves 429. 729 Co Litt 43b. The other freehold estates were the fee simple which also goes back to the origins of the land law and the fee tail, or entail, which was created by the Statute De Donis Conditionalibus 1285. All estates in land were originally held under some form of tenure either directly from the Crown (by tenants in capite) or from a mesne landlord who himself held the land in tenure from the Crown. The creation of further subordinate freehold estates to be held in tenure was prohibited by the Statute Quia Emptores of 1290. All forms of tenure were converted into tenure by free and common socage by the Tenures Abolition Act 1660. Even today freehold fee simple estates in land are technically held in socage tenure from the Crown. This situation is to be contrasted with that in other countries, such as the United States, where there is no tenure and land ownership is said to be allodial. 730 Law of Property Act 1925, s 1. 731 Law of Property Act 1925, ss 1, 149(6). The requirement of a premium or a rent if the lease is to operate as a lease for 90 years is inserted in order to differentiate leases of this character from equitable life interests which may take effect as a freehold interest and are not normally granted in return for any consideration such as a premium or a regular rental.

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7.303  Proprietary Estoppel by an order for the grant of a lease.732 There is old and established authority for saying that if a purported lease is granted for an uncertain term, it is treated as a lease for the life of the tenant but determinable prior to the death of the tenant in accordance with its terms for determination.733 There may be occasions on which an order that a claimant is entitled to occupy a property may amount to the grant of a lease, possibly in accordance with one or other of the above principles. However, it seems unlikely that a right of occupation ordered to be granted by a court is intended to be a lease unless the court expressly states that that is the interest expected to arise in the claimant. A lease, if it is to be a legal estate in land as provided in section 1(2) of the Law of Property Act 1925, must be a term of years absolute and to comply with that description must be granted for a term of years certain or on a periodic basis determinable by notice given by either of the parties to it. It would be very difficult to fit the type of right of occupation granted in some instances to satisfy a proprietary estoppel into this conception of a lease, for example a right to occupy a property for as long as the claimant wished.734

(v)  The Third Possibility: A Licence 7.303  The obvious and most satisfactory result of an order for a right of occupation of a property free of charge is the creation of a licence. The classic definition of a licence is a permission to enter land which renders lawful that which would otherwise be a trespass.735 A grant of exclusive possession of land is usually construed as a lease whatever label the parties attach to it provided the other characteristics of a lease, such as a term certain or rights of determination to either party at the end of regular specified periods, are stated. The right of occupation conferred in satisfaction of a proprietary estoppel will normally be a right to occupy without any payment and in many cases the other characteristics of a lease such as a term certain will not be satisfied. In these circumstances, although exclusive possession is granted, the rights can readily be categorised as a licence. 7.304  Licences to occupy land usually fall into one of three categories which are a bare licence, that is a licence granted for no consideration, a contractual licence, that is a licence granted as part of a contract for some consideration such as the payment of a sum of money, or a licence coupled with an interest. A licence coupled with an interest means a licence associated with some other interest such as a profit granted over land, and is dependent on the existence of that other incorporeal third-party interest in land. Such a licence is unlikely to be relevant in the situation here to be examined. A contractual licence is clearly an inappropriate description of the type of licence ordered by a court in a proprietary estoppel case since no contract is involved and no consideration is normally payable by the occupier of the land. Technically therefore a licence of the type ordered by a court will

732 eg, in Ramsden v Dyson (1866) LR 1 HL 129 a renewable 60-year lease would have been likely to have been ordered if the estoppel had been made out, as it in probability would have been under the law as understood today. 733 Mexfield Housing Co-operative Ltd v Berrisford [2011] 3 WLR 1091. The principle goes back to Bracton, De Legibus et Consuetudinibus Angliae, Vol 3, p 50 (f176b), published in the mid-13th century (1977 edn by Professor Thorne); see also Littleton on Tenures, Vol 2, section 382 (1481). 734 Matharu v Matharu (1994) 68 P & CR 93. 735 Thomas v Sorrell (1673) Vaugh 330.

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Form of Relief or Remedy  7.306 be a bare licence but one which will have its own terms as to its determination. It may also have its own conditions such as that the licensee properly maintains the property. A licence created as a constituent of a proprietary estoppel has been described as a licence coupled with an equity.736 A bare licence with no stated duration may be revocable at the will of the licensor since there is no contract which can be enforced by the licensee. It is plain that the type of licence ordered by a court in a proprietary estoppel case is not revocable except in accordance with its terms so that it will last for the period stipulated, such as for the life of the claimant or for as long as the claimant wishes to remain in the property. If a licence is granted by an order of the court which is stated to be irrevocable then presumably it will last forever.737 7.305  A further matter may arise as regards licences ordered to be granted by a court, that matter being the effect of the licence on third parties. The first question is whether the benefit of the licence may be transferred by the claimant. An ordinary contractual licence may be expressly made personal to the licensee, but in the absence of such a restriction it is assignable on the principle that the benefit of a contract is generally assignable. The court in making its order may specify that the licence is personal to the claimant, and a licence to occupy property with some such stipulation as that it shall last as long as the claimant wishes to occupy the property falls into this category. The matter may not always be as clear. It is generally considered that a bare licence is not assignable. In one case, a right granted to maintain foundations of a building which had been constructed partly on the land of an adjoining owner was said to constitute a licence and the licence was said not to be capable of running with the land of the licensor or the licensee but to be periodically renewable between the persons from time to time concerned that it should apply.738 Presumably a perpetual licence will be assignable. Possibly the best practical rule is that a right of occupation of a property ordered to be granted by a court in satisfaction of a proprietary estoppel as a licence is to be regarded as personal to the licensee, and will terminate either on the death of the licensee or in accordance with the terms of a licence such as that it is to endure only as long as the licensee wishes to occupy the property. The only exception may be where there is some specific term of the order permitting assignment or the licence is declared to be perpetual.739 7.306  The second question is the effect of a licence ordered by a court on a third party, such as a transferee of the land of the defendant as the owner of the land under the licence so ordered. There are here two separate matters. One is the binding effect of rights under a proprietary estoppel on third parties during the period between the coming into existence of the estoppel because its requirements are satisfied, and the crystallisation of the estoppel through an order of the court satisfying it by the creation of some interest or rights.

736 Inwards v Baker [1965] 2 QB 29, 37 (Lord Denning MR). 737 Plimmer v Mayor, etc, of Wellington (1884) 9 App Cas 699. A licence granted for an indefinite period, as in this case, was described by Sir Arthur Hobhouse in the Privy Council as perpetual. 738 ER Ives Investment Ltd v High [1967] 2 QB 379, 404 (Winn LJ). 739 It seems unlikely that in proprietary estoppel cases of the present sort, which usually involve circumstances of a personal or domestic relationship, a licence ordered giving a right to occupy property would be in favour of a company or other corporate entity as opposed to an individual. However in Plimmer’s case (see above (n 737)) if the works to the harbour had been carried out by a company controlled by Mr Plimmer, the irrevocable licence would presumably have been granted to the company.

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7.307  Proprietary Estoppel The other matter is the binding effect of an interest ordered to be granted in satisfaction of the equity and on its crystallisation on third parties, such as a subsequent transferee of the ownership of the land bound by the licence. If the interest ordered to be granted is a freehold, there are no third parties. If the order is for the grant of a lease, there is no difficulty under the second question since the ordinary principles of the binding effect of a leasehold interest on successors in title to the interest of the landlord operate. The position as regards licences is less straightforward since ordinarily a licence, whether a bare licence or a contractual licence, is not a proprietary interest in land and does not bind third parties.740 However, a licence to occupy a property for life or as long as the licensee wishes ordered as a result of a proprietary estoppel would be an empty remedy if the owner of the land could at any time defeat the right to occupy by transferring the land to a third party. The general question of the binding effect of estoppels on third parties, including proprietary estoppels, is considered in chapter two and a full examination of the above two matters relating to proprietary estoppel is there carried out.741 The general conclusions there reached are (a) that the rights of a person after a proprietary estoppel has come into existence by the satisfaction of its necessary elements are an equitable proprietary interest in land binding on successors in title of the land affected subject to registration under the Land Charges Act 1972 or the Land Registration Act 2002 as necessary, and (b) that after the grant of a licence to occupy land by order of the court on the crystallisation of the equity, the licence binds transferees of interests in the land affected by virtue of the terms of the court order.

(vi) Appeals 7.307  An appeal from the High Court or the county court to the Court of Appeal on the form of the relief is, as with other appeals, a review rather than a rehearing of the matter.742 The basic rule is that an appeal will be allowed when the decision of the lower court was wrong.743 The determination of the correct remedy is a matter for the discretion of the court of first instance after a consideration and weighing of all relevant considerations. In general the Court of Appeal will not interfere with a discretion exercised in these circumstances unless either the Judge has failed to take into account a relevant consideration of some weight or has taken into account a consideration of some weight which ought not to have been taken into account or has reached a decision which in the opinion of the Court of Appeal is wholly wrong.744 The corollary of this approach is that the Court of Appeal will 740 Ashburn-Anstalt v Arnold [1989] Ch 1. 741 See ch 2, part (I). 742 CPR, Part 52.11(1). The Court of Appeal may order that in the circumstances of an individual appeal it would be in the interests of justice to hold a rehearing: CPR 52.11(1)(b). 743 CPR, Part 52.11(3). 744 The principle has been stated by Lord Woolf MR in Phonographic Performance Ltd v AEI Rediffusion Music Ltd [1999] 1 WLR 1507, 1523 as follows: ‘Before the court can interfere it must be shown that the judge has either erred in principle in his approach or has left out of account or taken into account some feature that he should or should not have considered, or that his decision was wholly wrong, because the court is forced to the conclusion that he has not balanced the various factors fairly in the scale’. See Suggitt v Suggitt [2012] EWCA Civ 1140, [2012] WTLR 1607, for a decision in which the Court of Appeal refused to alter the relief awarded by the Judge of first instance in a proprietary estoppel case on the ground that it was wholly wrong or perverse. The correct approach has recently been summarised by Lewison LJ in a proprietary estoppel appeal as being: an

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Form of Relief or Remedy  7.308 not normally interfere with the discretion of the Judge merely because, within the generous ambit within which a sensible disagreement is possible, the Court of Appeal might itself have reached a different decision.745 This is a similar approach to that adopted where discretionary decisions of public and administrative bodies are challenged in the courts by way of judicial review. Indeed, it is an approach generally adopted when the exercise of a discretion by a court or tribunal of first instance is challenged on appeal.

(vii)  Refusal of Relief 7.308  Since proprietary estoppel is an equitable principle the grant of relief in a claim for the estoppel is always at the discretion of the court. No estoppel can be established unless the claimant shows an assurance, actions in reliance on the assurance, detriment and unconscionability. The first three elements are matters mainly of fact or law and no element of discretion is normally involved.746 The last element, that it would be unconscionable to permit the maker of the assurance to resile from it without any relief or remedy against that person, may be largely a matter of judgement or discretion, although it is usually dependent on the existence of actions in reliance on the assurance and on detriment. Other factors may come into play at the unconscionability stage, such as the respective means of the parties or unmeritorious conduct by the claimant relevant to the relationship between the parties. Matters such as these may be sufficient to show that there is no unconscionability so that there can be no estoppel or may show that, although unconscionability is established and there is an estoppel, the form of relief should be tempered in some way by reason of the factors in question. The only remaining question is whether, if all four elements of the estoppel including unconscionability are satisfied, the court still has a residual discretion to refuse any relief, and so in substance to refuse to give effect to the estoppel. The probable answer is that a court always has such a residual discretion but it will be rare for it to be exercised in favour of there being no remedy or relief. Most of the factors which could militate against there being no remedy would be factors which showed that as between the claimant and the defendant unconscionability had not been established. It is possible that a residual reason why a remedy might be refused notwithstanding the existence of all four elements of the estoppel is a possible adverse effect on third parties who were not in any way connected with appeal court can only interfere with the trial judge’s exercise of discretion (a) if he has misdirected himself in law, or (b) he has taken irrelevant considerations into account, or (c) he has failed to take relevant considerations into account, or (d) his decision is outside the area of legitimate disagreement (in other words, his decision is one that no reasonable judge could have reached): Habberfield v Habberfield [2019] EWCA Civ 890, para 25. For a recent decision in which the form of relief ordered by the Judge was varied on appeal, see Moore v Moore [2018] EWCA Civ 2669. 745 G v G (Minors: Custody Appeal) [1985] 1 WLR 647, 652 (Lord Fraser). An application of this principle in the area of proprietary estoppel is the decision of the Court of Appeal in Liden v Burton [2016] EWCA Civ 275 in which the Court expressed its reluctance to overturn a decision of a Judge on fact-sensitive issues which have been reached having regard to the correct legal principles. The Court also refused to alter the remedy for the estoppel reached by the Judge in his discretion since he did no more than order the minimum required to do justice between the parties. In Habberfield v Habberfield [2019] EWCA Civ 890, para 87, Lewison LJ regarded the order made by the Judge in satisfaction of the estoppel as a hard outcome but stated in rejecting an appeal that the question was not whether he would have made the same order as the Judge. 746 Certain matters relevant to these elements, such as the amount of the detriment or the degree of influence which the assurance had on the actions of the claimant, may be relevant to the fourth element of unconscionability.

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7.309  Proprietary Estoppel the events which give rise to the satisfaction of the elements of the estoppel.747 However, even factors such as the effect on third parties can usually be brought within the overall concept of unconscionability.

(viii)  The Wish of the Claimant 7.309  It seems correct in principle that the wish of the claimant as to the form of relief granted to him should be a material, although not of course a decisive, consideration in the determination of the appropriate relief. Fairness to a defendant is naturally also a significant consideration. For example, if a claimant wishes for the payment of a sum of money to him rather than a vesting in him of the property the subject of the assurance a court might be ready to assent to his desire provided that the sum of money was not greater than the value of the property at the time when the estoppel crystallised and effect was given to it by an order of the court. The ability of a defendant to find or pay a sum of money would also be a relevant consideration. An illustration of this situation is Baker v Baker748 in which a grandfather was entitled as a result of an assurance to occupy a house owned by his son and lived in by his son’s family, but voluntarily left the property after unjustified allegations had been made against him of improper sexual conduct towards a granddaughter. It was obviously unsuitable that the equity should be satisfied by an order which allowed the return of the Claimant to the property (which he did not want), and a monetary order based on the value of the right of occupation during the anticipated remainder of the life of the Claimant was determined to be the appropriate order.

(ix)  Giving Effect to the Order 7.310  Where the relief given is the transfer or creation of a proprietary interest in land the order of the court will normally specify that which should be done.749 The order must then be put into effect by the ordinary conveyancing machinery appropriate to such a transfer or creation which may be by a transfer of the title to registered land under the Land Registration Act 2002 or the grant of a lease. Registration under the 2002 Act when needed must be put into effect in the proper manner. The court may itself direct the means by which certain matters relevant to the carrying out of its order are to be determined if not agreed. In one case, a declaration was made in the Chancery Division of the High Court that a party was to have a right of way over an access strip not more than 30 feet in width with the precise

747 See Trustee Solutions Ltd v Dubery [2006] EWHC 1426 (Ch), [2007] 1 All ER 308, para 51(ii) (Lewison J); PW & Co v Milton Gate Investments Ltd [2004] Ch 142 (Neuberger J). These two decisions are on estoppel by convention. 748 (1993) 25 HLR 408. 749 See, eg, the order of the Judge, upheld by the Court of Appeal, in Voyce v Voyce (1991) 62 P & CR 290, a case of an imperfect gift, which was that the freehold of the cottage and the garden as shown on a plan annexed to a pleading should be transferred to the Defendant. In Pascoe v Turner [1979] 1 WLR 431 the order of the Court of Appeal was that the Defendant should, within 28 days and at his own expense, execute a conveyance of property to the Claimant. In Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776 the House of Lords restored the order of the trial Judge which was a declaration that the Defendants held land on a bare trust for the Claimant.

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Summary  7.312 alignment of the access route to be determined in the county court if not agreed.750 An order for the payment of a sum of money requires no step beyond the due payment. If the order is to confer a right of occupation of land on the claimant by way of a licence, the terms of the licence will be those specified by the court, such as a right to occupy a property free of payment for the life of the claimant or for as long as the claimant wishes to remain in occupation. Presumably in such cases the right of occupation depends on the terms of the order made by the court and no formal documentary licence is required. An order of a kind less frequently found, such as a charge over land, must be put into effect by the conveyancing and registration machinery appropriate to the right as ordered.

(J) Summary 7.311  As with some other chapters this concluding part of this chapter is an attempt to be helpful by setting out in summary form the main rules which constitute and govern the principle of proprietary estoppel as that principle stands today. It should be understood (a) that in some instances the general statement of a rule as set out will not refer to various details and sub-rules or even in some cases to limited qualifications or exceptions to a rule, and (b) that while a rule as stated seeks to state the best view of the law as it is today in the light of the authorities and other considerations, it is inevitably possible in some instances to argue in favour of a somewhat different view of a particular aspect of the law. Both of these caveats are particularly apposite for proprietary estoppel because of the comparatively recent establishment and description of its essential elements. In general, though not wholly, the sequence of this summary adopts the same sequence in which various aspects of proprietary estoppel have been examined earlier in this chapter. Because of the complications, and sometimes the uncertainties, involved this summary is somewhat longer than that provided for some other forms of estoppel.

1.  The Nature of the Estoppel 7.312  Proprietary estoppel is a form of equitable estoppel (the other form being promissory estoppel) depending on principles of equity developed by the former Court of Chancery from at least the early eighteenth century, established by three major decisions in the ­mid-nineteenth century, although not then recognised or described as a form of ­estoppel, and given its modern form by decisions mainly since the 1960s culminating in two decisions of the House of Lords about a decade ago which both clarified and limited the nature, and stated the major elements, of the estoppel.

750 Clark v Clark [2006] EWHC 275 (Ch), para 46. See also Lim v Ang [1992] 1 WLR 113 where an enquiry into the value of land was directed and Duke of Devonshire v Eglin (1851) 14 Beav 530 in which the amount of compensation for the grant of an easement was directed to be determined by a Master.

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7.313  Proprietary Estoppel 7.313  There have been a number of attempts to state in as concise a way as possible the essence of proprietary estoppel. The following formulation is used in this book: Where A owns an interest in land and by an express or implied assurance leads B reasonably to hold an expectation that B has become or will become entitled to an interest or rights in the land, and B acts reasonably and to his significant detriment in reliance on this assurance and expectation, with A both knowing of the expectation of B and doing nothing to remove that expectation, then when it would be just to do so A will be compelled to transfer to B an interest in A’s land or to make some other form of recognition of the rights of B or to make some other recompense to B.

7.314  Although there is little discussion of the matter in the authorities, it seems likely that the principle of proprietary estoppel can extend beyond interests and rights in land and can operate as regards rights in chattels and rights such as intellectual property rights which do not have as their direct subject matter any corporeal property. The above formulation must therefore be applied to such rights as well as to interests and rights in land. The principles as next summarised may have to be appropriately modified to apply to cases not concerned with land.

2.  The Main Elements of the Estoppel 7.315  Proprietary estoppel has four main elements which must be established if a claimant wishes to rely on the estoppel. These elements are (a) an assurance relating to an identified property which may be express or implied and which in particular can be implied from acquiescence, that is remaining silent when knowing of the conduct of some other person and of the conflict between that conduct and the rights of the first person, (b) action by the person to whom the assurance is given in reliance on it, (c) detriment which would be caused to that person if the giver of the assurance was entitled to resile from the assurance, and (d) that it would be unconscionable to allow the giver of the assurance to resile from it without any liability or without making any recompense to the person who has relied on the assurance.

3.  The Assurance 7.316  The assurance, whether express or implied, must be ‘clear enough’ in its terms, something which is a considerable relaxation of the requirement for a clear and unequivocal statement or promise which is necessary for some other forms of estoppel. The meaning of an assurance is normally ascertained by an objective test, that is the meaning which a reasonable person in the position of the person to whom the assurance was made would attribute to it. 7.317  It is necessary that the person making the assurance should at the time of the assurance intend that the assurance should be taken seriously and acted upon by the person to whom it was made. The necessary intention is also ascertained by an objective test. 7.318  The assurance must be such as to create in the person to whom it is given a reasonable expectation of an entitlement to an interest in or rights over land. It is not enough 688

Summary  7.324 that the assurance creates an expectation of further negotiations which may or may not result in an entitlement to an interest or rights. For that reason, arrangements which are subject to contract or subject to some similar limitation are unlikely to create a proprietary estoppel. 7.319  It is necessary that the maker of the assurance knows at the time of the assurance of his own rights which will be removed or altered or reduced if effect is given to the assurance. 7.320  It is also necessary that the maker of the assurance should at the time of the assurance know of the expectation of an entitlement to an interest in or rights over land which is created in the person to whom the assurance is given. 7.321  It is usually the case (and will always be the case when the assurance is implied from acquiescence) that the maker of the assurance knows or will come to know of the actions taken in reliance on the assurance by the person to whom it is given, but it is doubtful whether there is any inflexible requirement that such knowledge must be established in all cases before there can be a proprietary estoppel. There is no requirement that the maker of the assurance should know of the detriment suffered by the recipient of the assurance as a result of that person’s actions in reliance on the assurance. Nor is there any requirement that the maker of the assurance knew that the recipient of the assurance acted under a mistake as to his rights, if indeed that person did act under such a mistake. 7.322  A revocation of an assurance made before the essential elements of actions in reliance on the assurance and detriment have occurred, and so before the estoppel has come into existence, is effective to prevent the subsequent existence of an estoppel. A purported revocation of an assurance after the essential elements are satisfied, so that the estoppel has come into existence, cannot remove the equitable rights created by the estoppel but, depending on the reason for the revocation or on subsequent events, may affect the way in which effect is given to the estoppel by an order of a court.

4.  Identified Property 7.323  The assurance must relate to a specific and conceptually identifiable property such as a house or farm identified by its name or its address but no exact definition with precise boundaries and areas such as would be found in a conveyance or lease of property is needed. 7.324  Fluctuations in the extent of the property after the time of the assurance fall into two broad categories. (a) It might be contemplated at the time of the assurance that there would be later changes in the boundary or extent of the property, such as an addition to the garden of a house; in such a case the estoppel will continue to operate in respect of the property as it is from time to time. (b) There might following the assurance be a disposal of the whole or a major part of the property by the person who made the assurance; in such a case the estoppel can come into or remain in existence but the form of relief given by the court may involve a monetary recompense to the person asserting the estoppel in place of the whole or a part of the land which is not in practice available to satisfy the estoppel. 689

7.325  Proprietary Estoppel

5. Reliance 7.325  The second of the main elements of the estoppel is that the person to whom the assurance is given has acted (or failed to act) in reliance on the assurance. It has to be shown that the actions were motivated at least in part by the assurance, although the assurance need not be the only or the main motivating factor, and it has to be shown that the actions were reasonably carried out in reliance on the assurance. The person to whom the assurance was given may or may not have been under a mistake as to his strict legal rights at the time the relevant actions were taken.

6. Detriment 7.326  The third of the main elements of the estoppel is that it also has to be shown that the person to whom the assurance was given acted reasonably and to his detriment in reliance on the assurance. Detriment within this rule has two aspects. First, the actions taken must involve detriment such as the carrying out of work for no, or no adequate, monetary reward. Secondly, it must appear that the person asserting the estoppel would suffer detriment if the person who made the assurance was not held to the assurance or at least obliged to make some recompense for a failure to adhere to the assurance. The two aspects are obviously closely interrelated.

7. Unconscionability 7.327  Unconscionability, in the sense that it would be unconscionable to refuse the estoppel, is best regarded, as with other forms of estoppel, as a separate element of proprietary estoppel and is in this account treated as the fourth main element of the estoppel. The requirement of unconscionability is generally satisfied if the person to whom an assurance has been made in relation to land acts to his detriment in reliance on the assurance. However, even in such a case it may still in some circumstances not be unconscionable to refuse to give effect to the assurance, for example because the claimant has behaved in some way unmeritoriously or has already received a substantial benefit such as a period of ­rent-free accommodation in a property or because of the adverse effect on a third party if effect is given to an estoppel. It is because of considerations of this sort that it appears best to regard unconscionability as a separate element of proprietary estoppel.

8.  The Burden of Proof 7.328  In accordance with the usual rule in civil litigation the burden of proof on factual matters necessary to establish the elements of proprietary estoppel is generally on the person who asserts and seeks to rely on the estoppel. Thus, the burden of proof is on that person to establish (a) the making of the assurance, (b) the intention of the maker at the time of the assurance, (c) the necessary knowledge of the maker of the assurance at the time when it 690

Summary  7.332 was made, (d) the necessary identification of the land to which the assurance relates, (e) any actions carried out by the recipient of the assurance, and (f) the detriment caused to the recipient of the assurance. 7.329  The only exception to the above general rule is that there is some authority to indicate that the burden of proof in relation to the factual question of whether the actions taken by the recipient of the assurance were in reliance on the assurance is such that it is incumbent on the person making the assurance, and against whom the estoppel is asserted, to prove that the actions in question were not carried out in reliance on the assurance if the estoppel is to be resisted. It is suggested that this exception is unnecessary and contrary to general principle, and in truth may do no more than to state the fact that if the person asserting the estoppel can show by way of a reasonable inference that his actions were taken in reliance on the assurance, that is sufficient to discharge the ordinary burden of proof on him and it will then become incumbent on the maker of the assurance to adduce evidence to the contrary if this element of reliance is to be denied and the estoppel as a whole is to be resisted.

9.  Form of Relief 7.330  There is some dispute over what is the overriding purpose of the estoppel to be applied in deciding the appropriate relief to give effect to the estoppel. One view is that the primary purpose of any order is to fulfil the expectation of an interest in or rights over land created by the maker of the assurance and reasonably held by the person to whom the assurance has been given. Another view is that the primary purpose is to avoid detriment to the person who has acted in reliance on the assurance. A further approach, similar in its effect to the second view, sometimes applied is that the relief should be confined to that necessary to give effect to the minimum equity, that is the minimum order required to avoid an unconscionable situation. A possible reconciliation of any conflict on the purpose of the principle of proprietary estoppel is to say that the order made should be designed to give effect to the reasonably held expectation of a claimant in any particular case unless (a) it would not be practical to do so, or (b) the effect of such an order would be wholly disproportionate to the detriment suffered by the claimant. 7.331  There is no limitation on the form of order which might be made to satisfy the equity created by the estoppel but the usual form of order is either (a) to require a transfer or the creation of an interest in land or other rights over land in favour of the claimant, or (b) to confer on the claimant a licence to occupy land, or (c) to order the payment of a sum of money to the claimant, or (d) some combination of these orders. 7.332  In deciding the form and content of the order a court will take into account and weigh all relevant considerations. There are few, if any, factors which are logically relevant to the decision on the form of order which in principle cannot be taken into consideration. Of course, the weight to be attributed to any factor is in any particular case a matter for the court.

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8 Election (A) Introduction 8.1  The essence of election, as its name suggests, is that a party who with the necessary relevant knowledge elects for or chooses one of two or more inconsistent courses of action available to it in law, usually to assert some right or remedy or benefit, and then communicates its choice, may thereby become disentitled to pursue from those available a different course of action. As it was put in a leading decision by Lord Atkin: In cases where the doctrine [of election] does apply the person concerned has the choice of two courses, either of which he is at liberty to adopt, but not both. Where the doctrine does apply, if  the person to whom the choice belongs irrevocably and with knowledge adopts the one he cannot afterwards assert the other.1

Other less precise expressions describe the substance of the matter, such as that a person cannot ‘blow hot and cold’2 or, as regards equitable election, cannot ‘approbate and reprobate’ under the same instrument. ‘Approbate and reprobate’ is a phrase which came into English law from the law of Scotland and was said by Lord Eldon in 1819 to mean that no person can accept and reject the same instrument.3 The concept of ‘approbate and reprobate’ is fundamental to the English principle of election in equity and is considered later.4 1 Lissenden v CAV Bosch Ltd [1940] AC 412, 429. 2 ‘Blowing hot and cold’ was said by Lord Atkin in Lissenden v CAV Bosch Ltd [1940] AC 412, 439, to be a phrase which might be applied correctly in defining what was meant by election whether at common law or in equity. The phrase was used by Ashurst J and Buller J in Birch v Wright (1786) 1 TR 378, 379 and 387, to indicate that a party cannot claim remedies against the same person and in respect of the same period by treating that person as both a lawful tenant and a trespasser during that period. 3 Ker v Wauchope (1819) 1 Bligh 1, 21, Lord Eldon referred to a person not being entitled to approbate a will by taking a gift given to him by the will and at the same time to reprobate the will by keeping for himself that which was intended to be given to another person. See also Codrington v Codrington (1875) LR 7 HL 854, 866, (Lord Chelmsford). More recently in Oliver Ashworth (Holdings) Ltd v Ballard (Kent) Ltd [2000] Ch 12, 31, Robert Walker LJ remarked that the principle that a party cannot approbate and reprobate was an importation into English law from Scotland although it covered much the same ground as common law election and estoppel (which he described as elective waiver and waiver by estoppel). This decision is examined more fully in para 8.29. 4 See para 8.6 et seq. The expressions ‘approbate’ and ‘reprobate’ are also sometimes used in connection with common law estoppel: see, eg, Aquis Estate Ltd v Minton [1975] 1 WLR 1452, 1458 (Russell LJ). In R v Paulson [1921] 1 AC 271, 283, Lord Atkinson used these expressions, together with the phrase ‘blowing hot and cold’, while justifying the application of common law election. It has even been said that the effect of common law estoppel by representation is that it does not allow a person to approbate and reprobate: Re Exchange Securities & Commodities Ltd [1988] Ch 46, 54 (Harman J). See also what was said by Robert Walker LJ in Oliver Ashworth (Holdings) Ltd v Ballard (Kent) Ltd, cited in the last footnote. The expression ‘approbate and reprobate’ was used by Sir ­Nicholas Browne-Wilkinson V-C to introduce what may be an extension to the doctrine of common law election in Express Newspapers Plc v News (UK) Ltd [1990] 1 WLR 1320. The relevant citation from the judgment of the Vice-Chancellor is set out in para 8.27.

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Introduction  8.3 8.2  The doctrine of election has two forms, equitable election and common law election. Equitable election is a somewhat technical, though useful, principle of equity. It applies only to written instruments, in the sense of deeds, wills and other documents, under which benefits are conferred on beneficiaries. The principle is that if A by the instrument confers a benefit on B but by the same instrument confers a burden on B in favour of some other person, such as that B shall confer a benefit on C, B has a choice. He may accept the benefit given to him but must then confer on C the benefit specified to be given to C. Alternatively of course B may decline the benefit given to him in which case he will not be obliged to confer any benefit on C. The foundation of equitable election is the general rule that a person cannot both accept and reject the same instrument.5 For example, A may by his will give land to B but with a stipulation that B shall give a part of B’s land to C. B cannot take the land given to him unless he is willing to give a part of his own land as specified to C or make some appropriate compensatory payment to C. If B elects to do this he is said to approbate the instrument. If he wishes, B may reprobate the instrument, that is in the above example decline to give any of his land to C or provide some equivalent compensatory payment to C, in which case the will will not operate to confer the stated benefit of an area of land on B. The binding effect and status of the decision to approbate or reprobate as an election are obvious. The principle of equitable election has a number of detailed aspects and certain of these are mentioned in outline later in this chapter.6 It is said that equitable election has no connection with the common law principle of election which is summarised next.7 They are certainly not two principles of law which can be readily merged into each other. 8.3  Common law election is a principle with a much wider operation. It applies when a person has two legally enforceable rights which he may assert but which are inconsistent with each other. The rights cannot both be exercised and the person with the choice has an election. Once he has made his election to choose one of the rights, and has communicated that choice to the person against whom the rights are exercisable, he cannot subsequently revoke his election and assert the other and inconsistent right.8 The final and irrevocable nature of an election has the result that where a right lost by virtue of an election is appurtenant to an interest in land, the loss of the right binds a successor in title to the land. Thus, if a landowner accepts rent after a breach of covenant by the tenants and thereby loses the ability to forfeit the lease for that breach, a successor in title of the landlord is equally bound by the loss of the right to forfeit the lease for that breach even if he had no knowledge of the relevant events. This simple rule contrasts with the position concerning the passing of the burden of estoppels to successors in title where there is

5 Birmingham v Kirwan (1805) 2 Sch & Lef 444, 449 (Lord Redesdale). 6 See para 8.6 et seq. 7 Lissenden v CAV Bosch Ltd [1940] AC 412, 418 (Viscount Maugham); Young v Bristol Aeroplane Co Ltd [1946] AC 163, 173 (Viscount Simon). However, an early decision on what might be regarded as a common law election was decided within a Chancery jurisdiction: Lucy v Anderson (1581–82) Choyce Cases in Chancery 155. 8 An inability to revoke a communicated choice is certainly the general rule. There are no exceptions where the choice is to terminate a transaction by reason of a breach of obligation by the other party to the transaction. There is some suggestion that where the innocent party chooses to affirm a contract despite a repudiatory breach which entitles that party to treat the contract as at an end, the innocent party may still in some circumstances later end the contract by reason of the breach, for instance if the party in breach refuses to take any steps to remedy the breach. This possibility is discussed in para 8.21.

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8.4  Election substantially less clarity.9 The doctrine of common law election applies in principle where A has two inconsistent rights against B, where A has two inconsistent remedies against B, and where A has two inconsistent rights against B or C. There are important differences in the application of the concept to the first two categories, rights and remedies, including the need to distinguish between a right and a remedy, and the differences are examined later in this chapter. 8.4  It is apparent from the width of the common law principle as stated that the principle may apply through diverse areas of civil law where alternative and inconsistent legal rights are vested in a person. Possibly the most frequent application of the principle is where a party to a contract is faced with a repudiatory breach of contract by the other party and then has a choice of whether (a) to accept the repudiation, treat the contract as at an end and so absolve himself from all future obligations under it, and also, if he wishes, sue for damages for the breach, or (b) affirm the contract so that the contract continues and also, if he wishes, sue for damages for the breach. Once the innocent party has chosen one course and has by some means communicated his choice to the party in breach, the doctrine of election operates so as to prevent him taking the other course. Another field of law where election frequently operates is forfeiture clauses in leases under which the landlord can terminate the lease upon a breach of covenant by the tenant. A landlord who with knowledge of the facts constituting the breach of covenant does some act such as accepting rent due after the date of the breach is said to waive the forfeiture with the result that the forfeiture clause may no longer be operated in respect of that breach. Although the word ‘waive’ is usually used in this context the process is an example of the operation of common law election.10 It should be noted that in these circumstances what an innocent party to a contract is doing, or what a landlord is doing, is only to give up his right to terminate the contract or the lease by reason of a particular breach. He is not giving up the right to enforce the obligation of the other party by seeking damages and he is not giving up the right to enforce the termination of the lease for some future breach of it or to treat the contract as repudiated by reason of some future breach of it. There are a number of elements which have to be established before a common law election can be relied on so as to prevent the assertion of a right and these are stated and examined later in this chapter.11 8.5  Neither of the forms of election is an estoppel. Both forms, and especially common law election, have considerable affinities with the doctrine of estoppel, and common law election has in particular substantial similarities with promissory estoppel.12 The principles of common law election and promissory estoppel share the common characteristic that a person, by making an express or implied statement as to the exercise of his rights, may disentitle himself from exercising those rights or from exercising one of those rights.

9 The law on the effect of estoppels on third parties is discussed in ch 2, part (J). 10 These were the two examples of the doctrine of common law election given by Lord Diplock in Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, 883: see para 8.11. The concept of ‘waiver’ is discussed in detail in ch 2, part (H), and it is there suggested that if this word is to be used accurately, or at all, it should be confined to a description of the effect of the operation of common law election. In practice, the word is used widely and in a variety of ways. 11 See para 8.24 for a statement of the four essential elements. 12 A comparison between election and promissory estoppel is contained in para 8.111 et seq of this chapter and in ch 6, paras 6.155 and 6.166, on promissory estoppel.

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Equitable Election  8.8 These  last two principles, one of common law and one of equity, do have important ­differences and different elements have to be proved in order to establish the operation of one or the other principle. Leading authorities sometimes discuss the possible application of the two principles to the facts of a case and point out the differences between the principles.13

(B)  Equitable Election 8.6  The nature of equitable election has been described.14 It has been said to be a decision by which equity fastens on the conscience of the person who is put to his election and refuses to allow him to take the benefit of a disposition contained in a will or other instrument except upon certain conditions.15 A detailed description of the doctrine belongs to a specialised work on equity16 and only a few of the more important features of the doctrine are summarised here. 8.7  Equitable election usually operates not where a testator or donor consciously intends to bring the doctrine into effect but where he has made a mistake.17 It is immaterial whether the testator or donor believed that he had power to dispose of the property of another person. The doctrine applies in the same way whether he did or did not have that belief.18 The doctrine should therefore be regarded as one imposed by a rule of equity and not as something which depends on the actual or presumed intention of the person making a will or other disposition.19 8.8  The application of equitable election is to be distinguished from a gift which is made expressly conditional on some action by the donee, for example the withdrawal of some claim which the donee has made against the donor or against some other person or the making of a further disposition by the donee to a third party. Thus, if A gives property to B with an express condition that B is only to take the property if he gives different property of his own to C, B can only take the benefit of the gift if he complies with the condition. Equitable election is more flexible. For example, if a beneficiary is given a share of assets disposed of under a will, and the testator mistakenly believed that property belonging to the beneficiary was a part of the assets of which the testator was making the disposition, then the 13 See, eg, Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) [1990] 1 Lloyd’s Rep 391, 399, where Lord Goff compared the two principles and explained some of the important differences between them. See also Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394, paras 6–9 (Mason CJ). The similarities between equitable estoppel and election can be seen from the fact that two of the Judges in the majority in the High Court of Australia in this last case rested their decision on an equitable estoppel, and two other of those Judges rested their decision on the doctrine of common law election. 14 See para 8.2. 15 In Re Mengel’s Will Trusts [1962] Ch 791, 797 (Buckley J). For a fuller modern statement of the principle see Re Gordon’s Will Trusts [1978] Ch 145, 153 (Buckley LJ). An older statement of the doctrine is found in the judgment of Lord Eldon in Ker v Wauchope (1819) 1 Bligh 1 where it is said that the beneficiary must elect to take ‘under the instrument’ or ‘against the instrument’. 16 See Snell’s Equity, 33rd edn (Sweet & Maxwell, 2015) ch 6, section 2. 17 In Re Mengel’s Will Trusts [1962] Ch 791, 796–97. An example of the operation of the doctrine where a donor acted under a mistake is given in the next paragraph. 18 Cooper v Cooper (1874) LR 7 HL 53, 78 (Lord Moncreiff). 19 ibid, 67 (Lord Cairns).

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8.9  Election beneficiary may be put on terms. In order to take his share of the assets he must either bring his own property into the distribution or submit to a reduction in the amount he receives under the distribution equal to the value of his own property.20 The purpose of course is to bring about that outcome in terms of assets available to the beneficiaries which would have ensued if the mistaken belief of a testator or donor had been correct. The distinction between the operation of equitable election and a conditional gift is therefore a fine one. The usual difference is that, as in the example just given, equitable election often operates where a testator or donor has made a mistake as to the ownership of assets, whereas a conditional gift operates where a testator or donor with a full appreciation of the true facts has subjected a gift made to an express condition involving some burden on the beneficiary. A conditional gift is less flexible in that either the donee satisfies the exact terms of the condition and so takes the gift, or he does not satisfy those terms and so cannot take the gift. There is no question of the donee being put on terms or allowed alternative courses by the court as in the example of an equitable election just given. 8.9  As with common law election, the donee must make his election if he is to be bound; he must approbate or reprobate his gift under the instrument. The choice of the donee must of course be communicated to the donor or to those responsible for giving effect to the will of the testator. The election may be express but may also be an inference from the conduct of the donee. 8.10  The donee will be held to his election only if at the time of his election he understood his rights and the facts relevant to his choice.21 In this respect equitable election is similar to common law election.22

(C)  Common Law Election 1.  The Nature of an Election (i)  The Leading Authorities and the Background 8.11  The general nature of common law election has been described and two of the most frequent applications of the doctrine, the acceptance of a repudiatory breach of contract as opposed to the affirmation of the contract and ‘waiver’ of forfeiture under leases, have been explained as leading instances of the doctrine.23 Lord Diplock, discussing the various meanings of the word ‘waiver’ of which election is one, has described election in the following terms: This arises in a situation where a person is entitled to alternative rights inconsistent with one another. If he has knowledge of the facts which give rise in law to these alternative rights and acts 20 Brown v Gregson [1920] AC 860. 21 Wilson v Thornbury (1875) 10 Ch App 239, 248 (Sir WM James MR): ‘Election by conduct must be by a person who has positive information as to his rights to the property, and with that knowledge really means to give that property up’. This citation with the use of the words ‘really means’ suggests that what is required for an equitable election is a subjective intention to take a particular course. However, for the purposes of common law election the decision of the person electing for a particular course of action is judged objectively. 22 See para 8.62 et seq. 23 See para 8.4.

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Common Law Election  8.13 in a manner which is consistent only with his having chosen to rely on one of them, the law holds him to his choice even though he was unaware that this would be the legal consequence of what he did. He is sometimes said to have ‘waived’ the alternative right, as for instance a right to forfeit a lease or to rescind a contract of sale for wrongful repudiation or breach of condition; but this is better categorised as ‘election’ rather than as ‘waiver’.24

8.12  The nature and the application of common law election are illustrated by the judgment of Lord Goff in Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India  (The Kanchenjunga).25 This decision concerned a charterparty agreement for the hiring of a large oil tanker. The loading points were agreed to be one or two safe loading ports in the Arabian Gulf at the charterers’ option. One port in the Gulf, Kharg Island, became subject to air raids as a part of the Iran–Iraq war of 1980. The charterers nonetheless nominated this port for loading oil onto the vessel. At this stage, the owners could have rejected the port as unacceptable since it was plainly not a safe port but instead they directed the Master of the ship to proceed to Kharg Island and to load. In this situation the owners when faced with the nomination had two alternative courses of action under the terms of the charterparty. They could have rejected the nomination of Kharg Island and sued for damages as a result of the breach of contract by the charterers in nominating an unsafe port. Alternatively they could have agreed to direct the vessel to load at Kharg Island. By taking the latter course and informing the charterers of their decision, they elected not to reject the charterers’ nomination and in these circumstances they lost their right to reject the nomination and to call for another nomination. In reaching his conclusion, Lord Goff explained a number of the elements of the doctrine of election and applied it as stated by Lord Diplock in the Kammins decision.26 8.13  The doctrine of common law election is old and well established in the law. This aspect of the law goes back at least to the earlier part of the seventeenth century. Coke on Littleton, published in 1628, expresses the principle in Latin as ‘Quod semel placuit in electionibus, amplius displicere non potest’.27 Lord Blackburn in 1882 said that this and even older authorities established uniformly the proposition that where a man has an option to choose one or other of two inconsistent things, then once he has made his election it cannot be retracted; it is final and cannot be altered.28 A further Latin expression which encapsulates much the same principle is: ‘Quilibet potest renunciare iure pro se ­introdocto’

24 Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, 883. This description was given by Lord Diplock in the course of an analysis of the various usages of the concept of waiver, a subject which is discussed in ch 2, part (H).There is a recent, comprehensive and instructive, summary of the principles which govern common law election given by Aikens LJ in Tele2 International Card Co SA v Post Office Ltd [2009] EWCA Civ 9, para 53. References to this summary are given as appropriate in this chapter. In Tang Man Sit v Capacious Investments Ltd [1996] AC 514, 522, Lord Nicholls put the principle in the context of remedies as being: ‘Faced with alternative and inconsistent remedies a plaintiff must choose, or elect, between them. He cannot have both’. 25 [1990] 1 Lloyd’s Rep 391. 26 Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850. 27 Co Litt 146a. It was said in Comyn’s Digest, Election C2, in the 17th century: ‘If a man once determines his election shall be determined for ever’, quoted in Clough v London and North Western Rly Co (1871) LR 7 Exch 26, 34, by Mellor J delivering the judgment of the Court. 28 Scarf v Jardine (1882) 7 App Cas 345, 360. See para 8.21 for the possibility that where the election is to affirm, rather than treat as terminated, a contract following a repudiatory breach that election may be altered in limited circumstances.

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8.14  Election (a  person may renounce or give up a right introduced for his benefit).29 In the law of ­forfeiture of leases and ‘waiver’ of forfeiture, it was established as early as Pennant’s Case,30 that ‘if a lessor after notice of a forfeiture of a lease accepts rent which accrues due this is an act which amounts to an affirmance of the lease and a dispensation of the forfeiture’.31 A rather more modern expression of this aspect of the law of election is: ‘Waiver of a right of re-entry can only occur where the lessor, with knowledge of the facts upon which his right to re-enter arises, does some unequivocal act recognising the continued existence of the lease’.32 8.14  The core of the doctrine of election, and that which makes it most akin to an estoppel, is the rule that the choice of rights or remedies only binds the person who makes the choice if and when the choice is communicated to the person against whom the alternative rights or remedies are available. The essence of an estoppel, whether a common law or equitable estoppel, is not only that a person makes a decision on a matter, but also that he makes his decision known to another person by some form of statement or promise or assurance.33 It is this requirement of a communication which is common to most forms of estoppel and to common law election. The statement of principle often cited in this connection is that of Lord Blackburn in Scarf v Jardine.34 In this case a person was entitled to the price of goods sold and delivered to a two-person partnership. The partnership was dissolved and, with the knowledge of the seller, one of the partners formed a new partnership with a different person. The seller was entitled to recover the price for the goods sold from the new partnership or alternatively from the former partner and elected to sue the new partnership. It was held that he had made his election and had communicated it to those concerned, with the result that he had lost the right to sue the former partner. In a well-known passage Lord Blackburn stated the doctrine in the following way: The principle, I take it, running through all the cases as to what is an election is this, that where a party in his own mind has thought that he would choose one of two remedies, even though he has written it down on a memorandum or has indicated it in some other way, that alone will not bind him; but as soon as he has not only determined to follow one of his remedies but has communicated it to the other side in such a way as to lead the opposite party to believe that he has made that choice, he has completed his election and can go no further; and whether he intended it or not, if he has done an unequivocal act – I mean an act which would be justifiable if he had elected one way and would not be justifiable if he had elected the other way – the fact of his having done that unequivocal act to the knowledge of the persons concerned is an election.35

It should be noted that in the above passage Lord Blackburn drew an emphatic distinction between the decision of a person to assert one of two or more inconsistent remedies 29 Beawfage’s Case (1572) Co Rep 101a; Wilson v McIntosh [1894] AC 129, 133. 30 (1596) 3 Co Rep 64a. See also Lucy v Anderson (1581–82) Choyce Cases in Chancery 155 for an election made by a widow on the death of her husband. 31 See Williams J as a part of the giving of the advice of the Judges to the House of Lords in Croft v Lumley (1858) 6 HL Cas 672, 705. See also Jones v Carter (1846) 15 M & W 718. 32 Matthews v Smallwood [1910] 1 Ch 777, 786 (Parker J). 33 K Lokumal & Sons (London) Ltd v Lotte Shipping Co Pte Ltd (The August Leonhardt) [1985] 2 Lloyd’s Rep 28, 35 (Kerr LJ): ‘All estoppels must involve some statement or conduct by the party alleged to be estopped on which the alleged representee was entitled to rely and did rely’. 34 (1882) 7 App Cas 345. 35 ibid, 361.

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Common Law Election  8.15 and the communication by that person of the decision. When the essential elements of common law election are defined a little later in this chapter36 these two matters are treated as separate elements although in practice in many cases the first element, the decision, is inferred from the acts which constitute the second element, the communication of the decision. In the passage cited Lord Blackburn referred to remedies although the sense of what was said would have been the same if the reference had been to rights. It will be noted that the election in this case was between inconsistent remedies against different persons.37 There are differences between the application of the doctrine of estoppel to rights and to remedies and this matter is discussed later in this chapter.38 In most of this chapter the law is explained by reference to an election between inconsistent rights but the rules described should generally, and unless the content shows otherwise, be taken to apply equally to an election between inconsistent remedies. 8.15  An election may operate where A has two alternative and inconsistent rights against  B or where A has two alternative and inconsistent rights, one against B and one against C. Instances of an election in the second category, inconsistent rights against different persons, are not frequent. Scarf v Jardine,39 described in the last paragraph, is an example of inconsistent rights against different persons. The main instance of inconsistent rights against different persons may flow from the rule that where there is an undisclosed agent a third party may be entitled to enforce a right against either the principal or the agent.40 The two rights are then inconsistent and the assertion of one right, such as the commencement of proceedings against the agent alone, may amount to an election not to assert the inconsistent right against the principal. Rights against two persons may not be inconsistent, an example being cases where persons have a liability which is joint or is joint and several.41 In  such a case, no election will arise by reason of the enforcement of the right against one of the persons because the two rights are not inconsistent with each other.42

36 See para 8.24. 37 See also para 8.24. 38 It may be that on a modern understanding of the difference between rights and remedies the more apposite description of the election made in this often cited passage would have been to an election between alternative rights: see Oliver Ashworth (Holdings) Ltd v Ballard (Kent) Ltd [2000] Ch 12, 28 (Robert Walker LJ), a passage cited in para 8.41. 39 (1882) 7 App Cas 345. 40 Boyer v Thomson [1995] 2 AC 629, 632. 41 A liability is joint if two persons make a single promise which binds both of them. A liability is joint and several if two persons make a single promise which binds both of them and each makes a separate promise binding on that person alone. In each case the total liability to the creditor cannot exceed the total of what was promised, so that if the payment of £x is the subject of the promise or promises the creditor cannot recover more than £x in total. There is a presumption that a single promise made by two persons is joint and not joint and several unless its terms indicate the contrary. If the liability is joint and several a creditor can bring proceedings against one debtor and, if the whole of the debt is not recovered, can then bring different proceedings against the other debtor for the unpaid balance. At common law a debtor could sue one of joint debtors and, if full recovery of the amount promised was not obtained, could not then bring further proceedings against the other joint debtor for the balance. This last rule has been abolished by ss 3, 7(1) of the Civil Liability (Contribution) Act 1978. Of course, two persons may make to a third person not a single promise but two wholly separate promises which may have the same or a similar content. If B and C each separately promise to pay £x to A then A may recover £x from one or other or from both. No question of election arises since the rights to recover the money are plainly not inconsistent with each other. 42 See para 8.38 for the situation where a person has more than two inconsistent rights against some other person.

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8.16  Election 8.16  Election in the present sense is often described as a form of waiver.43 Indeed a primary example of election, the decision not to forfeit a lease for a breach of covenant by the tenant, is nearly always described as a waiver of forfeiture. It has been said in the High Court of Australia that waiver when used in the sense of an election is apt to signify ‘the legal grounds on which a person is precluded from asserting one legal right when he is entitled to alternative rights inconsistent with each other’.44 The status of an election as one of the methods by which a right can be lost and a comparison between election and other such methods are discussed later in this chapter.45 Waiver is an expression sometimes applied to a number of these methods. It is today almost certainly too late to resile from references to waiver of forfeiture in leases because of its long and widespread use, but in general it seems clearer to refer to the operation of the common law doctrine here under discussion as an election, a description which avoids the need to refer to waiver, a word which in law has protean and often imprecise meanings.46 It generally means the voluntary giving up of some right. The most useful means of dealing with this matter is to examine generally and separately the concept in law of waiver and its various meanings, and this is done in c­ hapter two.47 In this chapter, as in earlier chapters on the forms of estoppel, the word ‘waived’ is avoided so far as possible. 8.17  An election can operate against the Crown and against other public bodies at any rate where functions normally regulated by the principles of private law are being carried out.48 When the Crown or a public body carries out statutory powers or duties not available or applicable to private persons, and which have to be carried out for the purposes of the enabling statute and in the public interest, the authority cannot be constrained in exercising its functions, such as exercising a particular right or power, by the doctrine of estoppel. In the same way, a public body in these circumstances cannot be constrained in the exercise of its functions by an election. This subject is discussed in respect of estoppel generally in chapter two.49 An election which relates to an interest in land can bind a successor in title to that interest.50 43 Such terminology is of ancient origin. Lucking v Denning (1701) 1 Salk 201 concerned the jurisdiction of an inferior court which might be challenged by prohibition but that right might be lost by a submission to the jurisdiction of that court. Holt CJ observed (at 202) that if a party ‘waives that [the right to an order of prohibition] and pleads to the merits … he is estopped to say that it was a matter that arose out of their jurisdiction’. 44 Sargent v ASL Developments Ltd (1974) 131 CLR 634, 655 (Mason J). 45 See para 8.106 et seq. 46 Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850 (Lord Diplock), and see in particular the passage (at 883) cited at para 8.11 for election as one of the meanings of waiver. 47 See ch 2, part (H). 48 Davenport v R (1877) 3 App Cas 115. 49 See ch 2, part (D). This constraint on the operation of the doctrines of estoppel and election against public bodies exercising public law functions may to some extent be ameliorated by the doctrine of legitimate expectation which is a developing area of administrative law. Legitimate expectation is discussed in ch 2, para 2.92 et seq, in connection with the application of estoppel to public bodies. It might be contended in any particular case that a ground for holding that a public authority must act in a certain way was that the conduct of the authority would have amounted to a common law election if the rights or powers in question had been rights or powers in private law. 50 An acceptance of rent by a landlord after knowledge of a breach of covenant by the tenant will normally be an election not to forfeit the lease on the ground of that breach. A transferee of the reversion will be bound by the election whether or not he had notice of the acts which brought about the election. Equally where a party has affirmed a contract after a repudiatory breach or after a misrepresentation that party’s election should bind a transferee of the contractual rights. In general a transferee of an interest or rights cannot put itself in a better position

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Common Law Election  8.19

(ii)  Future Rights and Continuing or Repeated Breaches 8.18  It is important to note that all that a person loses by his election to assert one ­existing right is the other then existing alternative right which is inconsistent with the right asserted. Future rights which may arise in later circumstances are not lost even though they arise out of the same general transaction. The principle can be illustrated by a contract under which performance of works by one party is required by successive stages on successive dates. A failure of performance on one date may be a repudiatory breach which entitles the innocent party to treat the contract as at an end. The innocent party may elect not to accept the repudiation so that the contract continues and cannot later be rescinded by reason of that particular breach. The party whose performance is due may then again fail to carry out a part of the works due on a later date. This will again entitle the innocent party to treat the contract as at an end and the assertion of this further right is not lost by reason of the earlier election. These principles in a sense rest on matters of terminology. There may be a general right under the contract to treat it as ended by a repudiatory breach constituted by non-performance of items of work on the date due. There may arise a specific right to treat the contract as ended by a specific failure to perform one item of work on the date due for that item. An affirmation of the contract following the specific breach will bring to an end the specific right to rescind the contract by reason of that breach. It will not bring to an end the general right to rescind the contract for breaches and a further specific right to do this may arise and may be enforced if there is a later breach. A further way of putting the same point is that a party may on the facts known to it act in a way which constitutes an election so as to disentitle it from relying on a right based on those facts, but may subsequently discover further facts which themselves, or perhaps in conjunction with the earlier facts, create a new right. The new right will in such a case not be lost by election.51 There are circumstances in which a general right to enforce a contractual provision may be lost for all time by abandonment but this is not by reason of common law election and the possibility of an abandonment is discussed elsewhere.52 8.19  The above explanation of the limited effect of an election between inconsistent rights brings into focus the distinction which has become established between once and for all breaches of obligation and continuing breaches of obligation. A once and for all breach is a breach of an obligation which occurs and is completed as a breach at a certain date. The breach of a contractual duty to carry out building works by a stipulated date, used as an illustration in the last paragraph, is such a breach.53 By contrast, a breach of an obligation not to use a property in a certain way is a continuing breach in the sense that there is a new breach every day that the contravening use continues.54 Continuing breaches than a transferor. Such a rule avoids the difficulties which arise in connection with the transfer of the benefit and burden of estoppels which are discussed in ch 2, part (I). 51 Spriggs v Wessington Court School Ltd [2005] Lloyd’s Rep IR 474, para 78; Involnert Management Inc v Aprilgrange Ltd [2015] EWHC 2225 (Comm), [2015] 2 Lloyd’s Rep 289, para 169. 52 See para 8.109. In summary, an abandonment of a right means the toleration without protest over a long period of repeated breaches of that right from which there can be inferred an intention to abandon the right permanently with no prospect of future reliance on it. Abandonment with this meaning is one of the possible meanings of waiver and is also discussed in ch 2, part (H), where the various meanings of waiver are examined. 53 Stephens v Junior Army and Navy Store [1914] 2 Ch 516, 523. 54 Creery v Summersell and Flowerdew & Co Ltd [1949] Ch 751, 759 (the breach held to be a continuing breach in this case was a breach of a positive obligation to use premises in a particular way).

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8.20  Election of this latter type are often a feature of long-term contractual relationships with negative ­obligations such as leases and restrictive covenants.55 The significance for the doctrine of election of this distinction between these types of breaches is that the affirmation of a relationship, such as a contract or a lease after a once and for all breach, prevents subsequent reliance on a right to terminate the relationship by reason of that breach. The affirmation of a relationship after the occurrence of a continuing breach prevents reliance on a right to terminate the relationship for that breach as the breach has occurred up to the date of the affirmation, but does not prevent the exercise of a right of termination for any continuation of the breach beyond that date.56 8.20  The distinction between the two types of breach is probably most significant where there is an alleged election not to exercise a forfeiture provision in a lease by reason of an acceptance of rent (‘waiver of forfeiture’). If there has been a continuing breach of covenant by the tenant such as carrying out a prohibited use of the premises, and the landlord accepts rent knowing of the breach, the landlord disentitles himself from forfeiting the lease by reason of the use as carried out up to the date of the acceptance of rent but may forfeit the lease for any continuation of the breach after that date.

(iii)  General Irrevocability of an Election 8.21  An election once made and communicated is generally of its nature irrevocable. The party making the election cannot simply change its mind. This proposition is certainly correct for an election to treat a transaction as at an end such as an election to treat a contract as at an end due to a repudiatory breach. The proposition holds good even if the election to end a transaction has been made and communicated due to a mistake.57 The effect of an election to affirm a contract notwithstanding a repudiatory breach may be somewhat less clear cut. Once the election to affirm the contract has been made, the election cannot be revoked in reliance on events, that is the events constituting the breach, up to that date. As has just been explained, events subsequent to the affirmation may constitute a continuing and subsequent breach which may give rise to a further opportunity to treat the contract as at an end. It appears that even if the breach is not a continuing breach, the conduct of the party in breach may be in some way a continuation or repetition of the repudiatory conduct so justifying the innocent party in revoking its election to affirm the contract and entitling that party to treat the contract as at an end.58 55 A useful list of breaches of covenants in leases which are or are not continuing breaches is given in Hill & Redman’s Law of Landlord and Tenant (Lexis Nexis) para A[4848]. 56 Segal Securities v Thoseby [1963] 1 QB 887, 902; Price v Worwood (1859) 4 H & N 512, 516 (Martin B); London and County (A&D) Ltd v Wilfred Sportsman Ltd [1971] Ch 764. It may be that if the innocent party when he affirmed the contract knew that the breach would continue for a certain period, his election to affirm the contract would disentitle him from bringing the contract to an end for that period: Segal Securities v Thoseby ibid, 902 (Sachs J). 57 In GF Fashions Ltd v B & Q Plc [1995] 4 All ER 899 a landlord issued proceedings claiming forfeiture and possession on the ground of a breach of covenant. This amounted to an election to treat the lease as terminated and the landlord was prevented from revoking the election when he later sought to argue that there had in fact been no breach of covenant. 58 Safehaven Investments Inc v Springbok Ltd (1995) 71 P & CR 59, 66–68 (Jonathan Sumption QC); Gdanska SA v Latvian Shipping Co [2002] EWCA Civ 889, [2002] 2 Lloyd’s Rep 436, para 46 (Rix LJ). The rule here discussed appears rather to water down the binding effect of an election. If a contract has been affirmed after

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Common Law Election  8.23

(iv)  Inference of a New Contract or Relationship 8.22  Clarity requires that a firm distinction is drawn between two quite different legal conclusions which may be drawn from acts such as the acceptance of monetary payments in circumstances involving the determination of contracts including leases. The first conclusion, explained in the preceding paragraphs, is that a receipt of rent, or some other sum under a contract, which is payable after an event which entitles a party to determine the lease or contract may result as a principle of law in that person renouncing the right to terminate the lease or contract by reason of that event. This is a conclusion which the law ordains and this aspect of the law is the application of the doctrine of election. The effect of the doctrine, the loss of a right, does not depend on an intention in the sense that the person making the election knows that he is giving up the right and intends that that should happen. The other conclusion arises when rent under a lease, or some other sum under a contract, is accepted after the termination of the lease or contract. In this case, there cannot be any election not to determine the lease or contract since the lease or contract has ex hypothesi already determined. In this latter case, the only conclusion or inference which can be relevant is that by reason of the receipt of rent or other sums a new legal relationship is created as a result of the inferred intention of the parties. In this case, it is to be asked what was the intention of the parties in continuing to pay and receive rent or other sums or, put differently, quo animo the rent or other sums continued to be received.59 If the correct inference is that the parties intended to create a new legal relationship between them, such as a tenancy at will or a licence or a periodic tenancy, that relationship will come into existence and will continue until it is itself terminated.60 This aspect of the law has nothing to do with an election to renounce a specific existing right under an existing legal relationship.

(v)  Election and Estoppel by Record 8.23  A brief comparison can be made between common law election and the principles of common law estoppel which can conveniently be described as estoppel by record. ­Estoppel by record is considered in chapter nine, but its main application is estoppel

a repudiatory breach the innocent party is entitled to damages for the breach and the subsequent conduct of the party in breach, such as a refusal to remedy the repudiatory acts, may be relevant to the amount of those damages. A possible further illustration of a similar rule is where following a breach a party has obtained an order for specific performance of a contract, thereby affirming the contract and not accepting the repudiation and seeking damages, but the order is not complied with, the party may in such a case thereafter obtain damages for the repudiation of the contract: Johnson v Agnew [1980] AC 367; and see also below (n 131). 59 Javid v Aqil [1991] 1 All ER 243; Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048, 1051–52; General Assurance Society Limited v General Mutual Assurance Ltd (1969) 20 P & CR 753; Dreamgate Properties Ltd v Arnot (1998) 76 P & CR 25. A person who demands or accepts sums of money, usually as a result of a mistake, after the termination of a contract such as a lease or a licence is sometimes loosely said to have ‘waived’ the termination. This is an incorrect description, and yet a further instance of the loose use of the word ‘waiver’, since what, if anything, occurs is the inference of a new contract from the actions in question. Whatever may be meant by waiver in such circumstances there is no election involved. 60 Whether there is to be the inference of a new legal relationship, and the character of the new relationship if it is inferred, will of course depend on the exact facts and particularly on how often and over what period the further sums were received.

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8.24  Election per rem iudicatam which has two species, cause of action estoppel and issue estoppel.61 The broad effect of estoppel by per rem iudicatam is that when a cause of action or an issue relevant to a cause of action has been determined between two parties by a final judgment in proceedings between them, each party is bound by that judgment in any further proceedings between them. A particular aspect of cause of action estoppel is that if a party has succeeded in establishing a cause of action and has obtained a remedy, that party cannot thereafter bring further proceedings to alter or enlarge the scope of that remedy; for example, it cannot bring a further action to seek further damages. The similarity between this last rule and the rules of common law election is that they both operate in certain circumstances so as to permit a party who has asserted some right or claim from later asserting a different right or claim arising from the same general matter or incident. There are, however, major differences between the two doctrines. First, common law election applies in principle to any actions at any time which constitute a choice of one inconsistent right or remedy as against another inconsistent right or remedy, whereas estoppel per rem iudicatam applies only where a decision of a court has been made on the existence of a cause of action or on an issue. Secondly, common law election applies to inconsistent rights between two parties at a particular time, whereas estoppel per rem iudicatam operates only in later proceedings between the parties to previous proceedings and their privies. Thirdly, an estoppel per rem iudicatam applies only where there is an identity between the cause of action or issue determined in the first proceedings and the cause of action or issue sought to be raised in the second proceedings, whereas the essence of election is that a choice made is between inconsistent rights or remedies. Later in this chapter a comparison is made between common law election and promissory estoppel where there are certain similarities but also important differences.62

2.  The Definition of Common Law Election and its Four Essential Elements (i)  The Four Essential Elements 8.24  In the light of the authorities and the above discussion the doctrine of common law election may be defined in the following way. If A has one or more legally enforceable alternative and inconsistent rights or remedies against B and, with knowledge of the existence of the alternative rights or remedies and of the facts which make them exercisable, decides to enforce one of the rights or remedies and communicates that decision to  B, A cannot thereafter assert against B a right or remedy which is inconsistent with his election. The doctrine also extends to circumstances in which A has the same right or remedy which may be enforced against B or C but not against both, such that a decision to enforce the right or remedy against B may preclude the subsequent assertion of the right

61 The third of the three principles which make up estoppel by record is the principle of abuse of process based on the rule in Henderson v Henderson (1843) 3 Hare 100. This public interest rule may have a similarity to a possible extension of the doctrine of election within the context of litigation: see para 8.27 et seq. 62 See para 8.121 et seq.

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Common Law Election  8.26 or remedy against C.63 An illustration of alternative rights against different persons arises from an aspect of the law of agency which is that where an agent of an undisclosed principal makes a contract with a third party, the third party may sue the agent or the principal on the contract. There may therefore be an election between the two inconsistent rights. Such an election is usually made by the commencement of proceedings against the agent or the principal but it is possible, though said to be unlikely, that some earlier action by the third party could constitute the election.64 It should be emphasised that for there to be any question of election, the rights against the two parties concerned must be alternative rights and not rights as to which there is a joint or a joint and several liability. Accordingly, the elements which have to be proved by a person who relies on common law election as a defence to the assertion of a right or remedy against him are (a) the existence of the alternative and inconsistent rights or remedies, (b) the prior decision of the person who seeks to assert the right or remedy to enforce one of the other alternative and inconsistent rights or remedies, (c) the necessary knowledge of that person of the rights or remedies when the decision was made, and (d) the communication of the decision. The first element is mainly a matter of law; the remaining elements are matters of fact and the second and third elements relate to the mental state of the person who is alleged to be bound by an election. 8.25  Statements of the doctrine of common law election are cast sometimes in terms of rights and sometimes in terms of rights or remedies. In principle, the doctrine can apply to rights or remedies but there are significant differences in the two applications. The main difference is the time at which the election has effect. In particular, a binding election between different remedies is unlikely to occur unless and until one remedy is taken to judgment. For this reason the first element of the doctrine is to an extent in this chapter examined separately in its application to rights and remedies. The analysis of the four essential elements as stated in the last paragraph applies whether the election is (a) between inconsistent rights against a person, or (b) between alternative and inconsistent rights against two persons. 8.26  The operation of the doctrine of election depends on the actions of a person who has mutually inconsistent rights. It should be understood that once the essential elements of the doctrine are shown to exist, the doctrine operates automatically and as a matter of law. A person against whom the doctrine is raised cannot avoid the effect of the doctrine by pleading that whatever he has said or done he did not subjectively intend to give up one of his inconsistent rights.65 A consequence of the doctrine operating as an imposed rule of law is that a person against whom the doctrine may be raised cannot prevent the effect of an election to assert one inconsistent right as opposed to another by an equivocation or by a purported reservation of his position such as saying that the election is without prejudice

63 Scarf v Jardine (1882) 7 App Cas 345, discussed in para 8.14, is a decision concerning the assertion of alternative rights against different parties. 64 Chestertons v Barone [1987] 1 EGLR 15 (held that the third party had not elected to give up his right to sue an agent by sending an invoice to the principal); Clarkson Booker Ltd v Andjel [1964] 2 QB 775 (held that a letter before action did not constitute an election). 65 The difference between a decision to assert a right and the subjective intention of the person making that ­decision is discussed in para 8.55 et seq.

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8.27  Election to the possible future assertion of rights.66 It is proposed, after a reference to a possible extension of the doctrine as compared with that just analysed, to examine in detail the four essential elements of common law election.

(ii)  A Possible Extended Doctrine 8.27  There is some suggestion that common law election within the limits as just described is part of, or stands alongside, a wider or extended principle which operates in litigation. In Express Newspapers Plc v News (UK) Ltd,67 the Plaintiffs in their newspaper published an article which was substantially copied by the Defendants in their newspaper. The Plaintiffs sued for breach of copyright and obtained summary judgment with an order for an inquiry into damages. The Plaintiffs had themselves published an article on a different subject which substantially copied that which had been published by the Defendants and the Defendants issued a counterclaim for damages for breach of copyright. The Plaintiffs wished to raise a defence to the counterclaim that there was no breach of copyright because of a custom among newspapers that additional news could be published relating to an article in a different newspaper without acknowledgment. It was held that in other circumstances this would have been an arguable defence available to the Plaintiffs but they were not allowed to raise it in the counterclaim following their successful application for a summary judgment in the claim because of a wide principle of general application at any rate within the conduct of litigation. The wide principle was stated in the following terms by Sir Nicolas BrowneWilkinson V-C: There is a principle of law of general application that it is not possible to approbate and reprobate. That means you are not allowed to blow hot and cold in the attitude that you adopt. A man cannot adopt two inconsistent attitudes towards another; he must elect between them and, having elected to adopt one stance, cannot thereafter be permitted to go back and adopt an inconsistent stance.68

8.28  The application of the doctrine in the above circumstances was accepted by the court as being novel.69 No authorities were cited in support of the doctrine. The concept of ‘approbate and reprobate’ as explained earlier,70 is one adopted from Scottish law and is generally considered relevant to the operation of equitable election with its limited application to benefits conferred by wills and other instruments.71 In an earlier decision72 Viscount Maugham in the House of Lords recited a series of authorities on the doctrine of equitable estoppel with its Scottish origins but which had found a place in decisions in England as

66 The subject of attempts to equivocate or to reserve inconsistent rights is discussed in more detail in para 8.97 et seq. 67 [1990] 1 WLR 1320. 68 ibid, 1329. Nurcombe v Nurcombe [1985] 1 WLR 370 can be seen as a possible earlier instance of the wider doctrine. See below (n 87). 69 ibid. 70 See para 8.1. 71 The expression has been used in connection with common law election: see above (n 4). Counsel in the Express Newspapers case introduced the principle by the more homely expression that what is sauce for the goose is sauce for the gander. 72 Lissenden v CAV Bosch Ltd [1940] AC 412, 417–18.

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Common Law Election  8.29 early as the reign of Elizabeth I.73 However, he said that the doctrine of equitable election had nothing to do with the principle of election at common law of which he gave general examples. If the wider principle is to gain general approval and application, its limitations need to be noted.74 It appears to apply to the conduct of parties within litigation rather than in wider circumstances. The principle only has effect between the parties to a ­particular piece of litigation. In the circumstances of the Express Newspapers case, the defence of custom would presumably have been available to the Plaintiffs in proceedings brought against them by some different party. The wider principle may have some affinities with the law of an abuse of process in litigation under which a party may be prevented from bringing proceedings or making an assertion when that party could and should have done so in earlier proceedings.75 8.29  Just as the suggested wider principle was not supported by any specific authority, neither has it received any wide and general endorsement or application in subsequent decisions over nearly three decades. The decision was referred to at least with approval in a later decision.76 Tenants served a notice determining their lease under a break clause which the landlords alleged was invalid. The landlords sued for recovery of continuing rent. When the notice was adjudged valid, the landlords amended their pleading to claim double rent under the Distress for Rent Act 1737 which provides that double rent shall be payable in some circumstances in which a tenant remains in possession after giving notice. The tenants claimed that there was a common law election which prevented the claim against them but this contention was rejected since there had been no choice of alternative rights available to the landlords. Robert Walker LJ observed that there might have been a further argument available to the tenants founded on the wider principle stated in the Express Newspapers case. However, since the parties had not argued or supported that wider principle it was not thought right to come to a conclusion based on it in the case before the Court.77 In a subsequent first instance decision, the wider principle was applied so as to prevent a party from asserting that certain conditional fee agreements were invalid under human rights legislation when they had previously relied on such agreements in resisting an uplift for different reasons.78 In a further decision, any inconsistency in the courses taken by a party was not sufficiently marked to require the court to reject one course which that party wished to pursue in the litigation.79

73 Lucy v Anderson (1581–82) Choyce Cases in Chancery 155, 156. 74 eg, the degree of inconsistency between two different courses adopted by a party to litigation may not be so inexplicable that the party is to be prevented from taking a particular course: see Nexus Communications Group Ltd v Lambert [2005] EWHC 345 (Ch); and see below (n 79). 75 Henderson v Henderson (1843) 3 Hare 100; Johnson v Gore Wood & Co [2002] 2 AC 1. In Eight Representative Claimants v MGN Ltd [2016] EWHC 855 (Ch) Mann J applied the wider principle but observed that an alternative way of looking at the matter would be to view the taking of a point by a party in circumstances in which the wider principle applied as an inconsistency which could be prevented as an abuse of process. Abuse of process as one of the three principles which constitute estoppel by record is explained in ch 9. 76 Oliver Ashworth (Holdings) Ltd v Ballard (Kent) Ltd [2000] Ch 12. 77 ibid, 31. The tenants in the end successfully resisted the claim for double rent on the argument that s 18 of the Distress for Rent Act 1737 allowed such a claim only where a tenant had served notice to quit (as opposed to a notice under a break clause) and remained in possession as a trespasser after the expiry of that notice. 78 Eight Representative Claimants v MGN Ltd [2016] EWHC 855 (Ch). 79 Nexus Communications Group Ltd v Lambert [2005] EWHC 345 (Ch). A party alleged that the submission of a valuation dispute under an agreement to purchase shares to an expert for determination was procedurally flawed

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8.30  Election 8.30  The suggested wider or extended principle is not the application of a common law election. Whether it can be adopted as a general principle, and if so its limitations and applicability, remains to be determined in decisions of the appellate courts.

3.  The First Element: Inconsistent Rights or Remedies (i)  Types of Inconsistent Rights and Remedies 8.31  The doctrine of election is applicable in principle to all rights which are truly ­alternative and inconsistent in the sense that the exercise of one right is inconsistent with the exercise of another right or rights. Two of the most frequent applications of the doctrine have been explained.80 An innocent party under a contract may be entitled to treat a breach of contract by the other party as a repudiatory breach and so treat the contract as at an end but if it continues to operate the contract, for example by pressing for performance due after the date for performance has passed, it may lose its right to treat the contract as at an end. In addition of course a party to a contract may have under an express term of the contract a right to determine the contract on the occurrence of a breach by the other party or on the occurrence of some other specified event.81 A landlord under a lease with a right to forfeit the lease for breach of covenant by the tenant will lose his right to forfeit the lease for that breach if with knowledge of the breach he accepts rent due after the occurrence of the breach. In the first type of case the right, that of accepting the repudiation and treating the contract as at an end, is a right conferred by the general law; in the second type of case the right to forfeit and determine the lease is a right given contractually by the terms of the lease.82 The source of the rights does not matter; what is important is that the rights in question are truly alternative to each other and are inconsistent with each other. It is inconsistent to treat a contract as continuing and to treat it as at an end and

but later wished itself to serve a counter-notice requiring the expert to determine the dispute in accordance with its own case. It was held that the party could take this second course. 80 See para 8.4. 81 The law in this type of situation was summarised by Aikens LJ in Tele2 International Card Co SA v Post Office Ltd [2009] EWCA Civ 9, para 35 as being: ‘If a contract gives a party a right to terminate upon the occurrence of defined actions or inactions of another party, and those actions or inactions occur, the innocent party is entitled to exercise that right. The innocent party has to decide whether or not to do so. Its decision is, in law, an election’. In addition, the right to determine the contract may be exercisable on the occurrence of some external event, such as the refusal of a planning permission, which is outside the control of either party and the duty to elect may also operate in such circumstances. The stipulated right to determine the contract may be constrained by a specified time limit running from the occurrence of a particular event; it is possible to argue that in this last case there will not be an election not to exercise the right of determination merely because the party with the right of election operates the terms of the contract during the period so provided. However, a different view is that such a time limit does no more than state a date after which the right of determination cannot be exercised and does not prevent the exercise of the right at an earlier date with the result that actions by the owner of the right prior to the end date may still constitute an election not to exercise the right of determination but rather to allow the contract to continue. This latter view seems the preferable approach to the matter. See on this matter para 8.95. In some cases following a repudiatory breach of contract there may be a right available to the innocent party to end the contract either by the exercise of a contractual provision to that effect or by the acceptance of the repudiation. The interrelationship of these two distinct rights may be important and is discussed in para 8.100 et seq. 82 A further general area in which election may be important is the right of an insurer to avoid a policy of insurance due to non-disclosure of material facts by the insured person.

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Common Law Election  8.34 it is equally inconsistent to treat a lease as continuing with rent remaining payable by the tenant and to treat it as brought to an end by reason of forfeiture. 8.32  A number of important rules governing common law election are derived from the occurrence of an election in the two sets of circumstances just described. While waiver of forfeiture of a lease is a species of election, and while important general principles of election are derived from forfeiture cases, this subject has tended to generate its own separate and rigid rules such as the rule that an acceptance of rent due after a breach of covenant known to the landlord is always and necessarily the communication of an election not to forfeit the lease by reason of that breach.83 8.33  Apart from the two above examples of election there are many other areas of ­inconsistent rights with the potential for the doctrine to apply. An owner of a ship under a charterparty agreement is normally entitled to end the agreement if hire payments are not made on time but the owner will lose that right if he accepts hire payments made late.84 A person who has entered into a contract induced by a misrepresentation made to him is entitled to rescind the contract. If the misrepresentee, with knowledge of his rights and with knowledge that the representation made to him was untrue, nonetheless operates or continues to operate the contract he will lose the right to rescind. Such a person is said to affirm the contract when he continues to take the benefits of it. A buyer of goods cannot rescind the contract of sale if, after knowledge of the untruth of a representation made to him, he proceeds to use and enjoy the goods.85 A person who deals with the undisclosed agent of a principal may have rights against the agent or the principal but, having chosen to assert his rights against one, will not be able to assert his rights against the other.86 A wife in matrimonial proceedings affirmed certain dealings by her husband as a director of a company and was held to have disentitled herself from bringing further proceedings alleging a breach of fiduciary duty by the husband as a director.87 There may be an election between a statutory and a common law right, an instance being that an acceptance of payments of compensation under the Workmen’s Compensation Act 1925 was the exercise of a statutory right which barred a claim for damages made independently of the Act.88 A defendant who elects by some positive statement not to rely on a limitation defence may be prevented from subsequently raising that defence by reason of his expressed election.89 8.34  The doctrine of election applies in principle to remedies as much as to rights.90 Examples may be found of an election between alternative remedies such as when, in a case of wrongful conversion, a person ‘waives the tort’ and recovers the proceeds in an

83 See Expert Clothing Service & Sales Ltd v Hillgate House Ltd [1986] Ch 340. 84 The Brimnes [1975] QB 929. There are different standard forms of charterparty agreements and of course the exact language must be scrutinised in every case. 85 United Shoe Machinery Co of Canada v Brunet [1909] AC 330. 86 An illustration of the principle is given in United Australia Ltd v Barclays Bank Ltd [1941] AC 1, 30 (Lord Atkin). See para 8.15 for an election between inconsistent rights against different persons. 87 Nurcombe v Nurcombe [1985] 1 WLR 370. This decision may be seen as an instance of a possible wider doctrine of election in litigation between the parties: see para 8.26. 88 Young v Bristol Aeroplane Co Ltd [1946] AC 163; Leathley v John Fowler & Co Ltd [1946] KB 579. 89 See Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394 in which two Members of the High Court of Australia held that an election arose in these circumstances. 90 The statement of the principle underlying election by Lord Blackburn in Scarf v Jardine (1882) 7 App Cas 345, 361, is cast in terms of alternative remedies.

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8.35  Election action in restitution for money had and received.91 It is explained later that in connection with remedies, the doctrine of election is not directly concerned with different procedural remedies for the enforcement of the same right such as damages or an injunction, where the availability of remedies is generally a matter of discretion for the court, but is primarily concerned with a person not being able to challenge or alter a judgment of a court which he has obtained. The seeking of a particular remedy or remedies by way of commencing court proceedings may itself constitute the communication of a decision to assert one of two inconsistent rights. Thus, the commencement by a landlord of proceedings for possession by reason of forfeiture of a lease following a breach of covenant by the tenant is the communication of an election to terminate the lease rather than to allow it to continue.92 The important event in such a case is that of the seeking of possession on the ground of forfeiture which brings about the election; the fact that further different remedies are sought, such as damages for breach of covenant or an injunction to prevent the continuation of the breach until possession can be obtained, does not affect this essential point. 8.35  As mentioned in the last paragraph an election may operate not only where there is an election between different rights, such as a right to terminate a lease for forfeiture and a right to recover rent due under the lease, but also where there are two forms of entitlement to what is in substance the same benefit such as the recovery of a sum of money. An example given is where an employee suffers an injury at work and may have a right to damages for the injury for breach by the employer of an express or implied term under the contract of employment or a right to compensation for the injury under legislation. The recovery of money under one form of claim may prevent a claim for the recovery of money under the other form of claim. The correct analysis of such a situation is that there are two inconsistent rights leading to the same benefit if successfully asserted, not that there are two different remedies for the assertion of the same right.93 8.36  A party is only bound by an election where he has a real choice in law of alternative courses of action.94 There can be no election where a party’s rights are imposed automatically by the law and so do not result from a deliberate choice of a particular course of action. For example, a contract may come to an end under the doctrine of frustration if, after the contract has been entered into, some supervening event occurs which makes performance of the contract impossible or illegal. In these circumstances the contract ends automatically at the time of the supervening event.95 There is normally no question of one party choosing whether the contract shall come to an end.96 Consequently, there is no possibility of an election by either party since neither can choose that the contract shall or shall not continue. A further illustration of the need for inconsistent rights before there can 91 Lissenden v CAV Bosch Ltd [1940] AC 412, 418 (Viscount Maugham); United Australia Ltd v Barclays Bank Ltd [1941] AC 1. 92 See paras 8.42 and 8.93. 93 See para 8.40 et seq for an examination of inconsistent remedies. 94 Oliver Ashworth (Holdings) Ltd v Ballard (Kent) Ltd [2000] Ch 12. 95 Hirji Mulji v Cheong Yue Steamship Co [1926] AC 497, 505 (Lord Sumner). 96 There is a possible exception to this rule where the frustrating event is deliberately brought about by one party (self-induced frustration) in which case that party cannot assert that the contract has been frustrated but the other party may have a choice on whether or not to claim that the contract has ended. It is possible that there can be an election in these circumstances by the party who did not bring about the frustrating event such that he will be bound by his election to accept that the contract comes to an end or continues.

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Common Law Election  8.38 be an election is the situation where a party has the same rights against two other parties. If the rights are truly in the alternative, then an election can take place if the rights are asserted against one party. If the liability of the other parties is joint or joint and several, there will be no election.97 8.37  The rule of law established by the House of Lords in White and Carter (Councils) Ltd v McGregor98 is sometimes characterised as an exception to the doctrine of election. Contractors agreed to display for three years advertisements for a garage. When the garage proprietors refused to pay the agreed weekly fee the contractors insisted that they would continue to perform the contract in return for the continued payment of the agreed fee. It was held that the contractors were entitled to do so and were not bound to accept the repudiation of the contract by the other party. This was the straightforward application of the law of repudiation and the acceptance or otherwise of the repudiation. Nonetheless, the House of Lords held that there were two circumstances in which an innocent party might be compelled to accept a repudiatory breach of contract rather than being able to exercise his election to affirm the contract and require its continued performance, one being when the innocent party could not complete the contract without the active assistance of the party in breach and the other being on a general equitable principle that a person who has no legitimate interest, financial or otherwise, in performing the contract rather than claiming damages cannot be allowed to saddle the other party with a burden which confers no benefit to the innocent party.99 Viewed correctly, these exceptions are not an exception to the principle that a party who has an election between inconsistent rights is kept to his choice of rights once he has made his choice. The exceptions are to the general rule that an innocent party faced with a repudiatory breach of contract may elect whether or not to treat the breach as terminating the contract. If one or other of the exceptions applies there is no scope for the doctrine of election to apply since, ex hypothesi, there is no election that can be made.

(ii)  Two or More Inconsistent Rights 8.38  Election operates when a person decides to enforce one of two or more alternative and mutually inconsistent rights. It is not confined to circumstances where only two rights or only two courses of action are available.100 Thus, if a party has three rights all inconsistent with each other which he may assert an election to pursue the first right will, when communicated to the party with the correlative duties, prevent the subsequent assertion of either the second or the third right. On the other hand if the first right is inconsistent with the second right but is not inconsistent with the third right and the party with the benefit of the rights decides to enforce his first right and communicates that decision to the other party

97 See para 8.15. The decision in Scarf v Jardine (1882) 7 App Cas 345, explained in para 8.14, is an example of the rights against two parties which were inconsistent so allowing an election to take place. Another example is the right of a person who contracts with an undisclosed agent to assert rights under the contract against either the agent or the principal. 98 White and Carter (Councils) Ltd v McGregor [1962] AC 413. 99 ibid, 430–31 (Lord Reid). 100 Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) [1990] 1 Lloyd’s Rep 391.

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8.39  Election he may by reason of his decision become disentitled to enforce the second right but there seems no reason why he should not subsequently assert the third right. 8.39  A possible illustration of the application of the doctrine of election to the existence of a number of alternative rights can be found in the rights and remedies of landlords under a lease when a tenant fails to carry out repairs under a repairing covenant in the lease. Subject to the terms of the lease a landlord may have three rights.101 He may simply sue for damages for breach of covenant. He may operate a contractual provision in the lease which allows him to enter the premises, carry out the necessary repairs, and recover the cost of doing so from the tenant. He may forfeit the lease and also sue for damages. The existence of the second right is plainly inconsistent with the exercise of the third right. For the landlord to do the repair work and recover the costs, continuing to receive rent while he does so, assumes the continued existence of the lease and so constitutes an election not to terminate the lease by forfeiture. This same course adopted by the landlord probably also prevents a subsequent claim for damages. The recovery of the cost of repair carried out by the landlord is the recovery of a sum due which is a primary obligation under a provision under the lease,102 and is juridically different from the recovery of damages which is a secondary obligation of the tenant which arises on a breach of the primary obligation to carry out the repair.103 The measure of damages, the diminution in the value of the reversion,104 is not necessarily the same as the cost of executing the works of repair. Despite these differences the first and second courses are probably mutually inconsistent. On the other hand, the forfeiture of the lease is not inconsistent with a claim for damages for the breach which has occurred prior to the forfeiture, in the same way as a claim for damages for breach of contract by a party who accepts a repudiatory breach of the contract is not inconsistent with the termination of the contract, and indeed in such cases both remedies are often sought together. In all cases when a multiplicity of rights is available to a party and that party seeks to enforce one of the rights the question is whether it has previously decided, and communicated its decision, to enforce any different right which is inconsistent with the right then sought to be enforced. If it has so acted the doctrine of election will usually operate so as to prevent the later enforcement of the inconsistent right.

(iii)  The Distinction between Rights and Remedies 8.40  The exact distinction between rights and remedies is not always wholly clear.105 If A is entitled to recover money due under a contract or damages for breach of contract against B or, at his election, against C106 it seems equally apposite to say that A has one right which is enforceable against either B or C or that he has two alternative remedies 101 In such cases the availability of remedies may be constrained by s 1 of the Leasehold Property (Repairs) Act 1938. 102 Jervis v Harris [1996] Ch 195. 103 See the analysis by Lord Diplock in Lep Air Services v Rolloswin Ltd [1973] AC 331, 350; and see Ward (RV) Ltd v Bignall [1967] 1 QB 534, 548. 104 Landlord and Tenant Act 1927, s 18(1). It is in part because of this statutory limitation on the amount of the damages that a right for a landlord to enter, carry out the repair work, and recover the full cost of doing so, is ­sometimes inserted in leases. 105 See para 8.41. 106 A situation similar to that in Scarf v Jardine (1882) 7 App Cas 345.

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Common Law Election  8.42 by way of an action either against B or against C. To say that one person has a right to recover damages against another person means the same as to say that he has a remedy in damages against that other person. When language is used in this way the difference between rights and remedies is largely linguistic. Sometimes an election is described in general terms as being between ‘courses of action’107 which avoids the need to distinguish in this area of the law between rights and remedies. In other cases the difference between rights and remedies is ­important.108 It may therefore be preferable in the present context to confine the concept or sense of remedies to the particular form of relief sought from a court in order to enforce a right, for instance an injunction or damages. As stated later, the commencement of legal proceedings seeking an appropriate remedy to enforce a right may itself be the communication of an election to enforce that right and not to enforce some other right inconsistent with it.109 What is done in such a case is not so much to choose between two inconsistent remedies as to assert one remedy which is itself necessarily an election between inconsistent rights. The converse situation is where a landlord decides not  to assert his right to determine a lease for a breach of covenant. In such a case the landlord elects not to assert his right of forfeiture, and therefore also elects not to seek the remedy of possession. He remains entitled to seek the remedy of damages for the breach. One way of describing this type of situation is to say that the election between substantive rights and procedural remedies coincides.110 8.41  As just indicated, the distinction between rights and remedies can be obscured by terminology, and it has been said that in one sense every remedy is a right, even if the grant of the remedy is discretionary, but every right is not a remedy.111 The distinction has been clarified by Robert Walker LJ in the following passage: The distinction is clear if ‘right’ is used to indicate a substantive right such as an entitlement to a leasehold interest or to the benefit of a contract. If a would-be purchaser is induced by misrepresentation to enter into a contract he has a choice (exercisable subject to familiar constraints) whether to treat himself as no longer bound by the contract or to affirm it. In either case he will usually also be entitled to claim damages for any loss caused by the misrepresentation. This is an election between rights. If he chooses to affirm the contract and the other party defaults, the purchaser may sue for specific performance or for damages. This is an election between remedies.112

8.42  The doctrine of election will not be frequent in its application to the seeking of remedies in the sense mentioned in the last paragraph. Remedies such as an injunction or damages are often sought in the alternative and there is a statutory power to award equitable damages in addition to or in the place of an injunction.113 An order for possession 107 China National Foreign Trade Transportation Corporation v Evlogia Shipping Co SA of Panama [1979] 1 WLR 1018, 1034 (Lord Scarman). 108 See Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1996] AC 514, 521–22 (Lord Nicholls) where the importance of the timing of the election as regards remedies is emphasised. See the citation from this decision in para 8.43. 109 See para 8.42 and para 8.51. 110 Oliver Ashworth (Holdings) Ltd v Ballard (Kent) Ltd [2000] Ch 12, 28 (Robert Walker LJ). 111 Oliver Ashworth (Holdings) Ltd v Ballard (Kent) Ltd [2000] Ch 12. 112 ibid, 28. Robert Walker LJ also pointed out in Union Music Ltd v Watson [2002] EWCA Civ 680, para 26, that there was a clear distinction in principle between an election between substantive rights and an election between remedies. 113 Senior Courts Act 1981, ss 37(1) and 50, replacing the Chancery Amendment Act 1858 (Lord Cairns’ Act). See also s 38 of the County Courts Act 1984.

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8.43  Election on the ground of forfeiture of a lease and an injunction restraining the continuation of a breach of covenant may be sought in the same proceedings without there being an irrevocable election to forfeit the lease, with the result that the landlord can still abandon his claim to end the lease and seek the injunction.114 This situation is different from a claim for possession simpliciter which is an election to forfeit a lease.115 Since specific relief such as injunctions and specific performance are equitable and discretionary, the right to one remedy as opposed to another is usually best considered as the result of the exercise by the court of its discretion rather than the operation of the non-discretionary doctrine of election. Of course, the late claiming of a discretionary remedy, such as an injunction, when previously only a different remedy has been sought, may be a significant factor in a decision of a court to refuse an injunction.

(iv)  Remedies: The Time of an Election 8.43  Election as a legal doctrine can apply in principle to a choice of remedies as it can to a choice of rights but its impact is more limited when it comes to remedies and is likely to operate at a later stage in the total process of the assertion of rights. There are a number of reasons for the more limited impact in the case of remedies. It is not always easy to differentiate between rights and remedies. The choice of remedies is often a procedural matter which a court can control by the exercise of its discretion rather than by the operation of a legal doctrine such as election which has no similar discretionary element. The availability of different remedies is sometimes bound up with the detailed course of litigation and with matters such as pleadings and the ability of a court to allow amendments to pleaded cases and changes of direction by parties within the litigation process. The result is not only that election applies to remedies in a more limited way than it does to rights, but also that election as a doctrine operates more usually and readily at a late stage in the overall process of asserting legal rights, that is when a judgment has been obtained. The underlying rule as regards an election between remedies has been explained by Lord Nicholls: Faced with alternative and inconsistent remedies a plaintiff must choose, or elect, between them. He cannot have both. The basic principle governing when a plaintiff must make his choice is simple and clear. He is required to choose when, but not before, judgment is given in his favour

114 Calabar Properties Ltd v Seagull Autos Ltd [1969] 1 Ch 451; Wheeler v Keeble (1914) Ltd [1920] 1 Ch 57. In Garnac Grain Co Inc v HMF Faure and Fairclough Ltd [1968] AC 1130n, 1140, Lord Pearson posed the question of whether the issue of a writ without service of it constituted an election to treat a failure to perform a contract as a repudiation of it and said that the answer was unclear and that he expressed no opinion. If under the former procedure a writ was issued but not served, there was no communication of a choice to the Defendant and for that reason there may have been no election. 115 Moore v Ullcoats Mining Co Ltd [1908] 1 Ch 575; Billson v Residential Apartments Ltd [1992] 1 AC 494; Clough v London and North Western Rly Co (1871) LR 7 Exch 26, 34 (Mellor J): ‘On the other hand, if by bringing ejectment he uniquely shows his intention to treat the lease as void, he has determined his election and cannot thereafter waive the forfeiture’. The rationale behind the distinction is presumably that an action by a landlord claiming possession of the land and no more is the communication of an unequivocal decision to forfeit the lease whereas an action claiming possession and, as in the alternative, an injunction to prevent the continuation of a breach of covenant is more equivocal. It may be that the issue of proceedings seeking possession on the ground of forfeiture for a breach of covenant with a claim for an interim injunction is an election to terminate the lease since the interim injunction may be designed to prevent the continuation of the wrong only until the forfeiture is put into effect by an order for possession made by the court.

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Common Law Election  8.45 and the judge is asked to make orders against the defendant. A plaintiff is not required to make his choice when he launches his proceedings. He may claim one remedy initially, and then by amendment of his writ and his pleadings, abandon that claim in favour of the other. He may claim both remedies as alternatives. But he must make up his mind when judgment is being entered against the defendant.116

8.44  There is earlier authority to the same general effect. In United Australia Ltd v Barclays Bank Ltd117 Viscount Simon said: At some stage of the proceedings the plaintiff must elect which remedy he will have. There is, however, no reason of principle or convenience why that stage should be deemed to be reached until the plaintiff applies for judgment.

The same was said by Lord Atkin: [O]n a question of alternative remedies no question of election arises until one or other claim has been brought to judgment. Up to that stage the plaintiff may pursue both remedies together, or pursuing one may amend and pursue the other, but he can take judgment only for the one.118

(v)  Remedies: Procedural Steps 8.45  It seems unlikely that purely procedural steps taken during the course of legal proceedings and before judgment will amount to an election which prevents a subsequent alteration in the case for a party. Civil proceedings are today governed by the Civil Procedure Rules which require that a party shall provide pleadings in explanation of its case, mainly statements of case by way of a particulars of claim and a defence to the claim.119 Amendments to the pleadings may be made, sometimes without the permission of the court and sometimes only with that permission.120 Permission to amend pleadings is normally given when it is necessary to do so to enable justice to be done between the parties.121 When permission to amend is given it is often on terms that the party seeking the amendment shall pay any costs thrown away by the amendment. However, permission to amend may be refused, for instance if the proposed amendment is very late, or could easily have been made earlier, or would mean that a date fixed for the hearing with the attendance of witnesses had to be vacated. During the course of proceedings a party may be required by the court to elect between assertions made such as between relying on an agreement and seeking to avoid the agreement.122 All of this is again a matter for the general discretion of the court and has nothing to do with election as a doctrine of law in which no discretion is involved.123 116 Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1996] AC 514, 521. 117 [1941] AC 1. The facts of this decision are summarised in para 8.50. 118 ibid, 19. It does appear, however, that if a claimant should have elected before or at judgment between inconsistent remedies, but he has not been required by the court so to do, then the entry of inconsistent remedies in the judgment will not amount to an election and even if one remedy is thereafter pursued that may also not be an election: see paras 8.46–8.47 and the decisions there cited. 119 Civil Procedure Rules (CPR), Part 16. 120 CPR, Part 17. 121 Cobbold v Greenwich LBC (1999, Court of Appeal, unreported). 122 Union Music Ltd v Watson [2002] EWCA Civ 680. 123 The law to the general effect as just stated was explained by Lord Nicholls in Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1996] AC 514, 521: see the citation in para 8.43.

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8.46  Election 8.46  Although pleadings and other procedural steps in an action are not likely to bring about an election, an election between inconsistent remedies may occur when the proceedings come to judgment. This is illustrated by the decision of the Privy Council in Mahesan S/O Thambiah v Malaysia Government Officers’ Co-operative Housing Society Ltd.124 The Defendant was an agent of a housing society. In return for a bribe of $122,000 he induced the Society to purchase land at an overvalue. The Society sued the agent and judgment was given in its favour for the amount of the bribe of $122,000 and the amount of the overpayment of $443,000. In assessing the latter sum no reduction was allowed for the recovery of the amount of the bribe. It was held that the Society was in these circumstances bound to choose between inconsistent remedies. If the Society had elected between the remedies, as it should have done when judgment was obtained, it would obviously have elected for the $443,000 overpayment and the Privy Council ordered that judgment be entered in its favour for this sum alone. 8.47  The decision in Personal Representatives of Tang Man Sit v Capacious Investments Ltd125 is a further example of alternative and inconsistent remedies sought where the ­Plaintiff should have been put to his election between the remedies before judgment in his favour was entered. The Plaintiff entered into an agreement in a deed for the assignment to it of certain houses in Hong Kong. The owner of the houses did not give effect to the assignment but let the houses to tenants. The Plaintiff sought against the Personal Representatives of the owner an account for profits obtained from the lettings and damages for loss of use of the houses. A Master entered judgment for both remedies in favour of the Plaintiff. It was said in the Privy Council that the remedies were alternative and inconsistent and that the Plaintiff should have been put to its election between the remedies at the time of the entry of judgment. The Plaintiff enforced the order for an account and received a sum under that order in excess of $1.8 million. It was held that in these unusual circumstances the Plaintiff had not irrevocably elected for the remedy of an account and could proceed for the assessment of damages for the loss of use of the houses including a diminution in their value during the period when they were let. 8.48  The decisions explained in the last two paragraphs indicate certain general rules as to an election between inconsistent remedies. (a) The mere seeking of inconsistent remedies by pleadings and up to and during trial is unlikely in itself to amount to an election between the remedies unless of course the Plaintiff acts in some way to show that he is making such an election. (b) When it comes to judgment, a claimant who succeeds in the litigation should elect between the inconsistent remedies, and if he does not do so should be required by the court so to elect, and judgment will then be entered only for the remedy selection. The claimant will then not be able in the proceedings, or in any new proceedings, to seek the alternative remedy which he has given up by reason of his election. This rule is the effect of the statement by Lord Nicholls cited above.126 (c) However, if a claimant does not elect between inconsistent remedies, and is not required by the court to do so as he should have been, so that judgment is entered for inconsistent remedies that will not in itself amount to an election between the remedies since, ex hypothesi, no election has been made. In such

124 Mahesan

S/O Thambiah v Malaysia Government Officers’ Co-operative Housing Society Ltd [1979] AC 374. AC 514. A citation from the judgment of Lord Nicholls in this case is in para 8.43. 126 See para 8.43. 125 [1996]

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Common Law Election  8.50 a case, a claimant can generally proceed to enforce both remedies but in the assessment of any amount due under one remedy account must be taken of any sum obtained under the alternative remedy. 8.49  Some illumination on the relationship between election and estoppel and pleadings in legal proceedings in which these doctrines arise is provided by the decision of the High Court of Australia in Commonwealth v Verwayen (Voyager Case)127 which concerned a claim for damages by a sailor against the Government for injury suffered after a collision between two ships of the Royal Australian Navy.128 The Government had stated that no defence of limitation would be raised and did not at first plead a limitation defence under the relevant legislation. Later the Government obtained leave to plead a limitation defence. The majority of the Court held that the Government was precluded from relying on limitation as a defence either because of a waiver (or election) (two Members of the Court) or because of an estoppel (two other Members of the Court). It does not appear to have been considered that the Government should not be able to amend its pleading to raise a limitation defence, the real issue being whether a waiver (or election) or a ­promissory ­estoppel was a good reply to such a defence. Brennan J, although he considered that an estoppel arose, held that only the necessary minimum should be done to satisfy the equity and that it was sufficient that leave to amend should be given to the Government so as to rely on the limitation defence but only on terms that the Plaintiff should be compensated for any costs thrown away by the amendment (the usual order) and for any other financial loss attributable to the Government not observing its promise not to rely on a limitation defence. It seems that if the ill-health of the Plaintiff had been proved to have been exacerbated by the amendment of the defence compensation, for this effect could on this approach in principle also have formed a condition of the leave to amend.129 On this view the limitation defence could therefore be raised notwithstanding an estoppel. On this approach purely procedural matters and the operation of estoppel, and perhaps election, become to some extent intermingled. Subject to this possibility, the general approach is that what is or is not contained in a pleading or done in any other procedural step in litigation is unlikely in itself to amount to an election between inconsistent rights so as to prevent a party to the litigation subsequently, by a pleading amendment or otherwise, asserting a right as supportive of, or as a defence to, a cause of action.130 Any pleading amendment normally only allows a legal principle to be argued as a matter of procedure and does not determine as a matter of substance whether that argument is valid or invalid.

(vi)  Remedies: The Ambit of Election 8.50  The correct explanation in law appears to be that the doctrine of election can in principle apply to rights and remedies which are mutually inconsistent, but that the time at which an election can be made so as to amount to a renunciation of one right or one 127 (1990) CLR 394. 128 Both election and promissory estoppel were in issue and the decision is examined more fully in connection with promissory estoppel in ch 6, para 6.19. 129 Commonwealth v Verwayen (Voyager Case) (1990) CLR 394, para 22 (Brennan J). 130 See the citation from the judgment of Lord Nicholls in Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1996] AC 514, 521, in para 8.43.

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8.51  Election remedy differs. It is this which limits the ambit of election in the case of remedies. Where there are inconsistent rights, the rule is that when a person with full knowledge has done an unequivocal act showing that he has chosen one right he cannot thereafter pursue the other right. The election in this case constituted by the unequivocal act may occur at any time during which the person with the inconsistent rights has knowledge of the facts which show that the rights exist. In contrast, where alternative remedies for asserting the same right are involved, normally no question of election arises until one or other remedy has been brought to a judgment of the court. Up to that stage the two remedies may be pursued together or alternatively, but judgment can only be obtained for one of the remedies and when this has happened the other remedy cannot later be pursued.131 In one case a person wrongly endorsed a cheque payable to the Appellants and induced the Respondents to collect it and pay it into the account of a company of which he was a director. The Appellants brought proceedings for money had and received against the company whose director had wrongly endorsed the cheque and which had received the money, what today would be called proceedings in restitution, but no judgment was obtained in those proceedings. The Appellants then brought new proceedings against the Respondents for the tort of conversion. It was held that the second proceedings were not prevented since no judgment had been obtained in the first proceedings.132 8.51  The law as just stated should not obscure the principle that where different rights are concerned, as opposed to different remedies to enforce the same right, the bringing of legal proceedings may be a decision to assert one right and not another and so may bring into effect the doctrine of election. For example, as stated earlier if a tenant under a lease commits a breach of covenant the service of proceedings seeking possession and no other remedy will be an election by the landlord to forfeit the lease rather than let it continue.133 There is no question in such a case of inconsistent remedies being sought or obtained. On the other hand, if the landlord seeks possession on the ground of forfeiture but also claims a permanent injunction to prevent the continuation of the breach, that action may be equivocal and so not such as constitutes an irrevocable election to exercise the right of forfeiture.134 A further example of the commencement of proceedings constituting an election is that where a third party has a right to sue an undisclosed agent or the principal,

131 United Australia Ltd v Barclays Bank Ltd [1941] AC 1; Rice v Reed [1900] 1 QB 54; Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1996] AC 514, 521–12. However in Johnson v Agnew [1980] AC 367 a party who had obtained specific performance of a contract of sale of land was held to be entitled to seek an order dismissing the contract and awarding him damages when there was no compliance with the specific performance order. See above (n 58). The decision was described by Lord Nicholls in Personal Representatives of Tang Man Sit v Capacious Investments Ltd (at 572) as an exception to the general rule that an order of a court is a final order. 132 United Australia Ltd v Barclays Bank Ltd [1941] AC 1. The judgment of Viscount Simon LC contains a learned examination of the concept of ‘waiving a tort’ and of processes within the old forms of action procedure. It was considerations of this nature which led Lord Atkin in the same case (at 29) to make his famous observation: ‘These fantastic resemblances of contracts invented [eg the fictitious contract which underlay the form of action of indebitatus assumpsit for money had and received] in order to meet requirements of the law as to forms of action which have now disappeared should not in these days be allowed to affect actual rights. When these ghosts of the past stand in the path of justice clanking their medieval chains the proper course for the Judge is to pass through them undeterred’. 133 Billson v Residential Apartments Ltd [1992] 1 AC 494, 534 (Lord Templeman). This subject is considered more fully in para 8.43. 134 Calabar Properties Ltd v Seagull Autos Ltd [1969] 1 Ch 451.

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Common Law Election  8.53 the commencement of proceedings against one may amount to an election.135 It may be that in this last case an election can be avoided by the bringing of proceedings in the alternative against both the principal and the undisclosed agent. 8.52  A further aspect of election and remedies is that a person who has taken advantage of an order of a court may be prevented from subsequently seeking to have that order discharged or varied where the discharge or variation would be inconsistent with the benefit which he has obtained from the order. Thus, a Defendant obtained an order setting aside a judgment and execution against him which had been obtained in default of defence but only on condition that no action should be brought against the Sheriff who had seized the Defendant’s goods in execution under the judgment. The Defendant in reliance on the order obtained the goods from the Sheriff. The Defendant was not permitted to seek to discharge the condition since he had already taken advantage of the order containing the condition.136 In order for a party to become disentitled to challenge an order of a court because he has taken the benefit of the order the challenge must be truly inconsistent with the order. In Lissenden v CAV Bosch Ltd,137 a workman had obtained an award of compensation in the county court under the Workmen’s Compensation legislation and had been paid money under that award. He sought to appeal to the Court of Appeal contending that a greater sum of compensation should be awarded. It was held in the House of Lords that he was not prevented from appealing by the receipt of money under the award since the plea on the appeal was not that there was no entitlement to statutory compensation, which might have been inconsistent with taking payment under the award, but that there was an entitlement to a greater sum of compensation. As Lord Atkin put it ‘You have not lost your right to a second helping because you have taken the first’.138

(vii)  Remedies: Summary 8.53  The law on an election between remedies is perhaps not as straightforward as the law on an election between rights. A part of any difficulty may be caused by a difficulty in distinguishing clearly between rights and remedies, and by the fact that a binding election between remedies is likely to occur only at a late stage in any litigation when a judgment and order are obtained from the court. An attempt has been made in the preceding paragraphs to explain the rules which have arisen by reference to the main authorities. The following is a brief summary of the rules on this subject. (a) The first matter is to distinguish between rights and remedies. In basic terms a right is an entitlement that some other person shall act or not act in some way. A remedy is the order of a court which gives effect to a right if it is not observed, such as damages as a monetary recompense for the loss caused to the owner of the right or a specific order such as an injunction compelling compliance with the right.

135 Chestertons v Barone [1987] 1 EGLR 15 (although some earlier act such as sending an invoice to one or other is unlikely to be an election). See also para 8.33. 136 Pearce v Chaplin (1846) 9 QB 802. 137 [1940] AC 412. 138 ibid, 429.

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8.54  Election (b) The seeking of a remedy in legal proceedings does not normally amount to an election which makes it impossible to seek a different remedy. Indeed, different remedies are often sought cumulatively or alternatively in an action. Equally, procedural steps such as amendments to pleadings are unlikely to amount to an election between remedies. (c) Generally, the obtaining of one particular remedy from a court following a judgment is an election between remedies which prevents the later seeking of a different and inconsistent remedy. (d) However, if a party has sought inconsistent remedies and has obtained judgment for both, because he has failed to elect between the remedies and has not been required by the court to do so before judgment is entered as should normally happen, there will be no election between the remedies, so leaving it to a claimant to enforce both remedies provided that in the assessment of a sum due under one remedy account is taken of any sum recoverable under the other remedy. (e) The commencement of legal proceedings may in itself sometimes constitute the communication of an election to assert a particular right and may thus be an election between rights which prevents the owner of the rights seeking a different and inconsistent right.

(viii)  Statutory Provisions 8.54  Obviously the common law doctrine of election cannot prevail over express statutory provisions and some such provisions provide for a right to revoke an election that might otherwise be binding. Equally, statutes may provide for the binding effect of certain decisions in circumstances which are akin to an election. It is not practicable to catalogue all statutory provisions of this nature but provisions may be mentioned which illustrate each of the two effects just mentioned. An illustration of the first effect is the Coal Mining Subsidence Act 1991 under which the Coal Authority is under a duty to carry out remedial works when property has suffered subsidence damage, that is damage due to loss of support by the ground as a result of coal mining. Under section 8 of the Act the Authority may elect that instead of itself carrying out remedial work it will reimburse to some other person the costs of remedial work carried out by that person. In the normal course of events such a decision once made and communicated to those involved might be irrevocable by virtue of the doctrine of election. In fact section 8(11) of the Act states that an election may be revoked and of course the statutory provision prevails. An illustration of the second effect, a statutory provision for the loss of a right by a form of election due to inactivity, is section 73(1) of the Arbitration Act 1996 under which a party to arbitral proceedings who takes part in or continues to take part in the proceedings without making an objection in good time that the arbitral tribunal lacks jurisdiction when knowing the grounds of the objection is prevented from raising the matter later.139 Under the Civil Procedure Rules a defendant who wishes to contest the jurisdiction of the court must do so within 14 days of his acknowledgment of the service of the proceedings on him and if he fails to do so he is treated as having accepted 139 Certain other grounds of objection, such as that the arbitration has been improperly conducted, are subject to the same rule. A not dissimilar principle as to acting so as to lose by inactivity a right to challenge by prohibition the jurisdiction of an inferior court was stated by Holt CJ three centuries ago in Lucking v Denning (1701) 1 Salk 201: see above (n 43).

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Common Law Election  8.56 that the court has jurisdiction.140 A recent example of a statutory provision for waiver is in the Insurance Act 2015. Under section 10(2) an insurer is not liable for any loss which occurs after a breach of warranty by the insured and before the remedy of that breach but section 10(3)(c) provides that this exclusion of liability does not apply where the insurer waives the breach of warranty.

4.  The Second Element: The Decision to Elect (i)  The Need for a Decision 8.55  Before a party can be bound by an election it is essential that he ‘in his own mind has thought that he would choose one of two remedies’ or that he has ‘determined to follow one of his remedies’.141 It is logical to say that a person must have decided or determined to assert one of two or more inconsistent rights or remedies before he can complete the election by communicating his decision, but the need for such a prior internal decision becomes of reduced significance within the doctrine of common law election as a whole for two reasons. One is the emphasis on a clear communication of the decision as an essential part of the doctrine. What becomes important is not so much the antecedent decision to assert one of two or more rights but the terms in which that decision is communicated.142 The existence of the decision is often inferred from the terms of the communication. Communication of the decision is the fourth of the four elements of the doctrine.143 The other reason is that the existence of the decision on the part of the person against whom the election is pleaded is to be judged objectively. An objective test can often only be applied to the state of a person’s mind in making a decision or forming an intention by considering the statements or other actions of that person and those actions are likely to amount to the communication of the decision. The objective test of the necessary decision is an important aspect of the doctrine of election and is now explained.

(ii)  Decision and Intention: The Objective Test 8.56  The decision to assert one right as compared with another is a mental state on the part of the person against whom the doctrine of election operates and is something which the person who relies on the doctrine must establish. It should be explained as an initial point that what has to be established is a decision by the owner of the inconsistent rights to assert one of them and not another. It does not have to be shown that the person making the decision or election intended to disentitle himself from subsequently asserting the right not chosen, and it is irrelevant whether or not the person choosing to assert one right knew

140 CPR, Parts 11(4) and 11(5). For the operation of a similar principle at common law in relation to court proceedings, see Wilson v McIntosh [1894] AC 129. It should be noted that the parties by their agreement, or by some similar process such as estoppel, cannot confer on a court a jurisdiction which it does not have: see ch 2, part (E). 141 Scarf v Jardine (1882) 7 App Cas 345, 361 (Lord Blackburn). See para 8.14 for the full citation. 142 ibid. 143 This fourth element is explained in para 8.87 et seq.

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8.57  Election of the consequences in law of his decision.144 The disentitlement is a consequence of the operation of the doctrine of election imposed by the law whether or not it was an intended consequence of the choice of rights.145 Therefore, a clear distinction has to be drawn between two questions where a person has available two (or more) inconsistent rights. (a) The first question is whether that person has so acted as to lead to the inference that he has decided to enforce one of the rights rather than the other right. It is this question, primarily one of fact, which is discussed in the following paragraphs of the chapter. (b) The second question is whether by making and communicating a decision to assert one of the rights that person is precluded from asserting the other right. This question is a matter of law, the answer being that the person is so precluded, and has nothing to do with whether by his decision the person involved actually intended to give up any reliance on the second right. 8.57  The remaining and central point is that the question of whether a person decided or elected to assert one of his inconsistent rights is something which has to be answered by the application of an objective test.146 What this means is that what matters is not what the owner of the inconsistent rights subjectively decided but rather what a reasonable person in the position of the person against whom the rights existed would conclude that the owner of the rights had decided. The following statement of principle in the context of the law of landlord and tenant and forfeiture in a major textbook on the subject has been approved by the Court of Appeal: ‘It is not necessary that the landlord should intend to waive the right to forfeit. If, objectively, his act recognises the continued existence of the tenancy, a waiver will result irrespective of his intention’.147 It probably assists the achieving of clarity if the law is stated as being that it must be established on an objective test that the person with the inconsistent rights has decided to assert one of those rights with the consequence in law that the other right or rights became unenforceable by him. Such a formulation avoids references to intention (and expressions such as quo animo) with their possible implication that the person making the decision must have actually and subjectively intended to give up any right or rights inconsistent with the right which he has chosen to assert.148 144 Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] 850, 883 (Lord Diplock). The citation is set out in para 8.11. The question is sometimes put as ‘quo animo’ (with what intention) a party with the inconsistent rights acted: se, eg, Creery v Summersell and Flowerdew & Co Ltd [1949] Ch 751, 761 (Harman J). Such statements must be read as subject to the law as stated in this paragraph. See also below (n 154) for the Creery decision. 145 Osibanjo v Seahive Investments Ltd [2008] EWCA Civ 1282, [2009] 2 P & CR 2, para 3 (Mummery LJ): ‘As a matter of law the right to forfeit may be waived by acceptance of rent by the landlord with notice of the breach, even though the landlord did not intend to waive’; Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048, 1052 (Lord Denning MR): ‘But if it is sought to say that an existing lease continues in existence by waiver of forfeiture, then the intention of the parties does not matter’. The principle of law is stated in these citations in connection with the ‘waiver’ of a right to forfeit a lease but is of course applicable to election generally. 146 See the Osibanjo decision at para 3: ‘The test is an objective one; did the landlord so act as to recognise the continued existence of the lease and the continued relationship of landlord and tenant’. 147 W Woodfall, Woodfall’s Law on Landlord and Tenant (Sweet & Maxwell) para 17.095, approved in Thomas v Ken Thomas Ltd [2006] EWCA Civ 1504, [2007] 1 EGLR 31, para 16 (Neuberger LJ). See also Peyman v Lanjani [1985] Ch 457, 488 (Stephenson LJ). 148 Nevertheless, the doctrine of election is often described in terms of an intention, albeit an intention objectively determined: see, eg, Peyman v Lanjani [1985] Ch 457, 488 (Stevenson LJ). Equitable election also involves a decision, in that case a decision whether to approbate or reprobate an instrument. It has been said that in connection with equitable election it has to be asked whether a donee ‘really means to reprobate the instrument’ thereby giving up the gift to him. This could suggest that for the purposes of equitable election the existence of the relevant decision may have to be judged on a subjective approach: see above (n 21).

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Common Law Election  8.60 8.58  When applying an objective test, the essence of the test being that which a reasonable person would consider had been decided by the owner of the inconsistent rights, an important factor may be what knowledge was available to the hypothetical reasonable person. The reasonable person, albeit a hypothetical entity, is in the position of the person against whom the alternative rights are exercisable such that the reasonable person must have imposed on him such knowledge as that person had.149 Such a rule accords with the principle that where the meaning of a document addressed to a person such as a notice terminating a contract is in issue what has to be determined is that which would appear as the meaning of that document to a reasonable person having all the background knowledge which is reasonably available to a person or class of persons to whom the document is addressed.150 On the other hand, and by contrast when what is in issue is the decision of two persons, such as the question of what is the meaning of a contractual provision entered into between two parties, what is important is the knowledge or information which is available to both of the parties.151 8.59  It will be explained later that actions taken by employees or agents within the general scope of their authority may bring about an election on the part of the employer or principal even though the employer or principal has itself made no decision to assert a particular right and even though that person has given instructions or taken precautions to prevent particular actions by the employee or agent.152 8.60  The rules as just described as a part of the doctrine of election can be said to operate harshly and have recently been described in the Court of Appeal as ‘somewhat archaic’.153 If a person breaks a contract so as to give the innocent party a right to treat the contract as repudiated, or a right to end a contract by notice arises by reason of the occurrence of some event, even an act carried out by mistake which is consistent only with the affirmation of the contract, such as a subsequent demand for a payment due under the contract made in error by a clerk, may constitute an election to affirm the contract with the result that a party cannot rely on his right to treat the contract as at an end or to bring it to an end by notice.154 An election comes into effect in such circumstances even though a party 149 In Peyman v Lanjani [1985] Ch 457, 488, Stevenson LJ said in the context of election: ‘In fact and in law mere intentions must be judged by their actions, and a man’s acts may convey to any reasonable person standing in the shoes of the other party to a contract, as clearly as any words, an intention to repudiate or affirm the contract’. 150 Homburg Houtimport BV v Agrosin Private Ltd (The Starsin) [2004] 1 AC 715 (bill of lading); Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 (contractual notice of determination of a lease). 151 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, 912. It is possible that when a contract is oral the subjective intention of a party may be admissible as a method of determining the meaning of the words used by that person: see Carmichael v National Power Plc [1999] 1 WLR 2042, 2048–51; Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 82. 152 See para 8.72 et seq. 153 Thomas v Ken Thomas Ltd [2006] EWCA Civ 1504, [2007] 1 EGLR 31, para 16 (Neuberger LJ). In Expert Clothing Service & Sales Ltd v Hillgate House Ltd [1986] Ch 340, 360, Slade LJ observed that the doctrine of election was quite capable in some instances of operating harshly especially where there had been an acceptance of rent by a landlord. 154 David Blackstone v Burnetts (West End) [1973] 1 WLR 1487. cf Creery v Summersell and Flowerdew & Co Ltd [1949] Ch 751 which is probably incorrect so far as it enunciates any principle of law to the contrary as was explained by Megaw J in Windmill Investments (London) Ltd v Milano Restaurants Ltd [1962] 2 QB 373, 376; and by Lord Denning MR in Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048, 1052. See also, Thomas v Ken Thomas Ltd [2006] EWCA Civ 1504, [2007] 1 EGLR 31; and see Doe d Nash v Birch (1836) 1 M & W 402 in which an instalment of rent demanded by a son while his father was sick was prevented from constituting an election only because the son had no authority to demand rent.

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8.61  Election had no actual intention to give up his right of termination and had made no actual decision that the contract should continue notwithstanding his right of termination. The fact which demonstrates that there was no actual decision to elect for one right, such as the error made by the clerk, may be unknown to the recipient of the demand for money. There seems no reason why a person who would otherwise be able to rely on an election as a defence to the assertion of a claim should not be able to do so because of an error made by an agent of the person asserting the claim. Any disadvantage caused by the error should most reasonably fall on the person who appointed the agent. The arguably harsh operation of the doctrine of election in circumstances of the sort just mentioned derives from the application together of two rules, namely (a) the rule that the existence and nature of the decision of an owner of inconsistent rights to assert one right is judged by reference to what a reasonable person would conclude from the known facts that that person had decided, and (b) the rule that the reasonable person in this situation is taken to have only that knowledge of the facts which the person against whom the rights exist has or can reasonably be taken to have. These rules are akin to those applied to other aspects of the interpretation and operation of contracts as explained in modern decisions155 and are not obviously archaic or unduly harsh.

(iii)  The Burden of Proof 8.61  The burden of proving that a person has decided to assert one of two or more inconsistent rights is on the person who alleges an election and relies on the effect of an election.156 As explained earlier, the person relying on the election as something which in law prevents the other party from asserting a right against him does not have to show that that other party actually intended to give up the right in question or even that that other party subjectively decided to assert one right in preference to an inconsistent right. All that the party relying on the election has to show is that the conduct of the other party has been such that a reasonable person with the knowledge of the party relying on the election would have concluded that the other party had decided to assert one right rather than another right. Proof of that decision, so judged in an objective fashion, can be, and often will be, founded upon communications made by the owner of the rights. However, in principle the existence of the decision can be inferred from any conduct of the person who has the inconsistent rights including any conduct by a person having authority to act on behalf of that person. Thus, a person entitled to rescind a contract for fraud may be taken to have elected to affirm the contract and so to give up the right to terminate it ‘either by express words or by unequivocal acts’.157 155 See para 8.58. 156 Matthews v Smallwood [1910] 1 Ch 777, 787 (Parker J). 157 Clough v London and North Western Rly Co (1871) LR 7 Exch 26, 34 (Mellor J, delivering the judgment of the Court of Exchequer Chamber written by Blackburn J). In China National Foreign Trade Transportation Corporation v Evlogia Shipping Co SA of Panama [1979] 1 WLR 1018, 1024, Lord Diplock referred to the need for an ‘unequivocal act or statement’ communicated to the person against whom mutually exclusive remedies are available. See also Peyman v Lanjani [1985] Ch 457, 501–03 (Slade LJ). The requirement of a clear and unequivocal communication of a decision to elect for one right is the last of the four essential elements of common law election and is discussed separately in para 8.87 et seq. If the decision to assert a particular right is relied upon as creating an election and that decision is inferred from actions of the owner of the right other than a statement, the actions in question must be made known to the other party in order that the requirement that the decision is communicated to the other party may be satisfied. Consequently, the actions of the owner of the right may be both (a) something from which

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Common Law Election  8.63

5.  The Third Element: The Necessary Knowledge 8.62  The third element of the doctrine of election is again an aspect of the state of mind of the person who elects between inconsistent rights and relates to the specific knowledge of that person at the date of the actions which manifest and communicate the election. It is possible that in some instances a person makes a decision to assert a particular right at one date and communicates that decision to the person against whom the right is enforceable only at a later date. In such circumstances, the necessary knowledge on the part of the person making the election should be shown to exist at the date of the later communication since without the communication the doctrine of election will not result in the relinquishment of an alternative right. The person making the election must have at that time knowledge of the facts which create the ability to choose between inconsistent rights. A person cannot normally be said to have made a choice between courses of action if he did not know of the alternative courses of action available to him. These facts will often be some breach of a contractual or other obligation by the person against whom the inconsistent rights are exercisable where that breach creates both of the rights. It is probably the case that the person with the inconsistent rights must also know of the existence of the rights at the time when he communicates the election between those rights, but this proposition remains open to some possible doubt not yet fully resolved at the highest level. Accordingly, knowledge of the relevant facts and knowledge of the inconsistent rights are treated separately in this part of the chapter. The rule in general terms has been summed up as being that the choice of the person who is held to his election must be an informed choice.158

(i)  Knowledge of Facts: The Rule of Law 8.63  It is clear law that the person making an election between two or more inconsistent rights must have knowledge at the time of his actions which constitute the election of the facts which create both the right which he chooses and any inconsistent right or rights which he does not choose. It has been held from the earliest cases on election that a right can only be lost under the doctrine if the facts giving rise to the right were known to the person with the right at the relevant time. A frequent instance of an election is the acceptance of rent by a landlord after a breach of a covenant in a lease which prevents a subsequent forfeiture of the lease by reason of that breach. In a decision in 1595,159 a lease gave the landlord a right of entry if the tenant assigned the lease. The landlord accepted rent after an assignment of the lease and then entered the property pursuant to his right to do so. It was held that the landlord had not lost his right to enter by reason of the acceptance of rent because at the time of the acceptance he did not know of the assignment.

a decision to assert a right can be inferred, and (b) the necessary communication of the decision to the person who has the correlative obligation. 158 Insurance Corporation of the Channel Islands Ltd v Royal Hotel Ltd (No 2) [1998] Lloyd’s Rep IR 151, 162 (Mance J). 159 Harvey v Oswald (1595) Cro Eliz 553.

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8.64  Election 8.64  The principle so established has been followed or applied in many subsequent authorities, for example in the statement of principle by Lord Diplock in Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd: This [election] arises in a situation where a person is entitled to alternative rights inconsistent with one another. If he has knowledge of the facts which give rise in law to these alternative rights and acts in a manner which is consistent only with his having chosen to rely on one of them, the law holds him to his choice even though he was unaware that this would be the legal consequence of what he did.160

Many other modern statements of the doctrine of election are to the same effect.161 In one modern decision which summarises the principles of election the rule was stated as being: ‘It is a prerequisite to the exercise of the election that the party concerned is aware of the facts giving rise to its right and the right itself ’.162 8.65  Actual knowledge of a particular fact is something which may connote a spectrum of mental states running from a certainty that the fact exists to a mere suspicion that the fact exists. The legal rule has been stated in the Court of Appeal to be that a person must be ‘fully aware’ of the breach before his later actions can amount to an election not to exercise a right of terminating a lease.163 Consequently, a mere suspicion or rumour that an event such as a breach of covenant has occurred is not sufficient as the necessary foundation of an election. In one case, a landlord who suspected that there had been an unlawful assignment of the lease by the tenant made enquiries of the tenant and was assured that there had been no assignment and that the person living in the property was the employed housekeeper of the tenant. The landlord at the time accepted this view of the facts and continued to accept rent under the lease. It was held that the landlord was not fully aware of the facts constituting the breach of covenant when the rent was accepted with the result that a purchaser of the reversion was not prevented from subsequently forfeiting the lease on the ground that the arrangement with the alleged housekeeper was a sham and that there had been an assignment.164 Although a party must be fully aware of the relevant facts before its actions can amount to an election, it does not follow that that party has to know every fact concerning the conduct of the other party. What is required for there to be an election

160 [1971] AC 850, 883. Lord Diplock referred to the statement of Parker J in Matthews v Smallwood [1910] 1 Ch 777, 786 where he said: ‘Therefore we get the principle that, though an act of waiver operates with regard to all known breaches, it does not operate with regard to breaches which were unknown to the lessor at the time when the act took place’. The law as stated by Parker J was approved by the Court of Appeal in Oak Property Co Ltd v Chapman [1947] KB 886, 898. 161 See, eg, Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) [1990] 1 Lloyd’s Rep 391, 398 (Lord Goff): ‘Generally, however, it is a pre-requisite of election that the party making the election must be aware of the facts which have given rise to the existence of his new right’; Osibanjo v Seahive Investments Ltd [2008] EWCA Civ 1282, [2009] 2 P & CR 2, para 3 (Mummery LJ): ‘As a matter of law the right to forfeit may be waived by acceptance of rent by the landlord with knowledge of the breach’; Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048, 1051–02 (Lord Denning MR): ‘It is sufficient if there is an unqualified act done by the landlord which recognises the existence of the lease after knowledge of the ground of forfeiture’; Banner Industrial and Commercial Properties Ltd v Clark Paterson Ltd [1990] 2 EGLR 139. 162 Tele2 International Card Co SA v Post Office Ltd [2009] EWCA Civ 9, para 53 (Aikens LJ), in his second proposition explaining the doctrine of common law election. 163 Oak Property Co Ltd v Chapman [1947] 1 KB 886, 898. 164 Chrisdell v Johnson (1987) 54 P & CR 257. See also Barnhart v Greenshields (1853) 9 Moo PC 18.

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Common Law Election  8.68 is that the party alleged to have made the election must have known all the facts necessary for that party to know of its inconsistent rights.165 Obviously, the degree of knowledge by a party to a contract that a particular breach of contract has occurred may be heavily dependent on what that person is told by the other party to the contract. 8.66  It is plainly possible that a person becomes aware of some facts relevant to the exercise of a right which he has but only later becomes aware of all the relevant facts. For example, a landlord may find out that a tenant has erected a building in breach of a covenant in the lease and thereafter accepts rent so losing his right to forfeit the lease for that breach. The landlord may later ascertain, as he did not ascertain at the time of the acceptance of the rent, that the building was being used for a purpose prohibited by the lease. Logic suggests that the landlord should then be able to forfeit the lease for the further breach, assuming of course that he does not accept further rent after he has become aware of the unlawful use.166 8.67  What is discussed in the preceding paragraphs is actual knowledge by a person of some existing fact or past event and the degree of certainty on the part of that person required if there is to be actual knowledge. This question is different from that which arises in circumstances where a person is taken for the purposes of the law to have knowledge of a fact or event even though he has no actual knowledge of that fact or event. Such circumstances are usually described as constructive knowledge or imputed knowledge and these concepts are discussed next.

(ii)  Knowledge of Facts: Constructive Knowledge 8.68  Actual knowledge, sometimes called actual notice,167 means that the relevant person actually knows of the facts in question. Constructive knowledge means that the relevant party does not actually know of the facts but that a reasonable and prudent person in his position would have ascertained those facts. Such a party may be treated in some circumstances and for the purposes of certain legal rules as having knowledge of those facts and is said to have constructive knowledge of the facts. The boundary between actual knowledge and constructive knowledge is sometimes blurred. A person may have notice of a fact of which he was once aware even though at the relevant time he has forgotten that fact, although whether he has knowledge of the fact at the relevant time in these circumstances is said to be an interesting philosophical point.168 It has been said that a person who receives a document such as a conveyance but does not read it is taken to have actual knowledge of facts which would have been ascertained and known by him if the document had been read by him169 although a better analysis might be that this is a plain example

165 Insurance Corporation of the Channel Islands Ltd v Royal Hotel Ltd (No 2) [1998] Lloyd’s Rep IR 151, 161 (Mance J). 166 Involnert Management Inc v Aprilgrange Ltd [2015] EWHC 2225 (Comm), [2015] 2 Lloyd’s Rep 289, para 169. 167 However, knowledge and notice of a fact are not necessarily the same thing: see MCP Pension Trustees Ltd v AON Pension Trustees Ltd [2012] Ch 1, para 17 (Elias LJ); Bignall Developments Ltd v Halil [1988] Ch 190, 200–02 (Millett J). 168 MCP Pension Trustees Ltd v AON Pension Trustees Ltd [2012] Ch 1, para 17. cf In Re Montagu’s Settlement Trusts [1987] Ch 264, 284 (Megarry V-C). 169 Eagle Trust Plc v SBC Securities Ltd [1993] 1 WLR 484, 494.

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8.69  Election of constructive knowledge. Distinctions of this nature may depend on the precise statutory language where notice or knowledge is required for some statutory purpose. For the purposes of the doctrine of common law election there is no statutory provision, and what is important is whether the person who is alleged to be bound by an election had knowledge of the relevant facts or events when he carried out those acts which are alleged to constitute the election. 8.69  Constructive knowledge or notice plays a central part in areas of the law, notably in the fundamental principle of equity that a bona fide purchaser of a legal estate in land takes that interest free of equitable interests or encumbrances unless at the time of the purchase he had notice of those interests or encumbrances.170 The concept of constructive notice applies to this principle so that a purchaser is taken to have notice of matters which would have been discovered with the exercise of proper diligence whether he had actual notice of these matters or not.171 Elaborate classifications of the categories of constructive knowledge have been attempted such as that it comprises (a) wilfully shutting one’s eyes to the obvious, (b) wilfully and recklessly failing to make such enquiries as an honest and reasonable man would make, (c) knowledge of circumstances which would indicate the facts to an honest and reasonable man, and (d) knowledge of circumstances which would put an honest and reasonable man on enquiry.172 The question for present purposes is whether as a general concept constructive knowledge, in the general sense mentioned earlier, of a fact or event is sufficient to satisfy the rule that a person making an election must have knowledge of the facts which create the inconsistent rights between which he elects. 8.70  It is apparent that constructive knowledge of facts in the above sense is sufficient when an election is alleged. When porters at a block of flats had knowledge that a person other than the tenant was in occupation of a flat and as part of their duties were required to pass that information to the landlords it was said that the landlords could have investigated and found out the precise facts relating to the occupation and whether there was any breach of covenant such that their acceptance of rent for some years without carrying out full investigations and ascertaining the true situation was an election not to determine the lease under a forfeiture clause.173 In the same way, when a tenant had been arrested amid some publicity for alleged offences under the Official Secrets Acts a landlord was deemed to have knowledge that there had been a breach of a covenant against illegal use of the demised premises in which the offences had partly been committed, even though at the time when the landlord accepted rent the tenant was awaiting trial and had not been convicted of the offences.174 If some matter is published in the London Gazette, such as that a company is in

170 This fundamental principle of equity has today been rendered much less important by the statutory systems of land registration under the Land Registration Act 2002 and of registration of land charges under the Land Charges Act 1972. 171 For a general account of this principle, see Megarry & Wade, The Law of Real Property, 9th edn (Sweet & Maxwell, 2019) para 5-013 et seq. 172 Baden v Societe Generale [1993] 1 WLR 509, 575–76 (Peter Gibson J). In MCP Pension Trustees Ltd v AON Pension Trustees Ltd [2012] Ch 1, para 11, Elias LJ said that he did not find this classification a helpful starting point in identifying the scope of constructive notice. 173 Metropolitan Properties Co v Cordery (1979) 39 P & CR 10, 17 (Megaw LJ). This decision is also an example of imputed knowledge: see para 8.72. 174 Van Haarlam v Kasner [1992] 64 P & CR 214. See also Cornillie v Saha (1996) 77 P & CR 147; Matthews v Smallwood [1910] 1 Ch 777, 789 (Parker J).

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Common Law Election  8.73 liquidation or that a liquidator has been appointed, this does not amount to notice to all the world of what is so stated.175 The situation is no different where the publication is pursuant to a directive issued under section 9 of the European Communities Act 1972.176 8.71  The principle of law is therefore clear. On one side a mere suspicion of facts which create the inconsistent rights is not enough to found an election. On the other side knowledge of some facts will be sufficient to found an election if a reasonable person with the knowledge of those facts would have taken steps to ascertain the full facts which would determine whether a particular right, such as a right to terminate a contract by reason of a breach of that contract, existed.

(iii)  Knowledge of Facts: Imputed Knowledge 8.72  Where a person employs an employee or agent, and it is a part of the express or implied duties of that employee or agent to report facts to the person employing him, knowledge of those facts is sometimes in law imputed to the employer or principal even though the facts are not reported back to him. On this principle, imputed knowledge is sufficient for the purposes of the doctrine of election. An obvious instance of the operation of this principle is that where a porter employed at a block of flats by a landlord is under a duty to report relevant facts known by him to the landlord, such as the occupation or use of one of the flats or work carried out at one of the flats, knowledge of facts ascertained by the porter will be imputed to the landlord even if they are not reported back to the landlord.177 Similarly, knowledge of facts by a person’s solicitor is imputed to the client of that ­solicitor.178 It is possible for an agent to instruct a sub-agent. In such a case knowledge acquired by the sub-agent should in principle be capable of being passed up the chain of agency so as to be imputed to the principal. Of course, if an employee has no duty to report a matter to an employer no knowledge of that matter will be imputed to the employer. Accordingly, a landlord will not be taken to have knowledge of facts, such as an unlawful user by a tenant, merely because those facts are discovered by a builder employed to carry out repairs to the demised premises. 8.73  Commercial organisations including property owners sometimes employ firms of agents to manage their activities or their properties. A further aspect of election is that the actions of such agents, such as demanding or receiving rent, are taken for present purposes to be those of the person who employs the agents. In the same way as knowledge of facts by such agents acting within their authority will be imputed to the person who employs the agents, so also the consequences of the actions of such agents acting within their authority will bind the principal for the purposes of election. These principles hold good even when an action in question, such as the receipt of rent, is effected by a clerk or other employee within the firm of agents. It seems that even if the agents have given instructions to their staff not to demand or accept rent a demand or acceptance by an



175 Ewart

v Fryer [1902] AC 187. Custodian for Charities v Parway Estates Developments Ltd [1985] Ch 151. 177 Metropolitan Properties Co v Cordery (1979) 39 P & CR 10. See para 8.70. 178 David Blackstone v Burnetts (West End) [1973] 1 WLR 1487. 176 Official

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8.74  Election employee without knowledge or recollection of these instructions will still amount to an election not to assert a right of forfeiture on the part of the landowner.179 8.74  Constructive and imputed knowledge are both instances of a person being taken in law to have knowledge of facts which he does not actually have. They are to be distinguished in concept but they may be combined to establish knowledge by a person of facts which give him inconsistent rights. An employer may be saddled with imputed knowledge of facts known to his employee or agent and may then be further saddled with constructive knowledge of further facts which as a reasonable person in possession of the imputed knowledge he would have ascertained. The end result of the processes may be that a person is taken to have such knowledge of the facts which give rise to his inconsistent rights that subsequent actions by him may be an election between those rights. As mentioned in the last paragraph and on the same general principle, actions by the employee or agent such as the receipt of rent may give rise to an election on the part of the employer or the principal. 8.75  A situation in which managing agents or porters or caretakers of premises have a duty to report facts found by them to their employer or principal is not infrequently encountered. The position of the principal or employer may be summarised in the following way. (a) If the relevant facts are reported then the principal or employer of course has actual knowledge of those facts. (b) If the agent or employee ascertains the relevant facts but fails in his duty to convey those facts to the principal or employer the latter parties are taken to have imputed knowledge of those facts. (c) If the facts are reported but are not sufficient to create certainty as to any particular breach the principal or employer may still be taken to have knowledge of the breach if a reasonably prudent person in his position would have made further enquiries which would have revealed the breach. This is a form of constructive knowledge. (d) If the agent or employee fails to carry out his duty to investigate certain facts then there will probably be no imputed or constructive knowledge of those facts on the part of the principal or employer.

(iv)  Knowledge of Facts: The Burden of Proof 8.76  The burden of proof that the person alleged to have made an election between inconsistent rights had knowledge, actual or constructive or imputed, of the facts which gave rise to those rights is on the person who contends that there has been an election.180 That person is of course normally the person against whom one of the inconsistent rights is sought to be enforced. If the person against whom the election is alleged does not go into the witness box and state what he did or did not know at the relevant time, an inference as to his knowledge may be drawn against him but it remains incumbent on the person alleging the election to provide some evidence, even if only an inference to be drawn from the circumstances, of the requisite knowledge by the person alleged to have made the election.181

179 Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048, 1052 (Lord Denning MR). 180 Matthews v Smallwood [1910] 1 Ch 777, 787 (Parker J); Peyman v Lanjani [1985] Ch 457, 501 (Slade LJ). See also Proctor v Bennis (1887) 36 Ch D 740, 762 (Bowen LJ). 181 Matthews v Smallwood [1910] 1 Ch 777, 787.

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Common Law Election  8.78

(v)  Knowledge of Rights: The Rule of Law 8.77  While it is beyond doubt that a person cannot be held to an election between ­inconsistent rights unless at the time of the actions constituting his election he knew or is taken to have known the facts giving rise to those rights it is perhaps not wholly certain that it is also necessary that that person knew of the existence of the rights. There is a considerable line of authority going back to the mid-nineteenth century stating that knowledge of the existence of the inconsistent rights by the person one of whose rights is said to be barred has to be shown.182 A similar view of the law has been taken in Australia,183 although it has been pointed out that if a person not knowing of his rights nonetheless acts in a way which, if he had known of his rights, would be an affirmation of a contract by virtue of an election his actions may still bind him by virtue of an estoppel if those actions have caused detriment to the other party.184 Although the law is clearly established as stated, the rule is not without its critics.185 8.78  A possible doubt on the principle of law as just stated is that created by observations made in the House of Lords in Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd.186 That decision concerned an application made to the court for a new tenancy of ­business premises under Part II of the Landlord and Tenant Act 1954 but made outside the time limits prescribed by that Act. The issue was whether the landlords by their conduct following the application had disentitled themselves from objecting to the validity of the application and one of the principles of law considered was the doctrine of election. In the course of his judgment, Lord Diplock said in connection with election as a principle of law that the person choosing between inconsistent rights did not have to be aware of the legal consequences of what he did.187 This appears to be no more than a statement that a person may be bound by his election even though he has no knowledge of the legal doctrine of

182 Vyuyan v Vyuyan (1861) 30 Beav 65, 74 (Sir John Romilly MR): ‘Waiver or acquiescence, like election, presupposes that the person to be barred is fully cognisant of his rights’; Kendall v Hamilton (1879) 4 App Cas 504, 542 (Lord Blackburn): ‘There cannot be an election until there is knowledge of the right to elect’; Evans v Bartlam [1937] AC 473, 479 (Lord Atkin): ‘It is a simple answer to say that to infer election it must be shown that the person concerned had full knowledge of the various rights amongst which he elects’; Young v Bristol Aeroplane Co Ltd [1946] AC 163 (Lord Russell of Killowen): ‘to make a choice the workman must be aware of his right to choose, and of the alternatives open to his choice’; Leathley v John Fowler & Co Ltd [1946] KB 579. 183 Coastal Estates Pty Ltd v Melevende [1965] VR 433. In Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394, para 6, Brennan J said that election consists ‘in a choice between rights which the person making the election knows he possesses and which are alternative and inconsistent rights’. 184 Coastal Estates Pty Ltd v Melevende [1965] VR 433, 443 (Sholl J). The relationship between election and estoppel is explained in para 8.122 et seq. While knowledge of the facts giving rise to inconsistent rights, and probably knowledge of the existence of those rights, are necessary elements of a common law election, no particular knowledge by a promisor need be shown to establish a promissory estoppel: see para 8.125. This is one of the main differences between an estoppel and a promissory estoppel. 185 In Involnert Management Inc v Aprilgrange Ltd [2015] EWHC 2225 (Comm), [2015] 2 Lloyd’s Rep 289, para 161, Leggatt J identified three criticisms of the rule, which were (a) inconsistency with the principle that ignorance of the law is no defence; (b) that in the field of commerce the existence of and exercise of legal rights should depend on manifestations of intent and not on a party’s private understanding; and (c) the difficulty of proving the requisite knowledge. None of these reasons seem to have weight against the principle of justice and common sense that a person should not be taken by his actions to have given up a right of which he was not aware, at any rate in the absence of a promise to give up that right. The justification for this principle is considered further in para 8.80. 186 [1971] AC 850. 187 ibid, 883. The passage referred to from the judgment of Lord Diplock is set out in para 8.11.

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8.79  Election election and of its effect. It is not a statement that a person may be bound by the effect of the election even though he had no knowledge of the inconsistent rights between which he was making a choice. However, in his judgment in the same case Lord Pearson was more unequivocal, saying that the only knowledge required for an election was knowledge of the relevant facts.188 8.79  Any doubt as to the question of the necessary knowledge of his rights of a person against whom an election is alleged has been resolved for the time being by the decision of the Court of Appeal in Peyman v Lanjani.189 A purchaser of property had a right to rescind the contract due to an irremovable defect of title. The purchaser entered into possession and paid a part of the purchase price. It was held that he was not bound by an election to affirm the contract created by his actions since he was not aware of his legal right to rescind the contract. The correctness of the decision in Peyman v Lanjani has been left open in the House of Lords,190 and a final decision on the question may therefore require a reconsideration of the question by the Supreme Court. Subject to this possibility, the law seems to be fully established that a party who rejects the exercise of a right against him on the ground of an election must show that the party alleged to have made the election was aware at the time of the actions said to constitute the election not only of the facts which gave rise to the inconsistent rights but also of the existence of those rights. 8.80  The rule of law on the present subject as stated by the Court of Appeal, and as it has now stood and been applied for some 30 years,191 is readily supportable. The justification for the doctrine of common law election is that a person who has made and communicated a choice between inconsistent rights available to him should be held to his choice. That person cannot sensibly be said to have made a choice between rights if he is ignorant of the rights. In order for him to be aware of his rights, and so in the position to make a choice, he should normally be aware of the existence of the rights as a generality and as to the facts which specifically at any time make the two inconsistent rights both exercisable at that time at his election. The difference between the rule on this matter for election and the rule for promissory estoppel is justifiable since election is a result imposed on a party without any express statement or intention to give up a right whereas the principle of promissory ­estoppel requires a clear and unequivocal promise to give up a right with an intention that that promise should be binding and should be acted upon. Also it is unlikely, though

188 ibid, 878. See also the minority judgments in the House of Lords in Young v Bristol Aeroplane Co Ltd [1946] AC 163, particularly Lord Simonds (at 189). 189 [1985] Ch 457. A similar statement of the law was made more recently by Aikens LJ in Tele2 International Card Co SA v Post Office Ltd [2009] EWCA Civ 9, para 53, where he stated as the second of his propositions explaining the principle of common law election: ‘It is a prerequisite of the exercise of the election that the party concerned is aware of the facts giving rise to its right and the right itself ’. 190 In Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) [1990] 1 Lloyd’s Rep 391, 398, Lord Goff said that it was not necessary for him to consider cases in which it had been held that the knowledge of the inconsistent rights was necessary since in the case before the House of Lords the shipowners were aware of their rights. See also Bliss v South East Thames Regional Health Authority [1987] ICR 700, 717, where Dillon LJ (who had decided Peyman v Lanjani at first instance) expressed doubt on the operation of the principle that knowledge of the inconsistent right is necessary to support an election in employment law. 191 It was, for example, applied by Hoffmann J in Banner Industrial & Commercial Properties Ltd v Clark Paterson Ltd [1990] 47 EG 64 where it was held that a landlord who had demanded rent at the new rate after receiving the award of an arbitrator under a rent review did not elect not to challenge the award since at the time of the demand he was not aware of his right of challenge.

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Common Law Election  8.82 certainly not impossible, that a person may promise not to enforce a right of which that person is not aware.192 8.81  A problem with the above rule may be the difficulty in showing that a particular person at a particular time had full knowledge of his rights.193 Inconsistent rights vary in their content and complexity. The exact content of rights within a complex commercial contract may be difficult for parties to ascertain and may even be difficult for their legal advisers to ascertain. Different persons who own rights may have different degrees of legal and commercial knowledge and acumen. There is the question of whether the person alleged to have made an election must have an exact knowledge of his legal rights and position as opposed to a general understanding.194 Looking at two of the main areas of law within which an election can operate, it may not be apparent to laymen operating ordinary commercial arrangements that there is a rule of law which permits a person who experiences a serious breach of contract by the other party to decide whether to bring the contract to an end or to continue it. A right to forfeit a lease for breach of covenant may be generally known to lawyers and to property agents, but may be less known to persons who let and manage leases of small properties which they own. Nonetheless, it has been suggested that there can be no question that every lessor must know or be taken to know of the right of re-entry given to him by the express terms of the lease.195 When it comes to actual knowledge of rights, the sensible rule may be that the person alleged to have made an election must, at the time of the communication of the election, have had sufficient knowledge of his rights to enable him as a reasonable person and on the facts known to him to be aware of the inconsistent courses of action open to him. In some cases, this knowledge of a person may have to extend to both (a) knowledge that on the facts there has been a breach of a contract or other obligation owed to that person, and (b) knowledge that, given that breach, some right, such as a right to serve a notice determining a contract, was available.

(vi)  Knowledge of Rights: Constructive and Imputed Knowledge 8.82  When knowledge of relevant facts giving rise to a right is in issue, the rule is that a person without actual knowledge of those facts is taken to have constructive knowledge of facts which a reasonable and prudent person in his position would have ascertained.196

192 The justification for the rule that a promissory estoppel may operate to remove or limit a right even though the promisor was not aware of the right at the time of the promise is explained in ch 6, para 6.148 et seq. 193 See, eg, Yukong Line Ltd of Korea v Rendsburg Investments Corporation of Liberia [1996] 2 Lloyd’s Rep 604, 608–09; and see the third criticism of the rule requiring knowledge of rights made in Involnert Management Inc v Aprilgrange Ltd [2015] EWHC 2225 (Comm), [2015] 2 Lloyd’s Rep 289, para 161 (Leggatt J) referred to above (n 185). 194 A similar question arises in connection with the degree of knowledge of the relevant facts required of the person alleged to have made an election. See para 8.65. In Stevens & Cutting Ltd v Anderson [1990] 1 EGLR 95 a solicitor was absolved from having knowledge of a right of his client to object to a notice not served within a statutory time limit under the Landlord and Tenant Act 1954 when the court accepted his evidence that he had general knowledge of the statutory timetable but that he had not observed that the specific date of a notice rendered it outside the statutory provisions. 195 Peyman v Lanjani [1985] Ch 457, 482 (Stephenson LJ). See para 8.91 and below (n 220) for a summary of what may be two special rules of law applicable to forfeiture of leases. 196 See para 8.81.

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8.83  Election There is much to be said for applying the same rule to knowledge of legal rights so that the owner of rights should be taken to have knowledge of rights of which he could reasonably be expected to know if a reasonable and prudent person in his position would have knowledge of those rights. For example, on this principle every property owner who lets property under a lease containing a forfeiture clause should be taken to know both that there is a provision which entitles him to terminate the lease for a breach of covenant and in many cases that particular facts known to him constitute a breach of the terms of the lease which brings that right into effect at a particular time.197 Also a person is to be treated as having knowledge of his rights where he has deliberately and for tactical reasons decided not to acquire definite knowledge of some matter.198 If a rule to the general effect just mentioned as regards constructive knowledge of rights is applied it would do much to alleviate any difficulty which a person may have in proving the requisite knowledge of rights by an owner of those rights and may remove the prospect of persons resisting the effect of the doctrine of election by pleading that they were unaware of their own rights.199 On the other hand it has been said that it is not correct to introduce any conception of constructive knowledge into the present situation.200 8.83  As to imputed knowledge, when a person appoints an agent or employee the knowledge of that agent or employee is imputed to the principal or employer where it is knowledge of facts which are relevant to the operation of the doctrine of election.201 It seems reasonable that a similar rule should apply to knowledge of rights. If A appoints someone to advise him on his rights and that person knows, or if he were doing his duty he should know, that A had a particular right against B then for the purposes of election it might seem that A should be taken to have imputed to him the knowledge of that right. Yet the leading decision on the subject of knowledge of rights suggests a contrary answer. In Peyman v Lanjani,202 the Court of Appeal had to consider whether knowledge by a solicitor of a party that his client had a right to rescind a contract of sale of property for an irremovable defect of title could be imputed to the client for the purposes of an election. It was held that there was no imputation of the knowledge.203 It is not apparent why a different rule applies to knowledge of facts

197 It is probably the case that every landlord is assumed to know of the existence of a forfeiture clause in a lease which contains such a clause: see the last paragraph and see para 8.91 and below (n 220). There may, however, be cases in which the question of whether a particular activity by a tenant constitutes a breach of a covenant is disputable (an example might be the exact interpretation of a user clause) and it would not necessarily be fair to attribute constructive knowledge of the answer to questions such as this to a landlord in all instances. 198 Insurance Corporation of the Channel Islands Ltd v Royal Hotel Ltd (No 2) [1998] Lloyd’s Rep IR 151, 161 (Mance J); Allcard v Skinner (1887) 36 Ch D 145. 199 eg, on the facts of Stevens & Cutting Ltd v Anderson [1990] 1 EGLR 95 (see above n 193)) many might think that it could reasonably have been held that a solicitor who advised clients on the Landlord and Tenant Act 1954 should have had detailed knowledge of the timetable provisions under that Act and should have applied this knowledge to the facts and the date of a notice received by his client. 200 Insurance Corporation of the Channel Islands Ltd v Royal Hotel Ltd (No 2) [1998] Lloyd’s Rep LR 151, 161 (Mance J). 201 See para 8.72 et seq. 202 [1985] Ch 457. 203 ibid, 491–92 (Stephenson LJ). Stephenson LJ reached his decision in cautious terms, saying that there was no presumption that the solicitor had imputed knowledge of the defect in title to his client and referring to the character and relationship of the parties involved. It may be that there is no absolute rule against an imputation of knowledge for present purposes. There was no examination by the Court of why the rule as to imputed knowledge should be different for knowledge of facts and for knowledge of the existence of rights. At 457G

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Common Law Election  8.85 and knowledge of the existence of rights. This particular situation is a further instance of a problem which often arises in the law. A person such as a solicitor may have been under a duty to ascertain rights available to his client and to inform his client of those rights. If he fails to do so then the question arises of who should suffer for his failure, that is either his client if knowledge of the rights is imputed to that client or, if there is no such imputation of knowledge, the person against whom rights are enforceable and who may be prevented from relying on what would otherwise be the operation of the doctrine of election. Justice generally requires that it is the person appointing an agent or employee in these circumstances who should initially suffer, both because it is his agent or employee who is in the wrong and because that person is likely to have some redress in damages against a failure by a person such as a solicitor to carry out properly his contractual duties. 8.84  A distinction must be made between on the one hand the imputation of knowledge (knowledge of a matter imputed to B even though B had no actual knowledge of the matter) and on the other, an inference that B has actual knowledge of a matter, including B’s legal rights, because B has consulted a legal or other adviser who is likely to have made B aware of the matter. In the latter case it can be inferred that advice as to the matter was given to B such as would constitute actual knowledge of the matter by B.204

(vii)  Knowledge of Rights: The Burden of Proof 8.85  Given that a person who acts in such a way as to elect between inconsistent rights cannot be held to his election as a matter of law unless at the time of his acts he had knowledge of his rights, it should on general principles be incumbent on the person who relies on the operation of the doctrine of election to prove that there was the requisite knowledge of the two or more inconsistent rights on the part of the person against whom the election is asserted. The general rule in civil proceedings is that the burden of proof on any issue of fact lies on the party who asserts the affirmative of that issue.205 The burden of proof of showing that the person alleged to be bound by an election had knowledge of the facts which gave rise to his inconsistent rights is on the person relying on the election.206 The same rule should apply to knowledge of the existence of rights. In many cases of an alleged election the right in question is a right to terminate a contract by reason of a breach of contract. What the person alleging the election then has to show is twofold. It must be shown that, given knowledge of the facts, the person said to have made the election knew that as a matter of law the facts constituted a breach of contract, and it must further be shown that that Stephenson LJ said that a party can rely on his own ignorance of the law unless he is precluded from doing so by what he has done ‘or by his solicitor’s knowledge of the law’, a statement which appears to leave open the possibility of imputed knowledge in some circumstances. As against this rule against imputed knowledge, it was said in Involnert Management Inc v Aprilgrange Ltd [2015] EWHC 2225 (Comm), [2015] 2 Lloyd’s Rep 289, para 161 (Leggatt J), that there was a presumption that a party who had a legal adviser at the relevant time received appropriate advice. 204 Moore Large & Co v Hermes Credit Guarantee Plc [2003] 1 Lloyd’s Rep IR 315, 335–36 (Colman J). Of course in this case B can give evidence that he did not receive advice as to the matter and if this evidence is accepted the inference will be rebutted. 205 ‘In general the rule which applies is “Ei qui affirmat non ei qui negat incumbit probation”. It is an ancient rule founded on considerations of good sense and should not be departed from without strong reasons’: Constantine Line v Imperial Smelting Corporation [1942] AC 154, 157 (Lord Maugham). 206 Matthews v Smallwood [1910] 1 Ch 777, 787; Peyman v Lanjani [1985] Ch 457, 501. See para 8.76.

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8.86  Election person knew that as a matter of law as a result of the breach he was entitled to terminate the contract.207 8.86  The leading authority on the subject of knowledge of rights confirms that the law is as just stated.208 In such cases, the proof of the necessary knowledge may appear from written or oral statements made by the person with the rights but in many cases the conclusion on knowledge of rights may be an inference from the circumstances as is often the case where the mental state at a particular time of a party to litigation is in issue as a matter of fact. It is, of course, open to the person against whom the election is alleged to give evidence that at the relevant time that person had no knowledge of the inconsistent rights.209 In all cases, whether the presence or absence of the requisite knowledge is to be derived as a conclusion from oral evidence or as an inference from the circumstances, the burden is on the person alleging the election to demonstrate on the balance of probability that the requisite knowledge existed on the part of the person with the inconsistent rights at the time of the actions by that person which are said to constitute his election between those rights and its communication.210

6.  The Fourth Element: Communication of the Decision (i)  The Rule of Law 8.87  In his classic definition of the nature of a common law election Lord Blackburn said that a decision to elect between two remedies was not enough to bring about an election. In addition there had to be a communication of the decision to the person against whom the remedies or rights were exercisable in such a way as to lead that person to believe that the election had been made.211 This element of the doctrine of election is readily understandable, since the rationale of the doctrine is that someone who is informed that a right is to be enforced against him should not subsequently find that a different and inconsistent right is sought to be enforced against him.

(ii)  Clear and Unequivocal Evidence: The Principle 8.88  There are forms of estoppel in which it is emphasised that the promise or statement which brings about the estoppel has to be clear and unequivocal, or precise and unambiguous, the best examples being promissory estoppel212 or estoppel by representation.213 207 See paras 8.65 and 8.81 for a comment on this quality of knowledge. 208 Peyman v Lanjani [1985] Ch 457, 501. 209 ibid. 210 It has been said that a party alleging an election should expressly allege the necessary knowledge of the other party in its pleading and further particulars of the allegation should if necessary be sought and given under Part 18 of the CPR. In many cases, the best particulars which can be given of knowledge of rights will be of the facts from which the inference of the necessary knowledge can be drawn. See Peyman v Lanjani [1985] Ch 457, 501 (Slade LJ). 211 Scarf v Jardine (1882) 7 App Cas 345, 361: see para 8.14 for the full citation. 212 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741, 755 (Viscount Hailsham LC). 213 Low v Bouverie [1891] 3 Ch 82. The requirement is considerably relaxed for proprietary estoppel where it is sufficient that the assurance which initiates that form of estoppel is ‘clear enough’: see Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776.

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Common Law Election  8.90 The  same requirement applies to the communication of a decision to assert one of two or more inconsistent rights or causes of action.214 For example, under most charterparty agreements the shipowner has the right to withdraw the ship if an instalment of hire is not punctually paid. If the shipowner accepts late payment of an instalment he is likely to be held to have chosen that the agreement shall continue and so to have disentitled himself from withdrawing the ship. It has been said that in these circumstances what is needed to establish an election to allow the agreement to continue is ‘evidence, clear and unequivocal, that such acceptance [of a late payment of hire] has taken place’.215 8.89  The stark requirement that the communication of the decision must be clear and unequivocal requires some explanation and qualification. That which has to be communicated is the decision to assert one particular right. If the communication is by a simple statement, for instance a letter or message stating that the right is being asserted or is to be asserted, then that statement has to be clear and unequivocal in its meaning. Thus, a request for further information from the party in breach of contract designed to elicit the circumstances of the breach will not be a communication of a decision to allow the contract to continue. Such a request will be most intelligible on the assumption that the innocent party is seeking further information before deciding which of his inconsistent rights to exercise. In the same way an innocent party faced with a repudiatory breach of contract may call upon the wrongdoer to desist from his wrong or reconsider his position and in these circumstances there will not necessarily be an election to affirm the contract despite the breach.216 8.90  Frequently the communication of the decision in a contractual case is constituted not by a statement but by some action on the part of the owner of a right which is explicable only on the basis that that person has decided to allow the contract to continue despite the breach. The demand for or acceptance of hire charges under a charterparty after a default in payment or the acceptance of a late tender of an instalment of hire is an act which is explicable only on the basis that the shipowner has decided not to withdraw the ship; an acceptance of rent under a lease after a breach of covenant by the tenant is explicable only on the basis that the landlord has decided not to terminate the lease by forfeiture. In such cases the requirement of clarity and of an absence of equivocation has two aspects. First, the actions themselves, such as an acceptance of hire instalments or of rent, must be clear and unequivocal. Secondly, the actions must clearly and unequivocally lead a reasonable person in the position of the person against whom the rights are exercisable to conclude that a decision has been taken to assert a particular right. It is at this point that the second element 214 In Involnert Management Inc v Aprilgrange Ltd [2015] EWHC 2225 (Comm), [2015] 2 Lloyd’s Rep 289, para 161, the requirement was stated as being that the decision to exercise or not to exercise the right in question must have been communicated unequivocally to the party against whom the right was exercisable. In Tele2 International Card Co SA v Post Office Ltd [2009] EWCA Civ 9, para 53, Aikens LJ said as one of his propositions describing the law of election that where it is alleged that a party has elected not to exercise a right there will only be an election if that party ‘has so communicated [its] election to the other party in clear and unequivocal terms’. See Official Custodian for Charities v Parway Estates Developments Ltd [1985] Ch 151, 159, for a decision in which the wording of a ‘somewhat muddled’ letter was held not to bring about an election. 215 Mardorf Peach and Co Ltd v Attica Sea Carriers Corporation of Liberia [1977] AC 850, 891 (Lord Wilberforce); China National Foreign Trade Transportation Corporation v Evlogia Shipping Co SA of Panama [1979] 1 WLR 1018, 1024 (Lord Diplock). 216 Yukong Line Ltd of Korea v Rendsburg Investments Corporation of Liberia [1996] 2 Lloyd’s Rep 604, 608 (­Moore-Bick LJ): ‘The law does not require an injured party to snatch at a repudiation’.

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8.91  Election of common law election, a decision to assert a particular right, and the fourth element, the communication of that decision by some means, interrelate. It has been explained that the decision to select a particular right from two or more inconsistent rights available must be judged objectively in the sense that a reasonable person would conclude that a decision had been made to select that right.217 An action, such as demanding further hire charges under a charterparty agreement after a failure to make punctual payment, both demonstrates that a decision has been taken to allow the agreement to continue and itself constitutes the communication of that decision.

(iii)  Clear and Unequivocal Evidence: Illustrations of the Principle 8.91  The rule that the communication of the election has to be clear and unequivocal should therefore not obscure the fact that in many instances the choice of one right over another will be an inference from the actions of the person entitled to the rights.218 The actions of the owner of the rights will not usually admit of any doubt and the question is more likely to be one of whether the inference of a decision to assert one right is unequivocally to be drawn from the nature and circumstances of the actions.219 Obvious examples already mentioned of an inferred decision not to bring a contract to an end but to treat it as continuing are acceptance of hire instalments under a charterparty agreement after a failure of payment in good time and acceptance of rent due under a lease after a breach of covenant by a tenant. It may be that cases where there is an acceptance of rent under a lease fall into a special category as far as election is concerned since the legal effect of such an acceptance is so clear and so established that, whatever the exact circumstances, it is probably not open to a landlord to contend that there has been no election against the enforcement of a forfeiture provision.220 It is doubtful whether a similar rigid rule applies to the acceptance of sums of money after a repudiatory breach in contract generally.221 Within the law of landlord and

217 See para 8.56; and see, eg, Involnert Management Ltd v Aprilgrange Ltd [2015] EWHC 2225 (Comm), [2015] 2 Lloyd’s Rep 289, para 161. 218 As it was put by Aikens LJ in Tele2 International Card Co SA v Post Office Ltd [2009] EWCA Civ 9, para 153: ‘An election can be communicated to the other party by words or conduct’. See also Vitol SA v Norelf Ltd [1996] AC 800. 219 In much the same way, the clear and unequivocal promise not to enforce or not fully to enforce a right, which is an essential element of a promissory estoppel, is sometimes inferred from the conduct of the person alleged to be estopped: see ch 6, para 6.107. A similar inference can be made of the plain and unambiguous statement of some existing matter needed to found an estoppel by representation: see ch 3, para 3.38. 220 Expert Clothing Service & Sales Ltd v Hillgate House Ltd [1986] Ch 340, 360 (Slade LJ). The rule that an acceptance of rent after notice of a breach of covenant is an affirmation of the lease and prevents a subsequent forfeiture for this breach goes back four centuries: see Pennant’s Case (1596) 3 Co Rep 64a. It appears therefore that as regards forfeiture of leases two special and inflexible rules of law apply which are (a) that a landlord is taken always to know that the lease contains a forfeiture clause and to know of his right to terminate the lease for a breach of covenant by the tenant (see para 8.86); and (b) that an acceptance of rent due in respect of a period after the right to forfeit has accrued with knowledge by the landlord of the facts which create that right is necessarily an election not to exercise the right of forfeiture by reason of that breach. It is less certain that a demand for an instalment of rent in the above circumstances is necessarily an election against forfeiture although it might be thought that an active demand for a payment of money was, if anything, a clearer indication of a decision that the lease should continue than a passive acceptance of that payment: see Greenwood Reversions Ltd v World Environment Foundation Ltd [2009] L & TR 2; and see Parbulk II A/S v Heritage Maritime Ltd SA [2011] EWHC 2917 (Comm), para 21. 221 In Parbulk II A/S v Heritage Maritime Ltd SA [2011] EWHC 2917 (Comm), para 21, Eder J was willing to assume that the rule would apply under a charterparty.

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Common Law Election  8.92 tenant, the rule arose at a time when the power of courts to grant relief against forfeiture of a lease was more limited than it now is and courts may have been ready to find a means of migrating the harshness of the operation of a forfeiture. The rigid rule has not been applied to the demand for or receipt of sums other than rent due under a lease such as insurance payments by a tenant.222 An offer made as to the variation of a contract after a breach may amount to an affirmation of the contract and so preclude its termination such as a without prejudice offer made by a landlord to purchase the tenant’s interest.223 The selection of one form of remedy claimed in legal proceedings will not generally constitute an election especially if remedies are sought in the alternative.224 It seems likely that where a right is claimed in legal proceedings on two alternative and inconsistent bases of fact or law, the successful establishment of the right on one basis may preclude the late assertion of the same or a similar right on the alternative basis.225 Even if a decree of specific performance of a contract of sale is obtained, the party who has obtained the order may, if the order is not complied with, apply to the court to dissolve the order, put an end to the contract, and award damages to him.226 8.92  In all cases (perhaps other than an acceptance of rent under a lease where a special and rigid rule probably applies as just indicated) it is necessary to look at all the circumstances as they exist when the acts alleged to constitute the communication of an election occur and to determine whether those acts could only be reasonably regarded as having been done consistently with the continuation rather than the determination of a contract.227 For instance, in one case the submission by a solicitor to a tenant of a variation agreement for execution by the tenant was held not to be an election not to exercise a right of forfeiture in the light of the fact that a notice under section 146 of the Law of Property Act 1925 requiring possession by reason of a breach of covenant had already been sent to the tenant.228 The exercise of a right to examine documents pursuant to a provision in a contract may be an election to affirm the contract since it is inconsistent with the termination of the contract.229 On the other hand, the exercise by an insurer under an insurance policy of a power to conduct the defence to a claim against the insured person constitutes

222 Greenwood Reversions Ltd v World Environment Foundation Ltd [2009] L & TR 2 (Neuberger J). 223 Bader Properties v Linley Property Investments Ltd (1967) 19 P & CR 620, 641. See also below (n 228). 224 See para 8.51 as regards the seeking of forfeiture of a lease and an injunction in the alternative. For example, specific performance of a contract of sale and damages are often pleaded as alternative forms of remedy. In such a case, damages will become the important remedy if the court in its discretion declines to make an order for specific performance. 225 This situation may be an instance of what has been described earlier as a possible extension in litigation of the doctrine of common law election: see para 8.27 et seq. 226 Johnson v Agnew [1980] AC 367. This decision has been prayed in aid in support of a possible wider rule that a party who elects to affirm a contract after a repudiatory breach may treat a later refusal by the party in breach to take steps to remedy the breach as a reason for revoking the election and for treating the contract as terminated by the breach: see Safehaven Investments Inc v Springbok Ltd (1995) 71 P & CR 59; and see para 8.21. 227 Expert Clothing Service & Sales Ltd v Hillgate House Ltd [1986] Ch 340, 360. 228 Expert Clothing Service & Sales Ltd v Hillgate House Ltd [1986] Ch 340. cf Bader Properties v Linley Property Investments Ltd (1967) 19 P & CR 620 (see above (n 223)). These decisions show how sensitive to individual facts is the conclusion on whether there has been a clear and unequivocal communication of an election. 229 Involnert Management Ltd v Aprilgrange Ltd [2015] EWHC (Comm) 2225, [2015] 2 Lloyd’s Rep 289, paras 171–78.

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8.93  Election an election not to treat the insurance policy as void for non-disclosure.230 A particular action, if its reasons are not explained, may have more than one purpose and for that reason may not be inferred to be an unequivocal decision to pursue a specific right. On this basis, action such as changing the locks of a property may be equivocal and so not necessarily the communication of a decision to end a lease since the purpose could be to secure the property against trespassers.231

(iv)  Election to Terminate a Contract 8.93  Election often operates where an innocent party faced with a breach of contract does some act, such as accepting further money due under the contract, which is explicable only on the footing that he has decided that the contract is to continue notwithstanding his right to terminate it by reason of the breach. Election can of course in principle operate in the opposite way. The innocent party may act in such a way as shows that he has elected to terminate the contract. Once that has occurred the innocent party cannot change his stance and decide that the contract shall remain in force. He is not entitled to future payments which would become due under the contract if it had continued. A consistent line of authority suggests that once an election to determine a contract has been made and communicated no rights under the contract falling due after the determination can be enforced.232 Equally any receipt of money, which would otherwise be due under the contract, cannot then amount to an election to allow the contract to continue since a decision has already been made to end the contract and that decision has been communicated to the other party. In principle an election to accept a repudiation and terminate a contract may be communicated to the party in breach by any means.233 An obvious election to end a contract would be a statement or notice to that effect. Where land is concerned a physical re-entry onto the land by the owner manifests a decision to end the lease or other contract.234 An action for possession by the owner, or in former days the bringing of an action for ejectment, may be an election to determine a lease.235 However, if the legal proceedings claim possession on the ground of forfeiture for breach of covenant and there is a claim for an injunction to restrain the continuation of the breach pleaded in the alternative the issue of the proceedings will not be so unequivocal an act as to be an election in favour of forfeiture. The claimant could still abandon his claim for possession and seek the injunction.236 230 Kosmar Villa Holidays Plc v Trustees of Syndicate 1243 [2008] EWCA Civ 147, [2008] 2 All ER (Comm) 14. 231 Relvok Properties v Dixon (1973) 25 P & CR 1. 232 Birch v Wright (1786) 1 TR 378. There is some doubt as to the exact status and position of a tenant in the period between the service of proceedings seeking possession and judgment in those proceedings, especially when the tenant claims relief against forfeiture (see Driscoll v Church Commissioners for England [1957] 1 QB 330) but this should not detract from the general effect of the principle stated in this paragraph. 233 Vitol SA v Norelf Ltd [1996] AC 800. 234 R v Paulson [1921] 1 AC 271; Croft v Lumley (1858) 6 HL Cas 672. The making of a physical re-entry is today constrained by statutory restrictions under s 6 of the Criminal Law Act 1977 and s 2 of the Protection from ­Eviction Act 1977. 235 Jones v Carter (1846) 15 M & W 718; Grimwood v Moss (1872) LR 7 CP 360; Moore v Ullcoats Mining Co Ltd [1908] 1 Ch 575; Canal Property Co Ltd v KL Television Services Ltd [1970] 2 QB 433; Billson v Residential ­Apartments Ltd [1992] 1 AC 494, 534 (Lord Templeman). 236 Calabar Properties Ltd v Seagull Autos Ltd [1969] 1 Ch 451; Wheeler v Keeble (1914) Ltd [1920] 1 Ch 57. cf Moore v Ullcoats Mining Co Ltd [1908] 1 Ch 575.

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Common Law Election  8.95

(v)  Silence or Inactivity 8.94  A question sometimes raised is whether a communication of a decision to elect between rights can be inferred from silence or inactivity or delay. On the face of it, it seems unlikely that a party can be said to have provided a clear and unequivocal communication of a decision if that person is entirely silent and inactive on the matter. A landlord does not lose his right to forfeit a lease for an unlawful use carried on at the premises merely because he stands by for years taking no action although he has knowledge of the use.237 Nonetheless, there may be exceptional circumstances in which inactivity could constitute communication of a decision. It has been said that under a charterparty agreement where an instalment of hire is not paid on time but is tendered late, the owners may lose their right to withdraw the ship for late payment if they do not give notice within a reasonable time that they have rejected the late tender.238 It has also been said that insurers when presented with a claim for an indemnity which they knew they could reject because of non-compliance by the insured with a condition of the policy, may be taken to have elected to accept the claim if they delay for so long in rejecting the claim that the delay constitutes evidence that they have decided to accept liability.239 In one case it was observed that in certain circumstances the effluxion of time can constitute communication of the election.240 A general statement of principle on this subject explains that an innocent party has to make a decision because if it does not do so then the time may come when the decision is taken out of its hands, either by holding it to have elected not to exercise the right which has become available to it, or sometimes by holding it to have elected to exercise it.241 8.95  A similar question on the effect of silence may arise in relation to forms of estoppel, and it is a not infrequent occurrence in connection with proprietary estoppel that an implied assurance relating to an interest in or rights over property may be given to a claimant sufficient to found an estoppel ‘in standing by cases, tacitly’.242 For the purposes of estoppel by representation, an implied representation of an existing matter may be derived from silence or inactivity where there is a duty to speak out and perhaps on other occasions.243 There is therefore no absolute rule that silence or inactivity, particularly a failure to respond to some matter, cannot constitute the communication of an election. The overall rule appears to be that a party with knowledge of inconsistent rights, such as a right to terminate a contract for a repudiatory breach or to affirm the contract, is entitled to take time to consider its position

237 Doe d Sheppard v Allen (1810) 3 Taunt 78 (Lord Mansfield). Of course in this situation rent will usually be paid and accepted and that will constitute an election not to forfeit the lease for breaches committed prior to any acceptance of rent. It has been said in relation to estoppel by representation that silence is of itself and of its nature normally equivocal and colourless: Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890 (Lord Wilberforce). 238 Mardorf Peach & Co Ltd v Attica Sea Carriers Corporation of Liberia [1977] AC 850, 872. This particular application of the doctrine of election may be influenced by the obvious practical inconvenience if the charterers of a ship are not speedily made aware of whether or not the ship is withdrawn. 239 Allen v Robles [1969] 1 WLR 1193, 1196. 240 Kosmar Villa Holidays Plc v Trustees of Syndicate 1243 [2008] EWCA Civ 147, [2002] 2 All ER (Comm) 14, para 38 (Rix LJ). 241 Tele2 International Card Co SA v Post Office Ltd [2009] EWCA Civ 9, para 153 (Aikens LJ). 242 Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, para 61 (Lord Walker). A similar question is discussed in connection with promissory estoppel in ch 6, para 6.125. 243 See ch 3, para 3.50 et seq.

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8.96  Election and its course of conduct. Mere delay and passivity will not normally constitute an election to affirm the contract. There are two reservations to this general rule. First, a lapse of time without rescinding the contract may be evidence of an election to affirm the contract.244 Secondly, if during the period of the deliberation an innocent third party has acquired an interest in the property involved, or if in consequence of the delay the conduct of the party in breach is affected, a party may be taken to have affirmed the contract.245 In this second case an election is in effect imposed on a party where that party’s delay in taking a decision has adversely affected some other person. 8.96  Where a party to a contract or other transaction has an agreed specified period in which to choose between inconsistent rights it is difficult to see how an election could arise from mere silence on the matter by that party during that period. Thus, a purchaser under a contract for sale of land might be given the right to determine the contract by notice if planning permission for a specified development was not granted by 1 January with the notice having to be served within two months of 1 January. Of course, the purchaser might during the two months serve a notice, or might clearly state its intention to do so, and either action would constitute an irrevocable election to terminate the contract. Also the purchaser might state clearly to the vendor during the two-month period that it did not intend to terminate the contract pursuant to its right, and this might give rise to a binding election. But simply by doing nothing and saying nothing during the two months the purchaser would not have made, or certainly would not have communicated, a decision on which of his inconsistent rights he was selecting so that no election takes place.

(vi)  Reservation of Rights 8.97  There are two ways in which a party to a contract may attempt to prevent the operation of the doctrine of election which would otherwise flow from decisions and communications. A provision may be included in a contract which seeks to preclude the operation of the doctrine in respect of rights which may arise under the contract. This possibility is discussed separately later.246 The other possibility is that any statements or other actions which might bring about a communication of a decision and therefore a binding election are qualified in a way which attempts to indicate that despite what is said or done no election between rights is being made. Thus, if there has been a breach of a covenant in a lease or a repudiatory breach of a provision in a contract the innocent party may accept rent or other sums due but state that in doing so it acts without prejudice to its right to forfeit the lease or accept the repudiation. Of course, other forms of words with a similar import of attempting to reserve rights may be used such as that the acceptance of a sum of money is conditional. 8.98  It might seem on an initial consideration that an attempt to avoid an election or the consequences of an election in the manner last described might succeed. The underly-

244 Clough v London and North Western Rly Co (1871) LR 7 Exch 26, 35 (Mellor J, delivering the judgment of the Court of Exchequer Chamber). 245 ibid. 246 See para 8.96 et seq.

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Common Law Election  8.99 ing theme of common law election is that if a person has two inconsistent rights and he acts in such a way as to indicate unequivocally his decision to assert the first and not the second of the rights, he is prevented from subsequently asserting the second right. Yet if in ­asserting the first right the owner of the rights expressly reserves a future capacity to change his mind and assert the second right, it may be difficult to conclude that he has decided unequivocally and finally to assert the first right in preference to the second right. Despite this argument the law has been established to be to the opposite effect. An acceptance of rent without prejudice to breaches of covenant which have occurred still operates as an election not to forfeit the lease for the breaches and so to prevent a subsequent forfeiture in reliance on the breaches. The reason is said to be that when money is shown as a fact to have been received as rent, the consequences in terms of the loss of the right to forfeit the lease are something imposed by the law and the parties cannot alter those legal ­consequences.247 Even an express statement such as ‘We do not intend to waive’ is insufficient to prevent an election.248 In accordance with this principle it has been said that a receipt of rent after a breach of covenant known to the landlord operates as an election even if the rent is accepted conditionally and without prejudice to the right to insist on a forfeiture, the reason being that the protest or the qualifying words cannot countervail the fact of the receipt of rent.249 8.99  The acceptance of rent under a lease is sometimes said to be in a special category when it comes to election because of the established legal consequences of such an action.250 There is nothing in the reasoning within the decisions on leases which confines the rule of law as stated in the last paragraph to the effect of a receipt of rent on forfeiture clauses in leases. The same rule should in principle apply to any contract where a party has an election to treat the contract as at an end due to some event such as a breach of the contract, and then acts in a way which would normally amount to an election to affirm the contract but purports to temper its actions by stating that its actions are without prejudice to its other rights. A shipowner under a charterparty generally has a right to withdraw the ship if hire charges are not paid on time. The owner loses his right of withdrawal if he waits too long before exercising his right to decide whether or not to withdraw the ship, and one basis for the loss of the right is that the delay amounts to an election not to withdraw the ship pursuant to the right of the owner to do so.251 It has been said in the Court of Appeal that the shipowner cannot avoid the consequences of an election occasioned by his delay by stating that his delay is without prejudice to his rights.252 The rule of law as to the ineffectiveness of an express reservation of rights within the doctrine of election is therefore a rule which applies to election generally. 247 Windmill Investments (London) Ltd v Milano Restaurants Ltd [1962] 2 QB 373, 376 (Megaw J), applying Croft v Lumley (1858) 6 HL Cas 672, 746 and Matthews v Smallwood [1910] 1 Ch 777, 786. 248 Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048, 1053 (Lord Denning MR), 1054 (­Buckley LJ); Expert Clothing Service & Sales Ltd v Hillgate House Ltd [1986] Ch 340, 359 (Slade LJ). 249 Davenport v R (1877) 3 App Cas 115; R v Paulson [1921] 1 AC 271. 250 See para 8.91 and below (n 220). 251 A different possible basis for the loss of the right of withdrawal is an implied term that the option to withdraw the ship must be exercised within a reasonable time, an implication which applies generally to options where no express time limit for their exercise is stated. 252 Antaios Naviera SA v Salen Rederierna AB [1983] 1 WLR 1362, 1370 (Lord Donaldson MR), 137 (Fox LJ).

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8.100  Election

7.  No Requirement of Reliance or Detriment 8.100  In most forms of estoppel the party who relies on the estoppel has to establish that it would be unjust or inequitable to allow the party who has made a statement of fact253 or a promise254 or assurance255 or has participated in an assumption256 to resile from what has been stated. The rule is often stated as being that it would be unconscionable to allow the maker of a statement to depart from what has been stated. It is usually a prerequisite of showing such injustice or unconscionability that the party relying on the estoppel demonstrates that it has acted in some way in reliance on what had been stated and that it would suffer detriment or prejudice if an estoppel was not enforced. This requirement for the operation of estoppels is not wholly uniform. It does not apply to estoppel by deed which is one of the earliest forms of common law estoppel.257 Estoppels where the requirement applies can aptly be called ‘reliance-based’ estoppels. As regards common law election, which as a doctrine is as old as estoppel, the rule is that the party relying on an election does not have to establish that it acted in reliance on the decision communicated to it that one of two or more inconsistent rights was being asserted against it.258 Once it is shown that a party with inconsistent rights has, with all relevant knowledge, decided and has communicated a decision to assert one of the rights, that party becomes automatically disentitled from asserting the inconsistent right or rights. No more has to be proved by the party who relies on the election and no element of what is unconscionable and no element of discretion are involved. This is one of the matters which distinguishes common law election from most forms of estoppel and certainly from promissory estoppel to which it has the greatest affinity.259

8.  The Operation of the Doctrine 8.101  The operation of the doctrine of common law election can be illustrated by a hypothetical example. The owner of land grants to a licensee a licence to use the land in return for a licence fee payable in advance at quarterly intervals on the usual quarter days with a provision that the owner may terminate the licence by a notice having immediate effect in the event of certain breaches of the terms of the licence by the licensee.260 The licensee

253 For estoppel by representation, see ch 3, part (E). It is probable that today an estoppel by representation can be founded on a statement of law as well as on a statement of fact or of mixed law and fact: see ch 3, para 3.18 et seq. 254 For promissory estoppel, see ch 6, part (G). 255 For proprietary estoppel, see ch 7, part (G). 256 For estoppel by convention, see ch 5, part (F). 257 See ch 4, para 4.45 et seq. 258 Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) [1990] 1 Lloyd’s Rep 391, 399 (Lord Goff); Peyman v Lanjani [1985] Ch 457, 500 (Slade LJ); BDW Trading Ltd v JM Rowe (Investments) Ltd [2011] EWCA Civ 548. 259 A more detailed examination of the differences between common law election and promissory estoppel is made in para 8.121 et seq. 260 The same general reasoning would apply if a lease with the same terms had been used in the example rather than a contractual licence. A licence has been used in order to avoid any complications which might arise in connection with relief against forfeiture and the need in some instances for the service by the landlord of a notice under s 146 of the Law of Property Act 1925.

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Common Law Election  8.102 pays only a part of the licence fee due in September 2016. In November 2016, the licensee carries out unauthorised alterations to the land such as to bring into effect the right of the owner to terminate the licence but the owner is not immediately aware of this breach. The December 2016 instalment of the licence fee is demanded and paid on time and is accepted. In February 2017, the owner finds out about the breach and tells his administrative staff not to demand or accept any further fees. By an error in March 2017 there is an acceptance of (a) the part of the September 2016 fee which was previously unpaid, and (b) the whole of the fee due in March 2017. However, the clerk responsible for the error marks the receipt for the fee ‘accepted without prejudice’. In April 2017, the owner gives notice terminating the licence because of the unauthorised alterations. The licensee contends that the various payments and acceptances of payments of the licence fee constitute an election which prevented the owner from exercising his right of termination by reason of the unlawful alterations. 8.102  The right to terminate the licence and the right to continue to receive instalments of licence fee are plainly mutually inconsistent rights. A decision to assert one right, the payment and receipt of the fees, is therefore capable of amounting to an election not to assert the other right which is that of terminating the licence. The exact operation of the doctrine of election can be illustrated by the effect of the various successive acceptances of licence fee in the above example. (i) The acceptance of a part of the September 2016 fee at that time did not create an election since at that date the inconsistent right, the right to terminate the licence for breach, had not then arisen. (ii) The payment and acceptance of the December 2016 fee also did not create an election as regards the unlawful alterations because, although the right to terminate the licence had arisen by reason of the alterations carried out in November 2016, the owner of the land was unaware in December 2016 of the breach of contract and so was unaware of the facts which gave him the right to terminate the licence for that breach.261 (iii) The situation had changed by the time of the receipt of the instalment of the fee in March 2017. The owner had by that date become aware of his right to terminate the licence so that a receipt of the fee is then consistent only with his decision that notwithstanding the breach of contract the licence is to continue. However, a distinction must be drawn between the two components of fees accepted in March 2017. The receipt of the first component, that part of the fee due in September 2016 but not up until then paid, would not bring about an election. The reason is that the instalment of the licence fee due in September 2016 remains wholly due and payable whether or not there is a termination of the licence so that its receipt is not inconsistent with the termination of the licence.262 It is otherwise with the second component of the fee. The receipt and 261 It is arguable that by accepting the fee in December the owner elected not to terminate the agreement by reason of the then unpaid part of the September fee, but that is not the ground of determination relied on in the example. 262 Green’s Case (1582) Cro Eliz 3. In Re A Debtor No. 13-A10 of 1995 [1995] 1 WLR 1127, 1131, Rattee J said that a demand for or receipt of rent accrued due before the relevant breach was not an election to affirm the lease. In Osibanjo v Seahive Investments Ltd [2009] 1 EGLR 32, para 31, Rix LJ was inclined to the view that acceptance of rent after knowledge by the landlord of the breach of covenant was an election even though the rent so accepted had accrued due prior to the knowledge.

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8.103  Election acceptance of this sum is consistent only with the continuation of the licence since if the licence is terminated that sum would not be payable. The fact that an administrative error was made and so brought about the receipt of this component would not protect the owner of the land from the consequences of what was done.263 The attempt to prevent the acceptance of the fee from having any adverse consequences on the owner by marking the receipt with the words without prejudice or some similar language would also not be successful.264 The end result of the example is that the purported termination of the licence by notice fails by reason of the operation of common law election. The example here given concerns a licence but similar considerations would in general apply to a lease or any other similar arrangement for payment of instalments of money whether concerning land or not. Of course, in any specific case there may be other relevant provisions in the contract and in the case of leases there will often have to be the service of a notice under section 146 of the Law of Property Act 1925. 8.103  Limitations on the effect of an election have been touched on earlier. The loss of a particular right following a breach of obligation, often the loss of a right to terminate a contract, does not mean that the same right is lost as regards subsequent and different breaches.265 A breach may be a continuing breach, such as a breach of a covenant to use or not use land in a specified way, and the continuation of the breach after the communication of an election not to terminate the contract will give rise to further rights of termination.266 A loss of a right to terminate a contract for breach does not prevent the recovery of damages for the breach.267 8.104  It sometimes happens that although a contract has been validly terminated, such as by a notice in the example here considered if there had been no election, further instalments  of payments are accepted, usually by inadvertence, after the termination of the contract. Such further demands for or receipt of instalments cannot be an election since the  contract has already been ended and there are no longer any inconsistent rights. Depending on the circumstances, the continued acceptance of sums of money, particularly for the possession or use of land, may give rise to the inference that a new contract of some nature has arisen.268

9.  Contractual Provisions Affecting Election 8.105  The operation of the doctrine of election may be affected by contractual provisions. There are two categories of such provisions to examine. The first category is where a contractual provision expressly purports to prevent or limit the operation of an election between 263 See para 8.73. 264 See para 8.97. 265 See para 8.18. 266 See para 8.22. 267 An example is Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) [1990] 1 Lloyd’s Rep 391. In general a party with a right to terminate a contract for breach may recover damages for the breach whether or not it elects to exercise its right of termination. 268 See para 8.22.

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Common Law Election  8.108 the parties. The second category is where a contract is terminable following a breach in circumstances where its own provisions for termination for breach operate together with the common law rule that the innocent party may terminate a contract following a r­ epudiatory breach by the other party.

(i)  Express Provisions on Election 8.106  There is some support in authority for the rule that a person cannot prevent what would otherwise be the effect in law of an election between inconsistent rights by including in the contract a provision which seeks to exclude wholly or partially the operation of the doctrine of election. The main authority in support of this rule is a decision of the Privy Council in R v Paulson269 on an appeal from Canada in which a tenant held a lease for 20 years containing a covenant to commence coal mining operations within a year and then to continue those operations. The tenant did not commence mining operations and the period for his doing so was extended from time to time. In June 1909, the landlords accepted rent for the year ending in July 1910 but in September 1909 purported to forfeit the lease for breach of covenant. The lease stated that no waiver of any breach should have effect unless it was in writing. The probable intention of this provision was to prevent any election being inferred from circumstances as opposed to a specific statement that a right was being waived. The landlords contended that as the receipt of rent was not a written statement of an election it had no effect under the doctrine of election. After a substantial examination of the older authorities, the Privy Council rejected this contention and held that there had been an election which prevented the forfeiture. 8.107  While the above decision is clearly some authority for the rule as stated at the beginning of the last paragraph, and while the correctness of the rule has not been questioned in subsequent English writings or decisions,270 the generality of the rule is perhaps weakened by the statement of Lord Atkinson, giving his conclusion on the facts before him, that ‘It may well be that many cases may occur to which the clause as to waiver would be applicable; their Lordships think that it is not applicable in the present case under all its circumstances’.271 This statement suggests that as a matter of principle there could be cases in which there was an effective ‘contracting out’ from the operation of the doctrine of election. What on this basis is uncertain is the principle which decides which clauses purporting to prevent or limit election do or do not have full effect. 8.108  The rule as generally stated to be the law on the authority of R v Paulson272 has not been applied in Australia or New Zealand. In one Australian case, a lease contained

269 [1921] 1 AC 271. 270 Leading textbooks on the law of landlord and tenant (W Woodfall, Woodfall’s Law of Landlord and Tenant (Sweet & Maxwell) para 17.096; and Hill & Redman’s Law of Landlord and Tenant (LexisNexis) para A[4843]) cite the decision of the Court of Appeal in Expert Clothing Service & Sales Ltd v Hillgate House Ltd [1986] Ch 340 as further authority for the rule. This attribution of authority for the rule considered seems not to be correct. In fact in that decision Slade LJ referred only to the different question of whether rent could be accepted on a without prejudice basis so as to prevent an election and R v Paulson was not cited in the case. For this separate rule see para 8.97 et seq. 271 R v Paulson [1921] 1 AC 271, 286. 272 ibid.

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8.109  Election a provision that the acceptance of rent by the landlords should not prevent or impede the exercise of a power of forfeiture for breach of covenant. Windermeyer J in the High Court of Australia pointed to the cautionary words of Lord Atkinson in R v Paulson as cited in the last paragraph and held that the effect of the provision mentioned was that the landlords were not prevented from asserting a forfeiture by reason of the acceptance of rent. His decision on this point was upheld by the Full Court.273 The same conclusion was reached in New Zealand in respect of a lease in which it was provided that any acceptance or demand for rent after notice of any breach of covenant ‘shall in no way be deemed to be waiver of any rights accruing to the lessor by virtue of such breach’. Reliance was placed on the previous Australian decision.274 8.109  The law on the present subject is therefore less than certain. The purpose of the doctrine of election is to protect the parties to a contract or other transaction from having inconsistent rights asserted against them. There seems no obvious reason in principle why the parties should not agree that the protection normally given by the doctrine of election should be removed from their transaction if that is what they wish, either generally or in respect of such matters as the receipt of rent under a lease. The ability of parties to contract in this way is an aspect of the principle of freedom of contract in that parties may agree what they wish unless to do so would contravene a statutory provision or would be contrary to public policy. The situation is different from that of an attempt to avoid the effect of what would otherwise be an election, by qualifying the receipt of a sum of money due with some expression such as ‘without prejudice’ where such an attempt is established as being without effect275 since in the latter type of case the purported ouster of election is a unilateral rather than an agreed action. The decision in R v Paulson is itself substantially qualified and has not been followed in other jurisdictions. As against this, there are practical benefits from the untrammelled effect of the doctrine of election, such as tenants not being left in suspense over whether they may lose their lease or charterers of ships not knowing the legal status of the ship or what can be done with it. In view of these conflicting considerations, this aspect of the law of election might repay reconsideration by the higher courts.

(ii)  Determination of Contracts for Breach by Notice and at Common Law 8.110  Commercial contracts not infrequently contain provisions which entitle one or both parties to terminate the contract in the event of specified breaches of contract by the other party.276 Such a contractual right of termination may exist alongside the common law right of a party to a contract to elect to treat the contract as at an end in the event of a repudiatory breach by the other party. Contractual rights of termination generally have a number of differences from the common law right and the exercise of a contractual right may have benefits from the point of view of the person wishing to end the contract by reason of a

273 Ovendale Pty v Anthony (1966) 117 CLR 539. 274 Inner City Businessmen’s Club v James Kirkpatrick [1975] 2 NZLR 636. 275 See para 8.98. 276 A contractual notice of termination may of course be specified to be available upon the occurrence of some event other than a breach of contract, instances being where there has been a refusal of planning permission or upon a change in the price level of some commodity. In such a case there is no potential conflict with an acceptance of a repudiatory breach since no breach of contract is involved.

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Common Law Election  8.112 breach. A contractual right of termination may be phrased so as to operate in the event of a particular breach or breaches of the contract, even if the breach causes no substantial loss to the innocent party, and so eliminates any doubt over whether the breach is sufficiently serious to be repudiatory in character.277 Often a contractual provision requires some specified form or time of notice indicating the decision of the innocent party to terminate the contract, whereas the decision of a party to accept the repudiation of a contract may be communicated by any means.278 When a repudiatory breach is accepted the law prescribes the remedies available to the innocent party, usually an award of damages assessed on settled principles. A contractual right of termination may provide certain results of the termination of the contract, such as the return of property or recompense for some particular loss which may not be the same as the common law remedies. 8.111  The relevance of the doctrine of election to the existence and operation of the two distinct methods of determination is the possibility that the operation of one method will be taken as an election not to rely on or operate the other method. The starting point is to emphasise that the two methods of termination are certainly two separate rights but they are not necessarily inconsistent. The continued assertion of general rights or benefits under a contract may be inconsistent with the termination of the contract by any means since a contract cannot both end and continue to exist. On the other hand, the termination of a contract by the exercise of the contractual right of termination or a determination by the acceptance of a repudiatory breach are not necessarily inconsistent in the same way since they both proceed on the same basis and seek the same result, namely that the contract is brought to an end. Therefore, subject to the particular terms of any particular right of termination, the doctrine of election does not in principle prevent the innocent party to the contract asserting together or in the alternative both methods of ­termination.279 Thus, where the contract provides a right to terminate which closely corresponds to the common law right under the general law no election is necessary. In such cases it is sufficient for the injured party simply to make it clear that he is treating the contract as terminated. 8.112  Conversely, if the contractual right of termination and the termination by an acceptance of a repudiation are significantly different in their consequences, for example because of particular contractual provisions as to the ownership of property or the payment of sums of money in the event of a contractual termination of the contract, it may be necessary for the party terminating the contract to signify which right he is exercising. In such a case, there will be alternative and inconsistent rights with different consequences such that a party must make his election as to the right which he is exercising and he may then be bound by his election.280 The terms of any notice terminating the contract may make it clear that the innocent party has elected to take one course as opposed to another, an instance being where the notice refers to a particular clause of the contract permitting termination

277 In Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514 a contract for the sale of land prescribed a date, time and place for completion and provided that if there was non-compliance with this term the vendor could rescind the contract. It was held that the vendor was entitled to rescind the contract even though the price was tendered only 10 minutes late. 278 Vitol SA v Norelf Ltd [1996] AC 800. 279 Stocznia Gdynia SA v Gearbulk Holdings Ltd [2010] QB 27; Dalkia Utilities Services Plc v Celtech International Ltd [2006] 2 P & CR 9. 280 ibid.

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8.113  Election and refers to specific breaches under particular terms of the contract which the contractual provisions specify as creating the right of termination. 8.113  Consequently, if a party faced with a known repudiatory breach of a contract then gives notice terminating the contract under a break clause so asserting one method of termination only, that party might be held to have affirmed the contract by reason of the contractual notice and so disentitled itself from treating the contract as at an end by an acceptance of the repudiatory breach. The distinction between this situation and the situation described at the end of the penultimate paragraph may be that in the case as described in this paragraph a party with two rights of termination specifies which right he is relying on and asserting, whereas in the other case there is no such specification and only a statement that the contract is terminated. It follows that a party with a contractual and common law right of terminating a contract for breach may be at risk of becoming bound by election to one right if either (a) the operation or consequences of the two rights are so different that he must in practice elect between one or the other, or (b) he chooses to specify which of the rights he is relying on. 8.114  By reference to a similar principle where a landlord serves a notice to quit to terminate a tenancy, that action may prevent a subsequent termination of the lease by forfeiture for a breach of contract which has occurred and which is known to the landlord at the date of the service of the notice to quit since, although both processes have the same aim, namely the ending of the tenancy, the service of the notice to quit is a recognition of the existence of the tenancy at that time.281 8.115  The effect of an election on contractual and common law methods of terminating a contract for breach is here considered in relation to contracts generally. A lease is ultimately dependent on contract or consensus although it operates to create a legal estate in land.282 Nearly all leases contain a forfeiture clause which entitles the landlord to terminate the lease in the event of a breach of covenant by the tenant so that no question of an acceptance of a repudiation arises and it is unnecessary for a landlord to rely on repudiation.283 It remains uncertain whether and to what extent the principle of a repudiatory breach of contract applies to a lease,284 although the question may be of importance in the event of a serious breach of contract by a landlord such as a failure by a landlord to carry out repairing obligations where forfeiture is inapplicable.

10.  Election and Other Methods of Loss of Rights (i)  Loss of Rights Generally 8.116  The nature of a common law election is that it deprives a party to a contract or other transaction of the ability to exercise a right which it previously had, the reason being that it 281 Marche v Christodoulakis (1948) 64 TLR 466. 282 Law of Property Act 1925, s 1(1)(b). 283 There are special provisions which govern the operation of the right of forfeiture such as the general availability of equitable or statutory relief from forfeiture and the statutory requirement in some cases of a notice under s 146 of the Law of Property Act 1925. 284 For a discussion on this question see W Woodfall, Woodfall’s Law of Landlord and Tenant (Sweet & Maxwell) para 17.314.

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Common Law Election  8.119 has elected to exercise an inconsistent right. Election operates within its own ambit and in accordance with its own rules and essential elements. It is useful to distinguish the operation of election from other principles and methods under which rights under transactions may be lost. A helpful starting point on this subject is the analysis of the word ‘waiver’ by Lord Diplock in Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd,285 where he distinguished a number of legal grounds on which a person may be debarred from asserting a substantive right which he once possessed or from raising a particular defence to a claim against him which would otherwise be available to him. The legal grounds considered were (a) election, (b) an agreement not to raise a particular defence, (c) common law estoppel, (d)  promissory estoppel, and (e)  estoppel by acquiescence.286 An analysis of the various ways in which a right may be lost by some voluntary action of the owner of the right, which may loosely be described as a waiver of that right, is found in chapter two where the concept of waiver and the various meanings of the word are examined.287 8.117  The first, and most obvious, method by which a contractual right is lost is by reason of a provision within the contract for just that to happen. An illustration would be a right to renew a lease which is often accompanied by a provision that the right is lost if at the time of its purported exercise or at the end of the existing lease there is a subsisting breach of covenant by the tenant.288 8.118  Secondly, a right under a contract may be lost by an express agreed variation of the contract so as to remove (or limit) that right. It should be noted that such a variation is a new contract and, like any other contract not under seal, requires consideration to support it. If a party to a contract enters into a variation agreement giving up a valuable right under the contract that agreement, and thus the removal of the right, will only be enforceable if the other party has given consideration for it. This distinguishes a variation from an election since no consideration is required for the doctrine of election to operate.289 Also of course an election is a unilateral act by the person making the election and does not involve any agreement with the other party against which rights are exercisable. 8.119  Thirdly, in certain circumstances a right under a contract or other transaction may be abandoned so that it is lost forever. In accordance with this principle, a right to

285 [1971] AC 850, 882–84. The decision concerned an application for a new tenancy of business premises under Part II of the Landlord and Tenant Act 1954 which had been made outside the statutorily prescribed time limits for the making of such an application and the question whether the landlord had lost the right which it would otherwise have had to resist the application on the basis that it was out of time. 286 An analysis of different ways of losing a right, there a right to rely on a limitation defence to a claim for damages for negligence, is also found in the decision of the High Court of Australia, in Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394, eg, Mason J (at 406 et seq) and Brennan J (at 424 et seq). 287 See ch 2, part (H). 288 Such provisions are strictly applied and even a trivial breach of covenant will prevent the exercise of an option unless there is some qualification (as now frequently happens) in the lease as to the seriousness of the breach: Finch v Underwood (1876) 20 Ch D 310. Similarly, under the terms of a particular clause a right to secure completion of a contract of sale may be lost by some slight failure of performance by the purchaser: see Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514. And see above (n 277). 289 Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) [1990] 1 Lloyd’s Rep 391, 398 (Lord Goff): ‘Moreover it [an election] does not require consideration to support it, and so it is to be distinguished from an express or implied agreement, such as a variation of the relevant contract, which traditionally requires consideration to render it binding in English law’. See ch 6, para 6.41 et seq for a fuller explanation of this aspect of the law of consideration.

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8.120  Election enforce a restrictive covenant under a lease was held to have been lost after many years of failure to enforce the covenant against obvious and blatant breaches,290 and the benefit of an easement may be lost if the facts show an intention never in the future to make use of the easement.291 Such an abandonment of a right is to be distinguished from an election since the effect of an election will often be to prevent the exercise of a right on one occasion, such as a right to accept a particular repudiatory breach of a contract, but leaving intact the general right of accepting any future repudiatory breach, whereas an abandonment means that a particular right such as the right to enforce a continuing obligation is lost for all time. 8.120  Fourthly, a common law estoppel by representation rests on a statement of an existing matter in reliance on which the representee has acted in some way to his detriment. The fact that the representor is not permitted to deny the truth of his representation does not directly deprive him of any right, but in practice the assertion of the contrary of what has been represented may be necessary for the assertion of some cause of action or right by the representor and the inability to assert the contrary of the representation may result in the person estopped being unable to assert a right. This process is different in concept and in practice from an election which results directly in the ability to enforce a right being lost. Other forms of common law estoppel, estoppel by convention and estoppel by deed, may also in a similar way result indirectly in the inability of the person estopped to assert a particular right.292 Rights may also be lost by reason of the operation of proprietary estoppel where a person with an interest in land makes an assurance to another person creating in that other person an expectation of an entitlement to an interest or rights in the land. Clearly giving effect to the assurance by reason of an estoppel may deprive the maker of the assurance of rights over the land. It is likely that the principle of proprietary estoppel can apply to interests and rights beyond those in land.293

(ii)  Election and Promissory Estoppel 8.121  Finally, the closest method of the loss of a right, and the closest form of estoppel, to the doctrine of election is probably promissory estoppel. A promissory estoppel arises when a person promises not to enforce a right available to him under an existing transaction and the promisee acts to his detriment in reliance on the promise. A court then has power to enforce the promise so rendering the right wholly or partly unenforceable.294 There are similarities between the loss of a right by the operation of a promissory estoppel and the

290 Attorney General of Hong Kong v Fairfax [1997] 1 WLR 149. 291 Tehidy Minerals Ltd v Norman [1971] 2 QB 528. 292 eg, as regards estoppel by convention, if in Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84 the contract of guarantee on its proper construction had not extended to the loan made by a subsidiary company, the guarantor would, as a matter of the construction of the contract, have been able to deny liability under the guarantee but would have been prevented in the end from denying that liability by reason of an estoppel by convention. In this sense, the estoppel by convention would have operated to deprive the guarantor of the right to deny liability on the contract of guarantee. For a full discussion of the Texas Bank decision and its place in estoppel by convention see ch 5, para 5.9 et seq. 293 See ch 7 for proprietary estoppel. 294 See ch 6 for promissory estoppel. Such a promise may often have only a temporary effect and so may operate to suspend the exercise of the right but in principle the effect may be permanent.

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Common Law Election  8.124 loss of a right by the operation of an election. In both cases some statement relating to an existing right results directly in the loss of that right. In both cases the necessary promise or statement communicating the election may be express or may be inferred from the circumstances but must be unequivocal. That having been said, there are clear differences between the two areas of law.295 There are six primary differences. 8.122  Promissory estoppel rests on a promise not to enforce, or not fully to enforce, a particular right under an existing transaction. Election rests on a decision to assert one of two or more inconsistent rights. The bedrock on which the two legal principles or doctrines rests is therefore different. It is important here to be clear on what is at any rate normally the basis of election as a separate doctrine of law. If A has a single right against B he may decide at any time either to enforce or not enforce that right. The reason why this situation does not normally form an election is that only one right is involved. There may be a different situation in which A has two or more different and mutually inconsistent rights which he may exercise against B. The decision of A to enforce one of the inconsistent rights may constitute an election once it is communicated to B. For instance, a landlord after a tenant’s breach of covenant has the right either to forfeit the lease and give up future rent under the lease or allow the lease to continue and receive future rent. If he accepts payments of future rent, that is an election between his inconsistent rights. To revert to the first situation, a single right such as a right to receive rent under a lease where there is no question of forfeiture, the landlord may promise not to enforce the full payments of rent for a period and this, although it is not an election, may raise against the landlord a promissory estoppel which will prevent the recovery of the full rent.296 8.123  It is a necessary element of promissory estoppel that the promisee has acted in reliance on the promise and would suffer detriment or prejudice if the promisor was permitted wholly to resile from his promise. No such element of reliance or potential detriment is necessary for the operation of an election.297 It is the elements of reliance and detriment which generally make it unconscionable to allow the promisor to depart from the promise. No criterion of unconscionability applies to common law election.298 8.124  Promissory estoppel often operates so as to result in the suspension of the operation of a right rather than its total abrogation. Election is different in that the decision to assert

295 The main decision which explains many of the differences between a promissory estoppel and an election is Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) [1990] Lloyd’s Rep 391 and the differences are explained in the judgment in that case of Lord Goff. The distinction is also discussed in two decisions of the High Court of Australia: Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; and Commonwealth v Verwayen (Voyager Case) (1990) 170 CLR 394. The two Australian cases are examined in ch 6, paras 6.18 and 6.19. See also the decision of Isaacs J in the earlier Australian decision of Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305 (and see [1922] 2 AC 541 for this decision on appeal to the Privy Council). 296 This is a classic example of promissory estoppel as shown by Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. 297 The distinction between an election and an estoppel was referred to by Rix LJ in Kosmar Villa Holidays Plc v  Trustees of Syndicate 1243 [2008] EWCA Civ 147, para 75, where he said that a decision by an insurer to conduct the defence of the insured was ill-fitting as an alleged election not to avoid the insurance policy for nondisclosure, but could be said to be an unequivocal representation (or promise) that the insurer will not rely on some provision entitling it to deny liability under the policy such as to bring about an estoppel where the other requirements of an estoppel, detrimental reliance and injustice, were satisfied. 298 There is an element of unconscionability in equitable election as is explained in para 8.6.

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8.125  Election one of inconsistent rights means that the other inconsistent right or rights are wholly and permanently lost.299 8.125  An election will only arise when a person decides between inconsistent rights. It is an informed choice made with knowledge of the facts giving rise to the rights and with knowledge of the existence of the rights. For the purposes of a promissory estoppel no question arises of the particular knowledge of the person promising not to enforce a right.300 8.126  Promissory estoppel requires that at the time of the promise the promisor intended that the promise should be acted upon. The intention is to be judged objectively. As against this in election no particular intention need be shown on the part of the person with inconsistent rights when he communicates his election between those rights. It is enough to establish that his statements or other acts objectively assessed demonstrate a decision to assert one of the inconsistent rights. 8.127  Promissory estoppel is an equitable and flexible doctrine. Thus, a court has a discretion to do only the minimum which is necessary to ensure justice and give effect to the equity. This may mean that the right in question is prevented from operating for a limited period of time or that the promisor is put on terms as to the circumstances in which he can assert or resume the assertion of his right, for instance by serving a notice that his full rights will in the future be enforced. In contrast, election is an absolute doctrine in that where it operates in relation to an inconsistent right that inconsistent right is wholly lost and is lost as a result of the operation of the law. There is no question of the right being merely suspended or postponed or of the person who has elected being put on terms as to the future assertion of the inconsistent right which he has chosen not to assert. 8.128  There is nothing to prevent a party against whom a right is sought to be enforced from resisting that enforcement by reliance on a promissory estoppel or alternatively reliance on the operation of a common law election. It should however be recognised that a person relying on these two principles or doctrines must establish different probanda in each case. One of the sources of confusion in distinguishing between the doctrine of common law election and promissory estoppel as a form of estoppel is the use of the word ‘waiver’. In general legal parlance it can be said that a person has waived a right when he has promised not to enforce that right (which may lead to a promissory estoppel) or has waived a right when he has communicated his decision to assert a different and inconsistent right (which may lead to an election). It has been said that when a right to forfeit a lease or a right to rescind a contract for repudiation is lost, this is better categorised as election rather than as waiver.301 The concept of waiver and its various meanings, of which election is one, is examined in chapter two.302

299 Note, however, that in Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The ­Kanchenjunga) [1990] 1 Lloyd’s Rep 391, 399, Lord Goff said that promissory estoppel and election ‘may involve a loss permanent or temporary of the relevant party’s rights’. The temporary loss of rights by reason of an election may refer to the loss of a right to determine a contract by reason of a particular breach but leaving intact the right to be exercised by reason of further breaches: see para 8.18. 300 ibid 399 (Lord Goff). 301 Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, 852–53 (Lord Diplock). 302 See ch 2, part (H).

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Summary  8.134

(D) Summary 8.129  As with all summaries at the end of chapters of this book this summary of the law of election states the main aspects and components of election in a series of propositions and in as brief a form as possible. Inevitably this process does not capture every rule or qualification or possible doubt which applies to some propositions of law. These details are of course explained and discussed in the earlier parts of this chapter. The summary in general follows the sequence of the examination of the subject in earlier parts of the chapter.

1.  The Underlying Nature of Election 8.130  The underlying nature of the doctrine of election is that a person who chooses to pursue one of two or more inconsistent rights available to him and communicates his choice may become disentitled from subsequently pursuing the other right or rights. Election as a doctrine takes two forms, equitable election and common law election.

2.  Equitable Election 8.131  Equitable election is a doctrine applicable to gifts of assets in a document such as a will or deed of gift. 8.132  The equitable doctrine is that if A by an instrument confers a benefit on B but by the same instrument imposes a burden on B in favour of C, such as that B shall confer a benefit on C, B may approbate the instrument and take the benefit, but must then confer the benefit on C, or B may reprobate the instrument and reject the benefit to him.

3.  Common Law Election 8.133  The doctrine of common law election arises where a person has two or more inconsistent rights. If that person, with knowledge of his rights and the facts which give rise to the exercise of the rights, decides to assert one of the rights, and unequivocally communicates his decision to the person against whom the rights are exercisable, he thereby disentitles himself from subsequently asserting any inconsistent right or rights. The doctrine may also operate where a person has rights against two other persons which are inconsistent with each other so that the assertion of a right against one of these persons prevents the subsequent assertion of a right against the other person. This result ensues as a matter of law and irrespectively of whether the owner of a right intended to give up that right. 8.134  A person relying on a common law election must therefore prove four matters or elements against the person said to be bound by the election. These elements are (a) the existence of two or more inconsistent rights, (b) a decision by the owner of the rights to assert one of them, (c) the knowledge by that owner of the rights at the time of the communication of the decision of the existence of the rights and of the facts rendering the rights 755

8.135  Election exercisable, and (d) the communication of the decision to the person against whom the rights were exercisable. 8.135  As to the first element, the inconsistent rights may derive from any source such as contract, tort or statute. The doctrine applies in principle to alternative remedies sought for the enforcement of rights but an election between remedies normally only occurs where one or other remedy has been brought to a judgment of a court. 8.136  As to the second element, the decision to assert one of the inconsistent rights is judged by an objective test and so occurs when the owner of the rights acts in such a way that a reasonable person with the knowledge of the person against whom the rights exist would conclude that such a decision had been taken. 8.137  As to the third element, the party who relies on an election must prove that the person who made and communicated the decision to assert one of the inconsistent rights at the time of the communication had actual or constructive or imputed knowledge of the facts giving rise to his ability to exercise the rights and had actual, or perhaps constructive, knowledge of the existence of the rights. 8.138  As to the fourth element, the communication of the decision may be by way of an express statement of the decision or may be an inference from the words and other actions of the owner of the rights. A statement must constitute an unequivocal communication of the decision and other actions relied on as a communication must permit it to be unequivocally inferred from them that the decision has been taken. 8.139  Unlike with certain forms of estoppel there is no requirement for the operation of a common law election that the person to whom the election is communicated has acted in reliance on that communication or would suffer any detriment or prejudice if the person who has communicated the election was allowed to assert a right inconsistent with that which he has elected to assert. There is no requirement or test of unconscionability in common law election. 8.140  When the four essential elements of a common law election have been proved, the election operates with its consequences as a doctrine imposed by the law. It is not possible to avoid the effect of an election either (a) at any rate on one view by a provision in a contract which states that certain actions shall not constitute an election, or (b) by a purported qualification of the communication of the election such as stating that it is without prejudice or by using some other limiting or qualifying words. 8.141  The operation of a common law election brings about an inability to assert a right which would otherwise be available. The operation of the doctrine must be distinguished from other circumstances which in law bring about the loss of a right, such as the variation of a contract or a permanent abandonment of a specific right or the operation of some form of estoppel. In particular, the operation of an election must be distinguished from the operation of promissory estoppel where the two doctrines or principles have affinities to each other but also have important distinguishing aspects and different elements which have to be satisfied for their operation.

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9 Estoppel by Record (A) Introduction 1.  Nature and Categories of the Estoppel (i)  Nature of the Estoppel 9.1  Estoppel by record is one of the three categories of estoppel described by Coke in his Commentaries on Littleton in 1628,1 the others being estoppel by writing (which has become estoppel by deed) and estoppel in pais (which has become estoppel by representation). In essence, estoppel by record is an estoppel which depends not solely on the actions of the parties as do other forms of estoppel but is founded on a previous decision of a court or other judicial body.2 9.2  The foundation of estoppel by record is that once a final decision of a court has been given on a matter in issue between parties, none of the parties should be entitled in later proceedings between them to have that decision reconsidered and re-litigated.3 The parties are bound, or estopped, from challenging the correctness and effect of that which a court has previously decided.4 It is debatable whether estoppel by record is properly categorised as an estoppel at all. It is treated as an estoppel in this book partly because of its ancient classification and definition going back at least to Sir Edward Coke and partly because estoppel by record does share the characteristic of other forms of estoppel that a party is prevented by previous events in which it has participated from asserting some cause of action or defending some cause of action or disputing some issue or making some assertion which would

1 Co Litt 352a. It appears that estoppel founded on a previous decision of a court was known in Roman law. See the citation from the judgment of Lord MacNaghten in Bader Bee v Habib Merican Noordin [1906] AC 615, 622–23, set out in para 9.65. 2 The record is the formal document in which the decision of a court is recorded. Courts and other judicial bodies are divided into those which are or are not courts of record. An estoppel by record can arise from the decision of courts and tribunals whether or not they are courts of record, as is explained in part (G) of this chapter. The record was originally that which was recorded on parchment as the decision of a court of record. Lord Guest explained in Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, 933, that it is now quite immaterial whether or not the judicial decision is pronounced by a tribunal which is required to keep a written record of its decisions. 3 As explained later the principle can sometimes extend so as to prevent a party from raising in legal proceedings a claim or an issue which ought to have been raised by that party in previous proceedings. See part (J) of this chapter. 4 In the words of De Grey CJ giving the unanimous opinion of the Judges in The Duchess of Kingston’s Case (1776) 20 St Tr 355, (1776) 1 Leach 146: ‘A judgment is evidence conclusive between the same parties upon the same issue directly in question in another court’.

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9.3  Estoppel by Record otherwise be available to that party. It is equally disputable whether estoppel by record requires separate treatment in a book on estoppel or is more appropriately dealt with in works on evidence or procedure.5 Estoppel by record has a part in criminal law where, subject to recent statutory exceptions,6 it prevents a person being tried more than once for the same offence, something which is sometimes called double jeopardy. This aspect of estoppel by record is not dealt with in this chapter which does not extend to criminal law and double jeopardy. 9.3  The justification for estoppel by record is in part the public interest and in part the protection of individual parties. It is in the public interest that there should be some finality in litigation and an end to it. Courts are often overburdened and proceedings may be delayed, a state of affairs which can only be exacerbated if parties are entitled to require some matter which has already been decided between them to be determined again by a court. Also, the repetition of deciding the same issue is inimical to an efficient system of litigation and to public confidence in it.7 Apart from any public interest, a party would feel justly aggrieved if, having fought and succeeded in a dispute before a court, the other party was able to require the same matter to be tried again.8 The purpose of the res iudicata rule was summarised by Lord Blackburn where he said: The object of the rule of res iudicata is always put upon two grounds – the one public policy, that is the interest of the state that there should be an end of litigation, and the other, the hardship on the individual, that he should not be vexed twice for the same cause.9

The rationale behind most forms of estoppel and that behind estoppel by record are fundamentally different. The justification of most estoppels, certainly of reliance-based estoppels, is the moral principle that a person should be bound by a statement made by that person and intended to be acted upon by another person or persons.10 The justification for the principles which comprise estoppel by record is the twin desiderata of finality in litigation 5 The subject is treated in a leading textbook on the law of evidence, Phipson on Evidence, 19th edn (Sweet & Maxwell, 2018) ch 43. In Halsbury’s Laws, 5th edn (LexisNexis, 2015), the subject is dealt with primarily in vol 12A under the title ‘Civil Procedure’. 6 See Part 10 of the Criminal Justice Act 2003 and the more limited provisions in the Criminal Procedure and Investigations Act 1996, the 1996 Act dealing with ‘tainted’ acquittals. In criminal law, the subject is sometimes called autrefois acquit or autrefois convict. Even so, decisions on criminal cases have given rise to judicial decisions or observations which are of general importance to estoppel by record in its application to civil proceedings: see, eg, The Duchess of Kingston’s Case (1776) 20 St Tr 355, (1776) 1 Leach 146; and DPP v Humphrys [1977] AC 1. In Thrasyvoulou v Secretary of State for the Environment [1990] 2 AC 273, 289, Lord Bridge gave the application of estoppel by record in parts of the criminal law as a reason for the application of this form of estoppel to administrative law which, like criminal law, is a part of public law. 7 This reasoning is encapsulated in the Latin expression ‘interest reipublicae est finis litium sit’ (it is in the public interest that there should be an end to litigation). 8 This reasoning is expressed in a further Latin expression ‘nemo debet bis vexari pro una et eadem causa’ (nobody should be troubled twice on the same matter). This expression is of particular relevance to the rule in criminal matters on double jeopardy or autrefois acquit mentioned in the last paragraph. The two Latin maxims are set out together in the judgment of Lord Guest in Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, 933. In Johnson v Gore Wood & Co [2002] 2 AC 1, 31, Lord Bingham said in relation to estoppel per rem iudicatam and the rule in Henderson v Henderson that the public interest in finality in litigation and the interests of a party in not being vexed twice on the same matter were reinforced by the current emphasis on efficiency and economy in the course of litigation. 9 Lockyer v Ferryman (1877) 2 App Cas 519, 530. 10 See ch 1, para 1.1.

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Introduction  9.4 and the avoidance of a person having to litigate twice on the same matter.11 The general principle which underlies estoppel by record, or at any rate estoppel per rem iudicatam which constitutes its main principles, has been said to be clear and to be ‘that the earlier judgment relied upon must have been a final judgment, and that there must be identity of parties and of subject matter in the former and in the present litigation’.12 9.4  The ordinary effect of an estoppel per rem iudicatam is that a judgment on a cause of action or an issue in one set of proceedings binds the parties to the judgment where an identical or closely similar cause of action or issue arises for determination between them in later proceedings. Apart from this situation relating to sequential sets of proceedings it can readily occur that an estoppel of this type operates between the parties at later stages of the same overall proceedings. In such a case the parties to the proceedings will necessarily be the same. The reason for this latter type of operation of an estoppel is that a court may give a final judgment on certain matters at different stages of a set of proceedings. An instance would be where a court determined a preliminary issue in proceedings. The decision of that preliminary issue, provided that there is a final judgment on the issue, will bind the parties in subsequent parts of the proceedings designed to lead to a final conclusion of the proceedings as a whole. What in practice can sometimes happen is that after an important preliminary issue has been determined, the parties then reach a compromise or an agreement on the cause of action to which the issue was relevant and preliminary and that no final determination of the court of the cause of action by a judgment is given. In such a case, the determination of the preliminary issue probably operates as an issue estoppel and not a cause of action estoppel.13 In some cases, a court may give final judgment on a cause of action and then make further orders for the ascertainment of a precise remedy. An obvious example is where a court determines that a claimant succeeds on a cause of action against a defendant and is entitled to damages and then orders an inquiry as to damages. In the normal course of events, there will then be a cause of action estoppel between the parties as regards the cause of action. In some modern leading cases on estoppel per rem iudicatam, a question has been whether a final decision at one stage of the proceedings does operate as an estoppel per rem iudicatam so binding the court and the parties at a later stage to what has been decided at an earlier stage.14

11 Thrasyvoulou v Secretary of State for the Environment [1990] 2 AC 273, 289 (Lord Bridge). The relevant passage is set out in para 9.142. 12 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, 909–10 (Lord Reid). 13 In most cases, the classification of a judgment as leading to a cause of action estoppel or an issue estoppel may not be of much practical significance. This is not always so since, as explained in para 9.192 et seq, the exceptions to the operation of the two species of estoppel per rem iudicatam are different so that, in order to know whether an exception arises, it may be necessary to know whether the estoppel which would arise in the absence of the exception would be a cause of action estoppel or an issue estoppel. It is also possible that the requirement of identity of subject matter in the previous proceedings and the subsequent proceedings may be stricter for issue estoppel than it is for cause of action estoppel. 14 In Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 3) [1970] Ch 506 a question before Buckley J was whether a previous decision in the proceedings of Cross J operated as an issue estoppel. In Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160, the question before the Supreme Court was whether a decision on the existence of a cause of action in the proceedings operated as an estoppel when it came to the implementation of an inquiry as to damages ordered by the Court of Appeal which had decided the cause of action.

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9.5  Estoppel by Record

(ii)  Appeals and the Doctrine of Precedent 9.5  A judgment of a court cannot bring about an estoppel by record unless it is final. English law has an extensive system of appeals, and sometimes further appeals, in some cases exercisable as of right but in most cases exercisable only when there is a permission given by the court below or by the proposed appellate court and on occasions with a restriction on the ambit of the appeal such as that the appeal is confined to matters of law.15 A judgment can still operate as an estoppel by record even though there is a possibility of an appeal against it and even though an appeal is pending.16 Of course, if an appeal succeeds in whole or in part the judgment of the appellate court becomes that which can operate as an estoppel. If the appeal is dismissed the judgment of the appellate court, which will usually contain the reasons for the dismissal, also becomes the judgment which can create an estoppel by record. Judgments of inferior courts and tribunals are usually also subject to the possibility of judicial review in the High Court but only on limited grounds such as an excess of jurisdiction or some procedural unfairness.17 Again, the possibility of judicial review by a court of higher jurisdiction does not prevent a judgment operating as an estoppel unless of course the review process succeeds.18 Judicial review may proceed by way of quashing the decision of the inferior court or tribunal and if this is done a new hearing is sometimes ordered. Obviously a judgment or decision which is quashed cannot create an estoppel by record. There are usually strict time limits for appeals and for applications for judicial review, although these can be extended. 9.6  The binding effect of a judgment by reason of an estoppel by record must be differentiated from the binding effect of a decision under the doctrine of precedent. English law has an established system of binding precedent called the principle of stare decisis. The ratio decidendi19 of a decision of a court may establish a principle of law which may then be binding for the purposes of further decisions between any parties in lower courts and ­sometimes in a court of the same status as has made the decision. For instance, decisions of the Court of Appeal bind lower courts and bind the Court of Appeal itself. A further ­decision between any parties in a court bound by the ratio decidendi of a previous court binding on the subsequent court has to be made in accordance with the principle of law

15 See, eg, Part 52 of the Civil Procedure Rules (CPR) for general appeals to the Court of Appeal from the High Court or the county court in civil proceedings and the need for permission and see, for example, s 13 of the Tribunals, Courts and Enforcement Act 2007 for appeals on matters of law from the Upper Tribunal to the Court of Appeal. Permission is also required, and is sparingly given, for appeals from the Court of Appeal to the Supreme Court. 16 DSV Silo-und Verwaltungsgesellschaft mbH v Sennar (Owners), The Sennar (No 2) [1985] 1 WLR 490, 494, where Lord Diplock said in connection with the judgment of a foreign court that in order for it to work for an estoppel by record, the judgment on the cause of action before the court must be one that ‘cannot be varied, re-opened or set aside by the court that delivered it or any other court of co-ordinate jurisdiction although it may be subject to appeal to a court of higher jurisdiction’. In Penn-Texas Corporation v Murat Anstalt (No 2) [1964] 2 QB 647, 660–61, Lord Denning MR stated that one test for determining whether a decision on a matter could bring about an issue estoppel was whether there could have been an appeal from the determination of that issue. 17 See CPR, Part 54. 18 See the citation from the judgment of Lord Diplock in The Sennar (No 2) above (n 16). 19 The ratio decidendi, often referred to as just ‘the ratio’, of a decision is a principle of law held to be correct by the court and applied for the purposes of reaching an overall conclusion on the case before the court. It is to be distinguished from an obiter dictum, which is a statement of the court but which does not have the characteristics of a ratio decidendi. Obiter remarks are not binding as a matter of precedent.

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Introduction  9.7 established by the earlier decision. The doctrine of precedent is quite different from estoppel by record. An estoppel by record arises from a judgment of a court and normally binds only the parties to the proceedings before the court which issues the judgment in future proceedings between these parties, and does not bind other parties who did not play any part in the original proceedings, whereas a binding precedent binds all parties in any proceedings in the future.20 An estoppel by record may be concerned with any matter, including matters of fact, where a judgment has been given on the matter and is not confined to principles of law which alone can be the subject matter of a precedent.

(iii)  Categories and Principles of the Estoppel 9.7  As often happens with the law of estoppel, the terminology used in describing ­estoppel by record is not always uniform. In this chapter the following classification is adopted. Estoppel by record comprises three separate principles which are (a) cause of action estoppel, (b) issue estoppel, and (c) an aspect of the operation of the law of abuse of process, that is the rule that in certain circumstances a person is not permitted to assert some claim or issue or defence because that party has failed to raise the matter on a previous occasion in legal proceedings. The first two of the three principles are species of what is generally called estoppel per rem iudicatam or just res iudicata. These two legal expressions usually have the same meaning.21 The third principle is sometimes regarded as not an estoppel at all but as a rule of public policy and is examined in this chapter because it shares with the first two principles the characteristic that a party is prevented from raising a matter in later proceedings because of its conduct, usually a failure to raise that matter, in previous proceedings.22 The explanation of estoppel by record in this chapter is divided into a consideration of the three principles of law just described.23 It is possible that a 20 Certain judgments of courts are judgments in rem which are concerned with the status of some person or thing and such judgments do bind the whole world and not just the parties to the proceedings in which the judgment is given. See para 9.18 et seq. Judgments may bind not only the parties to the proceedings by virtue of an estoppel but may bind also the ‘privies’ of those parties. The concept of privity is explained in para 9.127 et seq. 21 Estoppel per rem iudicatam literally means an estoppel by reason of a matter already adjudicated on or decided. Res iudicata means a matter decided. In the phrase ‘estoppel by record’, the record is the record of a court of its decision in legal proceedings which have taken place before it. See further para 9.163 for the meaning of a court of record. 22 The third principle is usually described as the rule in Henderson v Henderson since it was first articulated as a separate principle by Sir James Wigram V-C in Henderson v Henderson (1843) 3 Hare 100. There is some discussion in the authorities on whether the rule is an aspect of res iudicata and this matter is discussed in para 9.220 et seq where the rule is examined in detail. 23 Different and more detailed classifications and distinctions are possible. For example, in Phipson on Evidence, 19th edn (Sweet & Maxwell, 2018) para 43-15, the judgment of a court of competent jurisdiction is said to have six possible effects on later proceedings between the same parties. The difficulties in classification can be seen in the statement of Lord Sumption in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160, para 17, that res iudicata is a ‘portmanteau’ term which he then divided into five principles which include the three principles stated in this paragraph. In this decision what is here described as the third principle is categorised as the fifth of the five principles which together make up the overall doctrine of res iudicata. Indeed, the general procedural rule against abusive proceedings, which is the foundation of what is here described as the third principle of estoppel by record, is stated in the Zodiac case as something which should be regarded as the policy which underlies all the principles which together make up the doctrine of res iudicata. There is some support for the division of res iudicata into two principles, cause of action estoppel and issue estoppel, in the judgment of Lord Upjohn in Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, 946–47. Further support is found in the judgment of Diplock LJ in Thoday v Thoday [1964] P 181, 187. A wholly agreed classification is probably incapable of being

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9.8  Estoppel by Record j­udgment of a court can give rise to both a cause of action estoppel and an issue estoppel with the two kinds of estoppel having different consequences in law.24 It should be understood that estoppel by record, like other forms of estoppel, is not something which a court is bound to apply as a matter of public policy, or as a matter going to jurisdiction irrespective of the wish of the parties. It is for the party who wishes to rely on the estoppel as a defence or in support of its case to do so, usually by way of a pleading in the proceedings. 9.8  The first principle, cause of action estoppel, is that once a cause of action has been held to exist or not to exist as between two or more parties, that outcome may not be challenged by either party in subsequent proceedings between the same parties. It has been said that it is properly described as a form of estoppel preventing a person from challenging the same cause of action in subsequent proceedings.25 A cause of action is a factual situation the existence of which entitles a person, in accordance with some rule of law, to obtain from a court a remedy against another person.26 For instance, if a party can establish the facts of the existence of a contract, the presence of an obligation owed to it in that contract, and a breach of that obligation by the other party to the contract, it can in accordance with the ordinary law of contract obtain against the other party the recovery of damages for the loss suffered, or an injunction to prevent the continuation of the breach, or both. Having obtained that remedy by a judgment and order from a court the party cannot then bring further proceedings on the same cause of action against the other party.27 A consequence of this last rule is that a party, having sought and obtained a remedy by establishing a cause of action, cannot subsequently bring further proceedings against the other party to obtain a different remedy on the same cause of action or to enhance its earlier remedy such as by seeking larger or further damages for the breach of contract.28 The principle also prevents a party who has failed to establish a cause of action derived from the authorities and the best that can be done in this chapter is to state a classification and terminology which, whether juridically correct or not, is at least explained and consistently used. 24 An example of how this might occur is given in para 9.33. It may in some instances be important to determine whether the estoppel relied upon is a cause of action estoppel or an issue estoppel given the rules as to identity of subject matter may differ between the two species of estoppel and the rules as to the applicability of exceptions certainly differ. For example, in Arnold v National Westminster Bank Plc [1991] 2 AC 93 the nature of the alleged estoppel, that relating to the meaning of a part of a rent review clause in a lease, was held to be an issue estoppel so that the exception applicable to issue estoppel could be applied: see para 9.197. 25 Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160, para 17 (Lord Sumption). 26 Letang v Cooper [1965] 1 QB 232, 242–43 (Diplock LJ). In Republic of India v India Steamship Co Ltd [1993] AC 410, 419, Lord Goff, after referring to the description as given by Diplock LJ, said that a cause of action consists of the minimum facts which a plaintiff is required in law to plead and (if traversed) prove in order to obtain the relief which he claims. 27 Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630, 640 (Lord Denning MR). 28 Conquer v Boot [1928] 2 KB 336. This last rule is described by Lord Sumption in the Zodiac case as a separate principle and one possibly deriving from the doctrine of the merger of a cause of action into a judgment. The doctrine of merger is discussed in para 9.67 et seq. Attention in this context should also be paid to the doctrine of common law election whereby a party which in legal proceedings has obtained a judgment in its favour for one  remedy may then be prevented from seeking an alternative and inconsistent remedy (see ch 8, para 8.39) and for a summary of the rule on an election between remedies see Personal Representatives of Tang Man Sit v ­Capacious Investments Ltd [1996] AC 514, 521 (Lord Nicholls), a passage cited in ch 8, para 8.43. A point to be borne in mind is that the operation of the doctrine of election in the circumstances described may defeat an action by A against X when the previous proceedings were between A and B. The reason is that A may have two alternative and inconsistent rights against B and X and an election to assert the right against B may prevent the later assertion of the inconsistent right against X. The doctrine of res iudicata can only bar later proceedings between A and B or the privies of A or B.

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Introduction  9.10 from again seeking to establish the same cause of action by bringing new proceedings against the other party for that purpose. 9.9  The second principle is issue estoppel. The determination of the existence or otherwise of a cause of action by a court will frequently involve the determination of various issues between the parties which must be decided before the existence or otherwise of the cause of action can be known. In the example given in the last paragraph, the court may need to determine an issue as to the meaning of the provision in the contract alleged to have been infringed before it can be determined whether the cause of action claiming damages for breach of contract succeeds as a whole. Once that issue has been determined, the parties are bound in any subsequent proceedings between them to accept and apply the earlier determination. Thus, and looking at the example, if there is a further and separate breach of contract a new cause of action may arise and may be separately pursued but in that subsequent litigation, assuming that it is between the same parties, the parties will be bound to accept the interpretation of the contractual term as decided in the previous proceedings. It is of course possible that two or more issues are decided in the same proceedings with different parties succeeding on different issues. In such a case, each party will be bound in future proceedings between them by the result of each issue whether that party succeeded or failed on that issue. The issue which is the subject matter of an issue estoppel can be one of law or of fact or of mixed law and fact. 9.10  The principle of issue estoppel has been described as a rule that where in litigation on a cause of action, a separate issue as to whether a particular condition has been fulfilled is determined by a court of competent jurisdiction, either upon evidence or upon admission by a party to the litigation, neither party can, in subsequent litigation between one another upon any cause of action which depends upon the fulfilment of the identical condition, assert that the condition was fulfilled if the court has in the first litigation determined that it was not, or deny that it was fulfilled if the court in the first litigation determined that it was.29

A leading modern decision on the subject of issue estoppel, Thoday v Thoday,30 from which the above citation is taken, supports the general classification of estoppel per rem iudicatam into two principles or species of estoppel as used in this chapter. In this decision, cause of action estoppel and issue estoppel were described as common law estoppels which could be subsumed under the description of estoppel per rem iudicatam and which were two species of that form of estoppel. The second species, issue estoppel, was said to be an extension of the same rule of public policy which justified cause of action estoppel, a rule expressed in the Latin maxim ‘Nemo debet bis vexari pro una et eadem causa’.31

29 Thoday v Thoday [1964] P 181, 187. Diplock LJ distinguished issue estoppel from the determination by a court of the existence or non-existence of a fact, the existence of which is not itself a condition the fulfilment of which is necessary to a cause of action which is being litigated before the court, but which is only relevant to proving the fulfilment of such a condition. Such a determination was said not to bring into force an estoppel per rem iudicatam. This distinction and its effect, which have been substantially criticised, are examined in para 9.105 et seq. 30 ibid. 31 ibid. The distinction between cause of action estoppel and issue estoppel is illustrated by Arnold v National Westminster Bank Plc [1991] 2 AC 93, an important decision of the House of Lords on exceptions to the two species of estoppel per rem iudicatam which is discussed in paras 9.196 and 9.197.

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9.11  Estoppel by Record 9.11  The third principle is the aspect of public policy mentioned earlier.32 This is the ­principle which owes its origin or first full formulation to the judgment of Wigram V-C in Henderson v Henderson,33 and which has recently been described in the Supreme Court as being a rule which precludes a party from raising in subsequent proceedings matters which were not, but could and should have been, raised in the earlier ones.34 The principle has been taken forward and applied in modern decisions in a rather less rigid fashion than that formulated in 1843.35 It may be that the principle cannot properly be described as an estoppel per rem iudicatam, since of its nature its application depends not on what a court has decided but on what a court has not decided but could have decided if the matter had been brought before the court as it should have been.36 The principle is one of public policy which prevents parties from abusing the process of the court and is in accordance with the policy in favour of the finality of litigation in the sense that it prevents parties from raising in further proceedings matters which could and should have been raised in earlier proceedings. The rule against abusive proceedings as a general rule or concept has been described as the policy which underlies all parts or classifications of estoppel per rem iudicatam.37 9.12  The first two principles operate as regards parties to later proceedings where those parties are the same parties as in the previous proceedings. The principles do not operate as regards a stranger to the first proceedings, that is against someone who was not a party to those earlier proceedings. However, the persons bound in later proceedings by what was decided in earlier proceedings extend to what are called the privies of the parties in those earlier proceedings. A privy is someone who is in some way connected to the former proceedings by reason of having some connection with a party to these proceedings or with the subject matter of those proceedings. The most obvious example of a privy is where a judgment concerns land, and following the judgment a person buys the land affected. The question of who exactly is ‘a privy’ of a party is discussed later in this chapter.38 The usual classification for the purposes of estoppel by record is to divide persons into parties to legal proceedings (in relation to whom an estoppel can operate), privies of those parties (in relation to whom an estoppel can also operate), and strangers to the proceedings (in relation to

32 See para 9.7. 33 (1843) 3 Hare 100, 115. 34 Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160, para 17 (Lord Sumption). 35 See, in particular, Johnson v Gore Wood & Co [2002] 2 AC 1, discussed in para 9.225. 36 See, however, Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160, para 17 (Lord Sumption), where the principle is described as one of the five aspects of res iudicata. As mentioned above (n 22) there is some discussion on the exact status of the principle and this matter is discussed in para 9.218 et seq. 37 ibid. As regards the first two principles of estoppel by record, a purpose of the process before a court is to decide and to achieve finality in a dispute between parties so that in these circumstances it is also generally an abuse of that process to allow one party to raise the matter again or dispute the result of proceedings against the other party when a cause of action or an issue has been decided by a final judgment and order. 38 See para 9.127 et seq. Although the terminology is not wholly clear, privity is generally classified into (a) ­privity in blood (eg, ancestor and heir); (b) privity in law (eg, testator and executor of a will); (c) privity in estate or title (eg, vendor and purchaser of land); and (d) privity in interest, sometimes called quasi-privity (usually the privy is someone who though not a party to proceedings is in some way closely connected to one of the parties or to the subject matter of those proceedings). In some descriptions of the subject, privity in law is left out of the classification. The principle here stated applies to judgments in personam. There is a limited class of judgments in rem which determine the status of some person or thing and which are binding on the whole world. The subject of judgments in rem is explained in para 9.19 et seq.

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Introduction  9.14 whom an estoppel cannot operate unless, as explained in the next part of this chapter, the proceedings culminate in a judgment in rem).39 It is possible that the third principle, the rule in Henderson v Henderson, can apply where in the later proceedings a party, although not a party in the previous proceedings or a privy of that party, is nonetheless closely connected with a party in the previous proceedings.40

(iv) Procedure 9.13  The question of whether there is an estoppel per rem iudicatam will arise in proceedings between two or more parties who are the same as the parties, or are the privies of the parties, in previous proceedings.41 An estoppel can be pleaded by a party in the normal way in a particulars of claim or a defence or a reply in the proceedings and can be tried along with all other questions in dispute at a full trial of the action. As against that, the character of an alleged estoppel by record is that if it succeeds it may prevent other questions having to be litigated in an action and may even be determinative of the action. Consequently, and as a matter of procedure for estoppel by record, there may be much to be said for the estoppel question being decided at a preliminary stage in the litigation so as to prevent time and expense being incurred in an examination of matters which, if the estoppel plea succeeds, may not need to be investigated at all. 9.14  In the circumstances as just explained there are procedural methods by which a court can determine an estoppel by record contention at an early stage. The obvious procedure is that the estoppel question should be tried as a preliminary issue.42 Another possibility is that one or other party applies for summary judgment on the estoppel issue.43 A third possibility is that an application is made to strike out a part of a party’s pleading as an abuse of the process because what is pleaded is defeated by the operation of res iudicata.44

39 See para 9.19 et seq. 40 This was the situation in Johnson v Gore Wood & Co [2002] 2 AC 1 where the Plaintiff in the later proceedings was an individual who owned all but two of the issued shares in a company which was the Plaintiff in the previous proceedings against the Defendants. It is possible that in circumstances such as this one party is a privy of another: see para 9.136. For purposes of clarity it seems best to confine the doctrine of privity to cause of action estoppel and issue estoppel, the two species of estoppel per rem iudicatam. A kindred principle applies to the rule in Henderson v Henderson where a party in later proceedings may be prevented from raising or relying on a claim or other matter in later proceedings even though he was not a party to earlier proceedings in which the matter could have been raised but is closely connected to that party. In this chapter, privity as a doctrine is discussed together for both cause of action estoppel and issue estoppel in part (E); and the possibility of a connection between parties is discussed separately for the purposes of the rule in Henderson v Henderson in part (J). 41 In the protracted Carl Zeiss litigation, res iudicata was relied upon at one stage by the Defendants in an effort to stay or dismiss the claim and res iudicata was relied upon at another stage by the Plaintiffs as a ground of striking out certain parts of the defences which had been filed: see Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853; and Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 3) [1970] Ch 506. A summary of the course of the litigation is given in para 9.122 et seq. 42 It is for a court to decide whether in any particular case there should be the determination of a preliminary issue. A court will often be willing to take this course if both parties seek it. 43 Under CPR, Part 24. 44 Under CPR, Part 3.4. The proceedings in Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 3) [1970] Ch 506 were under a similar procedure available in the former Rules of the Supreme Court. See at 537 of the decision of Buckley J on the courses available to a court when the question of an estoppel by record arises in some part of the proceedings prior to the final determination of the action. An application to strike out may be a particularly appropriate procedure where the allegation is that the commencement of the proceedings is an abuse of the process

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9.15  Estoppel by Record 9.15  In the law of estoppel generally the burden of proving all factual matters relevant to the establishment of the estoppel is on the party who asserts the estoppel.45 In Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2),46 one of the reasons for the rejection of a decision of the Federal Supreme Court of West Germany as creating an issue estoppel was that the party who wished to rely on the judgment of that court for this purpose had not proved that the judgment was final.

(B) Judgments 1. General 9.16  In order to apply any of the principles which together constitute estoppel by record, it is necessary to know what is the judgment of the court in the previous proceedings which is the foundation of all of the principles.47 It is fundamental to estoppel by record that there is an initial adjudication by an independent person or body of persons. Consequently, the taking of disciplinary proceedings against an employee does not by itself necessarily prevent the taking of subsequent disciplinary proceedings since the first proceedings were not the determination of any dispute between employer and employee by an independent body but were a method by which the employer could gain information on whether the conduct of the employee was inappropriate.48 The practice of courts in England in civil proceedings is that a court states by way of a reasoned judgment that which it has decided and so far as necessary the reasons for its decision and each aspect of its decision.49 There may then be under the Henderson v Henderson rule. In such a case all relevant facts are likely to be known by the close of the pleadings and it would be strange that an action should be fought out to an end conclusion only for it to be then held that the action could not properly have been brought at all. 45 The burden of establishing that the rule in Henderson v Henderson prevents a claim or other matter being raised in proceedings is on the person who invokes the application of the rule: Dexter Ltd (In Administrative Receivership) v Vlieland-Boddy [2003] EWCA Civ 14, [2003] All ER (D) 221, para 49. There may be an exception as regards one form of estoppel in that when a proprietary estoppel is claimed it may be that the burden of proof of showing that acts taken following an assurance were not taken in reliance on it is on the person against whom the estoppel is claimed. This exception seems somewhat anomalous, if indeed it is good law today: see ch 7, para 7.217 et seq. 46 [1967] 1 AC 853, 919 (Lord Reid). 47 The adjudication of a court on a matter before it may be described using various words such as a decision, a judgment, an order, a decree, an award (usually in arbitrations), a holding (usually of law), and a finding (usually of fact). The operation of estoppel by record proceeds on the same principles whichever word is used. 48 Christou v Haringey LBC [2014] QB 131. 49 Judgments may be reserved or unreserved. An unreserved judgment, called an extempore judgment, is a judgment given orally at the conclusion of the evidence and argument. A reserved judgment is one given usually in writing after a time for deliberation by the court. It has become increasingly the practice that judgments are reserved, although one of the decisions of greatest importance over the last century to the law of estoppel, Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130 on promissory estoppel, was an unreserved judgment of Denning J. The former practice was for reserved judgments to be read out in court but today judgments are increasingly ‘handed down’, that is provided in writing to the parties in advance sometimes with a subsequent short and formal reference to the judgment in open court. A copy of all judgments, including a transcript of judgments delivered orally, can be obtained. It has not normally been thought that the status of a judgment, either as founding an estoppel per rem iudicatam or as constituting a binding precedent, was affected by the exact mode or circumstances of the delivery of the judgment or on the amount of authority cited to the court. Nevertheless, in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160, para 30, Lord Sumption,

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Judgments  9.17 further argument on ancillary matters such as the costs of the proceedings or permission to appeal or a stay of execution or the exact form of the order to be made by the court. The final stage is that a formal order is drawn up, dated and sealed by the court.50 An order states the final determination of the proceedings or a part of the proceedings before the court and should not itself contain the reasons for the order which are to be found in the preceding judgment.51 Estoppel by record depends on what a court has previously decided. The final order of a court may be terse as drawn up and may contain only some such words as ‘appeal dismissed’ or ‘action dismissed’ and obviously such an order by itself cannot explain or explain fully the determination of the court on the issues before it. Accordingly for the purposes of deciding what is the decision of the court on a cause of action or on any issue which arises in the course of a decision on a cause of action, a subsequent court must have regard to the full judgment or judgments given, as well as to the terms of any formal order. It may also be necessary to examine the pleadings in order to ascertain the exact meaning of a judgment.52 Where there are no pleadings oral evidence may be adduced to show what were the issues on which the court made its decision.53 It has been said that if an order of a court is clear in its terms it is that order which constitutes an estoppel per rem iudicatam between the parties so that if the order was maliciously obtained, the remedy of an aggrieved party is to secure by some process an amendment to the order.54 Only by a process as just described can it be found in some cases exactly what was the cause of action or the issue determined by the court. Even so, it is said that once it has been ascertained what exactly was the cause of action or the issue the subject of a judgment it is that cause of action or issue which constitutes the estoppel per rem iudicatam and not the reasons or justification given by the court for its decision.55 As explained later, estoppel by record applies to decisions of tribunals and other bodies exercising judicial functions, such as arbitration tribunals, and the same principles apply to the ascertainment of what exactly was decided by such bodies.56 9.17  Not every judgment can give rise to an estoppel by record. It is necessary in this context to refer to (a) the finality of a judgment, (b) judgments obtained by fraud or collusion, (c) judgments given under some procedural rule or on some procedural matter not

in considering a decision of the Court of Appeal which had stood for a century, and which was overruled, pointed out that the judgment was delivered in an extempore judgment delivered on a Friday afternoon after an argument in which no authority was cited on the ambit of the law of res iudicata other than The Duchess of Kingston’s Case (1776) 20 St Tr 355, (1776) 1 Leach 146. This observation may be something of a break with traditions of judicial comity and could require courts in later cases to investigate the exact circumstances and timing of decisions in earlier cases, perhaps no easy task for older cases. It was not suggested that the decision in the earlier case was per incuriam, that is, reached without considering some earlier case binding on the court under the doctrine of precedent. 50 Rules as to the form and content of orders of civil courts are contained in the CPR, Part 40. 51 Richardson Roofing Co Ltd v The Colman Partnership Ltd [2009] EWCA Civ 839. 52 Re South American and Mexican Co, ex parte Bank of England [1895] 1 Ch 37, 47; Houston v Marquis of Sligo (1885) 29 Ch D 448. 53 Flitters v Alfrey (1874) LR 10 CP 29; Houston v Marquis of Sligo (1885) 29 Ch D 448. 54 Huffer v Allen (1866) LR 2 Exch 15. In this case a plaintiff sued for a sum of money and entered judgment in default for the full sum even though a part of it had been paid to him. It may be that today such a judgment would be regarded as fraudulent and incapable of creating an estoppel. 55 See para 9.110 et seq. 56 See part (G) of this chapter for an estoppel arising from the decisions of various bodies other than the ordinary courts.

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9.18  Estoppel by Record involving a consideration by the court of the substance of an issue between the parties, and (d) judgments given without jurisdiction. Before coming to these matters it is necessary to refer to and to distinguish between judgments in rem and judgments in personam.

2.  Judgments and Actions in Rem and in Personam (i)  The General Distinction 9.18  For the purposes of estoppel by record, a distinction must be drawn between judgments in personam and judgments in rem. A judgment in personam is a judgment of a court which operates in favour of or against a party or parties to the proceedings before the court and has effect between them as an estoppel, whether a cause of action estoppel or an issue estoppel, but does not operate as an estoppel and is not binding on persons who are not parties to the proceedings or their privies. The law is that if one party brings an action against another for a particular cause and judgment is given upon it, there is a strict rule that he cannot bring another action against the same party for the same cause.57 Such a judgment operates as a judgment in personam and the great majority of judgments are of this character. 9.19  A judgment in rem is quite different in its effect. Such a judgment establishes the status of some person or matter. The effect of the judgment and the status so established then operates not just as between the parties to the proceedings which lead to the judgment but also as between all persons. A judgment in rem binds the world. A judgment in rem has been defined in the following way. The term ‘judgment in rem’ is one clearly understood by the law and has been defined as meaning ‘a judgment of a court of competent jurisdiction determining the status of a person or thing, or the disposition of a thing (as distinct from the particular interest in it of a party to the litigation)’; see Halsbury’s Laws of England, Hailsham Edition, vol 13, p 405; and such a judgment is conclusive evidence for and against all persons whether parties, privies or strangers of the matter actually decided.58

The reason for this effect is apparent. One type of judgment in rem is a decree of a court dissolving a marriage. The status of the petitioner is dissolved from that of a married to that of an unmarried person. Obviously this change of status should bind everyone. If A obtained a decree of divorce against B on the ground of adultery and A sought to remarry it would be ridiculous if someone who was a stranger to the proceedings could contend that the decree of divorce should not have been issued because the adultery had not been made out. Such a result is prevented by the judgment operating in rem. The person or thing whose status is determined by a judgment in rem is regarded as the ‘res’.59

57 Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630, 640 (Lord Denning MR). 58 Lazarus-Barlow v Regent Estates Co Ltd [1949] 2 KB 465, 475 (Evershed LJ). A more ancient way of expressing the principle is that a judgment in rem is a judgment to which the whole world is a party: Bernardi v Motreux (1781) 2 Doug 575, 580 (Lord Mansfield CJ). 59 Ballantyne v MacKinnon [1896] 2 QB 455, 460 (AL Smith LJ): ‘A judgment in rem is always as to the status of the res’.

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Judgments  9.22 9.20  It is doubtful whether a judgment in rem can properly be said to give rise to an ­estoppel by record in the normal sense of that expression. All three principles which comprise this form of estoppel60 operate so as to prevent parties to legal proceedings and their privies from disputing some cause of action or issue or matter already decided, or raising some cause of action or issue or matter which should have been raised in previous proceedings. The estoppel does not operate to the benefit or the disadvantage of other persons not parties to the proceedings in which the cause of action or issue or other matter was or should have been determined. The estoppel therefore depends on the judgment which creates it being a judgment in personam. The binding effect of a judgment in rem against all persons, whether parties to the proceedings in which the judgment was given or not, depends on a separate imposed rule of law created by the nature of such judgments. 9.21  A neat illustration of the difference between a judgment in personam and a judgment in rem was given by Lord Neuberger in a recent decision of the Supreme Court concerning the decision of the Technical Appeal Board of the European Patent Office under the ­European Patent Convention and the Patents Act 1977 which gave effect to the ­Convention.61 Such decisions operate in rem.62 The decision of the Supreme Court, which is discussed in more detail elsewhere,63 concerned the effect of a decision of the Appeal Board on a previous decision of an English court. Lord Neuberger pointed out that with a judgment in personam the fact that an identical issue is determined differently in two different sets of proceedings is irrelevant to the rights of the parties to each set of proceedings inter se. He said that in the normal run of things ‘where A has lost against B on an issue in one case, it is simply irrelevant to A’s legal obligations and rights as against B if C subsequently defeats B on the very same issue’.64 The reason is that the determination of most issues in litigation can only bind parties to that litigation and their privies. This is the result of an estoppel by record when the judgment is a judgment in personam.65 The contrast with this situation is a case, such as the decision of the Appeal Board on the validity and revocation of a patent, where the decision or judgment operates in rem and so binds everyone. 9.22  Judgments in rem cover a variety of circumstances relating to the status of some person or thing.66 Among the more important are a judgment of a court dissolving a marriage or issuing a decree of nullity of marriage,67 the judgment of a probate court setting up a will,68 an order revoking or amending a patent,69 an order depriving a 60 See para 9.7 et seq. 61 Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160. 62 ibid, para 7 (Lord Sumption). 63 See para 9.207 et seq. 64 Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160, para 46. 65 An illustration of the principle arose where an annuitant under a will was bound by a judgment on the meaning of tax legislation by reason of an earlier decision of the Court of Appeal to which he was a party but where another annuitant was entitled to contend for a different effect of the legislation, relying on a subsequent decision of the House of Lords, because he had not been a party to the earlier decision of the Court of Appeal: In Re Waring (No 2); Westminster Bank v Burton-Butler [1948] Ch 221. 66 A list is given in Halsbury’s Laws, vol 12A, 5th edn (LexisNexis, 2015) para 1598. 67 Bater v Bater [1906] P 209. It was said arguendo in R v Hebden (1738) Andr 388 that Hardwicke CJ had held ‘A judgment in Court-Christian on the nullity of a marriage, is conclusive evidence against the whole world’. 68 Noell v Wells and Page (1668) 1 Lev 235; Beardsley v Beardsley [1899] 1 QB 746. 69 Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160.

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9.23  Estoppel by Record c­ lergyman of his living,70 and a decision that a path is subject to a public right of way.71 There are some statutory provisions which in effect render a determination binding on the whole world.72

(ii)  Admiralty Actions in Rem 9.23  Admiralty actions in rem have a meaning and purpose which are radically different from the general meaning of judgments in rem. A judgment in rem in its general signification establishes the status of a person or thing as against the whole world. An Admiralty action in rem relating to a ship operates as a means of bringing the owner of the ship to meet a potential liability by seizing the ship as the property of the owner.73 It is in effect the enforcement of a lien over the owner’s ship as a means of obtaining a security for the personal liability of the owner. The action determines the liability of the owner and the ship then stands as a security for the fulfilment by the owner of that liability if it is established. The ship is seized and detained and is only released when any sums adjudged to be due from the owners of the ship are paid. A question which is relevant to the law of estoppel by record is whether, when a judgment on a cause of action has been obtained by a judgment in personam against the owner of a ship, that judgment under the principle of estoppel per rem iudicatam prevents a subsequent action in rem relating to the ship under the same cause of action. This question arose in Republic of India v India Steamship Co Ltd (No 2)74 in c­ onnection with the operation of section 34 of the Civil Jurisdiction and Judgments Act 1982, a provision applying to judgments in foreign courts, when a judgment in personam was obtained in India and an action in rem was then brought in England but the same question would have arisen if the judgment in personam had been given in England. 9.24  The litigation in the India Steamship case was long and complex and twice reached the House of Lords. Apart from the present point concerning the nature of an action in rem, the decisions are important for the matter of the identity of causes of action if there is to be a cause of action estoppel, for the doctrine of merger of a cause of action in a judgment, and for the matter of whether a defence of estoppel per rem iudicatam can itself be defeated by an estoppel such as an estoppel by convention (called the ‘cross-estoppel’ issue), and these aspects of the two decisions in the House of Lords are discussed later in this chapter.75 It is sufficient for present purposes to say that the Indian Government contracted with the Defendants as owners of a ship, the ‘Indian Grace’, for the Defendants to transport a cargo of

70 Philips v Bury (1696) 1 Ld Raym 5. 71 Armstrong v Whitfield [1974] QB 16. 72 eg, a landowner may appeal to the Secretary of State under s 174 of the Town and Country Planning Act 1990 against a planning enforcement notice on the ground that what has been done is not a breach of planning control. The general effect of s 181 of the Act is that the notice if upheld continues to have effect against other persons who carry out acts on the land even though those parties had no part in the determination of the appeal. 73 The Tervaete [1922] P 259, 270 (Scrutton LJ). The seizure was, and is, not necessarily of the ship to which the dispute relates but could be of a different ship of the same owner. This is what occurred in the India Steamship case referred to in the next paragraph. 74 Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878. 75 See para 9.74 et seq for identity of causes of action, para 9.67 et seq for the doctrine of merger, and para 9.84 et seq for cross-estoppels. As well as for aspects of estoppel by record the second decision in the proceedings is important for the statement by Lord Steyn of the essential elements of estoppel by convention: see ch 5, para 5.4.

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Judgments  9.27 munitions from Sweden to India. A fire occurred during the voyage and a part of the cargo was jettisoned and the remainder was found on arrival in India to have been damaged by the heat of the fire. A judgment at Cochin in India was obtained by the Indian Government for the loss of the jettisoned cargo and a subsequent action in rem was brought or continued in England to obtain damages for the loss of value of the remainder of the cargo and to seize a sister ship of the owners as a security for the payment of any damages held to be payable by the owners. 9.25  Cause of action estoppel, as a species of estoppel per rem iudicatam, requires that if a second cause of action is to be defeated by reason of the estoppel (a) there must be an identity between the cause of action asserted in the two proceedings, and (b) the two proceedings are between the same parties or their privies. On the first criterion, when the proceedings first came before the House of Lords it was held that the action in India on which judgment had been obtained was founded on the same cause of action as that asserted in the English action.76 The Government of India reposted that the estoppel failed because there was a different Defendant in the action in personam, brought in India, and the action in rem, brought in England. It was this contention which necessitated a consideration of the nature of an Admiralty action in rem and this was one of the matters considered when the proceedings came for a second time before the House. 9.26  It is necessary here to explain this last matter only in outline. Admiralty actions in rem were originally brought in the High Court of Admiralty which was to some extent subject to the prerogative writ jurisdiction of the Court of King’s Bench such as the writ of prohibition. Following the reorganisation of the courts by the Judicature Acts 1873–75 the Admiralty Court became a part of the Probate, Divorce and Admiralty Division of the High Court and its jurisdiction was extended. Actions in rem continued with the purpose indicated above. Prior to the Judicature Acts there arose the ‘personification theory’ which was a fiction that the action was brought against the ship itself as a chattel and that the ship itself was the ‘wrongdoer’. By the end of the nineteenth century and in the twentieth century, this fictional theory had lost its attraction and was replaced by the procedural theory of the nature of an Admiralty action in rem.77 The procedural theory was the realist view that an action in rem was an action not against the ship (the res) but against the owners of the ship as the Defendants. This latter theory was in due course upheld by the House of Lords.78 Thus, an Admiralty action in rem was seen and classified as what in truth it was, that is an action against the owners of a ship claiming some remedy such as damages for breach of contract, with the ship itself held and detained as a security for the discharge of any liability which might attach to the owners as a result of the action.79 9.27  The history and the current day juridical analysis of Admiralty actions in rem were expounded by Lord Steyn when the India Steamship case came before the House of Lords

76 Republic of India v India Steamship Co Ltd [1993] AC 410. 77 See in particular The Dictator [1892] P 304. 78 The Cristina [1938] AC 485. 79 Consequently the ship might be released from its seizure and detention upon the giving of some alternative security or undertaking. This was what happened in the India Steamship case where an underwriting association agreed to pay the claim of the Government of India if it was proved and following this the ship seized was allowed to sail.

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9.28  Estoppel by Record on the second occasion. The personification fiction had been discarded80 and it was held that the action in rem in England brought by the Republic of India was an action against the owners of the ship from the moment that the English court was seized of the claim within the jurisdiction. Consequently, the parties in the Indian action and the English action, the Republic of India and the shipowners, were the same with the result that in principle a cause of action estoppel was available to the shipowners by way of a defence to the English proceedings.81

3.  Final Judgments 9.28  In order for it to work an estoppel by record a judgment has to be final. This requirement does not mean that the judgment is not subject to a possible appeal, but before it can be final it must be a judgment which cannot be varied, reopened, or set aside by the court which decided it or by another court of coordinate jurisdiction.82 Illustrations of decisions which do not create an estoppel because they are not final come in part from judgments of foreign courts where of course procedures may be different from those in English courts. In one case, an English court refused to give effect as an estoppel to a judgment in a Spanish court which had been obtained by a summary form of procedure. Under the procedures operating in Spain, it was possible to reopen the whole of the decision by commencing a different form of action.83 A party who wishes to rely on a judgment of a foreign court in support of a res iudicata plea must prove that that judgment was final under the law of the country in question. In Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2),84 a party claimed an estoppel based on a judgment in its favour relating to want of authority to sue in the Federal Supreme Court of West Germany. One of the reasons that the estoppel plea failed was that the party had not proved that German courts would not allow the reopening of the want of authority issue in a new case between the parties.

80 As the matter was vividly put by Lord Steyn in the House of Lords at [1998] AC 878, 913: ‘The role of fictions in the development of the law has been likened to the use of scaffolding in the construction of a building. The scaffolding is necessary but after the building has been erected scaffolding serves only to obscure the building. Fortunately, the scaffolding can usually be removed with ease: Fuller, Legal Fictions (1967) p 70. The idea that a ship can be a defendant in legal proceedings was always a fiction’. 81 Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878. 82 See para 9.5 and see Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853; DSV Silo-und ­Verwaltungsgesellschaft mbH v Sennar (Owners), The Sennar (No 2) [1985] 1 WLR 490. Obviously before there can be a final judgment there must be a judgment, that is an adjudication on some dispute by an independent body. The  initiation of disciplinary proceedings by an employer against an employee is not a judgment or adjudication in this sense since it is no more than a method by which the employer can inform itself as to the appropriateness of the conduct of an employee. Consequently, neither the principles of res iudicata nor the rule in Henderson v Henderson are engaged by such disciplinary proceedings: see Christou v Haringey LBC [2014] QB 131; Mattu v University Hospitals Coventry and Warwickshire NHS Trust [2013] ICR 270. 83 Nouvion v Freeman (1889) 15 App Cas 1. 84 [1967] 1 AC 853, 919 (Lord Reid). What the reasoning of Lord Reid amounts to is that for a judgment of a foreign court to be final and so capable of creating an estoppel in subsequent English proceedings between the same parties, that judgment has to be shown to be one which would operate as an estoppel in subsequent proceedings between the same parties in the courts of the foreign country. This appears to be sound since it would be unsatisfactory to allow a judgment of a foreign court to operate as an estoppel per rem iudicatam in England if it does not have that same status and effect in the courts of its country of origin.

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Judgments  9.29 A further illustration of the need for a final judgment if there is to be an estoppel founded on it arose at a further stage in the same litigation when it was urged in support of an application to strike out parts of defences filed that a decision of a New York Court holding that certain trademarks had been infringed brought about an issue estoppel in the English proceedings. The submission failed because there was a counterclaim under US Anti-Trust laws which remained to be determined so that the judgment given in New York was not final.85 Courts make many adjudications which are not final. An obvious example is an interim injunction which is granted to preserve the existing position until there can be a final determination of the issues between the parties. Such an order plainly does not determine any cause of action or issue between the parties, but merely states that on the balance of convenience it is right that the status quo is preserved until a final determination on a claim can be made.86

(i)  Interlocutory Orders 9.29  Courts often make decisions on interlocutory applications of various types. The decision on such an application is often merely the exercise of a discretion by the court on the facts as they exist at the time of the decision on the application and does not constitute a final judgment on anything.87 Applications of such a procedural and interlocutory nature can be renewed without fear of any estoppel derived from the previous disposal of the application, and a renewed application will be decided on the facts as they have changed or emerged since the decision on the previous application. Instances of this process are applications for a stay of execution or for permission to appeal from a decision.88 The making of a further application is sometimes constrained by a time limit but such time limits can usually be extended.89 The decision on such a renewed application is not constrained in law by the previous decision on a similar application.90 In the same way an interlocutory decision may be discharged or varied as a result of new facts having come to light. An illustration of this situation would be where after the grant of an interim injunction new facts emerged which

85 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 3) [1970] Ch 506, 547. A summary of this complicated litigation is given in para 9.122. 86 The principles which govern the grant of an interim injunction are explained in American Cyanamid Co v ­Ethicon Ltd [1975] AC 396. Subject to other matters, a test often applied in deciding whether an interim injunction should be granted is one of the balance of convenience. 87 In Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, 927, Lord Hodson asked the question of about what is the judgment to be final and conclusive and answered it by saying that the judgment must be on the merits and not only as to some interlocutory matter not affecting the merits. What is meant by ‘the merits’ in this context is the substance of the matter or matters in dispute between the parties. 88 Further instances of procedural orders, and their capacity or incapacity to create an estoppel by record, are discussed in para 9.44 et seq. 89 For instance, an application for permission to the Court of Appeal from a decision of the High Court must be made within 21 days of the decision of the High Court: CPR, Part 12.4(2)(b). 90 An extreme example is Buttes Gas & Oil Co v Hammer [1982] AC 888 when permission to appeal to the House of Lords from the Court of Appeal was initially refused but was granted on a renewed application five years later. The exceptional circumstances which justified such a course were that a further decision of the Court of Appeal on the matter in issue had been given in a different case in the intervening period. The important point for present purposes is that the original refusal of permission to appeal did not create an estoppel per rem iudicatam. As was pointed out by Buckley J in Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 3) [1970] Ch 506, 519, if an application for a stay of an action is refused the application can be renewed on new grounds.

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9.30  Estoppel by Record altered the balance of convenience, the usual test for the grant of such injunctions, and so justified the discharge of the injunction.91 9.30  The requirement of finality must not be pursued to extremes. A court may sometimes give a judgment and make an order which does finally dispose of the main issues before the court, but may leave over certain matters for further determination. An obvious example would be a determination that a provision in a contract had a certain meaning, and that on the basis of that meaning the Defendant had broken the contract and so was liable in damages. The court, having given judgment on the main issues, might then order that, unless the amount of the damages was agreed, there should be an inquiry as to the amount of the damages. In one sense such an order is not wholly final since it leaves over a significant matter as undecided within the totality of the litigation between the parties. Nonetheless, the judgment of the court on the issues decided is clearly a final decision on those issues and this will be sufficient to create an estoppel per rem iudicatam on those issues.92 An illustration of this process is litigation, discussed a little earlier in this chapter in connection with Admiralty actions in rem, which twice came before the House of Lords arising from a fire on a ship carrying munitions from Sweden to India where loss and damage was caused to the cargo. The cargo owners brought two successive sets of proceedings claiming damages, and it was held in the House of Lords that the second proceedings were on the same cause of action as the first proceedings and would therefore normally fail but that there could in principle be an estoppel by convention between the parties at the time of the first proceedings which prevented this result. The proceedings were therefore remitted to the Admiralty judge to determine whether there was such an estoppel. The decision of the House therefore did not finally determine the proceedings between the parties, but the decision on the identity of the cause of action and on the availability in principle of what has been called a cross-estoppel plainly did bind the parties in the same or in further proceedings. The second decision of the House of Lords determined the nature and application of the alleged cross-estoppel.93 9.31  The word ‘interlocutory’, as often used in legal parlance, is imprecise in its meaning. In one sense an interlocutory judgment or order is one which does not wholly and finally decide all questions in the proceedings before a court. For present purposes what matters is not whether a judgment is interlocutory in this sense, but whether the judgment finally

91 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 3) [1970] Ch 506, 519 (Buckley J). The Judge (at 542) put the principle as being that no decision on an interlocutory matter is final in the relevant sense unless, in consequence of the doctrine of res iudicata, it is a bar to further litigation on an issue. Perhaps a different way of putting it would be to say that since an interlocutory order is normally not final it cannot usually bring about any form of estoppel per rem iudicatam. 92 A further example of such a process is Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160, where in a judgment in earlier proceedings between the parties, [2009] EWCA Civ 1062, the Court of Appeal held that there had been a breach of a patent by the Defendants and ordered an inquiry as to damages. In the ordinary course of events this would have created an estoppel per rem iudicatam which bound the parties in any subsequent proceedings including the conduct of the inquiry as to damages. These were special later circumstances which were held by the Supreme Court to justify a refusal to give ordinary effect to the estoppel. This decision is discussed in more detail in para 9.207 et seq. 93 The two decisions are Republic of India v India Steamship Co Ltd [1993] AC 410; and Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878. These decisions are discussed further under cause of action estoppel in para 9.75 and in connection with cross-estoppel in para 9.88. The subject of Admiralty actions in rem is explained in para 9.23 et seq.

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Judgments  9.33 decides on the existence or otherwise of a cause of action (when it may give rise to a cause of action estoppel) or finally decides a discrete issue of law or of fact (when it may give rise to an issue estoppel).94 What is important is not the stage of an action at which a matter is decided, but whether the decision is final in the sense that it cannot be reopened in the action except by way of an appeal. 9.32  On occasions courts issue what is called an order nisi. What is meant is that the order will have full effect unless one or other party objects to it, and in the case of an objection the views of both parties will be taken into account before the court makes a final decision on the subject matter of the order. The order is in these circumstances usually one which is adverse against one of the parties who is given an opportunity to object to it. The effect of an order nisi is that, unless and until the court makes a full order in the light of an absence of objections or in the light of objections considered, the order is not final but becomes final when having considered any objections, or the absence of any objections, the court makes a final order. An illustration of this process is that a court, having determined an appeal, makes a proposed or ‘nisi’ order as to the cost of the appeal without having heard submissions on the matter of costs and then gives the parties an opportunity to make such submissions before the order becomes final.95

(ii)  Declaratory Judgments 9.33  A court may do no more in proceedings than make a declaration as to the respective rights of the parties. Such a judgment is plainly final and may operate as an estoppel per rem iudicatam. The judgment may decide only one issue but may still operate to give rise to a cause of action estoppel. The seeking of the declaration is an assertion of an entitlement to relief and, like any other cause of action, depends on the proof, or the admission, of the relevant facts needed to establish the right. Both parties will be bound in any subsequent proceedings between them to accept the existence (or non-existence) of the right in question in accordance with the exact terms of the declaration. Although there will be a cause of action estoppel, the parties will not be prevented from bringing further proceedings based on what has been decided, or from seeking further relief in pursuance of a new cause of action on any matter where the further relief depends on the correctness of the declaration made. Where A obtains a declaration that he has a right of way over B’s land, A can bring a further claim asserting that B has impeded the right of way and B will be estopped from asserting that there is no right of way. The further claim will be the assertion of a new cause of action. If the declaration is simply that a right of way against B exists, B will still in later proceedings be entitled to assert that the right of way in question is confined to a right on foot rather than a right on foot and with vehicles, since a simple declaration that a right of way exists may not have decided the exact content and extent of the right of way.

94 For instances of an interlocutory judgment giving rise to an issue estoppel, see para 9.30. 95 See, as an example, para 100 of the judgment of Lord Neuberger in the Court of Final Appeal in Hong Kong in Penny’s Bay Investment Co Ltd v Director of Lands, FACV No 1 of 2017. In the event, and after further submissions from both parties, a final order for costs was made which was even more in favour of the winning party in the appeal than that proposed in the order nisi.

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9.34  Estoppel by Record

(iii)  Other Matters 9.34  Another type of situation which occurs in litigation is that proceedings are truncated by one party discontinuing the proceedings. In such a case, there is plainly no final order which can work an estoppel per rem iudicatam. Indeed, there is no order at all except that the proceedings are discontinued (and possibly ancillary orders such as an order as to costs). There is therefore nothing in accordance with the rules of estoppel by record which prevents a party who has discontinued proceedings from initiating further proceedings on the same cause of action. This situation is dealt with by the Civil Procedure Rules which provide that a claimant who discontinues a claim needs the permission of the court to make another claim against the same defendant if it has discontinued the claim after the defendant has issued a defence and the new claim arises out of facts which are the same or substantially the same as those relating to the discontinued claim.96 This process is therefore the result of statutory provisions and not of the common law system of res iudicata. 9.35  On the question of finality, it is necessary to distinguish between the judgment of a court and the making by the court of an order which gives effect to the judgment.97 Once the order has been drawn up and sealed, the court is functus officio and has no power to alter its decision even though new matters arise or are discovered. However, a court does have an inherent power exercisable in exceptional circumstances to alter its judgment at any time until the formal order is made.98 Thus the doctrine of res iudicata arises only when the order is made. 9.36  As well as being final a judgment must be clear and certain if it is to operate as an estoppel. In Thoday v Thoday,99 an issue was before a Judge in divorce proceedings but, since the ultimate conclusion of the Judge made no certain finding on that issue, there was no issue estoppel which prevented the issue being re-litigated in later proceedings between the same parties.

4.  Fraud or Collusion (i)  Fraud or Perjury 9.37  It has long been accepted law that a decision which has been obtained by fraud or collusion cannot found an estoppel per rem iudicatam. This principle goes back at least to The Duchess of Kingston’s Case.100 Miss Chudleigh married Augustus Harvey but a quarter 96 CPR, Part 38.7. It might be possible to argue under the rule in Henderson v Henderson that in some circumstances where a party has for no good reason discontinued proceedings which it could and should have pressed to a conclusion the later bringing of the same or similar proceedings against the same Defendant should be prevented as an abuse of the process of the court. The rule in Henderson v Henderson is explained in part (J) of this chapter. 97 See para 9.16. 98 Charlesworth v Relay Roads Ltd [2000] 1 WLR 230; Stewart v Engel [2000] 1 WLR 2268; Railtrack Plc v ­Guinness Ltd [2003] 1 EGLR 124. Some judicial bodies have a power under procedural rules to review a ­decision during a limited period after it has been made and in limited circumstances: see, eg, the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010, rule 56. 99 [1964] P 181. See para 9.90 for a further consideration of this rule and of Thoday v Thoday in the context of issue estoppel. 100 The Duchess of Kingston’s Case (1776) 20 St Tr 355, (1776) 1 Leach 146.

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Judgments  9.39 of a century later brought a suit of jactitation of marriage against Harvey in an ecclesiastical court and obtained a judgment that she was free of the marriage.101 She then married the Duke of Kingston. She was subsequently charged with the crime of polygamy. The Duchess was tried before the Lord Chancellor acting under a commission directed by Parliament. She contended that the judgment of the Consistory Court which established the invalidity of her former marriage, and thus her unmarried status, at the time of her marriage to the Duke was binding, and so was a conclusive defence to the charge of polygamy. She was convicted of the offence and the matter was referred to 12 Judges where it was held that the judgment of the Consistory Court could not be used as a form of estoppel if it had been obtained by fraud.102 9.38  The principle of law just stated has been confirmed in more modern times and circumstances. In a criminal case, DPP v Humphrys,103 a person who had been acquitted of an offence was subsequently charged with perjury alleged to have been committed at his trial. Viscount Dilhorne when introducing his judgment stated the law as being that it was well established in civil cases that a decision which was obtained by fraud could be impugned and would not found an estoppel and amount to res iudicata.104 9.39  One species of fraud arises where a judgment may be impugned on the ground that it was obtained by perjured evidence. The application of the principle here discussed would create substantial practical problems in such cases if there were no restriction or qualification to it. If A succeeds on a cause of action or an issue against B and obtains judgment when the court has resolved a conflict of evidence, then if the same question is raised in later proceedings between A and B and B denies that there is an estoppel because the judgment was obtained by perjury of a witness or witnesses at the first trial, the resolution of the defence against an estoppel might in practice involve retrying the factual issue which had been resolved and which led to A’s success in establishing his cause of action or succeeding on the issue. Such a process is repugnant to the very purpose of estoppel per rem iudicatam which is to obtain finality in legal proceedings. Accordingly, there is a common law rule that an unsuccessful party who has been sued to judgment is not permitted to challenge that judgment on the ground that it was obtained by fraud unless he is able to prove that fraud by fresh evidence which was not available to him and could not have been discovered with

101 A suit for jactitation of marriage was a petition, heard before a Consistory Court, against a person who falsely claimed that he or she is married to the Petitioner. It could result in a decree that the Petitioner was free of the marriage. 102 The Duchess was in the end discharged ‘without being burned in the hand’ under statutes going back to the reign of Henry VI applicable to felonies committed by a peer or peeress of the realm. See also R v Hebden (1738) Andr 388, 392, in which it was said that a previous judgment against A and B was good evidence against the Defendant who claimed under A and B but it was not conclusive evidence ‘for that the Defendant might have proved that the judgment was obtained by collusion’. 103 [1977] AC 1. See also, eg, Frost v Frost [1968] 1 WLR 1221, 1229, in which it was said that even if res iudicata applied at all in child custody proceedings, which was doubtful, it did not prevent a party from contradicting a previous finding of adultery on the ground that the finding had been reached as a result of perjury and a conspiracy to deceive the court. 104 [1977] AC 1, 21. Further authorities for this principle cited were Abouloff v Oppenheimer & Co (1882) 10 QBD 295; and Vadula v Lowes (1890) 25 QBD 310 and the law was said to have been correctly stated (at 323) of the second edn of Spencer Bower & Turner: Res Iudicata, as being ‘The fraud necessary to destroy a prima facie case of estoppel by res iudicata includes every variety of mala fides and mala praxis whereby one of the parties misleads and deceives the judicial tribunal’.

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9.40  Estoppel by Record reasonable diligence before the judgment was delivered.105 This rule is said to be backed by many authorities and to be unquestionable.106 The result is that the ability of a party to resist an estoppel per rem iudicatam on the ground that the judgment which creates the estoppel was obtained or tainted by fraud is heavily circumscribed whether the alleged fraud is the giving of perjured evidence or is some other similar matter.

(ii)  Collusion or Bias 9.40  As with a judgment tainted with fraud, so a judgment in proceedings which are collusive or fictitious will not create a situation of res iudicata from the judgment in those proceedings. In Bandon v Becher,107 Lord Brougham accepted as substantially correct a submission to the House of Lords by the Solicitor General that: A sentence is a judicial determination of a case agitated between real parties, upon which a real interest has been settled, – in order to make a sentence there must be a real interest, a real argument, a real prosecution, a real defence, a real decision. Of all of these requisites not one takes place in the case of a fraudulent and collusive suit; there is no Judge, but a person invested with the ensigns of a judicial office is misemployed in listening to a fictitious case proposed to him; there is no party litigating, there is no party defendant, no real interest brought into question.

Of course, if the parties have made up fictitious facts or have colluded in some other way and this becomes known to the court, the court may itself refuse to decide the supposed issue.108 The question of res iudicata is most likely to arise when the court issuing a judgment has not been told of the fiction or the collusion but this emerges subsequently when reliance is sought to be placed on the judgment in accordance with the res iudicata principles. 9.41  In most cases an attack on the validity of a judgment of a court for fraud, collusion, or some similar reason, rests on the conduct of one or more of the parties to the proceedings which resulted in the judgment. It is possible that on occasions a court has itself acted in some way which renders its judgment unacceptable. Such a situation will arise in the case of actual or apparent bias by the Judge or one of the Judges making the ­decision.

105 Owens Bank Ltd v Bracco [1992] 2 AC 443, 483 (Lord Bridge). It was said that where the issue is reliance on or enforcement of a judgment in a foreign court the whole field is effectively governed by statute and is a matter for legislation. Estoppel by record based on foreign judgments is examined in part (H) of this chapter. 106 ibid. 107 Bandon v Becher (1853) 3 Cl & F 479, 511. 108 In Avon County Council v Howlett [1983] 1 WLR 605 a claim was made by an employer to recover an amount of sick pay paid by mistake to an employee. The employee responded that there was an estoppel by representation which prevented the employer from denying that the sums paid were due to him and that as a result of the representation he had acted to his detriment by expending a part of the money paid. Action to a person’s detriment in reliance on a representation is an essential requirement before an estoppel by representation can be established. It appears that in fact the employee had expended the whole of the money so paid and that the parties had made up certain of the facts in order to obtain a judgment from the court which would be of use to them in further proceedings where a similar issue might arise from partial expenditure. In the Court of Appeal, Cumming-Bruce LJ was unwilling to decide the case in these circumstances. Nonetheless, a full and reasoned judgment on the issue was delivered by the other two members of the Court. This decision is of some importance on the matter of whether an estoppel by representation can have a pro tanto or partial effect. It seems likely that where the Court was aware of any element of collusion or fiction but was nonetheless willing to proceed with that knowledge, the judgment of the court can work an estoppel per rem iudicatam. The Howelett decision is important for the law of estoppel by representation and is considered extensively in ch 3, para 3.157 et seq.

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Judgments  9.42 The most dramatic instance of a judgment which was set aside in such circumstances was the first judgment of the House of Lords in the Pinochet case, where it was held in a subsequent judgment of the House that the first judgment should be set aside because of apparent bias on the part of Lord Hoffmann due to his indirect association with an organisation which had campaigned for the extradition to Chile of General Pinochet on account of alleged actions by him while President of Chile.109 Clearly a decision which was unacceptable for such a reason could not create an estoppel per rem iudicatam. Where a judgment of a foreign court is challenged in proceedings in this country as resulting from a lack of independence or impartiality on the part of the judiciary, an English court can investigate that question where an attempt is made to recognise that judgment in English proceedings. The investigation is not prevented by the doctrine of act of state. Even so, cogent evidence will be needed before there is a refusal to recognise a decision of a foreign court on these grounds.110

5.  Judgments Not on the Merits and Procedural Orders (i)  Judgments on the Merits 9.42  The traditional form of legal proceedings is that a claimant asserts a cause of action before a court which then decides any issues of fact in dispute, then determines what are the relevant principles of law to be applied, then applies the law to the facts and so reaches a conclusion on whether the cause of action does or does not succeed, and finally, if the cause of action does succeed, decides on any appropriate remedy. The decision as a whole culminating in a judgment and a final order111 is sometimes described as a decision ‘on the merits’.112 Obviously a judgment given in these circumstances, normally after evidence and argument on any disputed matters, can give rise as between the parties to a cause of action estoppel as regards the cause of action which was established or rejected and an issue ­estoppel as regards any issues determined by way of leading to the final conclusion of the court. The question to be considered as regards either of the two principles of estoppel per rem iudicatam, cause of action estoppel and issue estoppel, is whether an estoppel can arise even though the decision of the court was not wholly on the merits in the sense just stated. In this context, the description of a question being determined on the merits may mean that the question has been determined after hearing any necessary evidence and ­argument on the question in dispute between the parties. While a judgment ‘on the merits’ with the  meaning just described will normally create an estoppel per rem iudicatam between 109 R v Bow Street Metropolitan Stipendiary Magistrate, ex parte Pinochet Ugarte (No 2) [2000] 1 AC 119. 110 Yukos Capital Sarl v OJSC Rosneft Oil Co (No 2) [2014] QB 458. A Dutch court had held that the decisions of courts in the Russian Federation setting aside arbitration awards should not be recognised because of a lack of independence and impartiality on the part of the judiciary and an unsuccessful attempt was made to treat the judgment of the Dutch court as creating an issue estoppel on this matter in the English proceedings. See para 9.99. 111 See para 9.16 for the distinction between a judgment and an order. 112 In DSV Silo-und Verwaltungsgesellschaft mbH v Sennar (Owners), The Sennar (No 2) [1985] 1 WLR 490. Lord Brandon put the matter of a decision on the merits as follows: ‘A decision on the merits is a decision which establishes certain facts as proved or not in dispute, states what are the relevant principles of law applicable to the facts and expresses a conclusion with regard to the effect of applying those principles to the factual situation concerned’.

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9.43  Estoppel by Record the parties, there is no absolute rule that a judgment not on the merits in this sense cannot ever create such an estoppel.113 A judgment on the merits may have the meaning that the judgment has been reached after a consideration of evidence or argument on some or all of the issues, or may have a second and different meaning of a judgment which decides by some procedure or process one or more of the substantive questions between the parties as compared with some procedural or adjectival question. The correct general approach is that if it is to create an estoppel per rem iudicatam, a judgment need not necessarily be of the first character (for example, a judgment by consent is sufficient) but does have to be of the second character. This important distinction is referred to again later.114 In one case, the somewhat extreme submission that the doctrine of res iudicata was confined to proceedings in which discovery (now called disclosure) of documents could be insisted upon was rejected.115 9.43  It is perhaps obvious that a decision of a court may be one on the merits in either of the above senses of that expression even though some of the matters relevant to the decision are not in dispute between the parties. Often some or all of the facts may be agreed.116 Sometimes the law is agreed between the parties and is accepted as correct by the court.117 Such a measure of agreement obviously should not prevent a cause of action estoppel arising from the final decision of the court. Nor should it prevent an issue estoppel arising even on the issues where there is agreement. A decision of a court on a particular issue may create an issue estoppel even though the judgment as a whole does not create a cause of action estoppel because, for example, the court had in one sense no jurisdiction. An unusual decision to this effect is The Sennar (No 2)118 in which a Dutch court held that it had no power to determine a dispute because of its ruling on the application to the dispute of an exclusive jurisdiction clause in a bill of lading, the effect of which was that any dispute had to be litigated in courts in Sudan. The decision of the Court on the issue which it decided, the meaning and effect of the clause, did create an issue estoppel 113 An obvious example of an order which can operate an estoppel, but is not a decision on the merits in the sense just stated, is a consent order. See para 9.45. A further example is a default judgment as explained in para 9.49. In neither of these cases does the court examine and adjudicate on the facts and the law and then state its own reasoned conclusion. See however R (Gray) v Police Appeals Tribunal [2018] 1 WLR 1609 in which it was held that a decision of a disciplinary tribunal not to remit a matter did not create a cause of action estoppel since that decision was not reached ‘on the merits’ in the sense that all relevant evidential material had been reviewed before the making of the decision. The Court relied on the statement of the requirements of cause of action estoppel by Lord Clarke in R (Coke-Wallis) v Institute of Chartered Accountants in England and Wales [2011] 2 AC 146, para 27, which included a requirement that the decision creating that estoppel was on the merits (see para 9.90 for the requirements as set out by Lord Clarke). The Court of Appeal in the Police Appeals Tribunal case had some difficulty in equating an ‘on the merits’ requirement in the above sense with the rule that a default judgment, which is plainly not a judgment on the merits in this sense, could create an estoppel per rem iudicatam: see para 9.50. 114 See para 9.56. 115 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 3) [1970] Ch 506, 546. 116 This situation is noted in the citation from the judgment of Lord Brandon, above (n 112). 117 There is here a distinction between matters of fact and matters of law. A court will generally accept the facts as agreed between the parties unless they are obviously fictitious or in some way collusive (see Avon County Council v Howlett [1983] 1 WLR 605 and above (n 108)). A court may refuse to accept a proposition of law, and certainly a proposition of general law, even though it is admitted or agreed between the parties if the court considers that the principle as so admitted or agreed is incorrect. An example, referred to later in this chapter, of a court not accepting a concession of law made on behalf of a party is the disinclination of Lord Millett in Johnson v Gore Wood & Co [2002] 2 AC 1, 60, to accept the proposition put to the House of Lords that a person who controlled a company was a ‘privy’ of that company. See para 9.137. 118 [1985] 1 WLR 490.

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Judgments  9.45 binding on the parties. The more general question of lack of jurisdiction and res iudicata is ­examined below.119

(ii)  Procedural and Other Similar Types of Order 9.44  It is now appropriate to examine the possibility of an estoppel per rem iudicatam resulting from various types of judgment or order commonly given or made by courts which are not, or are not wholly, judgments on the merits in the first of the senses just indicated, namely judgments by consent or given on an agreed assumption, judgments in default, judgments involving only the exercise of a discretion, judgments striking out the whole or a part of a claim or a defence, orders granting or refusing summary judgment, and orders for the discontinuance of an action. Following this examination a summary of the relevant rules is given. 9.45  A judgment by consent can create an estoppel per rem iudicatam as well as can a decision which has been reached after the resolution by a court of a contention between the parties. The law has been stated as follows: The basis of the estoppel [estoppel per rem iudicatam] is that, when parties have once litigated a matter, it is in the interest of the state that litigation should come to an end; and if they agree upon a result, or upon a verdict, or upon a judgment, or upon a verdict and judgment, as the case may be, an estoppel is raised as to all the matters in respect of which an estoppel would have been raised by judgment if the case had been fought out to the bitter end.120

It would be irrational that a party should be bound by an estoppel if he resisted a claim but had it decided against him following contested litigation and a reasoned judgment but would not be bound if, when the claim was raised in proceedings, he consented to judgment on that claim. It does not seem that this rule has ever been doubted.121 As stated above, it follows that to the extent that a judgment on the merits means a judgment obtained by a 119 See para 9.59 et seq. It is necessary to define carefully what in these circumstances is meant by a court having no jurisdiction. To take an extreme and hypothetical example, an employment tribunal might purport to determine a matrimonial dispute. The purported decision would be void and certainly could not create an estoppel per  rem iudicatam. An example of this process is the earlier decisions of Ontario courts examined in Toronto Railway Co v Corporation of the City of Toronto [1904] AC 809 discussed in para 9.60. In The Sennar (No 2) [1985] 1 WLR 490 a Dutch court had jurisdiction, in the sense of a general capacity to consider the proceedings, but by reason of an exclusion clause held that it was unable to determine the substantive issue between the parties which under the terms of that clause could be determined only by a Sudanese court. A similar situation arises in administrative law where a tribunal of limited jurisdiction has power to determine whether it has jurisdiction over a matter put before it. If it were otherwise, there would be no method of deciding whether the tribunal did or did not have jurisdiction. If such a tribunal decides that it does have jurisdiction when in fact it does not, then of course its decision, whatever the nature of that decision, can be challenged by way of judicial review and if necessary quashed by the High Court. 120 In Re South American and Mexican Company, ex parte Bank of England [1895] 1 Ch 37, 45 (Vaughan Williams J). See also Kinch v Walcott [1929] AC 482, 493. For the purposes of issue estoppel, the fact that a fundamental issue between the parties in one set of proceedings has been assumed or admitted to be correct does not prevent the decision of a court based on that issue creating an issue estoppel as regards that issue in later proceedings between the same parties: see Hoystead v Commissioner of Taxation [1926] AC 155, 171 (Lord Shaw), a decision discussed further in the next paragraph. In Thoday v Thoday [1964] P 181, 198, Diplock LJ in his description of issue estoppel referred to an issue as having been determined by a court of competent jurisdiction ‘either upon evidence or upon admission by a party to the litigation’. The relevant passage is set out in para 9.90. 121 For a modern reiteration of the rule in relation to proceedings before an employment tribunal, see Ako v ­Rothschild Asset Management Ltd [2002] EWCA Civ 236, [2002] ICR 899, para 28.

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9.46  Estoppel by Record reasoned decision after evidence and argument, the existence of a judgment on the merits in this sense is not an essential requisite of an estoppel per rem iudicatam. 9.46  An order by consent is a formal order of the court and so can create an estoppel as can any other final order. Such an order must be distinguished from an agreement between the parties which may bring an action to an end by discontinuance or some other process. An agreement to settle proceedings may be made under the formal process in Part 36 of the Civil Procedure Rules which provides for the consequences of an offer to settle which is accepted. An acceptance of a Part 36 offer results in the claim being stayed.122 A settlement may be reached by any other means,123 and such an agreement is enforceable between the parties as an ordinary contract. Under former provisions in the Rules of the Supreme Court, a Defendant could pay a sum of money into court which could be taken out of court by a Plaintiff in satisfaction of the claim and so would result in a settlement of the claim. It was possible for a Defendant to pay in a sum while denying liability and this process did not result in any estoppel.124 Any agreement can of course be reached on the express terms that there is no admission of liability. It seems unlikely that any process as here discussed which does not culminate in a formal order of the court will operate as an estoppel per rem iudicatam. If a party seeks to reopen a claim or bring a further claim after an agreement for the final settlement of a claim, he may be met with two responses, one being that to do so is in breach of the agreement to settle and the other being that a new claim is an abuse of the process under the rule in Henderson v Henderson.125 9.47  The best illustration of an assumption as something which can create an issue ­estoppel is the decision of the Privy Council in Hoystead v Commissioner of Taxation126 in which a decision relating to tax in Australia had been reached on an agreed assumption that certain beneficiaries under a will were joint owners of property. It was held that the ­Commissioner of Taxation was bound by this assumption when the same question arose in relation to taxation in a later year. It was said that the principle of issue estoppel extended to any point, whether of assumption or admission, which was in substance the ratio of and incidental to the decision.127 In a later decision in the House of Lords, Lord Reid described the Hoystead decision as a case which had given rise to some difficulties.128 9.48  It may be sensible in the area of estoppel per rem iudicatam, and particularly for the purposes of issue estoppel, to make a distinction between a situation in legal proceedings in which the parties have expressly agreed to a particular assumption as a part of deciding the issue or issues between them and with no reservation expressed on the effect of the assumption and a situation in which an assumption has been made expressly for the purposes of those proceedings but for nothing else. In the first type of situation, it seems reasonable that the parties should be bound by an estoppel to that which they have expressly agreed, whether it is described as an assumption or anything else. In the second situation,



122 CPR,

Part 36.11(1). Part 36.1(2). 124 Coote v Ford [1899] 2 Ch 93. 125 See part (J) of this chapter for the Henderson v Henderson rule. 126 [1926] AC 155. 127 ibid, 170. 128 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, 915. 123 CPR,

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Judgments  9.50 where there is the limitation of any consent or agreement or assumption to the particular proceedings, it seems reasonable that there should be no estoppel in relation to the subject matter of the assumption when further proceedings between the same two parties come before a court. To hold that there was an estoppel in the second type of situation would be to deny any effect to an express statement that the assumption made was for the purposes of one particular proceedings and nothing else. An example of the second type of situation would be where a defendant raised two issues by way of defence to a cause of action asserted against it, one of which was a short point of law on which the defendant was confident of succeeding and one of which was a more difficult and complex question of fact, involving factual and perhaps expert evidence, which would take a considerable time to be determined by a court. A defendant in these circumstances might reasonably say that it was prepared to assume against itself the question of fact for the purposes of the proceedings before the court but for nothing else because it was confident of winning on the question of law.129 A possible different way of analysing the type of qualified assumption mentioned in this paragraph would be to regard the qualification of the assumption, if accepted as such by the parties, as giving rise to a separate estoppel by convention that the subject matter of the qualified assumption could not give rise to an estoppel per rem iudicatam. This situation can be called one of a cross-estoppel.130 9.49  English procedural law has long contained a process under which a claimant may obtain a judgment in default where a defendant fails to take certain procedural steps after the initiation of the proceedings. The current provisions are in Part 12 of the Civil Procedure Rules under which a default judgment can be obtained when a defendant has failed to file an acknowledgment of the service of the proceedings on him or has failed to serve a defence as required by the Rules.131 A judgment by default can be equated in some ways to a judgment by consent, since the defendant is in effect consenting to judgment by reason of his inactivity as opposed to issuing an express consent.132 On the other hand, a judgment in default strictly says nothing except that a defendant has, for unascertained reasons such as negligence, ignorance or indifference, suffered judgment to go against him in particular proceedings.133 9.50  Because of the difference as just noted a judgment in default may have a more limited effect for the purposes of res iudicata than does a judgment by consent. The exact content of a judgment by consent can be discerned from the consent order made and, if necessary, from other elements of the proceedings such as the pleadings. The rule for a judgment in default under the system of pleading in use in the nineteenth century was said to be that, while a judgment by default can give rise to an estoppel in subsequent proceedings, the 129 Perhaps a more efficient way of dealing with this situation would be that the point of law should be determined as a preliminary issue so as to prevent the more complex issue of fact having to be determined if the issue of law went in favour of the defendant but to allow the issue of fact to be heard and determined if the first issue of law went against the defendant. 130 The matter of cross-estoppels is described in para 9.84. 131 CPR, Part 12.1. The time for filing a defence under rule 15.4 is 14 days after the service of a particulars of claim on the defendant or 28 days if the defendant has first served an acknowledgment of service. The court has a discretion to set aside a judgment obtained in default. 132 The citation from the judgment of Vaughan Williams J in para 9.45 treats the two forms of judgment as having the same effect for the purposes of res iudicata. 133 Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993, 1010 (Lord Radcliffe).

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9.51  Estoppel by Record defendant in such proceedings is estopped only from asserting something which, if pleaded in the earlier action, would have amounted to a direct traverse of what was there asserted and founded upon by the party who obtained that judgment.134 Later decisions have clarified the application of the rule to the somewhat simpler terminology and procedures used in current litigation,135 and the rule has now been stated as being that default judgments, though capable of giving rise to estoppels, must always be scrutinised with extreme particularity for the purposes of ascertaining the bare essence of what they must necessarily have decided and that they estop only for what must ‘necessarily and with complete precision’ have been thereby determined.136 A further consideration which suggests that there should be caution in applying the res iudicata principles to default judgments, particularly the issue estoppel principle, is that a party may allow an issue to be determined against it, perhaps because the issue is thought to have a minimal importance in the action, and the party then finds that it is bound on that issue in a later action between the parties where the issue has become one of cardinal importance.137 Recent authority indicates that the use of a default judgment as the foundation of a cause of action estoppel should be viewed with some caution in the light of the authorities which permit such a use.138 9.51  The limitation on the use of a judgment in default of pleadings as an estoppel per rem iudicatam is illustrated by the decision of the Court of Appeal in Mullen v Conoco Ltd.139 A garage owner entered into a contract with an oil company for the supply of petrol but refused to pay two particular sums for fuel delivered alleging that the price of the petrol was excessive. The oil company sued him in the High Court and obtained judgment in default of defence for £3,583. An application to set aside the judgment was refused. The garage owner then brought proceedings in the county court contending that for certain reasons the contract was not enforceable to the extent of the prices generally charged under it. The oil company contended that the default judgment prevented the claim by reason of res iudicata. 134 Howlett v Tarte (1861) 10 CBNS 813. 135 See Hoystead v Commissioner of Taxation [1926] AC 155; and New Brunswick Railway Co v British and French Trust Corporation Ltd [1939] AC 1. 136 Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993, 1012 (Lord Radcliffe). 137 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, 926 (Lord Hodson), 917 (Lord Reid). 138 In R (Gray) v Police Appeals Tribunal [2018] 1 WLR 1609 Sir Terence Etherton MR gave six reasons for treating the authorities on default judgments with caution. He stated (at para 57) these reasons as being: ‘Firstly, they [the New Brunswick Railway Co case and the Kok Hong case] were all obiter since in neither case was it held there was an estoppel. Secondly, they were cases of issue estoppel. Thirdly, the members of the Appellate Committee in the New Brunswick Railway case did not speak with one voice on the subject. Fourthly, it was emphasised in the Hong case that any estoppel arising from a default judgment must be given a restrictive operation and was limited to what must necessarily and with complete precision have been determined. Fifthly, there are different types of default judgments. In some cases, for example most non-money claims, it is not possible to obtain an order automatically but will require an application to a judge to satisfy himself or herself that the relief sought is justified on the alleged facts: see CPR 12.4. It would appear that this was the situation in the New ­Brunswick Railway Co case where in the earlier action, following the failure of the appellant to enter an appearance in the action, the respondent had filed a notice of motion for judgment in the same terms as the relief claimed (which included a declaration as to the proper construction of the bond in question). There is no difficulty in regarding a judgment in these circumstances as “on the merits”. Sixthly, these decisions were given without the benefit of the most recent analysis in the Virgin Atlantic Airways case, drawing a distinction between cause of action estoppel as a rule of substantive law and abuse of process’. In fact, the same distinction as last mentioned had been explained by Lord Millett in Johnson v Gore Wood & Co [2002] 2 AC 1, 59. The distinction in the Virgin Atlantic Airways case was drawn by Lord Sumption at [2013] UKSC 46, [2014] AC 160, para 25.

139 Mullen

v Conoco Ltd [1998] QB 382.

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Judgments  9.54 The Court of Appeal held that there was no estoppel since all that the default judgment decided was that a sum was payable for certain specific goods sold and delivered. This was all that had necessarily and with complete precision been determined. The wider questions raised in the new proceedings were not the subject of the default judgment and could not be the subject of an estoppel per rem iudicatam. 9.52  Some decisions of courts, often interlocutory decisions, involve the exercise by a court of a discretion. In exercising the discretion the court takes into account all relevant considerations and then reaches its decision. The nature of a discretion is that that court is required to form an opinion or reach a judgment on some matter where in doing so it is not necessarily deciding any issue of fact or of law. The exercise of a discretion does not as such create an estoppel per rem iudicatam. However, it is possible that the proceedings in which the exercise of the discretion takes place do decide some specific matter pertinent to or preliminary to the discretionary decision and an issue estoppel may arise from the decision on that matter. In accordance with this principle, where a judgment is obtained in default of defence, and a court in the exercise of its discretion refuses to set aside the judgment, the decision exercising that discretion does not itself create a res iudicata estoppel, but a specific finding in the decision, such as whether the judgment in default was a regular judgment, may do so.140 9.53  It is necessary to distinguish between what is an exercise of a discretion and what is a judgment of secondary fact. To take an example, a decision on whether to make an order for the giving of security for costs is the exercise of a discretion. The court considers all relevant factors and then in its discretion decides whether or not to make the order. Such a decision does not create an estoppel. The decision can be reconsidered if further relevant facts come to light. On the other hand, under statute, a court may have to decide whether the making of a particular order would impose greater hardship on a defendant than refusing to make an order would impose on a claimant. In a case of this sort the court again looks at all the relevant factors and then decides as a conclusion of secondary fact whether the greater hardship test is satisfied in favour of the claimant.141 If it is so satisfied there is no element of discretion involved; the court must, subject to all other matters in issue, make the order in favour of the claimant. If it is not so satisfied the court must refuse the order sought by the claimant. In cases of this sort there can in principle be an estoppel arising from the greater hardship decision.142 9.54  Actions are sometimes struck out for reasons such as that they are frivolous or vexatious or for a want of prosecution or because a claimant fails to comply with a procedural order of the court.143 Equally, a defence may be struck out for similar reasons. Such orders

140 ibid, 396 (Hobhouse LJ). 141 This example is loosely based on decisions which had to be made under the Rent Acts: see para 9.80. Of course in each case the exact process depends on the statutory provision which contains something such as a greater hardship criterion. 142 It may be that the statutory provision or later events permit a court to reconsider a matter such as a greater hardship criterion, and in these circumstances a new decision must be reached on the facts as they are at the time when the matter is again before the court and, because the facts are or may be different, the previous decision does not create an estoppel. See para 9.97. 143 Applications to strike out are made under Part 3.4 of the CPR. Where there is a failure to comply with a direction made, the court may impose an ‘unless’ order which means that a party’s case or a part of it will be struck out unless there is compliance with the order by a specified time.

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9.55  Estoppel by Record seem unlikely to lead to any res iudicata estoppel since they do not decide any substantive issue of fact or of law. In addition the decisions are often discretionary in nature.144 As mentioned earlier, a discontinuance of an action does not constitute an estoppel,145 but it is provided by the Civil Procedure Rules that the permission of the court is needed for the making of a new claim on the same or substantially the same facts as the discontinued claim if the discontinuance is made after the defendant has filed a defence.146 9.55  A further form of procedural order is the giving of summary judgment. A court may give summary judgment, that is a judgment without investigating the whole of the claim or defence, against a claimant or a defendant if the claimant has no reasonable prospect of succeeding on the claim or the defendant has no reasonable prospect of successfully defending the claim. Such a judgment may be given on the whole of a claim or defence or on a particular issue.147 The effect of an order made on an application for summary judgment as an estoppel per rem iudicatam depends on whether the application is or is not successful. If the application is successful, the applicant must have satisfied the court of his cause of action or his defence or his ability to rely on some issue. To that extent the judgment on the application can create a cause of action estoppel or an issue estoppel.148 On the other hand, if the application is unsuccessful the court does not determine that the respondent to the application is correct on any issue but merely decides that there is a triable or arguable issue or issues which should go on to a full trial. Such a determination does not decide any cause of action or decide any issue within a cause of action and therefore cannot create an estoppel per rem iudicatam.149 9.56  A number of different descriptions can be given to judgments and orders which are not final or for some reason cannot operate to create an estoppel per rem iudicatam. For instance, decisions can be said to be prevented from creating an estoppel because they are interlocutory or procedural or not on the merits. The last expression, ‘on the merits’, has been commented on earlier and may sometimes be unhelpful because it can have two distinct meanings.150 It repays a further comment following this review of types of procedural order. It may mean that a decision has been reached after a full examination of detailed evidence and consideration of arguments. It is apparent that a judgment on the merits in this sense is not a prerequisite of an estoppel. Judgments given by consent or default judgments or summary judgments may bring about an estoppel but are not judgments on the merits in

144 Pople v Evans [1969] 2 Ch 255; Byrne v Frere (1828) 2 Mol 157; Magnus v National Bank of Scotland Ltd (1888) 58 LT 617. 145 See para 9.34; and see The Ardandhu (1887) 12 App Cas 256, 259; Ako v Rothschild Asset Management Ltd [2002] EWCA Civ 236, [2002] ICR 899, para 29. 146 CPR, Part 38.7. 147 CPR, Part 24. The procedure was formerly called Order 14 proceedings since the relevant rules were contained in Order 14 of the Rules of the Supreme Court which had effect until 1999. 148 In England, a summary judgment on a matter cannot be reopened except by an appeal and so is a final judgment. In other countries, it may be possible under the procedures in force in that country to reopen what was decided summarily in a further action between the same parties. If so, the summary judgment will not work an estoppel per rem iudicatam in England. See Nouvion v Freeman (1889) 15 App Cas 1 (judgment of a Spanish Court); and Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853 (judgment of the Federal Supreme Court of West Germany). 149 Mullen v Conoco Ltd [1998] QB 382, 386 (Hobhouse LJ). 150 See para 9.42 for a further comment on the two possible meanings. See also the decision of the Court of Appeal in R (Gray) v Police Appeals Tribunal [2018] 1 WLR 1609 which is described above (n 113).

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Judgments  9.58 the first sense. The second meaning of the words ‘on the merits’ is that a judgment reached in this way goes to the substance of the issue between the parties as opposed to judgments on merely procedural matters such as an order for discontinuance, or an order designed to prevent further action on a temporary basis such as an interlocutory injunction, which does not finally decide the core of any matter between the parties. This second meaning may be a more useful meaning for present purposes. The overall rule may be that a judgment, whatever description is given to it, will generally only bring about an estoppel per rem iudicatam if (a) the judgment is final in the sense that it cannot be altered or reviewed by a further decision of the court which has made the order or another court of coordinate jurisdiction, and (b) the judgment finally decides any substantive issue or issues of law or fact or mixed law and fact which are in dispute between the parties and which must be resolved by some process or procedure or at some time before the overall proceedings can be disposed of.

(iii)  Procedural Orders: Summary 9.57  The effect as creating an estoppel per rem iudicatam of procedural orders and judgments and of judgments other than those which are a final determination of a cause of action or issue after full evidence and argument may be summarised as follows. (a) There is no rule that an estoppel cannot be created unless the judgment is a full judgment on the merits in the sense of a judgment after a full examination by the court of all relevant evidence and arguments. (b) A judgment by consent may create an estoppel but only of course as to the cause of action or the particular issue which was the subject of the consent. (c) A successful application for summary judgment may create an estoppel but an unsuccessful application will not do so. (d) A judgment entered in default of pleading may in principle create an estoppel but the estoppel will be narrowly confined to the bare essence of what must have necessarily been decided. (e) A judgment which is the exercise of a discretion by a court will not create an estoppel save as to any matter of fact or of law which the court has decided as a necessary preliminary to the exercise of the discretion. (f) A procedural order, such as the striking out of proceedings for want of prosecution or as vexatious or for a failure to comply with an order of the court, will not create an estoppel as to any cause of action or issue involved in the proceedings. (g) The discontinuance of an action does not of itself create an estoppel.

(iv)  The Third Principle of Estoppel by Record 9.58  The above narrative has been confined to the possible effect of certain forms of judgment or order as an estoppel per rem iudicatam, either a cause of action estoppel or an issue estoppel. The third category of estoppel by record is the abuse of process and public policy rule based on the decision in Henderson v Henderson.151 It is possible that some order of the types summarised in the last paragraph does not create an estoppel per rem iudicatam, but that the circumstances which gave rise to the order are such that to allow a party to raise again a claim or issue the subject of such a judgment or order would give rise to an abuse of



151 (1843)

3 Hare 100. See para 9.7 et seq for the three principles which together constitute estoppel by record.

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9.59  Estoppel by Record the process of the court and that for that reason a subsequent claim or reliance on an issue should be struck out. The rule in Henderson v Henderson is normally confined to the striking out of proceedings or a part of proceedings where a party seeks to raise a cause of action or issue which that party could and should have raised in previous proceedings between the same two parties. The circumstances in which the third principle within estoppel by record can operate are wide and depend on the facts of each individual piece of litigation. Nonetheless, it is possible to envisage cases in which previous proceedings have ended as a result of some procedural order in a way which does not create an estoppel per rem iudicatam, but the circumstances are such that for a party to those proceedings to launch further proceedings, or seek to litigate again a matter, against the other party by or in new proceedings, would be an abuse of the process of the court. For instance, a party might launch a number of successive actions claiming a particular relief against a defendant, but then discontinue them before a defence was filed, as some sort of threat against the defendant relating to the subject matter of the proceedings.152 If yet a further set of proceedings was issued, a court might consider whether in these circumstances they were an abuse of the process, since the matters sought to be litigated could have been decided in the previous proceedings if there had not been the repeated discontinuance. A claimant might have his proceedings struck out by reason of a deliberate and contumelious refusal to comply with a procedural order of the court when that party had been given repeated opportunities to comply. If the party then brought further proceedings on the same matter against the same defendant there might again be an abuse of process in the Henderson v Henderson sense since the matter in question could and should have been brought to trial in the previous proceedings by the party asserting it complying with the procedural or other order made by the court. In one decision, discussed earlier, an estoppel per rem iudicatam was held not to arise out of a judgment in default of pleadings due to the narrowness of the issue necessarily decided as the basis of that judgment but the court went on to consider whether the commencement of further proceedings by the Defendant relating to broadly the same subject matter should still be struck out under the Henderson v Henderson rule on the footing that the wider matters could have been the subject of a counterclaim or set-off by the Defendant in the previous proceedings. It was held that on the facts of that case there was no abuse of process in the commencement of the subsequent proceedings.153

6.  Lack of Jurisdiction 9.59  The judgment or order of a court cannot create an estoppel if the court had no jurisdiction to give the judgment or make the order in question. This rule is a part of the wider rule that the judgment of a court without jurisdiction has no effect in law for any purpose. A vivid example of the rule is that in one case a decree was held to have no effect when it was given by a purported court of persons, some of them being members of the Court of Exchequer and others being persons not members of that court such as 152 Where proceedings are discontinued in these circumstances and at this early stage, the permission of the court is not needed for the commencement of further proceedings raising the same or similar matters as those the subject of the discontinued proceedings: see para 9.34. 153 Mullen v Conoco Ltd [1998] QB 382.

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Judgments  9.62 the Attorney General and the Solicitor General, so that the proceedings were held to be without effect.154 9.60  A further example of the failure of a plea of res iudicata where the court giving a judgment had no jurisdiction to decide a matter is what was decided by the Privy Council in Toronto Railway Co v Corporation of the City of Toronto.155 The issue was whether electric trams which were used as a part of the Plaintiffs’ tramway system were real estate, and so liable to be taxed, or were personal property. The Privy Council, allowing an appeal from the Court of Appeal of Ontario, held that the trams were personal property. The Defendants raised an additional point that the status of the trams as real estate had been determined in previous proceedings between the parties in the Court of Appeal and in other Courts from which an appeal to that Court was heard, so that the issue was res iudicata. The plea was rejected on the ground that the jurisdiction of the Courts in the previous cases had been to determine whether the assessments were too high or too low and not whether certain property was assessable at all and thus the Courts had exceeded their jurisdiction in the decision which they reached so that no estoppel arose. The Plaintiffs were not prevented from asserting the lack of jurisdiction of the previous Courts by the fact that they had themselves initiated proceedings before those Courts. This part of the decision accords with the basic principle that parties cannot by their consent confer upon a court or tribunal a jurisdiction which it does not have and no estoppel can arise so as to extend the jurisdiction of a court beyond that conferred on it by statute.156 9.61  However, the principle that the parties cannot agree to an extended jurisdiction by giving their consent is not universally applied. In a decision a little earlier than the Toronto case, a county court had made an order ordering the Defendants not to discharge untreated sewage into a watercourse. The order was made under statutory provisions which did not apply to the length of watercourse in question since that length was tidal. The order was made by consent.157 In further proceedings for the enforcement of the order the Defendants raised the point that the county court had no jurisdiction to make its order. It was held that in the enforcement proceedings the Defendants were estopped from contending that they had committed no statutory breach and could not resist the estoppel on the ground that the order previously made was without jurisdiction.158 The short judgments given did not examine any matters of principle or of authority and it is difficult to accommodate this decision with the principle just explained. 9.62  The basis of the jurisdiction of many courts and tribunals is statutory, and the terms of the statute must be carefully considered in order to determine whether an issue which a judicial body has decided is within its jurisdiction and so can create an estoppel per rem iudicatam. Under section 84 of the Law of Property Act 1925 the Lands Tribunal (now the

154 Rogers v Wood (1831) 2 B & Ad 245. Lord Tenterden CJ (at 256) described that which had occurred as ‘a proceeding before persons not forming any Court known to the law of this country, nor having any competent authority to decide the matter in issue, or to make the decree which they made’. 155 [1904] AC 809. 156 See ch 2, part (E). 157 For an estoppel per rem iudicatam derived from a judgment given by consent, see para 9.45. It is usually considered that a judgment by consent has the same effect as regards an estoppel as a judgment given after a dispute on the issues. 158 Ribble Joint Committee v Croston UDC [1897] 1 QB 251.

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9.63  Estoppel by Record Lands Chamber of the Upper Tribunal) had power to discharge or modify a restrictive covenant affecting land on certain grounds. However under section 84(2), the High Court had power to decide whether any particular land is bound by a restriction and to decide the nature and extent of any restriction. Under section 84(3A) the Lands Tribunal was entitled to suspend proceedings before it in order that an application may be made to the High Court for a declaration on the matters mentioned in section 84(2). An application was made to the Tribunal by the owner of land to discharge a covenant but was refused. The Tribunal allowed certain persons to appear as objectors on the footing that they had the benefit of the covenant. A successor in title of the original Applicant sought a declaration from the Chancery Division that the restrictive covenant was personal in nature and that the land was not bound by it. The Defendants sought to strike out the application on the ground that the issue had already been decided by the Tribunal and so was res iudicata. The application to strike out was refused, since the legislation clearly defined the jurisdiction of the Tribunal which did not extend to deciding the enforceability of the covenant against successors in title of the original parties, and that the jurisdiction to decide such an issue was that of the High Court alone. Accordingly, any decision on the issue of enforceability or any assumption made on it in proceedings before the Tribunal did not create an estoppel per rem iudicatam since the Tribunal had no jurisdiction to decide such an issue.159 9.63  The excess of jurisdiction which invalidates a judgment will usually relate to the subject matter of the judgment. It may occur that a Judge is mistaken as to the status of the court in which he is sitting and his judgment will not necessarily be invalidated by this fact. In one case a Recorder delivered judgment when he believed he was sitting in the county court whereas in fact the proceedings were being heard in the High Court. The Recorder was not authorised to sit as a Deputy High Court Judge. The judgment was held by the Court of Appeal to be valid on the principle that the acts of a de facto officer were valid in law.160

(C)  Cause of Action Estoppel 1. Introduction 9.64  It has been explained that in the classification used in this chapter, although a classification far from universally adopted, estoppel per rem iudicatam is divided into cause of action estoppel and issue estoppel.161 Cause of action estoppel is an estoppel which arises when, by a judgment of a court, a cause of action alleged by A against B is upheld or is rejected by the court. The judgment then binds A and B in any further proceedings relating to the same cause of action. Certain of the matters which arise in cause of action estoppel are also relevant to similar matters which arise in issue estoppel, such as the

159 Doberman v Watson [2017] 4 WLR 103. 160 Baldock v Webster [2006] QB 315. This decision may be contrasted with Rogers v Wood (1831) 2 B & Ad 245 where the decree of a court constituted by persons not entitled to sit together as constituting any court was held to be invalid for lack of jurisdiction. See para 9.59. 161 See para 9.7.

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Cause of Action Estoppel  9.66 identity of the subject matter of the judgment and the subject matter of the subsequent proceedings, and it is convenient to examine first certain of these matters under cause of action estoppel. 9.65  The general effect of cause of action estoppel (and of issue estoppel) is enshrined in a statement of Lord MacNaghten: The result is that it appears that the point raised by this appeal has already been adjudicated upon. There is here, as there was in the case of Peareth v Marriott, to which Mr Levett referred, a decree inter partes on the very same subject. In the words of the Digest, lib, xliv, t.2, s 7, ‘exceptio rei judicatae obstat quotiens eadem quaestio inter eadem personas revocatur’. It is not competent for the Court, in the case of the same question, arising between the same parties, to review a previous decision not open to appeal. If the decision was wrong, it ought to have been appealed from in due time.162

The essence of the matter is, therefore, that the previous final decree or decision has to be on the same subject matter as in the subsequent proceedings and has to be between the same parties.163 More recently in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd,164 Lord Sumption described res iudicata as applying to a number of principles. The first two of the principles were described as follows: The first principle is that once a cause of action has been held to exist or not to exist, that outcome may not be challenged by either party in subsequent proceedings. This is ‘cause of action estoppel’. It is properly described as a form of estoppel precluding a party from challenging the same cause of action in subsequent proceedings. Secondly, there is the principle, which is not easily described as a species of estoppel, that where the claimant succeeded in the first action and does not challenge the outcome, he may not bring a second action on the same cause of action, for example to recover further damages: see Conquer v Boot [1928] 2 KB 336.

A further recent description of cause of action estoppel is found in the judgment of Lord Keith in Arnold v National Westminster Bank Plc.165 9.66  It might be thought that the two principles described by Lord Sumption were aspects of one underlying principle, called cause of action estoppel, the principle being that a judgment establishing or rejecting a cause of action is binding on both parties in any future litigation between them and so as between them, and subject only to an appeal, is final and conclusive. As a result of such a principle, the successful party who establishes a cause of action and obtains judgment in its favour cannot sue the unsuccessful party again on the same cause of action, for example by trying to obtain further damages, and the 162 Badar Bee v Habib Merican Noordin [1909] AC 615, 622–23. 163 The question of the identity of the parties, and the question of who may take the benefit or is bound by the estoppel as a privy of one of the original parties, are common to cause of action estoppel and issue estoppel and are dealt with in part (E) of this chapter. 164 [2013] UKSC 46, [2014] AC 160, para 17. In Outram v Morewood (1803) 3 East 346, 355, Lord Ellenborough explained that the recovery of damages in an action for trespass was a bar to the future recovery of damages for the same injury. A citation from the judgment is below (n 227). 165 [1991] 2 AC 93. This decision is examined in detail in para 9.196 et seq in connection with exceptions to the operation of estoppel per rem iudicatam. A further itemisation of the six elements needed to establish an estoppel per rem iudicatam was stated by Lord Clarke in R (Coke-Wallis) v Institute of Chartered Accountants in England and Wales [2011] 2 AC 146, para 34. The passage is set out in para 9.90. A further itemisation of the essential elements of the estoppel, in this case with a division into four elements, was stated by Buckley J in Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 3) [1970] Ch 506, 538, in a passage summarized below (n 233).

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9.67  Estoppel by Record unsuccessful party, against whom the cause of action is established, cannot in any subsequent proceedings between the parties assert that the cause of action is not established and cannot challenge the correctness of the previous decision in such subsequent proceedings. Equally, a party who fails to establish a cause of action cannot bring a further action asserting the same cause of action against the other party, for example in the hope that he might succeed on the subsequent occasion by adducing better evidence or deploying more cogent ­arguments.166 The development of the law on this subject shows that the matter is not always as simple as just stated and before coming to other aspects of the estoppel it is necessary to consider the doctrine of merger.

2.  The Doctrine of Merger 9.67  The doctrine of merger means that once judgment is given establishing a cause of action, that cause of action ceases to exist as such and is merged into the judgment. It is said to be due to this principle, rather than due to the operation of a cause of action estoppel, that the party who has established a cause of action by obtaining the judgment cannot bring further proceedings on the same cause of action.167 The cause of action has gone, having merged in the judgment. The cause of action ceases to exist.168 A defence to a cause of action which rests on the circumstances that the claimant has already obtained a judgment against the defendant on that cause of action is sometimes called a defence of ‘judgment recovered’. The defence is still available even though the previous judgment is wholly or partly unsatisfied. 9.68  The doctrine of merger is supported by both older and modern authority. In King v Hoare,169 a Plaintiff obtained judgment for the price of goods sold and delivered against one of two persons who were jointly liable for the sum due. A subsequent proceeding against the other person liable was defeated because the cause of action had merged in the judgment given. Baron Parke described the doctrine in the following way: If there be a breach of contract, or wrong done, or any other cause of action by one against another, and judgment be recovered in a court of record, the judgment is a bar to the original cause of action, because it is thereby reduced to a certainty, and the object of the suit attained, so far as it

166 The overall effect of cause of action estoppel is put in various ways and by different linguistic formulations in different judgments. A possible way of summarising the matter, avoiding the technicality of the doctrine of merger which is described next, is to say: (a) if A in proceedings establishes a cause of action against B, A cannot thereafter bring further proceedings on the same cause of action against B, for instance to obtain some greater damages; (b) if A in proceedings fails to establish a cause of action against B, A cannot thereafter bring further proceedings against B asserting or relying on the same cause of action; and (c) if A in proceedings establishes a cause of action against B, both A and B are bound in any subsequent proceedings between them to accept the existence of that cause of action. The particular effect of a declaratory judgment, which may not fall entirely neatly into this summary, as a cause of action estoppel is referred to in para 9.33. 167 It is therefore the doctrine of merger which technically brings about the first of the results of cause of action estoppel described in the last footnote. 168 This is how the effect of the merger was described by Lord Goff in Republic of India v India Steamship Co Ltd [1993] AC 410: ‘The basis of the principle [of merger] is that the cause of action, having become merged in the judgment, ceases to exist, as is expressed in the latin maxim transit in rem iudicatam’. 169 King v Hoare (1844) 13 M & W 494.

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Cause of Action Estoppel  9.69 can be at that stage, and it would be useless and vexatious to subject the Defendant to another suit for the purpose of obtaining the same result. Hence the legal maxim ‘transit in rem iudicatam’ – the cause of action is changed into a matter of record, which is of a higher nature, and the inferior remedy is merged in the higher. This appears to be equally true at common law where there is but one cause of action whether it be against a single person or many.170

The justification of what was said by Baron Parke was later described as being in part on the ground of public policy, that is that there should be an end of litigation and that there should not be a vexatious succession of suits on the same cause of action.171 A leading modern exposition of cause of action estoppel which explains the role of merger is that of Diplock LJ in Thoday v Thoday: The first species [of estoppel per rem iudicatam], which I will call ‘cause of action estoppel’ is that which prevents a party to an action from asserting or denying, as against the other party, the existence of a particular cause of action, the non-existence or existence of which has been determined by a court of competent jurisdiction in previous litigation between the same parties. If the cause of action was determined to exist, ie, judgment was given upon it, it is said to be merged in the judgment, or, for those who prefer Latin, transit in rem iudicatam. If it was determined not to exist, the unsuccessful plaintiff can no longer assert that it does; he is estopped per rem iudicatam. This is simply an application of the rule of public policy expressed in the Latin maxim ‘Nemo debet bis vexari pro una et eadem causa’.172

It can be noted that Baron Parke described merger as applying to a judgment of a court of record whereas Diplock LJ referred to a determination of a court of competent jurisdiction. In 1844, nobody envisaged the extensive system of tribunals and similar bodies now set up by statute to determine specific and often specialised matters. As explained later, the law of estoppel by record does apply to such tribunals and other similar bodies carrying out judicial functions as it does to the ordinary courts.173 The meaning of a court of record is also examined later in this chapter.174 9.69  The doctrine of merger has been described, as is readily apparent from this description of it, as a ‘highly technical doctrine’.175 What the technicality amounts to is that where A brings proceedings asserting a cause of action against B, and A succeeds in establishing that cause of action, A cannot then bring later proceedings against B on the same cause of action. This result is said to be due to the operation of the doctrine of merger. Conversely,

170 ibid, 504. 171 Kendall v Hamilton (1879) 4 App Cas 504, 542 (Lord Blackburn). While what was said in the older decisions explains the general nature of merger and the position at common law, today, when it comes to sums owed jointly by two or more persons, reference should be made to ss 1 and 3 of the Civil Liability (Contribution) Act 1978 for contribution between the parties where more than one party is liable for the same damages or debt. Section 3 provides that a judgment recorded against any person liable in respect of any debt or damages shall not be a bar to an action, or the continuation of an action, against any person who is jointly liable with him in respect of the same debt or damages. The nature of obligations which are owed jointly or jointly and severally is explained in connection with the doctrine of election in ch 8: see ch 8, para 8.15. 172 [1964] P 181, 197. Thoday v Thoday is also important for an explanation of issue estoppel and a further citation from the judgment of Diplock LJ is set out in para 9.90. 173 See para 9.164. 174 See para 9.163. 175 Republic of India v India Steamship Co Ltd [1993] AC 410, 424 (Lord Goff).

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9.70  Estoppel by Record if B successfully resists the proceedings such that the cause of action is rejected, then in any subsequent proceedings between A and B, both parties are bound to accept that the cause of action does not exist. This result is usually said to be due to the operation of a cause of action estoppel, one of the two species of estoppel per rem iudicatam. 9.70  It may on the face of it not much matter whether the inability of a claimant to bring further proceedings against a defendant on a cause of action when he has already obtained a judgment on that cause of action against the defendant, is due to the operation of cause of action estoppel, or is due to the operation of the doctrine of merger under which in the above circumstances the cause of action is not available in the second proceedings because it has ceased to exist by reason of its merger in the judgment given in the first proceedings. It is partly for this reason that the doctrine is regarded as highly technical.176 There was, until a few decades ago, a more real and practical as opposed to a legal and theoretical significance in the doctrine of merger. At common law an estoppel could arise from a judgment of a non-English court.177 When a judgment of such a court was in favour of a defendant a plaintiff could be prevented from raising again in an English court the same cause of action as rejected178 or an issue as decided against him.179 However, a plaintiff who had succeeded in a cause of action in a foreign court was at least on one view not prevented from bringing further proceedings on the same cause of action in an English court. The reason is that the doctrine of merger did not apply to non-English judgments.180 This anomaly was removed by section 34 of the Civil Jurisdiction and Judgments Act 1982 which provided that no proceedings might be brought by a person in England and Wales, or Northern Ireland, on a cause of action in respect of which a judgment had been given in his favour in proceedings between the same parties, or their privies, in a court in another part of the United Kingdom or in a court in an overseas country.181

176 The doctrine of merger was mentioned in Virgin Atlantic Airways Co Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160, a decision on cause of action estoppel and on exceptions to that species of res iudicata, but this was said by Lord Neuberger (at para 63) not to take the matter any further. See para 9.207 et seq for a full explanation of the Zodiac case. 177 The use of foreign judgments in support of an estoppel per rem iudicatam is explained in part (H) of this chapter. 178 Ricardo v Garcias (1845) 12 Cl & F 368. 179 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853. It appears that the determination of a particular issue in proceedings, as opposed to the determination of a whole cause of action, is unaffected by the doctrine of merger. In the case of a judgment on a particular issue, which may give rise to an issue estoppel, there is no cause of action which can merge into the judgment. 180 This rule and the authorities which supported it were explained in Spencer Bower: Res Iudicata, 2nd edn (Butterworths, 1969) 362–64. It is unnecessary to explore these decisions in the light of the statutory provision next stated. For a contrary view regarding merger and foreign judgments, see the statement of Lord Hodson in Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, 927. 181 Republic of India v India Steamship Co Ltd [1993] AC 410, 416–18 (Lord Goff). This decision of the House of Lords, and the subsequent decision of the House in Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878, are discussed in detail later in this chapter in connection with identity of subject matter and cross-estoppels. In the second decision, the situation as then examined was that a judgment on a cause of action was being sought in proceedings in an Indian court but no judgment had been obtained in that court when proceedings to assert the same cause of action, but as regards a different and greater item of loss, were commenced in an English court. Judgment in the Indian court was then obtained. It was held that the obtaining of the Indian judgment prevented the English proceedings from being continued. The statutory prohibition on further proceedings in England being ‘brought’ extended to a prohibition on those proceedings being continued.

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Cause of Action Estoppel  9.72

3.  Identity of Subject Matter (i)  The Rule of Law 9.71  A cause of action estoppel therefore operates to prevent a cause of action being raised or challenged by either party in subsequent proceedings where the cause of action in the later proceedings is identical to that in the earlier proceedings.182 If A brings proceedings against B alleging a cause of action and A obtains a judgment establishing his cause of action, then in the future A cannot bring further proceedings on the same cause of action against B and B, in any subsequent proceedings between A and B, cannot deny the validity of the cause of action so established. A reason for A wishing to bring further proceedings in reliance on the same cause of action as he has successfully established in the earlier proceedings may be that he hopes to obtain further damages or some other remedy which he did not obtain in the earlier proceedings. The effect of the estoppel rule as stated is that A will be unable to do this.183 If A in the previous proceedings fails to establish the cause of action then A cannot bring further proceedings against B in a further attempt to assert the cause of action and is bound by the judgment in any further proceedings there may be between it and B, with the result that in any further proceedings A cannot assert that the cause of action exists.184 It does not matter to the end result whether a part of these rules is attributable in technical terms to the doctrine of merger rather than being a cause of action estoppel. What is important is that for each of the results just described to occur the cause of action in the earlier and in the subsequent proceedings must be the same. The principle is explained and illustrated here by reference to cause of action estoppel but the same general principle applies to issue estoppel where it has if anything a greater strictness.185

(ii)  Continuing Breaches 9.72  It is necessary to be clear about when a new cause of action arises from the continuation of a state of facts which are a breach of some matter such as a restrictive covenant or a right of light. It is sometimes the case that a new breach of obligation, and thus a new cause of action as a consequence of that breach, arises each day of the continuation of the offending state of affairs. A claim for damages for the infringement of an easement of light may provide a good example of this aspect of the law. An infringement of an easement of light by the erection of an obstruction to the passage of light is a form of nuisance. A new cause 182 See, eg, the principle as stated in Halsbury’s Laws, vol 12A, 5th edn (LexisNexis, 2015) para 1603. In Arnold v National Westminster Bank Plc [1991] 2 AC 93, 104, Lord Keith stated that cause of action estoppel arose when the causes of action in the earlier and the later proceedings were ‘identical’ and as involving ‘the same subject matter’. 183 The actions of B may be a continuing breach of A’s rights such as a trespass on A’s land which continued after A had obtained judgment. In such cases, a new cause of action may arise each day the trespass continues and A will be entitled to bring new proceedings relying on the new cause or causes of action. This situation is discussed more fully in the next paragraph. 184 See the explanation of the law by Diplock LJJ in Thoday v Thoday [1964] P 181, 197, and the citation from the judgment set out in para 9.68. 185 The necessary identity of issue for the purposes of issue estoppel is examined in para 9.93 et seq. The rule as to identity of subject matter may on some formulations of the principle be somewhat stricter for issue estoppel but the underlying principle is the same.

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9.73  Estoppel by Record of action arises each day that the obstruction continues.186 As it has been put: ‘Each day that the Defendant continues the nuisance, he renders himself liable to another action’.187 If an action is brought seeking damages at common law the owner of the dominant land, that is the land entitled to the benefit of the easement of light, is entitled to damages for loss suffered by him due to the presence of the obstruction up to the date of judgment in his action. Accordingly, he may bring new proceedings for further damage caused by the continuation of the infringement over any later period.188 There can be no question of a cause of action estoppel as something which prevents the new proceedings since those proceedings will be based on a new cause of action brought about by the continuation of the nuisance.189 The same principles apply to a trespass to land which may be a continuing wrong, with a new cause of action arising each day that the trespass continues. The rules as explained in this paragraph apply in principle wherever there is a continuing positive or negative obligation. 9.73  In practice, difficulties caused by the above rules are obviated by the exercise by a court of the power, first given to Chancery courts by the Chancery Amendment Act 1858, to award damages in addition to or in place of some order such as an injunction. That jurisdiction continues today under section 50 of the Senior Courts Act 1981 and is available in all Divisions of the High Court and in the county court. Such damages, often called equitable damages, can take account of future anticipated losses. Equitable damages can be awarded in any case in which a specific remedy such as an injunction is in principle available even though a discretion to award an injunction is exercised against such an award on the facts of a particular case and even though an injunction is not sought.

(iii)  Meaning of Identity of Subject Matter 9.74  The principle that the second action must be on a cause of action identical with a previous cause of action which has proceeded to judgment before there can be a cause of action estoppel can, if strictly and technically applied, lead to a curious result. In one case an action was brought for damages to a person’s carriage and judgment was obtained. A  further action was brought for personal injury to the Plaintiff arising from the same ­incident. In proceedings of this nature a cause of action in tort cannot be established unless damage is proved. It was held that the second action was not prevented by an estoppel since the damages sought were for a different injury and different damage with the result that the second action was founded on a different cause of action.190 A rather different and less technical result was arrived at in a later decision in which a claim for a breach of contract constituted by a failure properly to complete a bungalow succeeded and damages were awarded. This operated as an estoppel which prevented the bringing of a separate action claiming further damages not pleaded in the first action.191 The different results may as a 186 Battashill v Reed (1856) 18 CB 696. 187 ibid, 714 (Jervis CJ). 188 Shadwell v Hutchinson (1831) 2 B & Ad 97. A part of that which was decided in the earlier proceedings may bring about an issue estoppel, for example, a decision that an easement of light had arisen by prescription. 189 See Attorney General v Blake [2001] 1 AC 268, 281; and see also Jaggard v Sawyer [1995] 1 WLR 269, 276 (Sir Thomas Bingham). 190 Brunsden v Humphrey (1884) 14 QBD 141. There was a dissenting judgment by Lord Coleridge CJ. 191 Conquer v Boot [1928] 2 KB 336.

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Cause of Action Estoppel  9.75 matter of legal theory be accounted for by the fact that in an action for a breach of contract, and in contrast to an action for the tort of negligence, damage is not an essential element of the cause of action.192 9.75  A less narrow and less technical approach to the question of the identity of causes of action was also taken by the House of Lords in a leading modern decision on the matter of cause of action estoppel. The decision in Republic of India v India Steamship Co Ltd193 concerned a contract between the Republic of India and the Steamship company for the carriage of munitions from Sweden to Cochin in India. A fire occurred on the ship near Cherbourg. As a result a small part of the munitions cargo was jettisoned. The ship continued to India where it was found that damage had been caused to the remaining munitions as a result of radiant heat from the fire. The Indian Government obtained a judgment in an Indian court for damages for the loss of the munitions jettisoned. The Government subsequently continued an action in an English court to recover the much greater loss suffered as a result of the damage to the remaining munitions. The question was whether there was a cause of action estoppel as a result of the Indian judgment which prevented the continuation of the action in England.194 The contract between the parties was governed by the Hague–Visby Rules as specified in the bills of lading. The contention that there was no identity between the causes of action was founded on the argument that the proceedings in India were a claim for short delivery (ie, the failure to deliver the jettisoned munitions), whereas the action in England was for damage to the remaining cargo. This contention was rejected, the reasoning of Lord Goff being that a cause of action consisted of the minimum facts which a claimant had to plead, and to prove it denied, in order to obtain the relief claimed.195 Both claims arose out of the same incident, the fire on the ship; the contractual duty of the Steamship company was governed by the Hague–Visby Rules which applied to both claims; and there was a sufficient congruity between the facts which had to be asserted and proved for the purposes of the short delivery claim and the damaged cargo claim to show that they were in truth parts of one cause of action. The India Steamship dispute and decisions are also important for the possibility of ‘cross-estoppels’, and when the case again came before the House of Lords the judgment of Lord Steyn became a leading modern definition of estoppel by convention.196 192 If a claimant establishes a breach of contract he may succeed in his action even though he cannot show any loss or damage arising from the breach and in these circumstances he may be awarded only nominal damages. 193 [1993] AC 410. See also HE Daniels Ltd v Carmel Exporters and Importers Ltd [1953] 2 QB 242 concerning an award by an arbitrator and explained in para 9.170. 194 As discussed earlier, at common law there would have been no estoppel because the doctrine of merger did not apply to foreign judgments. This rule was reversed by s 34 of the Civil Jurisdiction and Judgments Act 1982. See para 9.70. 195 As explained earlier in Letang v Cooper [1965] 1 QB 232, 243 (Diplock LJ). 196 The matter of cross-estoppels and the further proceedings in the same case are examined in para 9.84 et seq; and the nature of estoppel by convention and the judgment of Lord Steyn which established the essential elements of that form of estoppel are discussed in ch 5, para 5.4. Having lost on the question of the identity of the two causes of action in the first decision of the House of Lords, the Government of India then put forward a different contention which was asserted when the proceedings came again before the House and which was that there could be no cause of action estoppel because the parties to the Indian and the English actions were different, the Indian proceedings having resulted in a judgment in personam against the shipowners as the Defendants while the English proceedings were an Admiralty action in rem where the ship was the Defendant. This somewhat technical defence also failed. This aspect of the decisions is explained, together with the nature of an Admiralty action in rem, in para 9.23 et seq.

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9.76  Estoppel by Record 9.76  The principle which emerges as to different claims being a part of the same cause of action depends on addressing the nature of a cause of action in the sense that it consists of the essential matters which have to be asserted and, if necessary, proved in order to obtain some relief or order from a court. If there are two claims, and they each depend on proof of the same or very similar matters, then the two claims arise out of the same cause of action, so that if one claim is brought to judgment the other claim cannot later be asserted by a separate action because of cause of action estoppel (or perhaps technically, if the two claims are asserted in an English court, because of the doctrine of merger). For example, a claim for relief following a breach of contract requires proof of an obligation in the contract and of events which are a particular breach of that obligation. If an action for damages succeeds on proof of these matters no later action may be brought for relief based on the same breach of obligation. A claim for relief following the commission of the tort of negligence depends on the existence of a duty of care, a particular breach of that duty of care, and the occurrence of damage of some sort brought about by that breach. If these matters are admitted or proved and damages for the breach of duty obtained no further action may be brought for relief based on the same breach of the duty of care including an action for further damage alleged to be caused by the breach.197 9.77  It should be borne in mind that for a cause of action estoppel to arise there does not have to be a total and exact identity in the matters required to establish the cause of action in the first proceedings which have been brought to judgment and the matters required to establish the cause of action in the later proceedings. In the India Steamship case, the matters required to be proved in the two actions were very similar, for instance the contract between the parties and the fire on the ship, but in the first action it was necessary for the Plaintiffs to prove the jettisoning and thus the total loss of a small part of the cargo while in the second action it was necessary for the Plaintiffs to prove the damage to the remainder of the cargo. These were different facts. Yet the similarity of the facts needed to be proved, including the contractual background and the circumstances of the fire, was such that an estoppel did arise. An accurate description of the relevant rule may therefore be to say that for a cause of action estoppel to operate the facts needed to be proved to establish the two claims must be either identical or very similar.198 9.78  It is of course possible that an issue is decided in an action brought by A against B and that the same issue arises in a second action brought by A against B based on different facts and on a new cause of action. By way of illustration, A may sue B for damages caused to A by certain actions of B which are said to be a breach of a certain clause in a contract between the parties. The only or the main issue may be the correct meaning of the clause in the contract and that issue may be determined in favour of A who then obtains damages for the breach. If B then carries out further actions which are also said to be a breach of the same clause, there is nothing to prevent A commencing new proceedings founded on

197 If this analysis is correct then it appears that the decision in Brunsden v Humphrey (1884) 14 QBD 141, discussed in para 9.74, might be different today. 198 When the same general requirement is examined in connection with issue estoppel, it is pointed out that under the principle of issue estoppel the corresponding rule may be rather stricter in that there may have to be a precise identity between the issues in the earlier and the later proceedings before there can be an issue estoppel. See para 9.93.

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Cause of Action Estoppel  9.80 the later actions. There would be no cause of action estoppel. What this would be is an issue estoppel which bound both parties in the second proceedings to the meaning of the contractual clause as determined in the first proceedings. Issue estoppel is discussed under the next part of this chapter.

(iv)  Judgments on Facts at a Particular Time 9.79  A question may have to be decided between parties, often under a statutory provision, where the resolution of the question depends on some judgment or conclusion of a court to be reached on the facts as at a particular time. Clearly if such a judgment is reached, the facts may change such that on the new facts a different conclusion or judgment might be reached as to the operation of the statutory provision. In such circumstances, a reconsideration of the matter on the new facts will not be prevented by the operation of res iudicata. Such a situation may arise for the purposes of cause of action estoppel or issue estoppel and it is convenient to mention it here. An illustration of this situation was a claim for an incapacity payment under the Workmen’s Compensation Act 1906. A county court judge fixed the payment at 1 shilling per week on the basis that the Claimant was able, despite his incapacity, to carry out work for the same payment of 15 shillings per week as he had before the accident but that his chances of finding employment were somewhat reduced. The Claimant later applied for a review, as was his entitlement, and gave evidence that despite repeated efforts he had failed to find employment. The plea that the amount of the payment could not be altered because of res iudicata was rejected since it was the duty of the judge on the review to form a judgment on the facts as then presented to the court.199 A useful distinction was drawn between an issue of fact, such as the earnings of the Claimant before the accident, which once decided as a matter of fact could not be altered and so was the subject of res iudicata, and a judgment on likely future earnings which could change with changed facts on a review and so could not be the subject of res iudicata.200 9.80  The same principle was applied to the operation of an aspect of the old Rent Acts. Under the Rent and Mortgage Interest (Amendment) Act 1933, a court could make an order for possession against a tenant under a controlled tenancy if the landlord required the demised property for his own occupation as a residence subject to the question of whether  greater hardship would be caused by making an order than by refusing it. A ­possession order was refused because the landlord was at the time able to take his family to live with his wife’s parents which reduced any hardship to him. About a year later, there had been a change of circumstances regarding this last matter and the landlord applied again for an order for possession. It was held that no res iudicata arose since the matter had to be looked at again and a new judgment formed on the balance of hardship on the facts as they had changed.201 In cases of this nature, if a new application were made soon after the previous judgment with no assertion of a material change of circumstances the



199 Radcliffe

v Pacific Steam Navigation Co [1910] 1 KB 685. 690–91 (Fletcher Moulton LJ). 201 Burman v Woods [1948] 1 KB 111. 200 ibid,

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9.81  Estoppel by Record new application, even if it did not fall for res iudicata, might be liable to be struck out as an abuse of the process.202 9.81  It must be borne in mind that an absence of res iudicata in the circumstances described in the last two paragraphs will only occur if there is some statutory basis for the bringing of the second proceedings, such as a statutory right to the review of an award or the nature of Rent Act protection which allowed a landlord to bring successive proceedings claiming possession after the termination of the contractual tenancy and during a period of statutory protection of the continued possession of the tenant. To take an example where there is no statutory right to bring further proceedings, a person who claims damages for the future effects of a physical injury will have his damages assessed on the facts known and prognosis made at the time of the assessment of the damages by a court and at the time of the assessment of the future course of the injury. If that person brings a later action based on an unexpected deterioration in his condition he could be met by the defence of res iudicata. A similar point is made in the example mentioned below concerning anticipated future loss of earnings as an item of damages in a claim for damages for negligence.203

(v)  Categories of Decisions 9.82  It may be helpful in the present context to distinguish between four categories of decisions of courts. (a) The first category is where a court has to determine on the balance of probability whether some event has occurred in the past or whether some fact exists at the time of the decision. In addition, and within this category, is the case where a court has to decide finally and at a particular time what are the prospects of some future occurrence, such as that a physical injury will deteriorate or that some legal proceedings would succeed. These last cases concerning future events are decisions of fact although they are mainly directed not to an answer one way or other on the balance of probabilities, but to an assessment of the percentage chance that the future event will occur.204 Also of course a court may have to determine issues of law such as the meaning of a term in a particular contract. All final judgments within this first category are capable of creating an estoppel per rem iudicatam. (b) The second category of decisions comprises those, usually of a procedural nature such as a decision not to set aside a judgment entered in default of defence,

202 ibid, 114 (Somervell LJ). The situation may be rather different in public law when a public authority is able to take successive actions under statute. Under the Town and Country Planning Act 1990, a local authority can serve an enforcement notice in order to prevent the continuation of a breach of planning control. In Thrasyvoulou v Secretary of State for the Environment [1990] 2 AC 237 an authority served an enforcement notice alleging that property was in use as a hostel. On an appeal against the notice an inspector held that the use was not as a hostel. Some years later, the authority served on the owners a further notice again alleging use as a hostel. It was held that as no relevant change of circumstances had occurred there was an estoppel which prevented the allegation in the second notice. The Thrasyvoulou decision is discussed in more detail in para 9.142. A possible resolution of the principle here discussed is that when a matter has been decided between parties and under statute the same matter has to be reconsidered at a later date between the same parties or their privies, the second court or other judicial body is required to reassess the matter if there has been any material change of circumstances, but is bound by reason of res iudicata to the previous decision in the absence of a material change of circumstances. 203 See below (n 206). 204 Porter v Secretary of State for Transport [1996] 3 All ER 693; Transport for London v Spirerose Ltd [2009] 1 WLR 1797, paras 38 and 62.

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Cause of Action Estoppel  9.83 which are ­discretionary in nature. Here no estoppel per rem iudicatam can arise.205 (c) The third category of decisions comprises those which involve a judgment of the court on some, usually statutory, criterion such as whether greater hardship would arise from making a particular order than from not making that order, as indicated in the last two paragraphs. This type of decision is not the exercise of a discretion in the sense used for decisions in the second category. A finding that greater hardship to one party would be caused by the making of an order than would be caused to another party by the refusal of an order is a decision of secondary fact, following a determination of the primary facts, such as the size of the accommodation compared with the needs of each of the parties. There seems no reason why it should not form the subject of an estoppel per rem iudicatam if the decision has to be made on the facts at a particular time and there is no scope for a review of the decision by the court, or for the bringing of new proceedings, on potentially different facts at a later date. (d) The fourth category of decisions is where the court has to make a judgment of fact of the same nature as in the third category but with the procedural possibility of the matter having to be reconsidered again at a later time on the facts as they stand at that later time.206 It is decisions within this category which have been examined in the last few paragraphs. In cases within this last category the decision at an earlier date will not create an estoppel per rem iudicatam since the facts may have changed at the later date of a reconsideration.

(vi)  Summary of Possible Defences 9.83  In summary, a defendant who is sued on a claim which has been or could have been the subject of previous proceedings between him and the claimant may have various defences which should be considered. All of these possible defences assume that there has been a final judgment in previous proceedings and that the judgment is not vitiated by fraud or some other matter.207 (a) The defendant may plead a cause of action estoppel if the previous proceedings were between the claimant and him and the second proceedings are for the same cause of action as the previous proceedings. (b) If the second proceedings are between the same parties as the first proceedings and an issue arises which has 205 Discretionary decisions of this sort are discussed in para 9.52. 206 The need for a review of decisions of this nature may arise in a number of circumstances. A statute may provide for a review such as in Radcliffe v Pacific Steam Navigation Co [1910] 1 KB 685, referred to in para 9.79. A party may have failed on one occasion when the matter was before a court but may be entitled to bring further proceedings when the facts change in which a further judgment will need to be made by the court on new facts, as in Burman v Woods [1948] 1 KB 111 referred to in para 9.80. Such cases must be distinguished from those in which there is no right to a review of a matter or right to raise the matter again in proceedings asserting a new cause of action. If A brings an action against B for damages in the tort of negligence as a result of an accident, the court will assess and award damages based on all relevant facts known to it at the date of the judgment and on a reasonable estimate of likely future facts. Thus, if a part of the claim is for damages for past loss of earnings the court will take account of the fact that the claimant had spent a time in prison since the date of the accident and so could not have earned anything during that time (see Lesschke v Jeffs [1955] QWN 67). The court will also make an estimate of likely loss of earnings in the future. There would be no question of the claimant being able to bring new proceedings at a later date asserting that because of changed circumstances his loss of earnings had become greater than the estimate. He would have no statutory right to a review of the damages and cause of action estoppel would prevent the bringing of new proceedings based on the same cause of action. The rule of law that an assessment of damages is final and cannot be altered by reason of unanticipated future events has been somewhat eroded by the possibilities of interim awards and provisional awards and orders for periodic payments: see McGregor on Damages, 9th edn (Sweet & Maxwell, 2018) para 11.024. See also para 9.81. 207 See para 9.37 et seq for the matters which may vitiate a judgment.

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9.84  Estoppel by Record already been decided in the first proceedings, the defendant may claim an issue estoppel which prevents that particular issue being tried again.208 (c) The defendant may assert that the claim should have been, but was not, raised by the claimant in previous proceedings between the parties and that the public interest requires that the claim should not now be made. This is the rule in Henderson v Henderson and is also discussed later.209 (d) The defendant may claim that under the doctrine of common law election the claimant has in the previous proceedings elected for and has obtained judgment for a particular remedy against him or against some other person so that a different and inconsistent remedy cannot now be asserted against him.210

4.  Cross-Estoppels and Counter-Estoppels (i) Cross-Estoppels 9.84  This is a possibly somewhat esoteric subject but, if only because it has been discussed in recent authority, it requires explanation. It is referred to here under an explanation of cause of action estoppel, although any problem which arises may impinge upon any of the three principles which together constitute estoppel by record. If a cause of action is established and culminates in a judgment in favour of a claimant, the effect of cause of action estoppel is that the same cause of action cannot be asserted in further proceedings by that claimant against the same defendant. Put more technically, the cause of action is said to have merged in the judgment and therefore no longer exists.211 The question is whether a further and different estoppel may arise between the parties, the effect of that further estoppel being that the cause of action in question may still be asserted by reason of the further estoppel despite what would otherwise be the effective extinction of the cause of action by reason of an estoppel per rem iudicatam. 9.85  To a considerable extent, the answer to this question has been provided by authority. The decision of the House of Lords in Republic of India v India Steamship Co Ltd212 has been discussed as an illustration of the circumstances in which two claims arising out of the same incident were held to be founded on the same cause of action so that when judgment had been obtained on one claim the second claim could not be continued because of the res iudicata rule.213 Defeated on this point, the Plaintiffs, the Government of India, wished to rely on a further contention which was that the Defendants were not entitled to

208 Issue estoppel is explained in part (D) of this chapter. In these circumstances, a claimant may also be able to rely on an issue estoppel in support of his further proceedings. 209 See part (J) of this chapter. 210 Scarf v Jardine (1882) 7 App Cas 345; United Australia Ltd v Barclays Bank Ltd [1941] AC 1. Common law election, including election between different remedies, is explained in ch 8. The focus in this paragraph is on an election in proceedings between different remedies and an attempt in the same or in later proceedings to obtain a different remedy. Common law election operates mainly on an election between inconsistent rights, such as the decision whether to affirm a contract or to determine the contract following a repudiatory breach, and in such cases only one set of proceedings is normally involved. There is a further reference in para 9.118 to the relationship between issue estoppel and the doctrine of common law election. 211 The doctrine of merger is described in para 9.67 et seq. 212 [1993] AC 410. 213 See para 9.75.

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Cause of Action Estoppel  9.86 plead the res iudicata rule as a defence because at the time of the first judgment, which was before a court in India, there arose, by reason of an understanding between the parties, an estoppel, either an estoppel by convention or an estoppel by acquiescence, to the effect that the judgment in India would not prevent the commencement or continuation of further proceedings in England on a different part of the total claim. It was alleged that the Defendants were estopped from resiling from this understanding. The operation of the res iudicata rule in this case was statutory and rested on section 34 of the Civil Jurisdiction and Judgments Act 1982 which provides that no proceedings may be brought by a person in England and Wales, or Northern Ireland, on a cause of action in respect of which a judgment had been given in his favour in proceedings between the same parties, or their privies, in a court in another part of the United Kingdom or in a court of an overseas territory. This statutory provision was necessary because at common law a cause of action estoppel did not operate in respect of a judgment of a foreign court since cause of action estoppel was in these circumstances dependent on the doctrine of the merger of a cause of action into a judgment and the merger doctrine did not apply to judgments of foreign courts.214 The statutory provision was designed to remedy this deficiency in the law. The House of Lords held that section 34 was not a bar on the jurisdiction of an English court, but only provided a possible defence so that in principle its operation could be affected by an estoppel.215 The case was remitted to the Admiralty Judge to consider the cross-estoppel issue as a matter of detail and evidence. 9.86  Unfortunately, the availability of a cross-estoppel which could prevent the operation of section 34 of the 1982 Act, and so allow further proceedings to be brought in an English court on a cause of action even though that cause of action had been determined to exist in a judgment of a foreign court, does not conclude the question of the availability of a crossestoppel in the general situation here under consideration. Section 34 does not mention merger and has no application to judgments in English courts. Consequently, the question remains of whether, if a cause of action is established by a final judgment of an English court and the cause of action merges into the judgment under the highly technical doctrine of merger, a cross-estoppel can operate so as to allow further proceedings which assert that cause of action despite the merger. That question remains unanswered. There seems no reason of practicality or of common sense why a cross-estoppel should not operate in these circumstances. If a cross-estoppel can in effect operate so as to override the statutory provision in section 34 relating to foreign judgments, the same operation should be possible as regards English judgments and should not be prevented by the technicality of the doctrine of merger. If the general circumstances of the judgment in an Indian court in the India Steamship case had been repeated but with a judgment in an English court, it seems strange that a party would then be unable to defeat a res iudicata or merger defence to a further action by a cross-estoppel in the same way as was in principle possible for the circumstances of an Indian judgment. There is a line of decisions, mostly of some antiquity, going back to what Lord Eldon said in 1803, which is said to support the view that a cross-estoppel can 214 See para 9.67 et seq for the doctrine of merger. 215 The relationship between estoppel and the jurisdiction of courts and other judicial bodies is discussed in detail in ch 2, part (E). The principle is that an estoppel cannot enlarge the jurisdiction of a court so that if s 34 had defined the jurisdiction of English courts no estoppel of any form could have operated so as to qualify that jurisdictional restriction.

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9.87  Estoppel by Record operate so as to defeat the effect of a merger216 but these authorities were described in the India Steamship case as not particularly strong.217 In that case, the point was not investigated and argued and Lord Goff confined himself to saying that there was much to be said in favour of the proposition that a cross-estoppel could have the effect of defeating a defence based on the doctrine of merger especially since there was in modern days a reluctance to adopt a highly technical approach such as had been favoured in the past.218 It is submitted that common sense, the desideratum of subjecting English and foreign judgments to the same rule on the present point, and the avoidance of extreme technicality, combine to suggest that a cross-estoppel can in principle operate to defeat any defence of a cause of action estoppel or merger whether the previous decision prayed in aid in support of that defence is a judgment in an English or a foreign court. 9.87  A cross-estoppel of the nature here under consideration may operate when the third principle of estoppel by record, the rule in Henderson v Henderson, is operated. If a claim or defence or issue or other matter could and should have been raised in previous proceedings, then a court has a power to refuse to allow that matter to be raised in later proceedings, since to allow the matter to be so raised would be an abuse of the process of the court.219 Reliance by a party on the rule in Henderson v Henderson could in principle be defeated if at the time of the previous proceedings there had been a shared understanding between the parties, creating an estoppel by convention, that a matter could be raised in later proceedings notwithstanding the fact that it had not been raised in the previous proceedings. Some other form of estoppel might have the same effect. In Johnson v Gore Wood & Co,220 the possibility was considered but it was concluded that what had passed between the parties at the time of the previous proceedings was not enough to constitute the clear shared understanding which is necessary for an estoppel by convention. If the case had been one of estoppel per rem iudicatam, that would have been the end of the matter and in the absence of a counterestoppel by convention the principle of res iudicata estoppel would have had effect. There are limited exceptions to the operation of an estoppel per rem iudicatam but a court has no general power or discretion not to apply the doctrine. The point is less decisive when it comes to the rule in Henderson v Henderson where, even if a matter could and should have been raised in earlier proceedings, the court still has a power to refuse to strike out reliance on that point in later proceedings. If the possibility of later or second proceedings had been at least mentioned or discussed between the parties at the previous proceedings, that may be enough to persuade the later court to allow a matter to be ventilated in later proceedings in the exercise of its control over those proceedings.221

216 See Lothian v Henderson [1803] 3 Bos & Pul 499, 546–47 (Lord Eldon LC), 547–48 (Lord Alvanley); Magrath v Hardy (1838) 4 Bing (NC) 787; Litchfield v Ready (1850) 5 Exch 939, 945 (Parke B); and Langdon v Richards (1917) 33 TLR 325. 217 [1993] AC 410, 422 (Lord Goff). 218 ibid. Lord Goff (at 423) added that he hesitated to conclude that cross-estoppel can have no general application in the case of a judgment on a cause of action and merger of the cause of action into the judgment following a decision in an English court. 219 See part (J) of this chapter for an examination of the rule in Henderson v Henderson. 220 [2002] 2 AC 1. 221 ibid. The fact that the person who controlled the company which sued in the earlier proceedings had stated at the time of those proceedings that he might subsequently bring a new claim in his own capacity was a potent factor in the decision of the Court to allow such a personal claim in the later proceedings.

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Issue Estoppel  9.89

(ii) Counter-Estoppels 9.88  A further subject to be mentioned is what can be called a counter-estoppel. ­Judgments of foreign courts can create an estoppel per rem iudicatam. It is possible that a court in one country could decide an issue in one way and a court in another country in later proceedings between the same parties could decide the same issue in a different way (with or without knowledge of the first decision). Both decisions might be capable of constituting an issue estoppel if the same issue then arose in third proceedings between the same parties in an English court. Plainly, effect could not be given to the two contradictory estoppels. It would be unsatisfactory if the English court was bound to choose on some criterion between the two foreign judgments (possibly favouring the later judgment) so that one of them acted as an estoppel. The most satisfactory result of such a situation is that the English court is left free to reach its own decision on the issue untrammelled by an estoppel, but gaining what assistance it can from the two previous decisions of foreign courts. A further complicating factor in this type of situation is that the two foreign courts may have been applying the law of different countries.222 It may also be necessary to refer to the principle that a judgment of a foreign court will not give rise to an estoppel per rem iudicatam when the result of the foreign judgment is something which is contrary to public policy in England.223

(D)  Issue Estoppel 1.  Nature of the Estoppel 9.89  Issue estoppel is the second of the three principles which together constitute estoppel by record and its general nature has already been summarised.224 It is to be contrasted with cause of action estoppel which results when there is a final determination between parties of whether a cause of action exists. Issue estoppel depends on a particular issue which itself requires determination before it can be known whether a cause of action is established. The principle of issue estoppel, and the distinction between it and cause of action estoppel, was long ago applied. The types of issue a decision on which could bring about an issue estoppel were analysed by De Grey CJ in giving the opinion of the Judges to the House of Lords in

222 See Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 3) [1970] Ch 506, 545–47, where decisions of Pakistani, Indian and New York courts were put before Buckley J as allegedly creating an issue estoppel. All were rejected as creating an estoppel either because they did not determine the same issue as was before Buckley J, or as not being final. A further possible complication might arise from a situation in which an issue was decided in favour of a claimant in country A, and in proceedings raising the same issue between the same parties in country B, it was held that the issue should be decided in favour of the defendant and that no issue estoppel was created in favour of the claimant since the judgment in country A was too uncertain or was vitiated by some matter such as collusion. The question would be whether an English court where the same issue arose between the same parties, was bound by an issue estoppel arising from the judgment in country B to the effect that the decision in country A did not create an issue estoppel. See Yukos Capital Sarl v OJSC Rosneft Oil Co (No 2) [2014] QB 458 (explained in paras 9.19 and 9.98) and which raised a matter not wholly dissimilar to that here mentioned. 223 Vervaeke v Smith [1983] 1 AC 145: see below (n 400). 224 See para 9.10.

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9.90  Estoppel by Record The Duchess of Kingston’s Case in 1776.225 Lord Ellenborough alluded to the distinction in Outram v Morewood226 in an action for trespass where it was held that if a verdict was found on any fact or title distinctly put in issue that verdict could be pleaded by way of estoppel in another action between the same parties or their privies in respect of the same fact or title.227 In an appeal to the Privy Council from Australia it was assumed and admitted before the High Court of Australia that for the purposes of an assessment to land tax for one year certain beneficiaries under a will were joint tenants of an estate. It was held that this gave rise to an issue estoppel that the beneficiaries had the same status for the purposes of the assessment to tax for the next year.228 9.90  A leading modern statement of the principle of issue estoppel is that of Diplock LJ in Thoday v Thoday: The second species, [of estoppel per rem iudicatam], which I will call ‘issue estoppel’, is an extension of the same rule of public policy. There are many causes of action which can only be established by proving that two or more different conditions are fulfilled. Such causes of action involve as many separate issues between the parties as there are conditions to be fulfilled by the plaintiff in order to establish his cause of action; and there may be cases where the fulfilment of an identical condition is a requirement common to two or more different causes of action. If in litigation upon one such cause of action any of such separate issues as to whether a particular condition has been fulfilled is determined by a court of competent jurisdiction, either upon evidence or upon admission by a party to the litigation, neither party can in subsequent litigation between one another upon any cause of action which depends upon the fulfilment of the identical condition, assert that the condition was fulfilled if the court has in the first litigation determined that it was not, or deny that it was fulfilled if the court in the first litigation determined that it was.229

A further and more succinct description of issue estoppel was given by Lord Keith in Arnold v National Westminster Bank Plc: Issue estoppel may arise where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings between the same parties 225 (1776) 20 St Tr 355, (1776) 1 Leach 146. 226 (1803) 3 East 346. 227 ibid, 355. Lord Ellenborough put the principle as follows: ‘The recovery of itself in an action for trespass is only a bar to the future recovery of damages for the same injury: but the estoppel precludes parties and privies from contending to the contrary at that point, or matter of fact, which having been once distinctly put in issue by them or by those to whom they are privy in estate or law, has been on such issue joined, solemnly found against them’. In R v Inhabitants of the Township of Hartington Middle Quarter (1855) 4 E & B 780 the issue was where a particular person was ‘settled’. It was held in a former case that two persons were lawfully married and that children had been born thereafter as their legitimate issue and these facts were held to be binding in later proceedings. See also In Re Graydon [1896] 1 QB 417 (a finding that a sum of money received by a bankrupt person was in the nature of personal earnings on the part of a bankrupt patentee and belonged to him held binding as regards subsequent royalties received). 228 Hoystead v Commissioner of Taxation [1926] AC 155. See, however, the comments on this decision by Lord Russell and Lord Romer in New Brunswick Railway Co v British and French Trust Corporation Ltd [1939] AC 1, 29 and 42; and by Lord Radcliffe in Society of Medical Officers of Health v Hope [1960] AC 551. Any difficulty centres on the care which must be taken when an estoppel is said to be founded on a judgment in default or a ­judgment based on an assumption. See para 9.46 et seq. 229 [1964] P 181, 198. Diplock LJ contrasted issue estoppel with cause of action estoppel and his description of the latter principle in the same judgment is set out in para 9.68. The immediately following passage in the judgment has attracted some subsequent criticism. This further passage is set out in para 9.105 and is discussed there. This, however, does not detract from the usefulness of the passage here set out as a modern statement of the principle of issue estoppel as one of the two species of estoppel per rem iudicatam.

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Issue Estoppel  9.91 involving a different cause of action in which the same issue is relevant one of the parties seeks to re-open the issue.230

In R (Coke-Wallis) v Institute of Chartered Accountants in England and Wales,231 Lord Clarke stated the constituent elements of estoppel per rem iudicatam as the following six matters: (1) (2) (3) (4) (5) (6)

The decision, whether domestic or foreign, was judicial in the relevant sense. It was in fact pronounced. The Tribunal had jurisdiction over the parties and the subject matter. The decision was (a) final and (b) on the merits. It determined a question raised in the later litigation. The parties are the same or the privies, or the earlier decision was in rem.

9.91  It can therefore be said that the operation of the principle of issue estoppel in any proceedings depends fundamentally on the establishment of two matters. The first matter is that an issue raised in the later proceedings is the same as an issue which has been clearly and finally determined in the earlier proceedings.232 The second matter is that the parties to the later proceedings are the same parties as the parties to the previous proceedings in which the issue was determined or are the privies of those parties. Lord Guest has stated the requirements of issue estoppel as being threefold, namely (1) that the same question has been decided; (2) that the judicial decision said to create the estoppel was final; and (3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies.233 These requirements of course bear a close similarity to the requirements for a cause of action estoppel save that for issue estoppel and for the purposes of the first requirement the necessary identity of subject matter must be as to an issue rather than as to a cause of action. The first of these requirements is considered here under the topic of issue estoppel. The second and third requirements, finality of the judgment and identity of parties, which are common to cause of action and issue estoppel, are considered separately.234 Despite the similarity in the requirements it has been said that some confusion may have been introduced by applying to issue estoppel without modification, rules which had been evolved to deal with cause of action estoppel.235 It is not very apparent what significant modification to the rules is needed, but a possible difference is that a greater degree of similarity between the issue in the former and in the new proceedings may be needed to support an issue estoppel than is required in the similarity between the previous and the new claims to support a cause of

230 [1991] 2 AC 93, 105. This decision primarily concerns exceptions to the operation of estoppel per rem iudicatam and is examined in detail in para 9.196 et seq. 231 [2011] 2 AC 146, para 34. See also R (Gray) v Police Appeals Tribunal [2018] 1 WLR 1609, para 42 et seq (Sir Terence Etherton MR). 232 The requirement of clarity and certainty in a decision on an issue if the decision is to bring about an issue estoppel is explained in para 9.109. 233 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, 935. In the same case at a later stage, [1970] Ch 506, 538, Buckley J said that to make good a claim of estoppel per rem iudicatam the party asserting the ­estoppel had to establish: (1) that there has already been a judicial decision by a competent court or tribunal; (2) of a final claimer; (3) of the same question that is sought to be put in issue by the plea in respect of which the estoppel is claimed; (4) between the same parties, or their privies, as the parties between whom the question is sought to be put in issue. 234 See para 9.28 (final decision); and para 9.119 et seq (same parties). 235 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, 916 (Lord Reid).

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9.92  Estoppel by Record action estoppel.236 There is for issue estoppel an additional rule that an issue decided in one case will not ­operate as an issue estoppel in a later case if the issue was only ‘collateral’ to the overall result of the first case.237 9.92  It is possible that a judgment of a court brings about a cause of action estoppel and an issue estoppel, although the consequences of the two estoppel principles may be different. An illustration would be if a claimant sued a defendant for damages for a breach of contract. It might be agreed that the defendant had carried out certain actions and that the claimant had suffered a loss as a result of these actions, so that those matters were not in issue, but the defendant might contend that he was able to rely on an exception clause in the contract which absolved him from liability. The court might decide in favour of the claimant on the correct construction of the exception clause, the only disputed issue between the parties, so that the claimant succeeded on the issue and established his cause of action. Since there would be a cause of action estoppel, the claimant would be prevented from bringing a later action to obtain further damages under the same cause of action which depended on the same actions of the defendant. However, if the defendant carried out some further actions which were a further and separate breach of contract a new cause of action would arise in respect of which the claimant could sue without fear of a cause of action estoppel defence. If the exception clause was again relevant in the second action both parties would be bound by virtue of an issue estoppel to the construction of that clause as determined in the earlier proceedings.

2.  Aspects of Issue Estoppel (i)  Identity of the Issue 9.93  The core of issue estoppel is that the same issue as has been decided between parties in earlier proceedings cannot be disputed again in later proceedings between the same parties but must be accepted as correctly decided and as binding between them. What matters for the purposes of issue estoppel is that an issue has been finally determined in proceedings. Consequently, the estoppel may arise when there has been a final determination of an issue in interlocutory proceedings even though the proceedings as a whole await a final determination at a later stage.238 It may be that an issue is decided as one of the matters which arises for decision in the earlier proceedings or it may be that an issue was the only matter decided in the earlier proceedings such as where those proceedings were for a declaration.239 This raises the inevitable matter of what exactly is meant by the same issue or the same question. The matter was addressed by Lord Romer in a decision in which he said that parties were prevented from litigating in a later decision the same question as had been decided between them in an earlier decision but added: ‘But this is very different from saying that [a party]

236 See para 9.93 et seq. 237 This matter is discussed in para 9.100 et seq. 238 R v Governor of Brixton Prison, ex parte Osman [1991] 1 WLR 281 (application of an issue estoppel in habeas corpus proceedings). See also Midland Bank Trust Co v Green [1980] Ch 590, 608. 239 It may be technically correct to describe a declaration where there is only one issue in contention as a cause of action estoppel.

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Issue Estoppel  9.95 may not thereafter litigate, not the same question, but a question that is substantially similar to the one that has already been decided’.240 A justification for confining the estoppel to issues which are the same and not extending it to issues substantially similar may be that if there are any significant differences between the two issues, then when the first issue was decided a party may have had no full opportunity to present evidence or argument which related to any difference. The strictness of the identity of issue rule as it has been stated for issue estoppel may be contrasted with the rule for cause of action estoppel which, as explained earlier,241 allows a cause of action estoppel to arise not only if there is a complete identity, but also if there is a high degree of similarity, between the facts required to prove the cause of action in an earlier decided case and the facts needed to prove the cause of action in the later case in which a cause of action estoppel is alleged. 9.94  As one might expect, there is a fine dividing line between what is the same issue and what is not the same but only a substantially similar issue, and the authorities reflect the difficulty of demarcating between these two categories of issue. The question has arisen in cases in which two or more parties may be liable for a loss caused by an event, such as a motor accident or an industrial accident, in which they were involved. The Court of Appeal considered the matter in Marginson v Blackburn Borough Council.242 A vehicle owned by A in which he was a passenger, driven by his wife, collided with a vehicle owned by B and the collision caused damage to shop premises. The owner of the shop premises sued A and B for damages in negligence. It appears that the liability of A was alleged on the basis that the relationship between him and his wife, who died in the accident, was that of principal and agent or of employer and employee. It was held in the county court that A and B were liable to the owner of the shop and that their fault and liability were equal. By thirdparty proceedings B sought damages for negligence against A for the damage to B’s vehicle. The Judge awarded no damages on this claim since both A and B were equally liable for the damage to B’s v­ ehicle.243 In later separate proceedings A sought damages against B for injuries sustained by A in the accident. The Court of Appeal held that there was an issue estoppel which prevented this last claim since A and B had been judged equally to blame for the accident in the previous county court proceedings. 9.95  This last decision is to be contrasted with that in Randolph v Tuck.244 A was a passenger in a vehicle being driven by B which was in a collision with a vehicle driven by C. B brought an action in the county court against C claiming a breach of a duty of care and damages. The Judge held that B was wholly to blame for the accident and dismissed the action. Subsequently, A brought an action in the High Court against B and C for damages for injuries sustained by her in the accident. Lawton J held that B and C were equally to blame for the accident. He reasoned that he was entitled to do so because the claim before him was substantially different from that before the county court Judge since it depended on a different duty of care, that owed by B and C to A, whereas in the county court proceedings 240 New Brunswick Railway Co v British and French Trust Corporation Ltd [1939] AC 1, 43. In Thoday v Thoday [1964] P 181, 191. Willmer LJ said that an issue estoppel arose if the issue in the previous action the subject of adjudication was precisely the same issue as arose in the later proceedings. 241 See para 9.75. 242 Marginson v Blackburn Borough Council [1939] 2 KB 426. 243 The proceedings were prior to the passing of the Law Reform (Contributory Negligence) Act 1945. 244 Randolph v Tuck [1962] 1 QB 175.

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9.96  Estoppel by Record the duty of care which was in issue was that owed by C to B. The county court action was said to be concerned with causation whereas in the High Court it was necessary to consider both causation and blameworthiness, and the factor of blameworthiness might have had an important bearing on the extent of responsibility.245 9.96  As a generality there is no reason why, when there are two or more defendants in an action, a decision on liability should not operate as an estoppel per rem iudicatam in subsequent proceedings between the defendants. In a traffic accident case where there was a collision between two vehicles, a passenger in one vehicle established that the liability was that of one driver and it was held that this created an estoppel in a later action so that the liability could not be re-litigated.246 In another, case persons who suffered damage from an explosion sued a water company and its contractors and its consulting engineers. It was held in these proceedings that the liability was wholly that of the consulting engineers who had acted negligently. This result was held to create an estoppel in subsequent proceedings between the water company and the engineers.247 A further decision in which there was held to be an estoppel concerned the liability of different solicitors in a firm.248 It has been said in the Privy Council in an Indian appeal that for an estoppel to arise between co-defendants it was necessary to show that (a) there was a conflict of interest between the defendants concerned, (b) it was necessary to decide this conflict in order to give the claimant the relief claimed, and (c) the question between the defendants had been finally decided.249 To the extent that a guiding principle is needed on this subject, and despite its possible conflict with Randolph v Tuck, this last statement of principle does appear to offer a sensible summary of the law on the present subject. 9.97  A requirement that the issue in the later proceedings must be precisely the same as, and not just substantially similar to, that in previous proceedings if there is to be an issue estoppel arising from the determination of an issue may be said to be somewhat relaxed by the majority decision of the House of Lords in Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2).250 The background and the facts of this litigation are summarised later.251 The issue before the English court was described by Lord Upjohn as being whether the Council of Gera, an East German organisation, had authority to give instructions to begin proceedings in the name of the Stiftung in this country and was an issue which depended on precisely the same facts, circumstances and arguments as were advanced before the courts in the previous decision in West Germany and decided against the Stiftung. There was no suggestion that there had been any relevant change in the facts and circumstances since the date of the German decision in 1960, and 1966, when the matter was determined by the House of Lords 245 ibid, 185. Lawton J declined to follow the decision of McNair J in Bell v Holmes [1956] 1 WLR 1359 and the decision of the Supreme Court of New Zealand in Clyne v Yardley [1959] NZLR 617, which itself adopted the reasoning of McNair J, and preferred to follow the decision of the High Court of Australia in Jackson v Goldsmith (1950) 81 CLR 446 and the decision of the Appellate Division of the Supreme Court of New York in Neenan v Woodside Astoria Transportation (1932) 256 New York Supp 38. 246 Wall v Radford [1991] 2 All ER 741. 247 North West Water Ltd v Binnie & Partners [1990] 3 All ER 547. 248 Sweetman v Nathan [2003] EWCA Civ 1115, [2004] P & CR 7. 249 Munni Bibi v Tiroloki Nath (1931) LR 58 Ind App 158. 250 [1967] 1 AC 853. 251 See para 9.122.

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Issue Estoppel  9.99 in the English proceedings.252 The fact that the facts, circumstances and arguments on an issue are the same in the two proceedings may not necessarily mean that the issue in the two proceedings is precisely the same issue and the approach stated by Lord Upjohn may reveal a welcome move away from the rigidity of a rule that the issues in the two proceedings have to be precisely and exactly the same for there to be an estoppel.253 9.98  The question of identity of issue was considered more recently by the Court of Appeal in unusual circumstances. Arbitration awards for the recovery of money loaned were obtained in the Russian Federation against a state-owned company. Russian courts then set aside the awards. Proceedings were brought to enforce the awards in a Dutch court which held that the Russian judiciary was not impartial and independent and on grounds of public order as understood in the Netherlands refused to recognise the decisions of the Russian courts setting aside the awards. The Claimants sought further to enforce the awards in England under the Arbitration Act 1996. A question for the Court of Appeal was whether the Dutch decision operated as an issue estoppel such that the Defendants could not deny the invalidity of the decisions of the Russian courts setting aside the awards. It was held that there was no issue estoppel, since what constituted public order and justified holding a judgment of a court of a foreign country to be partial depended on the particular conception of public order in courts of a particular country, and that the conception of public order in Dutch law was not necessarily the same as that in English law. The issue before the Dutch courts and that in the English proceedings was therefore not the same so that there could be no issue estoppel.254 9.99  An underlying requirement for both cause of action estoppel and issue estoppel is that there is an identity of cause of action or of issue between the previous proceedings in which the matter has been decided, and the subsequent proceedings where an estoppel per rem iudicatam is alleged. It is difficult to see why the rule on how exact the identity must be if the estoppel is to be established should be different for the two species of estoppel per rem iudicatam. There seems to be no substantial policy consideration which could dictate a stricter requirement of identity for issue estoppel than for cause of action estoppel. It may be that there is much to be said for a rule applicable to both principles of estoppel by record that the cause of action or the issue must be the same or very similar

252 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, 943–44. 253 A stricter view was taken by Lord Reid in his dissenting judgment on the matter of identity of subject matter. He considered that the question before the German court was whether the Council of Gera were the legal representatives of the Stiftung at one date. The question in the English proceedings was whether at a different date a firm of solicitors had the authority of the Stiftung to raise the action. Lord Reid considered that this situation did not disclose an identity of subject matter. His view was therefore that even if in a later decision the facts, circumstances and arguments on some matter are the same as those in a previous decision that in itself is not sufficient to render the issue in the later proceedings or the subject matter of the later proceedings the same as that in the earlier proceedings. At a later stage in the same litigation it was contended, before Buckley J, that a judgment in Pakistan on the registration of a trade mark created an issue estoppel. The contention failed because the Pakistani judge had determined the status of one of the parties under East German law which was a different issue from the status of a party under West German law. A similar conclusion was reached in respect of a decision of the Joint Registrar of Trade Marks in India: see Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 3) [1970] Ch 506, 543. For a summary of the Carl Zeiss litigation see para 9.122. 254 Yukos Capital Sarl v OJSC Rosneft Oil Co (No 2) [2014] QB 458, paras 150–57 (Rix LJ, delivering the judgment of the Court of Appeal). See also Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2012] 1 WLR 1804.

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9.100  Estoppel by Record in the previous and the subsequent proceedings, but that there need not be a precise and exact identity. Whether there is a sufficient similarity can be judged by whether the facts, circumstances and arguments in the first proceedings are very much the same as in the second proceedings.255

(ii)  Collateral Issues 9.100  If the decision on an issue in one case is to create an issue estoppel in subsequent cases, that decision must be fundamental to the question before the court, and it is not enough that it is collateral to that question.256 This statement of the law was applied by Megarry J in Spens v IRC,257 holding that there was no issue estoppel concerning the income of a trust fund when a court had done no more than approve an arrangement relating to a different fund. The Judge relied on the proposition stated in the second edition of Spencer Bower: the Doctrine of Res Iudicata (1969), which recommended an inquiry with ‘unrelenting severity’ into whether the decision said to create the estoppel was so fundamental to the subsequent decision that a later case could not stand without the former case. 9.101  As long ago as 1776, De Grey CJ, giving the opinion of the Judges to the House of Lords in The Duchess of Kingston’s Case,258 divided the judgments in civil actions on issues before the court into three categories as far as their binding nature was concerned. The first category was a judgment ‘directly upon the point’ which operated as an estoppel per rem iudicatam when the same matter came directly in question in another court. The second category was a judgment also ‘directly upon the point’ which operated as an estoppel per rem iudicatam when the point came incidentally in question in another court. The third category was a judgment of a court which came collaterally in question in a later court which would not operate as an estoppel. The modern rule, if stated in terms that the determination of an issue in an earlier decision which is collateral to the question before a later court does not create an issue estoppel, is consistent with the language of De Grey CJ. 9.102  Despite its ancient pedigree the exact justification for the collateral issue rule is less than certain. It is said that an issue decided between the parties in previous proceedings between them will not operate as an issue estoppel in later proceedings if the issue is only collateral to the later proceedings. The question is what is here meant by ‘collateral’. If the 255 Such an approach to the matter of identity of cause of action and of issue is consistent with the judgment of Lord Goff in Republic of India v India Steamship Co Ltd [1993] AC 410 on cause of action estoppel and the judgment of Lord Upjohn in Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853 on issue estoppel. 256 Hoystead v Commissioner of Taxation [1926] AC 155, 171 (Lord Shaw). 257 Spens v IRC [1970] 1 WLR 1173, 1184; see also In Re Koenigsberg [1949] Ch 348, 364; and see The Good ­Challenger [2003] EWCA Civ 1668 in which it was held that a decision of a Romanian court on a limitation period under English law did not create an issue estoppel since the observation of the Romanian court on the point was collateral to the decision of that court. See below (n 373). 258 (1776) 20 St Tr 355, (1776) 1 Leach 146. In Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 3) [1970] Ch 506, 539, Buckley J said that issues decided as ‘incidents of the decision of the then primary issue’ might create an issue estoppel, an observation consistent with the second category of De Grey CJ. In the same decision (at 540) the Judge refused to hold that what had been decided at previous stages of the litigation created an issue estoppel as regards the summons before him to strike out parts of the defence since those decisions were ‘collateral’ to the subject matter of the summons. He relied on the statement of De Grey CJ in The Duchess of Kingston’s Case. For a summary of the Carl Zeiss litigation see para 9.122.

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Issue Estoppel  9.103 issue decided in the previous proceedings is irrelevant to the later action, then no question of an estoppel in the later proceedings arises. The issue is simply irrelevant. Possibly an issue which is collateral to the later proceedings is an issue which is of some, but only limited, relevance or importance to those later proceedings. If the issue is relevant at all to the later proceedings, then it is difficult to see why an issue estoppel should not attach to the issue. If the issue has to be held to be correct by virtue of an estoppel, it will not gain any greater importance than it would otherwise have. There seem to be three possible meanings of the word ‘collateral’ when used in the present context. First, it may simply be a synonym for ‘irrelevant’. Secondly, it may describe a matter which, though not irrelevant, is of limited significance to the question before the court in the later proceedings. These two possible meanings have just been mentioned. Thirdly, it is possible that a matter is collateral if it is a matter of fact which is not itself a condition of fulfilment of which is necessary to a cause of action but is relevant to proving the fulfilment of such a condition. This last possibility depends on the correctness of the analysis by Diplock LJ in Thoday v Thoday which is discussed below but which has not met with universal approval.259 The question of whether an issue is collateral is usually considered in relation to its status and significance within a later decision in which an issue estoppel may be alleged, but it may also be pertinent to ask whether the issue was collateral to the earlier decision in which it was decided, with its status in that earlier decision as being only collateral being a possible reason for not applying an issue estoppel based on that issue. The matter is sometimes approached in this way where the test is said to be whether an issue of fact or law concluded in favour of a party must have been ‘necessarily’ concluded in favour of that party in the previous decision where that issue is sought to be advanced as creating an issue estoppel.260 One of the difficulties with the collateral issue rule is that it is not always apparent from the authorities whether an issue determined in earlier proceedings is prevented from operating as an issue estoppel in later proceedings because that issue was collateral to the earlier decision or because it is collateral to the later proceedings. It may be that the best statement of the rule on the present matter is that an issue determined in an earlier case cannot create an issue estoppel in a later case between the same parties when the issue so decided was no more than collateral to the earlier decision in the sense that its determination was not necessary for that earlier decision so that that earlier decision would have been the same whichever way the issue was decided. 9.103  It has been noted in connection with cause of action estoppel that a judgment by consent which establishes the existence, or otherwise, of a cause of action between two parties will bind those parties by virtue of an estoppel as much as will a judgment given after a full investigation on evidence and argument between the parties where the cause

259 [1964] P 181, 198. See para 9.105 where the citation is set out. 260 Desert Sun Loan Corporation v Hill [1996] 2 All ER 847, 854. See also Re State of Norway’s Application (No 2) [1988] 3 WLR 603, 624, where May LJ described a basic requirement of an issue estoppel as being that ‘the earlier determination relied on as raising an issue estoppel shall have been fundamental to the decision first arrived at’. In Penn-Texas Corporation v Murat Anstalt (No 2) [1964] 2 QB 647, 660–61, Lord Denning MR said that one of the tests in seeing whether a matter was necessary to an earlier decision, or only incidental to it, was to ask: Could the party have appealed from it? If he could have appealed and did not, he is bound by it. If a party could not have appealed the matter decided in a previous decision (because it did not affect the order made), then that matter was only incidental and not essential to the decision and so did not create an issue estoppel.

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9.104  Estoppel by Record of action is disputed.261 The same rule applies to issue estoppel. In the decision of the Privy Council in Hoystead v Commissioner of Taxation,262 the issue between the parties, the ­existence of a joint ownership of assets by beneficiaries under a will, was admitted and assumed in proceedings and operated in subsequent proceedings as an issue estoppel. There is no inconsistency between this rule and the rule just noted that an issue must be fundamental to the question before a court and to its decision if a judgment on it is to operate as an issue estoppel. In the Hoystead decision, the issue admitted and assumed was as fundamental to the earlier as to the later case. What matters is the importance or centrally of an issue determined by a court to a decision of a later court if that determination is to operate as an issue estoppel in later proceedings between the same parties and not the method by which the earlier determination was reached, ie, whether that determination was after a hard-fought dispute or is a result of a consent or an agreed assumption.

(iii)  Nature and Form of the Previous Decision 9.104  There is no doubt that the issue which is determined and which can give rise to an issue estoppel may be an issue of law or of fact or of mixed law and fact.263 When it comes to a decision on an issue of fact, two distinctions of a similar nature need to be considered. The first is a possible distinction between an issue determined as a matter of fact and specific findings of fact which leads to the determination on an issue. The second distinction is between the determination of an issue and the reasons given for that determination. These two distinctions are now examined and the examination is followed by a summary of the different possible components of a judgment and the capacity of each component to give rise to an estoppel per rem iudicatam.

(iv)  An Issue and a Finding of Fact on an Issue 9.105  The well-known description of issue estoppel by Diplock LJ in Thoday v Thoday has been cited earlier.264 Immediately following that description, Diplock LJ in his judgment added the following passage which has caused some controversy: But ‘issue estoppel’ must not be confused with ‘fact estoppel’ which, although a species of ‘estoppel in pais’ is not a species of estoppel per rem iudicatam. The determination by a court of competent jurisdiction of the existence or non-existence of a fact, the existence of which is not itself a condition the fulfilment of which is necessary to the cause of action which is being litigated before the court, but which is only relevant to proving the fulfilment of such a condition, does not estop at any rate per rem iudicatam either party in subsequent litigation from asserting the existence or non-existence of the same fact contrary to the determination of the first court. It may not always be easy to draw the line between facts which give rise to ‘issue estoppel’ and those which do not,

261 See para 9.46. 262 [1926] AC 155. 263 Outram v Morewood (1803) 3 East 346, 355 (Lord Ellenborough); Jones v Lewis [1919] 1 KB 328, 345 (Bankes LJ). For Outram v Morewood, see para 9.89. The distinction between matters of law and of fact, and of mixed law and fact, is explored in ch 3, para 3.26 et seq where, at any rate until very recently, the distinction was important for the operation of estoppel by representation. It is still important for the operation of estoppel by deed. 264 [1964] P 181, 198. See para 9.90 for the earlier passage cited.

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Issue Estoppel  9.106 but the distinction is important and must be borne in mind. Fortunately it does not arise in the present case.265

What Diplock LJ was doing in his total description of estoppel per rem iudicatam in the above passage, and the preceding passages, in his judgment was to differentiate between (a) the determination of a cause of action in proceedings which can create a cause of action estoppel, (b) the determination of an issue in proceedings, described as a condition the fulfilment of which is necessary to a cause of action, which can create an issue estoppel, and (c) the determination of some disputed fact relevant to the cause of action or to an issue, which cannot create an estoppel per rem iudicatam. It appears from the language used that Diplock LJ contemplated that a question of fact might itself be an issue (and so capable of creating an issue estoppel) or might only be relevant to the determination of an issue without itself being an issue (and so not capable of creating an issue estoppel). 9.106  The supposed distinction between the determination of an issue, which can create an issue estoppel between the parties, and the determination of a fact relevant to that issue, which does not have that effect, has met cogent criticism as a matter of principle as well as because of the difficulty in differentiating between the two types of determination. It is worth citing the illuminating observation of Lord Reid in Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2).266 Lord Reid found the distinction between issue estoppel and fact estoppel (or perhaps the absence of a possible fact estoppel in certain circumstances) as made by Diplock LJ difficult to understand. Lord Reid observed: Suppose that as an essential step towards the judgment in an earlier case it was decided (a) that on a particular date A owed B £100 or (b) that on that date A was alive. The first is, or at least probably is, a question of law, the second is a pure question of fact. Are the findings to be treated differently when issue estoppel is pleaded in a later case? Or take marriage – an issue in the earlier case may have been whether there ever was a ceremony (a pure question of fact) or it may be whether the ceremony created a marriage (a question of law). I cannot think that this would make any difference if in a later case about a quite different subject matter the earlier finding for or against marriage was pleaded as creating issue estoppel.267

It is possible to hypothesise a similar example of the difficulty in a commercial sphere. Suppose that a party has a right to determine a contract by notice if the other party has committed certain breaches of contract. That right is exercised. The other party asserts by way of defence (a) that the notice was defective because it did not allow a sufficient time, (b) that the acts in question, even if committed, did not constitute a relevant breach, and (c) that the acts alleged to be the breach were not in fact committed. A court determines the case in favour of the other party on a finding that the acts were committed but that the notice was defective because it had not given a sufficient time for the determination of the contract. The court found it unnecessary to determine whether those acts did constitute the relevant breaches of contract. It might be that the party alleging the determination

265 ibid. By ‘estoppel in pais’ Diplock LJ was presumably referring to an estoppel by representation which has nothing to do with a decision of a court and was long thought to depend upon a person making a representation of fact or of mixed law and fact on which the representee had acted to its detriment. Recent authorities suggest that an estoppel by representation may be founded on a representation or statement of law: see ch 3, para 3.18 et seq. 266 [1967] 1 AC 853. 267 ibid, 916–17.

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9.107  Estoppel by Record of the contract was able to give a further notice depending on the same breaches. In the second proceedings it might be accepted that the notice was a valid notice in its form but the defendant might raise again the second and third defences. It seems strange that in those circumstances the defendant should be able to raise again the questions of fact as to whether certain actions had been carried out by it even though those facts may have been litigated with evidence and argument and determined against it in the previous proceedings. On one reading of what was said in Thoday v Thoday, the decision of the first court on the facts would not have been a determination of any issues but only of facts which would have led to a determination of the issue as to whether the actions did constitute a breach of contract and on that basis would not operate as an issue estoppel. 9.107  It does therefore seem that on this question there is much to be said for the view that where a court determines an issue of law or of fact of any character an issue estoppel may arise from that determination even if the facts as determined cannot for some reason be dignified by the status of ‘an issue’ or ‘a condition’. 9.108  The distinction between the determination of an issue in proceedings, which may give rise to an issue estoppel, and the finding of a specific fact or facts relevant to that issue, which on one view does not of itself give rise to an issue estoppel, may be a fine one and one where it is not always easy to draw the line.268 Even so, as the law may stand the distinction must be considered. This view of the law and the supposed distinction are illustrated by the judgment of Diplock LJ in Thoday v Thoday269 in the setting of a matrimonial dispute. A wife brought a petition for divorce against her husband alleging the matrimonial offence of cruelty. In order to succeed she had to show (a) serious ill-treatment of her, and (b) an adverse effect on her health. Her petition was rejected by the Court. The husband then in later proceedings petitioned for divorce on the ground of desertion by the wife. In response the wife alleged constructive desertion by the husband. To establish the matrimonial offence of constructive desertion it was necessary for the wife to prove (a) serious ill-treatment of her, and (b) that the ill-treatment was expulsive conduct or was accompanied by expulsive words. The first issue was therefore common to the first and the second proceedings. If in the first proceedings the Judge had made a clear and definite finding that there was no ­serious ill-treatment of the wife that would have constituted an issue estoppel which would have prevented the wife from disputing that finding when in the second proceedings she alleged constructive desertion. What in fact happened is that the Judge in the first proceedings made certain findings of fact relevant to the issue of serious ill-treatment, but he did not reach any clear and separate decision on that issue when rejecting the wife’s petition. The result was that the wife was able to raise the issue of serious ill-treatment in the second proceedings and in support of her contention of constructive desertion and was able to give evidence of facts relevant to the issue of ill-treatment. It seems on the face of it odd that, if the Judge in the first proceedings had found as a specific finding of fact on the evidence that an alleged incident of physical violence to her had not happened but had been made up by her, the Judge in the second case was not bound by that finding by reason of an issue ­estoppel. The operation of the law to this effect, if indeed it is the law, does appear to ­truncate the value of issue estoppel as a principle.

268 Thoday 269 ibid.

v Thoday [1964] P 181, 198.

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Issue Estoppel  9.111 9.109  The decision in Thoday v Thoday, as well as distinguishing between issues and facts relevant to an issue, also illustrates the rule that for a determination of an issue to bring about an estoppel that determination must be clear and certain.270

(v)  Reasons for a Decision 9.110  The rule that the reasons given by a court for its decision on a particular issue do not themselves create an issue estoppel as regards those reasons is easier to justify. A court may decide an issue in favour of a claimant, such as that a breach of contract has occurred as alleged by the claimant, in part because it determines that certain facts occurred and in part because it finds the evidence of a witness for the defendant to be untrustworthy. The issue which was decided, that the breach of contract occurred, may create an issue estoppel Whether the decision on the occurrence of certain facts would bring about an issue estoppel is less certain and depends on the possible distinction between a decision on an issue and a finding of facts relevant to an issue as just discussed. The unreliability of a witness as a reason for the decision arising does not create an estoppel. Therefore, if the same witness gave evidence in later proceedings between the same parties the court would not be bound to regard his evidence as unsatisfactory.271 9.111  The reason of a court for determining an issue in one way may be a matter of law. For example, if a landowner claimed against his neighbour a right of unimpeded access of light to his land over his neighbour’s land a decision of a court in his favour on this issue, where the right is claimed by prescription, might depend on the disputed interpretation of the language of the Prescription Act 1832. This interpretation would be a reason for determining the prescriptive claim in favour of the claimant, such that a right of light over a particular area of servient land was established. There could then be proceedings between the same two parties as to the existence of a right of light over a different building or area of land owned by the defendant. There would be no cause of action estoppel since the first decision did not relate to the second area of land. There would be no identity of cause of action. A court in the second proceedings would still be bound by virtue of an issue estoppel by the reason of law given for the first decision, that is a particular interpretation of the meaning of a statute, if that interpretation was also an issue in the second proceedings. In other words, a reason of law given for determining a cause of action may itself be

270 Co Litt 352b. The rule on this matter, as stated by Somervell LJ in In Re Koenigsberg [1949] Ch 348, 362, is that a point considered in one set of proceedings cannot be re-litigated in later proceedings between the same parties if the judgment in the previous decision must have necessarily involved a finding on the point. This principle was applied by the Court of Appeal in Re Wright, Blizard v Lockhart [1954] Ch 347, 359 (Romer LJ) where a plea of res iudicata was rejected. In Thoday v Thoday the decision of the Judge to reject the contention of cruelty in the first proceedings did not contain a clear and certain decision on the first issue, that of serious ill-treatment of the wife, so that no issue estoppel could arise on that issue in the second proceedings. The need for certainty in the decision on an issue if there is to be an estoppel, may be of particular importance where an issue considered in a foreign judgment is alleged to bring about an issue estoppel in subsequent English proceedings. Different legal procedures and expressions and differences in language may make it difficult for the English court to ascertain with certainty the issue decided by the foreign court. 271 Of course, the fact that the witness had been held to be untrustworthy in his previous evidence would be a ground for submitting that his evidence was similarly untrustworthy in later proceedings but the court in the later proceedings would not be bound by an estoppel to accept that submission.

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9.112  Estoppel by Record the ­determination of an issue. As against this, there could be a decision on the meaning of a particular statutory provision with a reason given for the decisions that the favoured interpretation of the provision fitted well with a further provision in the statute. The interpretation of the provision would be an issue capable of creating an issue estoppel but it seems that the reason mentioned would not create an estoppel.

(vi)  Different Types of Decision as Components of a Judgment 9.112  What this discussion demonstrates is that it is necessary to distinguish for present purposes between different types of decision. (a) A decision may establish the existence or non-existence of a cause of action, and so may create a cause of action estoppel. (b) A ­decision may resolve an issue relevant to a cause of action which may in principle be an issue of law or of fact or of mixed law and fact, and so may create an issue ­estoppel. (c) A decision may decide a matter of fact which is not an issue but is relevant to a decision on an issue. Such a decision (at least on one substantially criticised view) cannot create any form of estoppel per rem iudicatam. (d) A court may give its reasons for any of the above categories of decisions and these components of a judgment, unless themselves the ­determination of an issue, will not create any form of estoppel.

(vii)  The Purpose and the Parties 9.113  Once an issue has been finally determined between parties that issue binds the parties in all further proceedings between them. It does not matter what is the purpose of the further proceedings and it does not matter in what procedural position a party litigates in the further proceedings. 9.114  That the purpose of the later proceedings as compared with that of the earlier proceedings does not matter is illustrated by the early case of Flitters v Alfrey.272 A landlord obtained a warrant from Magistrates for the eviction of a tenant on the basis that the tenancy had been determined by notice to quit. The landlord then brought proceedings in the county court for arrears of unpaid rent. The tenant succeeded in that action on a finding by the Judge that his tenancy was a yearly tenancy. Thereafter, the tenant brought proceedings in the Court of Common Pleas for damages for wrongful eviction since his yearly tenancy had not been properly determined. A jury in those proceedings decided that the tenancy was weekly but it was held that the tenant was able to rely on the decision of the county court that the tenancy was yearly by reason of an estoppel. The county court proceedings were for the purpose of recovering rent allegedly due, whereas the proceedings in the Court of Common Pleas were for the purpose of obtaining damages for trespass. The difference in purpose did not prevent the operation of an estoppel between the parties on the issue of the nature and status of the tenancy. 9.115  In the same way, the procedural status or capacity of the parties in the two proceedings need not be the same. In Flitters v Alfrey,273 the Plaintiff in the first proceedings was



272 (1874) 273 ibid.

LR 10 CP 29.

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Issue Estoppel  9.117 the Defendant in the second proceedings. In Thoday v Thoday,274 the fact that in the first proceedings the Petitioner for divorce was the wife would not have prevented an issue ­estoppel arising from those proceeding, if it could otherwise have been established, by the fact that in the second proceedings the Petitioner was the husband. The procedural ­position of a party in the sense of being a claimant or defendant or third party does not matter. However, a change in the capacity in which a party acts in proceedings may prevent an estoppel. This last matter is explained later in this chapter.275

3.  Comparison with Other Principles 9.116  An attempt is made here to compare issue estoppel as a part of estoppel per rem iudicatam with other principles which may lead to a party being prevented from putting forward its case or a part of its case in legal proceedings. A brief comparison is made between issue estoppel and the rule in Henderson v Henderson and between issue estoppel and the doctrine of election.

(i)  The Rule in Henderson v Henderson 9.117  The rule in Henderson v Henderson276 has been explained in outline as one of the three principles which together make up estoppel by record. It is a rule which prevents a party from relying on a claim or a defence or some other matter in later proceedings when that party could and should have raised the matter in previous proceedings but failed to do so, the justification for the rule being to prevent an abuse of the process of the court. If a party is prevented in later proceedings from raising an issue because of an issue estoppel then there is no scope for the operation of the Henderson v Henderson principle.277 The issue estoppel principle operates as a matter of law (save in certain exceptional circumstances to be considered later)278 and ordinarily no element of discretion is involved. There may be factors which prevent the operation of the strict issue estoppel rule. The issue in the previous proceedings may be similar to that in the later proceedings but not the same or sufficiently similar to create an estoppel. A party in the later proceedings may not be the same party as in the previous proceedings or a privy of that party but there may still be a close connection between the persons or corporations involved. An issue may have been considered in general terms in previous proceedings but the judgment in those proceedings may not have stated a conclusion on the issue with sufficient certainty and clarity to bring about an issue estoppel. In these and other such circumstances, it is open to a party to contend that while another party cannot be prevented from raising an issue by reason of an issue estoppel, it would still be an abuse of the process for the other party to be allowed 274 [1964] P 181. 275 See para 9.126. 276 The rule takes its name from the decision of Wigram V-C in Henderson v Henderson (1843) 3 Hare 100. 277 Thus, in Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878 the House of Lords, having held that there was a cause of action estoppel, did not find it necessary to go on to consider the Henderson v Henderson rule. 278 See para 9.200. It was suggested by the Court of Appeal in Yukos Capital Sarl v OJSC Rosneft Oil Co (No 2) [2014] QB 458, para 158 et seq, that outside any established exception a court has a power to refuse to allow an issue estoppel in special circumstances, a rule, if it exists, described by the court as amorphous.

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9.118  Estoppel by Record to put forward some matter by way of a claim or a defence. It may be that the application of the Henderson v Henderson rule in the type of circumstances just outlined will be sparingly permitted, since if issue estoppel is circumscribed by strict rules it seems scarcely satisfactory in a case where there is not compliance with those rules that the same result is achieved by applying the more flexible rule in Henderson v Henderson.279 Furthermore, the primary area of operation of the Henderson v Henderson rule is where an issue has not been raised at all in previous proceedings when it could and should have been, and not where the issue has been ventilated but the principle of issue estoppel is prevented from operating by reason of some technical or restrictive rule governing that principle.

(ii)  Common Law Election 9.118  Common law election depends on a choice between different inconsistent rights or remedies. A party who chooses to assert one right against another party may then be prevented from asserting a different and inconsistent right against that party.280 Any possible overlap between this doctrine and estoppel per rem iudicatam is where there is an election in proceedings between one of two or more inconsistent remedies which may then prevent the assertion against a defendant of the inconsistent remedy not sought. Such an election only normally occurs when one remedy is brought to a judgment of a court. The difficult questions which arise in connection with election and inconsistent remedies are those of distinguishing between rights and remedies and of knowing at exactly what point the election for one remedy, so precluding the seeking of a different remedy, takes place. In any event, the effect of an election between remedies is usually to prevent the pursuing of a different and inconsistent remedy in the same proceedings as those in which the first remedy has been obtained.281 However, an action against one defendant could, if brought to judgment by way of a particular remedy, prevent an action against another defendant seeking what was in substance the same relief. There could be no estoppel per rem iudicatam in such a case given there were two different defendants. In effect, although there are some similarities, there is no substantial overlap between the operation of the doctrine of common law election regarding remedies and the principle of issue estoppel.

(E)  Parties and Privies 1.  General Principles (i) Parties 9.119  The underlying rule, which is no more than a rule of common sense, is that a judgment creates an estoppel by record only between the parties to the proceedings in which the 279 In Mullen v Conoco Ltd [1998] QB 382 the Court of Appeal, having held that there was no estoppel per rem iudicatam, went on to consider whether the proceedings brought by the Plaintiff should be prevented under the rule in Henderson v Henderson. It was held that the proceedings were not so prevented. 280 See ch 8 for the doctrine of common law election. 281 United Australia Ltd v Barclays Bank Ltd [1941] AC 1. See ch 8, para 8.44. In this case there was no election since the claim in the first action was discontinued before any judgment was obtained.

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Parties and Privies  9.123 judgment was given.282 Other parties, who may be described as strangers to the judgment, are not bound by it. This rule is applicable to cause of action estoppel and issue estoppel and is of obvious importance to the third principle of estoppel by record which is the rule in Henderson v Henderson.283 9.120  Mutuality is said to be a cardinal element of the law of estoppel as a whole.284 It is in the area of estoppel by record that this element finds its clearest expression. A final judgment on a cause of action or on an issue binds all parties to the proceedings in which the judgment was given, whichever party was successful or partly successful in the proceedings so that the estoppel which arises can be said to be mutual. 9.121  The rule as to identity of parties can be strictly applied. This is illustrated by the Carl Zeiss litigation. The decision of the House of Lords is important, as well as for the question of identity of parties, for the question of identity of subject matter and for the nature of what is a final judgment. The litigation was complicated and what was decided cannot readily be understood without a short account of the history of the matter which is given here, and which is also relevant to the other questions concerning estoppel per rem iudicatam on which guidance can be found in the judgment of the House of Lords. 9.122  In about 1846, Carl Zeiss started an optical business in Jena in Germany and in 1881 a charitable foundation called Carl Zeiss Stiftung was set up to carry out the business and other activities. The Stiftung was administered by a Board and was situated in the Grand Duchy of Saxe-Weimar. In 1918, the Grand Duchy was abolished by the Weimar Government and the Stiftung fell within the jurisdiction of the newly created state of Thuringia. Following the collapse of Nazi Germany in 1945, Thuringia was by agreement of the Allied Governments placed in the occupation and control of the USSR. In 1949, the USSR set up the German Democratic Republic (the GDR) as a communist satellite state. A primary issue in the litigation was whether an entity controlled and administered by the GDR could have any status in English courts since the GDR was not recognised de iure or de facto by the UK Government. It was held that the GDR was an organisation set up by the USSR and that its institutions could be recognised in English courts as set up by the country with sovereign control and jurisdiction over the area, the USSR, which was recognised as having that ­jurisdiction by the UK Government. 9.123  This last matter is beyond the subject of this book but the decision of the House of Lords is important for a number of aspects of estoppel by record. Organisations had been set up or operated in West Germany and the UK calling themselves Carl Zeiss Stiftung or some variant of that name and the GDR Stiftung sought to prevent this happening by bringing passing off actions against such bodies. In 1952, under GDR legislation, Thuringia was abolished and there was established a District and a Council of Gera which administered the Board of the GDR Stiftung. In 1953, the GDR Stiftung, represented by the Council of Gera, commenced proceedings in Stuttgart against a West German entity calling itself Carl Zeiss of Heidenheim. In 1960, the Federal Supreme Court of West Germany held that 282 The possibility of an issue estoppel between co-defendants in an action is examined in para 9.97. 283 It is possible that in some circumstances the rule in Henderson v Henderson can be applied against a person who was not a party to the previous proceedings: see Johnson v Gore Wood & Co [2002] 2 AC 1. 284 See ch 1, para 1.48. The requirement of mutuality goes back to Coke: Co Litt 352a; and see Petrie v Nuttall (1856) 11 Exch 569, 576 (Martin B).

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9.124  Estoppel by Record the GDR Stiftung was not properly before the German courts, since the Council of Gera was not the legal representative of the Stiftung. 9.124  The proceedings in England were in truth an action by the GDR Stiftung suing by a firm of English solicitors who had no interest in the subject matter of the action. The Defendant sought to strike out the action on the plea that the GDR Stiftung had no authority to sue in this country and that this issue was determined by reason of an issue estoppel arising from the decision of the West German Court. The House of Lords held that there was no identity of parties, and therefore no issue estoppel, because the party claiming relief in the German proceedings was the Council of Gera and that entity was not itself before the courts in the English proceedings.285 Four of the Judges acceded to this analysis. The decision may appear to some to be somewhat strict and technical since the reality in the German and the English proceedings was that a body of persons, namely the Council of Gera, sought to set up the GDR Stiftung as the party seeking relief from a court. Lord Wilberforce, dissenting on the identity of parties question, pointed this out and concluded that identity of parties did exist.286 The strict requirement for an identity of parties can be seen from the majority decision on this question. 9.125  The proceedings, which had been first heard by Cross J in the Chancery Division, were returned to the High Court and defences were served. The Plaintiffs then applied to strike out parts of the defences on the basis of an estoppel arising in part from decisions in courts in Pakistan, India and New York. The judgment of Buckley J287 on this application raises other important matters on the law of estoppel by rem iudicatam and is referred to as necessary in this chapter.

(ii)  Capacity of Parties 9.126  Persons who sue or are sued are only bound by an estoppel as a result of a judgment in the action if in subsequent proceedings they sue or are sued in the same capacity as in the previous proceedings.288 The widow of a deceased person sued as his administratrix for damages for injuries suffered by her deceased husband in a railway accident and obtained judgment against the railway company. She later sued the railway company for loss caused to herself and her children as a result of the death of her husband. It was held that the second proceedings were not barred by an estoppel since the Plaintiff sued in different capacities or in a different right in the two proceedings.289 A further illustration of there being no estoppel when the same person was a party to two successive actions, but in the second action was acting in a different capacity, is a case in which A brought proceedings against B for the infringement of a patent but failed because the specification had been anticipated (want of novelty) and subsequently B brought proceedings to have

285 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853. 286 ibid, 968. 287 Carl Zeiss Stiftung v Rayner and Keeler (No 3) [1970] Ch 506. 288 The Duchess of Kingston’s Case (1776) 2 Sm L C, 7th edn, 792: ‘It must be observed that a verdict against a man suing in one capacity will not estop him when he sues in another distinct capacity, and, in fact, is a different person in law’. As stated earlier, capacity in the sense of being a claimant or defendant or other party in the previous and the subsequent proceedings is irrelevant. See para 9.115. 289 Leggott v Great Northern Rly Co (1876) 1 QBD 599.

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Parties and Privies  9.128 the patent revoked. It was held that in the second proceedings A was not estopped from again alleging the novelty and thus the validity of the patent since B had brought the second proceedings on behalf of the public, and therefore in a different capacity from his capacity in the first proceedings.290

(iii) Privies 9.127  There is an important extension to the underlying rule in that a judgment binds not only the parties to the proceedings in which the judgment was given but also the privies of those parties.291 In very general terms, privity in this context means that there is a sufficient connection between a party to a judgment and some person not a party to that judgment which results as a matter of policy in that other person being bound by the judgment in the same way as the actual party. It has been said that there is little authority bearing on the exact circumstances, at any rate outside the traditional categories of privity relationships, in which there is a sufficient connection.292 The traditional categories are privity of blood, of title or estate, and of interest.293 Privity of blood is between ancestor and heir under the former law of inheritance and need not be further considered here.294 A further category of privity in law is sometimes added.295 The expression ‘privity of title’ and ‘privity of estate’ have the same or much the same meaning. 9.128  The nature of privity in its usual operation is that a person takes an interest affected by a judgment from a party to the judgment and after the judgment. Privity does not therefore affect a person who has an interest in property affected prior to the judgment but is not a party to the proceedings which culminated in that judgment. As an obvious example of this rule is if A succeeds in establishing that he has a right of way over freehold land owned by B but let to C, and the proceedings are between A and B alone, C is not bound by the judgment by reason of privity of estate. On the other hand if A obtains the judgment against  B, and B  then grants a lease of the servient land to C, C will be bound by the judgment by reason of privity of estate. A decision which applied this rule was one in which a judgment in proceedings to enforce a debenture against land could not be enforced against purchasers who had purchased the land prior to the action. The rule was expressed as being: ‘A prior purchaser of land cannot be estopped as being privy in estate by a judgment obtained in an action against the vendor commenced after the purchase’.296 Where an action for specific performance of a contract of sale of land was brought by an agent of an undisclosed principal and failed for want of prosecution, there was no estoppel per rem

290 Re Deeley’s Patent [1895] 1 Ch 687. For this decision in the House of Lords see [1896] AC 496. 291 This rule also goes back to Coke, Commentaries on Littleton. 292 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, 911 (Lord Reid). 293 ibid, 910 (Lord Reid); Gleeson v J Wippell & Co [1977] 1 WLR 510, 514 (Megarry J). 294 For the former rules as to inheritance on intestacy see Megarry & Wade, The Law of Real Property, 9th edn (Sweet & Maxwell, 2019) para 13.05. 295 Privity in law is usually taken to apply to persons who come in by an act in law: see Co Litt 352ob. It covers such relationships as testator and executor and bankrupt and trustee in bankruptcy. 296 Mercantile Investment and General Trust Co v River Plate Trust, Loan and Agency Co [1894] 1 Ch 578, 585 (Romer J). See Doe v Derby (1834) 1 Ad & El 783, 790, where Littleton J pointed out that the rule that a judgment binds a person claiming under a party to previous proceedings must mean a claim acquired under that party subsequent to the judgment.

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9.129  Estoppel by Record iudicatam which prevented the principal from bringing a subsequent action against the defendant for specific performance, the reason being that there was no trust relationship between the principal and the agent.297

2.  Categories of Privity (i)  Privity of Title or Estate 9.129  The most obvious form of privity is privity of title or of estate. This type of privity will operate where the subject matter of a judgment is land or an interest in land. A successor in title to the interest of a party to the judgment will normally be bound by the judgment. If it were otherwise, estoppel by record would lose much of its effectiveness, since a party against whom a judgment had been given relating to an interest in land could simply transfer the interest leaving the transferee to dispute the result of the judgment in new proceedings brought between it and the successful party to the judgment. Although privity of title or estate relates primarily to the acquisition of an interest in land from a party to a judgment, the same rule should apply to a successor in title to the ownership of a chattel such as a valuable painting. 9.130  The rule has been stated as being that ‘A verdict in another action for the same cause shall be allowed in evidence between the same parties. So, it shall be evidence, where the verdict was for one under whom any of the present parties claim’.298 A justification for the rule has been said to be that a person who takes a benefit must also take a corresponding burden. Chitty J put the matter as follows: ‘Of course parties to a judgment are bound, but persons claiming under them are also bound; and that is founded on the principle that “Qui sentit commodum sentire debet et onus”’.299 In accordance with this rule, persons bound by a judgment include those who acquire the interest of a party to the judgment and those who in some way derive their interest from that party. Parties in this category include a purchaser of the interest of a party to the judgment, a mortgagee of that party, and tenants and sub-tenants whose interest is carved out of the interest of the party to the judgment, provided always that the transfer or creation of the interest takes place after the date of the judgment. Where a person enters land under a will or deed, that person is estopped from setting up a title adverse to the will or deed and anyone who gains possession through a person interested in the land under the will or deed is bound as a privy by the same principle of estoppel.300

297 Pople v Evans [1969] 2 Ch 255. The assertion of res iudicata also failed because the dismissal of an action for want of prosecution was not a judgment which created an estoppel: see para 9.54. 298 Com Dig Evidence, A, 5 (1762–67). 299 In Re Last, Wilkinson v Blades [1896] 2 Ch 788, 795. In English the principle may be expressed as being that a person who takes the benefit of some interest such as an interest in land or a contractual right must also bear any burden associated with that interest. The same principle was used by the Court of Appeal of New Zealand in Bay of Plenty Electricity Ltd v Natural Gas Corporation Energy Ltd [2002] 1 NZLR 173 to justify the conclusion that an assignee of contractual rights was bound by an estoppel by representation relating to those rights when the representation had been made by the assignor. See ch 2, para 2.265. 300 Dalton v Fitzgerald [1897] 2 Ch 86, 94. See also Hawksbee v Hawksbee (1853) 11 Hare 230; Board v Board (1873) LR 9 QB 48.

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Parties and Privies  9.133 9.131  Other relationships also create the necessary privity so that, for example, an ­executor of a deceased person is bound by a judgment obtained against that person, as is an administrator of a person who has died intestate who is bound by a judgment obtained against the intestate person. A trustee in bankruptcy is bound by a judgment which has been obtained against the bankrupt person. A person who becomes the beneficial owner of property of a deceased person as a result of the terms of a will or under the rules governing intestacy is bound by a judgment relating to that property to which the deceased person was a party. It has been said that in relation to trust property there will normally be a sufficient privity between the trustees and their beneficiaries to make a decision that is binding on the trustees also binding on the beneficiaries, and vice-versa.301 Privity in some of these ­circumstances may be described as privity of estate or title or as privity in law.302

(ii)  Privity of Interest: The General Rule 9.132  The type of privity so far considered has been mainly circumstances where property is vested in A and a judgment is obtained in proceedings to which A is a party and where subsequently the same property becomes vested in B, who was not a party to the proceedings, by some process such as a purchase or a gift under a will. Privity of interest for present encompasses a wider meaning than that arising where there has been subsequent to a judgment a change in the ownership of an interest in the specific corporeal property which was the subject of the judgment. Privity of interest goes beyond such circumstances. If B succeeds on an issue in proceedings between A and B, and the same issue arises in subsequent proceedings between A and C, the question is whether C can assert that by reason of an issue estoppel the decision on that particular issue is binding as between A and C. The same question would of course arise in principle between A and C if A had succeeded on the issue against B. In such cases C may not derive any estate or title from B so that there is no privity of estate. It is difficult to find any precise test as to what constitutes a sufficient degree of identity of interest in these circumstances. The fact that C had a mere curiosity or concern in the outcome of the proceedings between A and B is not sufficient. The best that can be done is probably to say that, having due regard to the subject matter of the dispute, there must be a sufficient degree of interest between C and B to make it just that the decision to which B was a party should be binding in later proceedings to which C is a party. It is in this sense that the phrase ‘privity of interest’ should be regarded and applied.303 9.133  The question as discussed in the last paragraph can be illustrated by the decision in Gleeson v J Wippell & Co.304 The Plaintiff brought proceedings against the Defendant for breach of copyright of her drawings which contained the design of a special type of shirt

301 Gleeson v J Wippell & Co [1977] 1 WLR 510, 515 (Megarry V-C). 302 See para 9.127. 303 Gleeson v J Wippell & Co [1977] 1 WLR 510, 516. A passage from the judgment of Megarry V-C (at 515) was said to be the correct approach to the matter by Lord Bingham in Johnson v Gore Wood & Co [2002] 2 AC 1, 32. For a further consideration in the Court of Appeal of what was said by Megarry V-C, see Aldi Stores Ltd v WSP London Ltd [2008] 1 WLR 748, paras 8–10. 304 Gleeson v J Wippell & Co [1977] 1 WLR 510, 516.

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9.134  Estoppel by Record for use by the clergy. In previous proceedings by the Plaintiff against X she had claimed the same breach of copyright but the court had held that there was no infringement of her copyright. It appeared that X had copied a shirt supplied to them by the Defendant who had used a copy of the Plaintiff ’s drawings. The question was whether the determination of the issue that there had been no breach of copyright in the first proceedings against X was binding on the Plaintiff and so necessarily defeated her second action against the Defendant by reason of an issue estoppel. It was held that there was not a sufficient degree of identity of interest between X and the Defendant to make it just that the Defendant should be able to rely on an issue estoppel by virtue of privity of interest. A question which arose, and which was discussed, was what would have been the situation if in the first proceedings the Plaintiff had succeeded and sought to argue that by virtue of an issue estoppel she must therefore succeed in the second proceedings against the Defendant. It was said to be more plainly unjust that an issue estoppel could have been deployed in those circumstances and the point was made that if privity of interest is to be sufficient it must be sufficient ‘win or lose’.305 9.134  An attempt to draw together the criteria for deciding whether there is a sufficient interest in the previous proceedings to bring about an estoppel per rem iudicatam was made by Floyd LJ in Resolution Chemicals Ltd v Lundbeck A/S.306 In a previous decision,307 it had been suggested that a legal interest may be necessary in the subject matter of the previous action as opposed to merely a commercial interest if there was to be an estoppel. That was not thought to be a particularly helpful criterion in the case before the Court of Appeal which was concerned with successive actions relating to a patent. Floyd LJ drew the matter together stating that in his judgment a court which had the task of assessing whether there was a privity of interest between a new party and a party to previous proceedings needed to examine (a) the extent to which the new party had an interest in the subject matter of the previous proceedings, and (b) the extent to which the new party could be said to be, in reality, a party in the previous proceedings by reason of its relationship with a party in those proceedings, and (c) against that background to ask whether it is just that the new party should be bound by the outcome of the previous litigation.308 It seems unlikely that, subsequent to later judicial analysis, the question of what constitutes identity of interest for the purposes of an estoppel per rem iudicatam can be taken further forward than the application of these criteria. As sometimes occurs the question may arise of whether, if there is no cause of action estoppel or issue estoppel because the interest of a party in later proceedings is not sufficiently close to that of an interest of a party in previous proceedings so that there can be an estoppel per rem iudicatam, the rule in Henderson v Henderson could prevent a party in subsequent proceedings asserting or relying on a matter in previous proceedings to which he could have made himself a party and in which he could have participated.

305 See also Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 3) [1970] Ch 506, 541 (Buckley J): ‘The relationship cannot be conditional upon the character of the decision’ in the sense that an estoppel must apply or not apply irrespectively of which party has succeeded or failed in the proceedings. This proposition can be regarded as a consequence of the mutuality of estoppel per rem iudicatam. 306 Resolution Chemicals Ltd v Lundbeck A/S [2013] EWCA Civ 924. 307 Kirin-Angem Inc v Boehinger Mannheim GmbH [1997] FSR 289. 308 Resolution Chemicals Ltd v Lundbeck A/S [2013] EWCA Civ 924, para 32.

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Parties and Privies  9.136

(iii)  Privity of Interest: Illustrations of the Rule 9.135  An illustration of privity of interest which has emerged, although in imprecise terms, is that in which a party against whom a judgment on an issue has been given employs an employee or engages a third party to act in a way which contradicts the issue decided against him in order that he may in effect have an opportunity to re-argue the issue on the basis that technically the parties to the later action and the earlier action are not the same. Privity of interest in such circumstances had an unpromising start in the early decision in Kinnersley v Orpe.309 An employer sent a servant to fish on the land of the Plaintiff relying on an alleged right to do so. The Plaintiff succeeded in an action in trespass against the servant. Thereafter, the employer sent a different servant to carry out the same fishing. In a second action for trespass by the Plaintiff it was held that the judgment in the first case was not conclusive evidence on the issue decided of a right to fish.310 This decision was considered by Lord Reid in Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2)311 who was prepared to state that it seemed to him that a possible extension of the doctrine of privity as commonly understood was that a party against whom a previous decision was pronounced might employ a servant or engage a third party to do something which infringed the right established in the earlier litigation and so raise the whole matter again in his interest. Lord Reid considered that if the other party to the earlier litigation brought an action against the servant or agent, the real defendant could be said to be the employer who alone had the real interest and it might well be thought unjust if he could vex his opponent by re-litigating the critical question by means of the device of putting forward his servant. It seems therefore that in today’s law there may well be a sufficient identity of interest between a principal and an agent and an employer and an employee so as in appropriate circumstances to create a privity of interest between the respective parties. The rigidity of the application of the identity of parties rule as applied two centuries ago would be unlikely to find favour in today’s law. 9.136  An obvious instance of privity of interest might be where a company was a party to a judgment and an associated company became involved in subsequent litigation with the other party to the judgment where an issue decided in the previous judgment arose. The general rule is that companies are in law separate legal persons or entities, personae fictae, the status and powers attributed to them as fictional persons depending on the rules of law in the statutory provisions which create or permit the creation of such persons, that is the rules of attribution.312 The veil of separate corporate personality cannot be pierced except in very limited circumstances such as where statute so provides or where the corporate structure or personality is being used for improper purposes.313 To hold that an associated 309 Kinnersley v Orpe (1780) 2 Doug KB 517. 310 Lord Ellenborough CJ considered Kinnersley v Orpe in Outram v Morewood (1803) 3 East 346, 366, and said that it was extraordinary that it should ever have been for a moment supposed that there could be an estoppel in such a case, his reason being that the parties in the second action were not the same as those in the first action. A more recent application of this sentiment may be the decision of the High Court of Australia in Tomlinson v Ramsey Food Processing Pty Ltd (2016) 256 CLR 257 in which a party was not prevented by an estoppel from asserting his status as an employee by reason of a previous decision in which the issue had been decided in proceedings by an employment ombudsman acting under statutory authority. 311 [1967] 1 AC 853, 911–12. 312 Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500, 566–67 (Lord Hoffmann), a decision of the Privy Council on appeal from New Zealand. 313 Prest v Petrodel Properties Ltd [2013] 2 AC 415.

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9.137  Estoppel by Record company of a party to a judgment is bound by the judgment in later litigation by reason of privity of interest would not be to pierce the corporate veil, but would recognise the separate existence of the associated company in the second litigation and would then also recognise such a close connection of that company to the company in the first litigation that the rule of privity of interest should be engaged to allow the party who was common to both items of litigation to rely, by way of an estoppel, on that which was decided in the first litigation as conclusive. Whether there will in any particular case be a sufficient connection between the two companies, for example that between a holding company and a wholly owned subsidiary company, so as to give rise to privity of interest will naturally depend on the exact facts of each case and the closeness of the connection between the two companies. 9.137  Some assistance on the question just raised may be obtained from Johnson v Gore Wood & Co.314 This decision is a leading case on the rule in Henderson v H ­ enderson.315 A company, all the issued shares in which save two were owned by the Plaintiff, issued proceedings claiming damages for professional negligence against the Defendants. The Plaintiff then brought an action in his own name claiming further damages for the same negligence. It was held that the second action was not prevented by the rule in Henderson v Henderson, partly because at the time of the first proceedings the Plaintiff had indicated that he might bring later and further proceedings in his own name. When examining the relationship between the two parties, the Plaintiff and his company, Lord Bingham came close to saying that there might be privity of interest between them although Lord Millett took a rather different view.316 Privity as such and in its strict sense is not a concept important for the purposes of the rule in Henderson v Henderson. For the purposes of the rule what is important, where there is a different party in the second action, is whether there is a sufficiently close relationship between the parties in the two actions.317 On the other hand, the underlying question is the same whether one has to ask whether the interest of two parties is sufficiently close to create a privity of interest for the purposes of estoppel per rem iudicatam or has to ask whether there is a sufficiently close relationship between two parties to allow the rule in Henderson v Henderson to apply. Given certain circumstances, it would take some legal subtlety to arrive at different answers for the purposes of these separate principles or components of estoppel by record. 9.138  A further instance of privity of interest may be one in which a party to a contract was a party to a judgment concerning the meaning or operation of the contract and then assigned its contractual rights to an assignee. It has been held in the Court of Appeal of New Zealand that where companies A and B were parties to a contract for the construction of an electricity generating station and then the supply of electricity by one company to another, and company A was bound by certain representations which it had made to company B regarding completion of the works by reason of an estoppel by representation,

314 [2002] 2 AC 1. 315 See part (J) of this chapter for an examination of the rule. 316 Johnson v Gore Wood & Co [2002] 2 AC 1, 32 (Lord Bingham), 60 (Lord Millett). 317 In Johnson v Gore Wood & Co [2002] 2 AC 1 the Plaintiff was held to be entitled to bring the second action. If there had been privity of interest between the Plaintiff and his company then presumably a cause of action estoppel would have operated such that the Plaintiff could not have sought further damages by way of the second proceedings on the same cause of action. It would then have been a case of cause of action estoppel or possibly the operation of the doctrine of merger.

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Particular Areas of Law  9.140 X as the assignee of the contractual rights of company A remained bound towards company B by the operation of the estoppel.318 The basis of the decision was that a person who took the benefit of an assignment of rights also took any burden associated with those rights, including the burden created by an estoppel. A similar reasoning seems applicable to estoppel per rem iudicatam.319 If in the above example there had been a judgment between companies A and B prior to the assignment which decided some issue relating to the contract, then X should be as much bound by that judgment in later litigation between B and X as A would have been in later litigation between B and A. In a case of this sort this result which appears just can be reached by holding that there may be privity of interest between the assignor and the assignee of contractual rights. 9.139  The background to the Carl Zeiss litigation has been summarised earlier and it has been explained that the House of Lords in that case held that the parties to the previous judgment in Germany were not the same as the parties to the proceedings before the English courts so that there was no identity of parties.320 An attempt was made to show that the Plaintiffs in the English proceedings were privies, by virtue of privity of interest, of the party which commenced the proceedings in West Germany. This plea also failed. The Plaintiffs in the English proceedings were a firm of solicitors. Lord Reid rejected this privity argument on the ground that it was essential that the person who was estopped in subsequent proceedings must have had some kind of interest in the previous litigation or its subject matter.321 The solicitors in the English proceedings had no connection with and no interest in the German litigation. Lord Upjohn refused to extend the meaning of the word privy in its present context to cover the case of two successive solicitors (for that is what he said it amounted to) who had issued writs in the name of a common principal.322

(F)  Particular Areas of Law 9.140  As with other forms of estoppel, estoppel per rem iudicatam may have no application or only a limited application to certain areas of civil law. A reason given for one possible limitation is that in some areas of law what are involved are the interests of the public as well as the private interests of the parties to a particular piece of litigation. Thus, as a generality most forms of estoppel do not apply so as to constrain a public body in the exercise of public functions which have to be carried out in the interests of the public, such as the making of decisions under the law of town and country planning.323 As will now be explained it is

318 Bay of Plenty Electricity Ltd v Natural Gas Corporation Energy Ltd [2002] 1 NZLR 173. This decision is discussed in ch 2, para 2.265, in connection with the general question of the passing of the benefit and burden of an estoppel to third parties. 319 As mentioned in para 9.130 the principle that a person who takes the benefit of some matter should also take any burdens of the same matter has been stated as a justification for the rule relating to privity of title or estate. 320 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853. For a summary of the complicated background facts see para 9.122. 321 ibid, 910–11. 322 ibid, 948. 323 The application of estoppel to public bodies is discussed generally in ch 2, part (D). To some extent the application of estoppel to public bodies is replaced by the operation of the administrative law doctrine of legitimate expectation.

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9.141  Estoppel by Record possible as a result of observations in some authorities that similar considerations apply to estoppel per rem iudicatam in the control of public bodies by the process of judicial review and in the protection of children. 9.141  It has been suggested that in matrimonial cases where a court has a duty to be satisfied on some matter such as that a matrimonial offence has occurred the principle of estoppel per rem iudicatam may not operate in the same way as in other cases.324 However, in some modern decisions res iudicata has been held to be applicable in matrimonial proceedings.325

1.  Public Law and Judicial Review (i)  Public Law Generally 9.142  It is necessary to consider first whether estoppel by record, and in particular estoppel per rem iudicatam, applies to administrative law, that is the law of rights and duties as between public bodies exercising public functions and private persons, which is an important aspect of public law. This matter has been considered and determined as a generality by the House of Lords. In Thrasyvoulou v Secretary of State for the Environment,326 the House of Lords had to consider the application of estoppel per rem iudicatam in the field of public law. In 1981, a local planning authority served on the owner of property two enforcement notices alleging breaches of planning control under town planning legislation by the change of use of the property to either a hostel or a hotel. On appeal by the owner, an inspector appointed by the Secretary of State allowed the appeal holding that the existing and the previous use of the property were use as a hotel, and that that use had continued for many years so that there was no breach of planning control. The inspector held that the use of the property was not a use as a hostel. In 1985, the authority served further enforcement notices alleging that the property was being used as a hostel. It was agreed that there were no material changes in the circumstances between the date of the first enforcement notices and the date of the second enforcement notices. The owner again appealed and a different inspector found, contrary to what had been held four years earlier, that the premises were in use as a hostel. The House of Lords held that the first decision, that on the 1981 enforcement notices, created an estoppel to the effect that the premises were not used as a hostel and that the

324 See Harriman v Harriman [1909] P 123, 134 (Vaughan Williams LJ). 325 See, eg, James v James [1948] 1 All ER 214 where a Judge had held that adultery had not been proved by a husband in a petition brought by him for divorce and dismissed the petition. The wife subsequently brought proceedings alleging neglect to maintain her before Magistrates and the Magistrates held that the adultery had taken place in the circumstances mentioned and dismissed her proceedings. It was held on appeal to the Divisional Court that the Magistrates should not have acted in this way. A leading case on the principles of cause of action estoppel and issue estoppel, Thoday v Thoday [1964] P 181, concerned successive sets of divorce proceedings. It is said in Halsbury’s Laws, vol 12A, 5th edn, (LexisNexis, 2015) para 1609, that the doctrine of res iudicata is now in retreat in matrimonial proceedings. 326 [1990] 2 AC 273. See also Wakefield Corporation v Cooke [1904] AC 31 relating to a decision by Justices under the Private Street Works legislation that a particular road was a public highway. It was held that in a later decision relating to proposals under the legislation to carry out works in the same road, the Justices were bound by reason of an estoppel by their previous determination as to the status of the street as a highway reparable by the inhabitants at large. This is an example of a judgment in rem which binds the whole world.

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Particular Areas of Law  9.145 second inspector was bound by this decision through the normal operation of estoppel per rem iudicatam. The House rejected the submission, put forward on behalf of the Secretary of State, that estoppel per rem iudicatam had no place to play in public law. The relevant law was clearly stated in the following passage from the judgment of Lord Bridge: The doctrine of res iudicata rests on the twin principles which cannot be better expressed than in terms of the two Latin maxims ‘interest reipublicae ut sit finis litium’ and ‘nemo debet bis vexari pro una et eadem causa’. These principles are of such fundamental importance that they cannot be confined in their application to litigation in the private law field. They certainly have their place in criminal law. In principle they must apply equally to adjudications in the field of public law. In relation to adjudication subject to a comprehensive self-contained statutory code, the presumption, in my opinion, must be that where the statute has created a specific jurisdiction for the determination of an issue which establishes the existence of a legal right, the principle of res iudicata applies to give finality to that determination unless an intention to exclude that principle can properly be inferred as a matter of construction of the relevant statutory provisions.327

9.143  It is correct that with most forms of estoppel, other than estoppel by record, the general principle is that an estoppel cannot operate so as to prevent or constrain a public authority in exercising public functions and discretions conferred on the authority by ­statute.328 Certainly this is the case as regards estoppel by representation. This limitation was in the forefront of Lord Bridge’s mind since, immediately prior to the passage just cited, he observed that the rationale which underlies the doctrine of res iudicata is so different from that which underlies the doctrine of estoppel by representation that he did not think that the authorities which limited estoppel by representation in the fashion just mentioned had any relevance for the purposes of the general issue before him.329 9.144  It can therefore be said that there is binding authority of the House of Lords for the proposition that as a generality, and subject to any particular statutory exclusion, the principles of estoppel per rem iudicatam apply to the area of public administrative law in the same way as they apply to the generality of private law. The actual decision concerned enforcement notices, and appeals against enforcement notices, within the law of town and country planning but there is nothing in the judgment of Lord Bridge which suggests that the principle which he stated was not of general application to public administrative law. The principle so stated by Lord Bridge applies whether there is a particular statutory code, such as the enforcement notice procedure in town planning law, self-contained in itself, or the issue relates to public administrative law more generally.

(ii)  Judicial Review: The Problem 9.145  Applications for judicial review are the modern form of the old procedures by which under the prerogative writs such as certiorari and mandamus the Court of King’s 327 Thrasyvoulou v Secretary of State for the Environment [1990] 2 AC 273, 289. Of course if there had been a material change of circumstances between the service of the first and second sets of enforcement notices the inspector deciding the appeals against the second set of notices would have been bound to have regard to the facts at the date of the second notices, and this might have justified a conclusion that the premises were in use as a hostel. The law would then be the same for adjudicating in public law and in private law as is explained in para 9.80 and above (n 202). 328 See ch 2, parts (D) and (F). 329 Thrasyvoulou v Secretary of State for the Environment [1990] 2 AC 273, 289.

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9.146  Estoppel by Record Bench supervised and controlled the actions of public bodies and inferior tribunals. Orders such as a quashing order or a mandatory order (the modern equivalent of the old prerogative writs of certiorari and mandamus) may now be made, on an application which requires the prior permission of the court, against persons or bodies exercising public functions including organs of central government and local government and the many bodies which today exercise functions of a public nature.330 The essence of judicial review is that the court does not adjudicate upon the detailed merits of decisions by public bodies or the ordinary exercise of discretions by such bodies, but rather ensures that the bodies have acted within their jurisdiction and have observed certain basic rules of administrative law such as the audi alteram partem rule or the right to be heard. 9.146  There are two possible reasons why decisions on judicial review applications and res iudicata in the form of cause of action or issue estoppel may in some cases sit uneasily together. One reason is the point that in many instances, and by reason of the nature of the decision, a decision on a judicial review application does not finally decide the substance of matters which are in dispute. If a court quashes a decision of a Minister, such as a decision to withhold rate support grant from a local authority, it may well be that the court does not decide that the Minister had no power to withhold the grant but decides that in a particular case the withholding of the grant was unlawful because some procedural requirement, such as the giving of a proper opportunity for the making of representations to the Minister, had not been observed.331 It is then open to the Minister to observe the necessary procedure and to reach a new substantive decision. The new decision may be the same as the previous decision and it is not possible to say that the quashing of the previous decision creates any estoppel which prevents a new decision to the same effect. Of course, the process just described is not always the case and a court may quash an action of a public body because that body has no power at all to take that action whatever procedure it adopts. 9.147  The other and more important reason harkens back to the difference between litigation concerning only private parties and litigation where there is a public interest beyond the interest of any particular party. If a court decides an issue between A and B in the course of ordinary civil proceedings between those parties and the same issue arises as something which is relevant in later proceedings between A and B then, if the parties are held by reason of an issue estoppel to what has been the determination of that issue in the previous proceedings, the interests of no one are involved except those of A and B. By contrast, if there are judicial review proceedings between A and a public body and an issue is decided in favour of A and thereafter there are further proceedings between A and the public body, it may be that if the public body is bound to accept the previous determination of the issue there would be prejudice to the public interest if it could be shown that the previous issue had been decided without proper arguments having been put before the court or without evidence or other material being put before the court which could have been so put and which might have made a difference to the determination. If, to take an example, the issue the subject of the estoppel was such that the public body as a planning authority was unable to take adequate enforcement action against certain development then the public could be 330 The procedure for judicial review is today prescribed by CPR, Part 54. 331 See R v Secretary of State for the Environment, ex parte Hackney London Borough Council [1984] 1 WLR 592, referred to below.

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Particular Areas of Law  9.148 prejudiced. It is in these circumstances that the public interest might demand that there should be no issue estoppel and that in the second proceedings an opportunity should be given to the public body to raise again arguments and put again material before the court in a more adequate way than it had previously done with the possibility that a different decision is reached on the issue. The matter was put in the following way by Hale LJ: Issue estoppel is a doctrine appropriate to proceedings in private law: if a court decides, for ­example, that it is unlawful for X to act in a particular way in relation to Y then X should not be able to reopen matters if he nevertheless acts in that way, unless circumstances have changed so that his actions are no longer unlawful. But in judicial review … there is always a third party who is not present, the wider public or public interest. They should not be prejudiced by the failure of a public authority to place all the relevant material and arguments before the court on the first occasion.332

9.148  If the above line of reasoning is correct, then so far as estoppel per rem iudicatam, especially issue estoppel, applies at all to judgments given in judicial review proceedings it does so with substantial constraints as compared with its application to civil proceedings between parties none of whom is a public body. For example, as Hale LJ said in the Mersey Care NHS Trust case in the passage just cited a public body acting in the public interest may be enabled to re-litigate an issue decided in previous judicial review proceedings, even where that would not be possible in ordinary civil proceedings involving the same two parties, if the public body could show that the whole of the relevant materials and arguments had not been before the court which gave judgment in the previous judicial review proceedings. The remaining question, on which there is no decisive answer, is whether on this view of the law res iudicata is wholly excluded from any application to judicial review judgments or whether it may still have some, although limited, application to judicial review judgments. The question was touched on in the Court of Appeal in R v Secretary of State for the ­Environment, ex parte Hackney London Borough Council,333 a case concerned with a decision of the Secretary of State not to pay rate support grant to certain local authorities because of their overspending. The Divisional Court held that as a general principle issue estoppel could not be relied on in applications for judicial review. This question did not arise for decision in the Court of Appeal but Dunn LJ said that he inclined to the view that the Divisional Court was correct in its holding. He added that a court had an inherent jurisdiction as a matter of discretion in the interests of finality not to allow a particular issue which had already been litigated to be reopened.334 In R (on the application of Munjaz) v Mersey Care NHS Trust,335 the Court of Appeal stated that it shared the doubts expressed by the Court in the Hackney decision as to whether the doctrine of issue estoppel is applicable at all in judicial review proceedings. If this view is correct, then issue estoppel cannot be invoked by either party as a principle applicable in judicial review proceedings but possibly a court has some kind of residual discretion to prevent an issue which has already been decided to be argued again. This appears to be a sort of discretionary issue estoppel. There may be some dispute as to whether one decision in judicial review proceedings can operate as an 332 R (On the application of Munjaz) v Mersey Care NHS Trust [2004] QB 395, para 79. 333 [1984] 1 WLR 592. 334 ibid, 602. Lord Donaldson MR (at 606) took a similar view. 335 [2004] QB 395, para 79. See also R (on the application of Nahar) v Social Security Commissioners [2002] EWCA Civ 859.

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9.149  Estoppel by Record estoppel by record in subsequent judicial review proceedings between the same parties or their privies, but this question obviously does not prevent an application for judicial review succeeding where a body subject to judicial review supervision, such as a disciplinary body, has acted in breach of the res iudicata principles.336 9.149  An application for habeas corpus can be regarded as in principle similar for present purposes to an application for judicial review since the purpose of the ancient writ of habeas corpus was to prevent arbitrary detention of subjects by the state and the abuse of its powers by the state. However it has been said that no peculiarity on the principle of issue estoppel has been asserted in regard to habeas corpus proceedings and that there is none.337 9.150  There are statutory procedures akin to judicial review in which the validity of specific actions by public authorities may be challenged on limited grounds by way of an application to the High Court. For example, under section 23 of the Acquisition of Land Act 1981 the validity of a compulsory purchase order may be challenged by an application to the High Court on two specified grounds with the application having to be made within six weeks of the date on which the order has become operative. It seems logical that any limitation on the application of estoppel by record in relation to judicial review proceedings, if it exists, should also apply to analogous statutory proceedings of the type just mentioned. 9.151  Where the validity of some actions by a public body exercising statutory powers in the public interest is under challenge, that challenge has normally to be made by way of judicial review under the special procedure in Part 54 of the Civil procedure Rules applicable to that form of relief. The constraints of judicial review, such as the need for the permission of the court to make an application and the time limits prescribed, cannot normally be avoided by commencing ordinary civil proceedings.338 Even so, it is possible that in limited circumstances the validity of some conduct by a body exercising statutory public law powers can arise incidentally and collaterally in other proceedings and there is no absolute rule that this cannot happen or that a decision on that conduct cannot be made in the proceedings. The party who wishes to allege that the actions of a public body are contrary to law in these circumstances is met by the presumption of validity, namely the presumption that the actions of a public body are lawful unless the contrary is proved, sometimes expressed by the Latin maxim ‘omnia praesumunter rite ac solemniter esse acta’. It again seems logical that if the validity of the conduct of a public body is decided as a part of ordinary civil proceedings, any limitations on estoppel by record applicable to judicial review proceedings should also apply to that part of the decision in ordinary proceedings.

(iii)  Judicial Review: Analysis 9.152  There are three possibilities. One is that estoppel by record applies generally to judicial review proceedings in the same way as it applies to proceedings in private law. The second is that estoppel by record is not applicable at all to judicial review proceedings. 336 R (Coke-Wallis) v Institute of Chartered Accountants in England and Wales [2011] 2 AC 146. See para 9.166 et seq. 337 R v Governor of Brixton Prison, ex parte Osman [1991] 1 WLR 281, 291. 338 O’Reilly v Mackman [1983] 2 AC 237.

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Particular Areas of Law  9.156 The third possibility is that estoppel by record is not wholly excluded from judicial review proceedings but applies to such proceedings with substantial limitations. 9.153  Authorities which appear to support the second and third possibilities have been cited and attention has been drawn to relevant passages in the decisions of the Court of Appeal and the Divisional Court. It is difficult to accommodate what was stated in these decisions with the clear and succinct statement of the law by the House of Lords in the Thrasyvoulou case that the doctrine of res iudicata and the principles which underlie that doctrine cannot be confined in their application to litigation in the private law field but ‘must apply equally to adjudications in the field of public law’.339 Decisions in judicial review applications are adjudications in the field of public law. In giving his judgment in ­Thrasyvoulou, Lord Bridge did not limit or qualify the generality of what he said save where an intention to exclude the res iudicata principles could properly be inferred as a matter of construction of the relevant statutory provisions. In a recent decision in which the general application of res iudicata to judicial review proceedings was considered with a view to its limitation, R (On the application of Munjaz) v Mersey Care NHS Trust,340 the Thrasyvoulou decision was not considered and was not cited to the Court of Appeal. To that extent the observations in the Court of Appeal could be said to be per incuriam in that a decision of law and principle binding on them was not considered by the Court. 9.154  The simple approach to the relationship between estoppel by record and judicial review litigation is that estoppel by record applies in the ordinary way to such litigation. This seems to be the ordinary consequence of the binding decision of the House of Lords in the Thrasyvoulou case. If that is correct, nothing more need be said. Also if it is correct that estoppel by record has no place at all to play in judicial review litigation then again no further comment is needed. Nonetheless, it may be that as a result of recent authority estoppel by record has a part, albeit a limited and qualified part, to play in judicial review proceedings, the third of the three possibilities just mentioned, and for that reason it is necessary now to comment further on what the limitations and difficulties of that approach may amount to. 9.155  Assuming that estoppel by record has a function of a limited nature to perform as regards judicial review proceedings there are a number of specific points which need analysis, namely the difference between cause of action estoppel and issue estoppel, any difference between the respective parties to the judgment, and the application of the rule in Henderson v Henderson. 9.156  In the brief consideration that there is in the decided cases the focus is on issue estoppel.341 It is difficult to accept that cause of action estoppel is completely excluded as regards judicial review judgments. Suppose that a landowner challenges by way of judicial review the intention of a highway authority to close an adjoining road and succeeds in obtaining a determination that the proposal of the authority is unlawful (a) because the road is a private road and not a public highway, and (b) because the authority have not followed the necessary statutory procedures. The result could be said in normal circumstances to be 339 The full passage is cited in para 9.142. 340 [2004] QB 395. 341 See the statement of Hale LJ in R (on the application of Munjaz) v Mersey Care NHS Trust [2004] QB 395, para 79, which is confined to issue estoppel.

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9.157  Estoppel by Record both a cause of action estoppel (the cause of action being the facts which brought about the unlawfulness of the proposed actions of the authority) and an issue estoppel as to the two issues which brought about the determination (the status of the road and the statutory procedures involved). If the authority later initiate a further proposal to close the road with no relevant change in the circumstances, then the landowner would surely be entitled to rely on the judgment obtained in his previous proceedings as conclusive by reason of a cause of action estoppel rather than having the burden of again proving all aspects of his case.342 9.157  The position between the two usual parties to judicial review proceedings, a private person and a public body, is said to be not the same as that between two private parties. The main reason given for an issue estoppel not operating against a public authority in judicial review proceedings is that the public have an interest in the outcome of the proceedings and that this consideration might justify the authority not being held in later proceedings to the result of a decision on an issue on which they had failed in earlier proceedings. That consideration does not apply in the same way where the judgment in the proceedings goes against the citizen. There is no equivalent public interest in an issue estoppel not being able to operate in subsequent proceedings between that individual and the public authority in favour of the authority. Yet it is not easy to accept as fair that issue estoppel can apply so as to protect public authorities but cannot apply so as to protect a citizen who is in litigation with a public authority.343 9.158  A further point is that even as regards issue estoppel any exclusion of the principle where there is a judicial review judgment need only be limited. The justification given for the exclusion of the principle is the public interest and the possibility that in later proceedings new arguments or material could be deployed in favour of the public authority and the public interest which were not deployed or brought forward at an earlier hearing. It would therefore seem arguable that if issue estoppel is to be limited in its application to judicial review judgments, that limitation should only arise where (a) there is a real public interest involved in the initial decision having gone against the public authority, and (b) there is substantial reason to believe that a different result might be reached if new evidence or new material or new arguments could be presented to the court on a reconsideration of the issue. A limitation of issue estoppel in its application to judicial review judgments to this extent appears more attractive than a wholescale elimination of this form of estoppel as something which can be relied on by either party in any circumstances in relation to judicial review judgments. 9.159  Finally, there is the rule in Henderson v Henderson under which a party can be prevented from bringing forward in later proceedings a matter which it could and should 342 It should be noted that an order determining that a footpath is a public footpath (a form of highway) is a judgment in rem and so binds the whole world: Armstrong v Whitfield [1974] QB 16. See para 9.18 et seq for the meaning and effect of judgments in rem. If a determination that a particular road is a public highway can bind everyone, it would seem strange that a determination that a particular road is not a public highway would not even bind the highway authority in later proceedings against the owner of the road. 343 It has been said as regards issue estoppel in a different context (that of who is a privy of a party to previous proceedings) that the result should be the same whichever party had succeeded in the previous proceedings: ­Gleeson v J Wippell & Co [1977] 1 WLR 510. The same point was made by Buckley J in Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 3) [1970] Ch 506, 541, in a case in which decisions of courts or judicial bodies in Pakistan, India and New York were alleged to create an issue estoppel which justified the striking-out of parts of defences which had been filed. See para 9.122 for a summary of the Carl Zeiss litigation.

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Courts and Tribunals  9.161 have brought forward and relied on in earlier proceedings. The rule is akin to the ­principles of res iudicata if it is not a part of those principles.344 If estoppel by record can have any place in judicial review litigation, there seems no reason why this rule should not have its place. The prime objection to the application of res iudicata in judicial review cases is that the operation of res iudicata may prejudice the public interest. The essence of the Henderson v Henderson rule is that the court has to decide whether to exclude reliance on a matter because reliance on the matter would be an abuse of the process of the court. It would be open to a court to consider whether what would be an abuse by a private litigant might not have that character when a public body wished to rely on a matter because the interests of the public justified the raising of the matter. In other words, the flexibility of the operation of the rule in Henderson v Henderson may itself constitute an answer to any objection to the application of that rule in public law cases based on the public ­interest objection to the application of the two species of estoppel per rem iudicatam, cause of action estoppel and issue estoppel, to administrative law or to judicial review decisions. The important distinction is that as regards estoppel per rem iudicatam, once the requirements of the estoppel are established a court generally must apply the estoppel and has no discretion on whether or not to do so, whereas for the purposes of the rule in Henderson v Henderson a court always has a power or discretion on whether to prevent a party relying on a particular matter.

2.  Protection of Children 9.160  The public interest in the protection of children is such that issue estoppel has no application in childcare cases. The public interest in protecting the best interests of the child is greater than any public or private interest in securing finality in litigation.345

(G)  Courts and Tribunals 9.161  An estoppel by record under any of its three constituent principles depends on the existence of a final judgment or order of a court or other judicial body. The question here to be addressed is what bodies, exercising judicial functions, can by their final judgments create an estoppel by record which binds the parties to the judgment and binds the privies of those parties. There have long been bodies making binding decisions beyond the Royal Courts such as ecclesiastical courts and the complexities of modern life have brought about the establishment of numerous tribunals which can adjudicate on various limited and specialised matters. The general answer to the question is that estoppel by record does apply to such judicial bodies, including arbitral bodies. It is necessary to look at the matter in a 344 See para 9.218 et seq for a discussion of the exact status of the rule. 345 K v P [1995] 1 FLR 248. It was held in Hull v Hull [1960] P 118 that res iudicata did apply to custody proceedings. However, in Frost v Frost [1968] 1 WLR 1221, 1229, Salmon LJ, after observing that the paramount duty of the court in custody proceedings was to consider what was in the best interests of the child, doubted whether the principles of public policy upon which the doctrine of res iudicata is founded had any real application in custody proceedings.

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9.162  Estoppel by Record little greater detail by reference to (a) courts of record, (b) tribunals, (c) domestic tribunals, (d) ecclesiastical courts, and (e) arbitrators. 9.162  While the judgment which creates an estoppel may be that of any court the estoppel will normally be operated in a court of first instance in later proceedings between the same parties. Unlike in the doctrine of precedent there is no hierarchy of courts which governs the application of estoppel by record. A decision on a cause of action or on an issue in a county court or in a tribunal is in principle as capable of creating an estoppel in subsequent proceedings in the High Court as it is capable of creating an estoppel in subsequent proceedings in a different county court or in a differently constituted tribunal.

1.  Courts of Record 9.163  In historical terms whether a court was a court of record depended on certain factors such as whether its proceedings were recorded in parchment (such as the proceedings and decisions of the common law Courts of King’s Bench, Common Pleas and Exchequer), whether the court had the power to impose a fine or imprison persons, and whether the correctness of a judgment of a court could be challenged by a writ of error (courts of record) or by way of a writ of false judgment (courts not of record).346 The distinction between the two categories of courts is not of importance today for estoppel by record, partly because various courts and tribunals are declared courts of record by statute and partly because an estoppel by record can be derived from judgments of bodies which are not courts of record. Among the most important judicial bodies which are declared courts of record by statute are the Supreme Court, the Court of Appeal, the High Court, the Crown Court, and the Upper Tribunal.347

2. Tribunals 9.164  For many years, statutes have established a series of tribunals to adjudicate on various specialist subjects so bringing about a membership of the tribunal with a special expertise in an area of the law. Examples are employment tribunals dealing with claims for wrongful dismissal and the former Lands Tribunal which adjudicated on a variety of subjects concerning land, such as claims for compensation for the compulsory acquisition of land and claims to discharge or modify a restrictive covenant affecting land on limited grounds under section 84 of the Law of Property Act 1925. Many such tribunals have now been organised under the Tribunals, Courts and Enforcement Act 2007 into an Upper Tribunal and a Lower Tribunal with various divisions or chambers within each. The Lands Tribunal, for example, became the Lands Chamber of the Upper Tribunal. 346 For an account of this subject with a citation of the old authorities see Halsbury’s Laws, vol 24, 5th edn (­LexisNexis, 2010) para 618. 347 The declarations are contained in s 40(1) of the Constitution Reform Act 2005 (the Supreme Court); ss 15(1), 19(1) and 45(1) of the Senior Courts Act 1981 (the High Court, the Court of Appeal and Crown Courts); and s 35(1) of the Tribunals, Courts and Enforcement Act 2007 (the Upper Tribunal). County courts are also declared courts of record by s 1(2) of the County Courts Act 1984.

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Courts and Tribunals  9.166 9.165  As just mentioned, some of these tribunals are declared courts of record by statute. Whether a particular tribunal is technically a court of record or not it has generally been the case that judgments of a tribunal can bring about an estoppel in the same way as can judgments of courts of record. As long ago as 1694, Holt CJ said: [W]e are to give credit to a man that exercises judicial power, if he keep within his jurisdiction. The law hath respect not only to courts of record and judicial proceedings there, but even to all other proceedings, where the person who gives the judgment or sentence hath judicial authority and you shew no fault in the sentence.348

An example in modern times of the application of estoppel by record to a decision of a tribunal is that the Court of Appeal has rejected the principle that there is no place for the principle of estoppel in the field of industrial tribunal law and that an issue estoppel can operate so as to prevent employers reopening an issue already decided as to the application of a statutory provision.349 Of course, the ordinary principles of estoppel per rem iudicatam apply and there will be no issue estoppel if a particular issue had not been determined by an industrial tribunal.350 Accordingly, the general rule that a judgment by consent is capable of creating an estoppel per rem iudicatam whereas a discontinuance of proceedings does not do so, applies to proceedings before tribunals. Tribunals often have their own statutory procedural rules and it must be determined in any case what was the real substance of an order made in order to see whether that order could create an estoppel.351 It must always be remembered that the nature of estoppel by record is that it applies to some previous adjudicative process and not to a decision by a person such as an employer to act in some way where there is no res iudicata in the sense of a matter decided between parties in dispute by an independent third party.352

3.  Domestic and Disciplinary Tribunals 9.166  Domestic tribunals are tribunals established to regulate, often by the exercise of a disciplinary jurisdiction, those who practise in a particular profession or engage in some particular organised activities such as sporting activities. The legal and medical professions and such bodies as sporting associations have domestic tribunals of this nature. Some tribunals, especially for the professions, have a statutory basis but the powers of others may depend on contracts between those who participate in a particular organised activity and voluntarily submit themselves to a disciplinary jurisdiction. In principle the decisions of such tribunals are capable of creating an estoppel by record.353 The jurisdiction of a college 348 Philips v Bury (1694) Term Rep 346, 357. 349 Munir v Jang Publications Ltd [1989] ICR 1, 10 (Dillon LJ). 350 Friend v Civil Aviation Authority [2001] EWCA Civ 1204, [2002] ICR 525. 351 Under procedural rules applied to employment tribunals, the only method of discontinuing proceedings was by way of an order dismissing the proceedings. A claimant who wished to discontinue proceedings obtained such an order, and it was held that what had occurred was in substance a discontinuance of the proceedings so that no estoppel arose: Ako v Rothschild Asset Management Ltd [2002] EWCA Civ 236, [2002] 2 All ER 693. See also Sajid v Sussex Muslim Society [2001] EWCA Civ 1684. 352 Christou v Haringey LBC [2014] QB 131. See the comment at the end of the next paragraph. 353 R (Coke-Wallis) v Institute of Chartered Accountants in England and Wales [2011] 2 AC 146. The question of whether the rule in Henderson v Henderson applies to successive proceedings before a disciplinary committee

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9.167  Estoppel by Record over its members may be regarded as the exercise of powers by a domestic tribunal such that a decision expelling a member is conclusive and can create an estoppel unless reversed by some available procedure such as an appeal to the Visitor of the college.354 9.167  The scope for res iudicata to operate on decisions of domestic tribunals is limited. When proceedings are taken before a court or a tribunal of an administrative nature there is usually a dispute between two parties with opposing interests with the dispute adjudicated on by the court or tribunal. Res iudicata then operates to bind both of the opposing parties to the judgment of the court or tribunal in any further proceedings between them. When a domestic tribunal carries out a disciplinary function, the dispute is normally between the body, such as a sporting organisation which has set up the tribunal, and a member of the organisation who is alleged to have committed some wrongdoing. The decision of the tribunal is a matter of fact and does not require any estoppel to establish its existence. Where questions of this nature arise in connection with the proceedings of disciplinary or domestic tribunals it is appropriate to apply the principles of res iudicata or the rule in Henderson v Henderson as a matter of private law rather than the rule of autrefois acquit or criminal law. An example of the application of cause of action estoppel to the proceedings of a disciplinary tribunal was proceedings for a disciplinary offence brought by the Institute of Chartered Accountants in England and Wales against an accountant. Proceedings were dismissed by a disciplinary committee. The Institute then sought to bring further proceedings founded on substantially the same events which had taken place in Jersey. It was held by the Supreme Court that the second proceedings failed by reason of cause of action estoppel.355 What is less easy to see is how normally there could be an estoppel per rem iudicatam between the wrongdoer and other members of the organisation or anyone else. Other members are not as such parties to the decision of the tribunal, although they may of course have given evidence or played some other part in the tribunal proceedings.356 Disciplinary proceedings by an association or other body against one of its members are often heard by a standing committee of members of the body or by an ad hoc committee set up to hear a particular charge or complaint. It appears that such a committee is an independent third person or persons for the purposes of the decision operating as an estoppel. was left open as unnecessary for determination since the principles of res iudicata were held to apply. See R (Gray) v Police Appeals Tribunal [2018] 1 WLR 1609. In this case, the application of the rule in Henderson v Henderson was considered. 354 R v Grundon [1775] 1 Cowp 315 (decision of Lord Mansfield relating to the expulsion of a person from Queens’ College, Cambridge). 355 R (Coke-Wallis) v Institute of Chartered Accountants in England and Wales [2011] 2 AC 146. See also, ­Workington Harbour & Dock Board v Trade Indemnity Co Ltd (No 2) [1938] 2 All ER 101. See, however, Wee v Law Society of Singapore [1985] 1 WLR 362. 356 A decision which is sometimes cited in this context and which may to some extent run contrary to what is stated in this paragraph is Hill v Clifford [1907] 2 Ch 236. Two dentists, members of a dental partnership, were held by the General Medical Council, a statutorily established body, to have been guilty of professional misconduct. The other partners purported to terminate the partnership in accordance with the terms of the partnership deed for infamous or disgraceful professional conduct by the two dentists concerned. In proceedings to determine the validity of the termination it was held that the decision of the Council was admissible in evidence and that in the absence of any rebutting evidence there were good grounds for the termination of the partnership. However, the possibility of rebutting evidence indicates that the decision of the Council did not operate as between the dentists convicted before the Council and other members of the partnership as a binding estoppel per rem i­ udicatam as to anything specific decided by the Council.

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Courts and Tribunals  9.170

4.  Ecclesiastical Courts 9.168  Ecclesiastical courts are those courts of the established Church of England exercising an ecclesiastical jurisdiction, for example in former times judgments relating to marriages.357 A final judgment of an ecclesiastical court within its jurisdiction did create an estoppel per rem iudicatam between the parties.358 Much of the jurisdiction other than that dealing with purely ecclesiastical matters has now been transferred to the High Court359 and the ordinary law of estoppel by record applies to judgments of the High Court within this jurisdiction.360

5. Arbitrations 9.169  Section 58(1) of the Arbitration Act 1996 provides that an award of an arbitration tribunal, including a single arbitrator, pursuant to an arbitration agreement is final and binding on the parties and on other persons claiming through or under them.361 The estoppel, which is sometimes called estoppel per rem arbitratam, operates not only as regards future arbitrations between the same parties but also as regards future proceedings between those parties in the courts. The legislative provision repeats the rule at common law.362 9.170  The ordinary principles of estoppel by record apply to arbitral awards and an award will not operate as an estoppel if it was outside the jurisdiction of the arbitrator or was vitiated by fraud or collusion.363 An example of the possible operation of a cause of action estoppel was a case in which a buyer of goods claimed damages against the sellers under the contract for an alleged deficiency of quality in the goods sold and obtained an award,

357 See, eg, the decision of the Consistory Court of the Diocese of London in The Duchess of Kingston’s Case (1776) 20 St Tr 355, (1776) Leach 146, where the Court issued a judgment of jactitation of marriage holding that the first marriage of Miss Chudleigh, the future Duchess of Kingston, was invalid. See para 9.37. The jurisdiction of ­ecclesiastical courts formerly extended to a number of matters such as the discipline of the clergy and ranging from defamation to punishment for brawling in a churchyard. 358 Kenn’s Case (1606) 7 Co Rep 42b. Ecclesiastical courts were not courts of record. 359 eg, the power to impose punishments on ordinary lay members of the public for brawling in a churchyard was abolished by s 1 of the Ecclesiastical Court Jurisdiction Act 1860. The jurisdiction in matrimonial causes was transferred to the Divorce Court by the Matrimonial Causes Act 1857. 360 Judgments of the High Court exercising a jurisdiction formerly vested in ecclesiastical courts will operate as an estoppel per rem iudicatam between the parties to the proceedings in the ordinary way and in some instances the judgments of the court operate as judgments in rem which bind the whole world, an instance being decrees of divorce: see para 9.19. See para 9.141 for the suggestion that res iudicata may have only a limited application in matrimonial cases. 361 Although this provision applies the law of estoppel by record it does not, subject to any agreement to the contrary, prevent an appeal against the decision of an arbitrator: Arbitration Act 1996, s 58(2). Under s 69 of the Act, and subject to any agreement to the contrary, an appeal to the High Court can be brought on a question of law either by leave of the court or by the agreement of all parties to the arbitration. The reference to parties claiming through or under a party to an arbitration probably refers to parties who would be privies of a party to court proceedings. 362 Sybray v White (1836) 1 M & W 435. The Plaintiff ’s horse was killed by falling down a mineshaft. The Defendant denied that he owned the shaft but an arbitration panel of five persons determined that he was the owner of it. The Defendant was held to be bound by this decision in subsequent proceedings in a court brought against him by the Plaintiff for damages for loss of the horse. 363 See para 9.59 et seq (jurisdiction) and para 9.37 et seq (fraud or collusion).

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9.171  Estoppel by Record and then in a later arbitration alleged that the sellers were further liable by reason of a misdescription. It appears that the defence of the sellers based on cause of action estoppel in the second arbitration would have succeeded, although the arbitrator did not uphold that defence, if they had challenged the second award in good time by requesting the statement of a case for the opinion of the court.364 A confidentiality provision in the arbitration agreement or in directions given for the conduct of the arbitration, that is a provision that the award will not be disclosed to any third party, will not prevent the award operating as an estoppel by record in a subsequent arbitration between the same two parties since its disclosure and use in that second arbitration will not involve a disclosure to any third party.365

(H)  Foreign Judgments 1. Introduction 9.171  In most cases a judgment of a foreign court is as capable of giving rise to an estoppel per rem iudicatam, either a cause of action estoppel or an issue estoppel, as is a judgment of an English court. Before coming to the substance of this subject it is necessary to cover a few preliminary general points. 9.172  An initial point is what is meant in this context by a foreign judgment. An expression used in legislation is ‘an overseas country’ which is defined in section 50 of the Civil Jurisdiction and Judgments Act 1982 to mean any countries or territories outside the United Kingdom, that is outside England, Wales, Scotland and Northern Ireland which together make up the United Kingdom of Great Britain and Northern Ireland. However, for the purposes of section 34 of that Act, which prohibits new proceedings on the same cause of action between the same parties after a judgment in proceedings in a different country, the prohibition is applied also to judgments in Scotland. Scotland has its own separate legal system although a final appeal from Scottish courts lies to the Supreme Court of the United Kingdom. Naturally, any statutory provision must be looked at in the light of its own language and interpretative provisions, but for the purposes of other rules on the present 364 HE Daniels Ltd v Carmel Exporters and Importers Ltd [1953] 2 QB 242. In this case, the buyers under a contract for the sale of goods brought arbitration proceedings against the sellers alleging that there was a defect in the quality of the goods. They subsequently brought further arbitration proceedings against the sellers on the basis of a misdescription. The sellers raised the defence of a cause of action estoppel relying on the decision in Conquer v Boot [1928] 2 KB 336. Nonetheless, the buyers succeeded in the second arbitration. It appears that it would have been possible for the sellers to have asked that the arbitrator should state a case for the opinion of the court (the procedure then used to challenge awards on a point of law) and they would have been likely to have succeeded had they done so since the decision of the arbitrator not to apply a cause of action estoppel was probably wrong in law. When the buyers came to enforce the second award, the sellers claimed that the arbitrator had no jurisdiction to make that award because of his failure to apply the estoppel defence. It was held that, even assuming, as seemed likely, that the arbitrator erred in law in not applying the estoppel defence, his failure to do so did not deprive him of jurisdiction so that the second award could be enforced. 365 Associated Electric and Gas Insurance Services Ltd v European Reinsurance Co of Zurich [2003] UKPC 11, [2003] 1 WLR 1041. The position might be different if an award of an arbitrator under an arbitration agreement containing a confidentiality clause was sought to be used as an estoppel in subsequent court proceedings between the parties, since court proceedings and all aspects of them are generally open to the public.

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Foreign Judgments  9.176 subject a foreign judgment should be taken to mean a judgment in any country other than in England, Wales and Northern Ireland. 9.173  Subject to statutory provisions and agreements and conventions entered into between this country and other countries, there is for present purposes no hierarchy of foreign judgments. Basic rules which govern the operation of a foreign judgment as an estoppel in subsequent proceedings in this country are the same whether the foreign judgment is in a country such as Australia, where the law is based on English common law and where the procedures and cultural and historic legal background are similar to this country, or the judgment is in a country whose legal system and procedures are very different from our own. 9.174  The focus of this chapter is on a judgment in one set of proceedings operating as an estoppel per rem iudicatam in subsequent proceedings between the same parties. When it comes to foreign judgments, certain other areas of law may impinge upon the above question, namely statutory provisions for the enforcement of foreign judgments in this country and private international law (conflict of law) which determines which law of which country is to be applied in proceedings before courts. A similar matter to note is that there is a difference between the procedural enforcement of a foreign judgment in this country and the effect of a foreign judgment as an estoppel precluding further proceedings between the same parties in this country because the further proceedings are on the same cause of action or issue which has been decided in previous foreign proceedings. These other areas of law are outside the scope of this book and are dealt with in specialist books on these matters. 9.175  A last preliminary point is to mention that the current law on the operation of a foreign judgment as an estoppel per rem iudicatam in subsequent proceedings in this country is founded on a combination of common law and statutory provisions. A statutory provision may repeat or reinforce the common law rules or a statutory provision may seek to remedy deficiencies in the common law rules. The approach to an explanation on the present subject is first to explain the common law rules and then to look at certain statutory provisions.

2.  The Common Law Rules 9.176  The initial view taken at common law in the early nineteenth century was that ‘The judgment of a foreign court in courts of this country is only prima facie evidence – is liable to be averred against, and not conclusive’.366 Later in the same century it came to be accepted that a judgment in a foreign court could be enforced in this country, and could presumably create an estoppel in subsequent proceedings, and so was conclusive on the matter decided even if the foreign court had misunderstood or misapplied English law.367 At the time of these decisions, no clear distinction was drawn between cause of action estoppel 366 Houlditch v Donegal (1834) 8 Bligh (NS) 301, 338 (Lord Brougham LC on an Irish appeal to the House of Lords). 367 Godard v Gray (1870) LR 6 QB 139 (Blackburn J); Ricardo v Garcias (1845) 12 Cl & F 368. The genesis of the rule in Henderson v Henderson, the third principle of estoppel by record, was the decision in the case of that name (1843) 3 Hare 100, when the earlier decision, an action for an account in Newfoundland, prevented a further action by one of the parties for a further account in this country. See para 9.223.

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9.177  Estoppel by Record and issue estoppel.368 The House of Lords in more modern times have held that there is no reason in principle to deny the possibility of an issue estoppel based on a foreign judgment. The common law can therefore be stated to be that a decision of a foreign court (including a Scottish decision for these purposes) may, subject to certain possible reservations to be explained later and subject to a technicality concerning the doctrine of merger, also explained later, be the foundation of an estoppel per rem iudicatam to the same extent as a judgment of an English court, and that this rule applies to the two principles of estoppel per rem iudicatam, which are cause of action estoppel and issue estoppel.369 9.177  The best examples of what were at any rate potential issue estoppels arising from a foreign judgment arose in the Carl Zeiss Stiftung litigation. The general course of this litigation has been described earlier in connection with issue estoppel370 and it suffices to say that during the course of the proceedings English courts had to consider alleged issue estoppels arising from decisions of courts in West Germany, Pakistan, India and New York. It was always accepted by the English courts that as a matter of principle these foreign decisions could bring about an issue estoppel for the purposes of applications in the English proceedings to strike out the claim or to strike out parts of the defences. In the event, the reliance on estoppel per rem iudicatam was rejected for various reasons, such as that there was no identity of parties or privies, or that the issue decided was not the same as that before the English court, or that the decision of the foreign court was not a final decision which, as with decisions of English courts, is necessary if a judgment is to create an estoppel.371 The same or similar objections would have prevented the decisions relied on from constituting an estoppel even if they had been decisions of English courts. 9.178  It has been held that it is now too late to question that issue estoppel can be created by a judgment of a foreign court if that court is recognised in English private international law as a court of competent jurisdiction. Nor does it prevent an estoppel that an English court would regard the reasoning of the foreign court as open to criticism.372 In one case concerning a contract for the sale and shipment of Sudanese groundnut expellers, the contract contained an exclusion clause conferring exclusive jurisdiction concerning the  contract on Sudanese courts. A Dutch court held that due to this clause it had no jurisdiction to adjudicate on a dispute. It was held by the House of Lords in ­subsequent English proceedings that a claim before an English court failed because the decision of the Dutch court created an issue estoppel as to the effect of the exclusion clause with the result that an English court was bound by the estoppel to hold that sole jurisdiction lay with S­ udanese courts.373 368 See, however, the categories of what may amount to issue estoppel as stated by De Grey CJ in The Duchess of Kingston’s Case (1776) St Tr 355, cited in para 9.101. 369 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, 917 (Lord Reid). There is an exception where the effect of the foreign judgment is contrary to public policy as understood in this country: see para 9.195. 370 See para 9.122. 371 These reasons for rejecting reliance on an estoppel per rem iudicatam are explained more fully in para 9.28 et seq (finality), and in parts (C), (D) and (E) of this chapter (identity of issue and identity of parties). 372 Silo-und Verwaltungsgesellschaft mbH v Owners of the Sennar, The Sennar (No 2) [1985] 1 WLR 490, 493 (Lord Diplock). 373 ibid. Other decisions concerning foreign judgments include Andre & Cie SA v Euro Asian Investments ­Corporation [2001] All ER (D) 23 concerning a decision of a Russian court, and CHF Chevreau Haeute und Felle AG v Conceria Vigriola Nobile [2000] All ER (D) 1841 concerning a decision of an Italian court. In The Good ­Challenger [2003] EWHC 10 (Comm), and [2003] EWCA Civ 1668 on appeal, the alleged estoppel was founded

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Foreign Judgments  9.181 9.179  The current law on a decision of a foreign court operating as an issue estoppel in a court in this country has been summarised as follows: The authorities show that in order to establish an issue estoppel four conditions must be satisfied, namely (1) that the judgment must be given by a foreign court of competent jurisdiction; (2) that the judgment must be final and conclusive and on the merits; (3) that there must be identity of parties; and (4) that there must be identity of subject matter, which means that the issue decided by the foreign court must be the same as that arising in the English proceedings.374

It is difficult to discern any significant differences between these tests as applied to a foreign judgment as creating an estoppel per rem iudicatam and the tests which apply to an English judgment alleged to have the same effect.

3.  The Statutory Provisions (i)  The Judgments (Reciprocal Enforcement) Act 1933 9.180  The primary purpose of the Judgments (Reciprocal Enforcement) Act 1933 was, as its name indicates, to create a system whereby judgments in foreign countries and judgments in this country could be enforced on a reciprocal basis where foreign countries were willing to allow reciprocity of treatment. Orders in Council can extend the provisions of the Act to a particular country. As regards estoppel per rem iudicatam, it is necessary to consider section 8 of the Act. Section 8(1) provides: Subject to the provisions of this section, a judgment to which Part I of this Act applies or would have applied if a sum of money had been payable thereunder, whether it can be registered or not, and whether, if it can be registered, it is registered or not, shall be recognised in any court in the United Kingdom as conclusive between the parties thereto in all proceedings founded on the same cause of action and may be relied on by way of defence or counterclaim in any such proceedings.

Section 8(3) provides: Nothing in this section to be taken to prevent any court in the United Kingdom recognising any judgment as conclusive on any matter of law or fact decided therein if that judgment would have been so recognised before the passing of this Act.

9.181  On the face of it and in brief terms, section 8(1) of the Act provides for the general application of estoppel per rem iudicatam to foreign judgments. This is the natural meaning of a foreign judgment being conclusive between the parties. As explained earlier, English common law had by the late nineteenth century reached the position that in general foreign judgments could create an estoppel in subsequent proceedings in English courts in much the same way as a previous decision of an English court could do. It is therefore pertinent to ask what was the purpose and effect of section 8. The 1933 Act was preceded by a report on a decision of a Romanian court concerning a limitation period for the enforcement of a final arbitration award. It  was held that there was no estoppel arising from some incidental observations made by that court as to the English law of limitation which were collateral to the main decision. 374 The Good Challenger [2003] EWCA Civ 1668, para 51 (Clarke LJ). These principles were explained as being founded on the Carl Zeiss decision, the decision in The Sennar (No 2) [1985] 1 WLR 490, and the decision in Desert Sun Loan Corporation v Hill [1996] 2 All ER 847.

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9.182  Estoppel by Record prepared by a committee under the chairmanship of Lord Sankey which was presented to Parliament.375 The report was examined by the House of Lords in Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg.376 In his judgment Viscount Dilhorne, having considered the relevant provisions of the report,377 concluded that there was nothing in the report to support the conclusion that it was the committee’s intention to alter or depart in any way from the principles on which English courts had under the common law regarded foreign judgments as conclusive.378 This conclusion accords with what is stated in section 8(3). Given that section 8(1) substantially repeats and reinforces the common law principles, it is necessary only to make a few short comments on the meaning and effect of that sub-section. 9.182  Section 8(1) refers to a judgment of a foreign court being conclusive in a court in the United Kingdom in all proceedings founded on a cause of action. This language has led to a suggestion that the statutory provision was concerned only with cause of action estoppel and not issue estoppel. The distinction between these two principles as together making up the overall res iudicata principle was not generally recognised in 1933 and it has been determined that section 8(1) can bring about an issue estoppel in the same way as it can bring about a cause of action estoppel.379 9.183  A further suggestion is that section 8(1) may not apply to a judgment of a foreign court in favour of a defendant. This interpretation of the provision was espoused by Lord Reid in the Black-Clawson decision but Lord Wilberforce preferred to leave the matter open.380 That decision was an action on unpaid bills of exchange, which had been accepted by the Defendants, a West German company, in which a German court had given judgment for the Defendants since the proceedings in Germany were brought outside the three-year limitation period which applied to such proceedings in that country. The proceedings in England were brought within the six-year limitation period applicable in England. The decision in Germany was therefore a defendant’s judgment. If Lord Reid were correct, the reliance by the Defendants on section 8(1) would have failed for that reason. It seems that even if Lord Reid’s view of the ambit of section 8(1) was correct, the Defendants could still in principle have relied on the German judgment under common law rules, which contain no confinement of the possibility of an issue estoppel based on the judgment of a foreign court to a plaintiff ’s judgment. The availability of common law principles of ­estoppel ­concerning foreign judgments is preserved by section 8(3) of the 1933 Act. In fact, as explained below, the reliance which the Defendants wished to place on section 8(1) failed for a different reason.

375 The report of the Foreign Judgments (Reciprocal Enforcement) Committee was presented to Parliament in December 1932. 376 Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591. 377 See, in particular, paragraph 4 of the report and its footnote. 378 Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591, 626 (Viscount Dilhorne). 379 ibid, 620. 380 ibid, 618 (Lord Reid), 634 (Lord Wilberforce). The reasoning of Lord Reid was that the purpose of the provision was to meet the problem that under the doctrine of merger a judgment of a foreign court did not result in a merger of a cause of action in a judgment and so did not prevent a further action, perhaps to obtain additional damages, on the same cause of action. This difficulty is now removed by s 34 of the Civil Jurisdiction and ­Judgments Act 1982 as explained in para 9.186 et seq.

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Foreign Judgments  9.185 9.184  With limited possible exceptions there do not appear to be any significant differences between the way in which an estoppel per rem iudicatam based on a foreign judgment and deployed on reliance on section 8(1) is applied as compared with where that estoppel is based on common law principles concerning an English judgment.381 It has been said that there are a number of reasons for being cautious when the judgment said to create the estoppel is that of a foreign court. One reason is that because of lack of familiarity with foreign procedures it might be difficult to be certain that a particular issue had been decided or to be clear whether a particular matter decided was merely collateral to the overall question before the court or was an obiter dictum.382 While this proposition is clearly correct it must be remembered that certainty in the subject matter of a decision is required if the decision of an English court is relied on as founding an issue estoppel in subsequent proceedings between the same parties.383 Another reason is the possible injustice which might ensue if in one set of proceedings a party does not resist one issue alleged against it because it regards the issue as trivial in those proceedings only for that party to find in later proceedings where the issue is of central importance that it is bound by estoppel to what was decided in the previous proceedings.384 It might be that because of the difficulty and expense involved there would be an even greater reluctance to spend time and money in contesting a trivial issue in foreign proceedings than there would be in contesting a trivial issue in English proceedings. 9.185  The limitations in treating a judgment of an English court as creating an estoppel apply to judgments of foreign courts relied on for the same purpose. An issue estoppel depends on the issue in later proceedings being the same or perhaps substantially the same as an issue decided in earlier proceedings.385 The Black-Clawson decision386 is an illustration of this principle in its application to a foreign judgment. The judgment in favour of the Defendants in the German court was that the proceedings were defeated by the operation of the three-year limitation period applicable to such proceedings in Germany. It was not decided that the Plaintiffs’ action on bills of exchange was ill-founded for any other reason. Accordingly, when an action on the same bills of exchange was brought in an English court the precise subject matter of the German judgment, the application of the German limitation period, did not prevent the assertion of the action in an English court and the application to the proceedings of the longer limitation period which was prescribed in England for actions of the nature in question.387

381 The possible exceptions relate to possible perversity in the foreign judgment (see para 9.190) and a foreign judgment which is contrary to the public policy of this country (see para 9.191). The former difficulty, that the technical doctrine of the merger of a cause of action into a judgment did not apply to foreign judgments, has now been removed by s 34 of the Civil Jurisdiction and Judgments Act 1982 as is explained in para 9.186 et seq. 382 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, 918 (Lord Reid). 383 Thoday v Thoday [1964] P 181. 384 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, 918 (Lord Reid). 385 See para 9.93. 386 [1975] AC 591. 387 The law on this matter is the same under common law principles as under s 8(1). In Harris v Quine (1869) LR 4 QB 653 it was held that a Manx statute which provided a three-year limitation period barred the remedy but did not extinguish the debt with the result that proceedings to recover the debt, though time-barred in the Isle of Man, could still be brought in this country.

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9.186  Estoppel by Record

(ii)  Section 34 of the Civil Jurisdiction and Judgments Act 1982 9.186  Section 34 of the Civil Jurisdiction and Judgments Act 1982 provides: No proceedings may be brought by a person in England and Wales or Northern Ireland on a cause of action in respect of which a judgment has been given in his favour in proceedings between the same parties, or their privies, in a court in another part of the United Kingdom or in a court of an overseas country, unless that judgment is not enforceable or entitled to recognition in England and Wales or, as the case may be, in Northern Ireland.

9.187  The background to this section is the technical doctrine of merger of a cause of action in a judgment at common law. The doctrine of merger has been explained earlier.388 In law it is that when a judgment has been obtained on a cause of action, the cause of action is said to merge in the judgment with the result that the judgment can be enforced but no further action can be brought on the same cause of action. Of course, in most cases a party who has succeeded in a cause of action and has obtained a remedy will not wish to bring further proceedings on that cause of action. If it has obtained damages it cannot obtain them twice. One reason which could bring about a wish to sue again on the same cause of action would be where the claimant believed that there were further damages for further losses which it had not claimed, or was not considered, in the previous proceedings. A claimant is prevented from acting in this way since its cause of action has ended when it has been translated into a judgment and, since the cause of action no longer exists, no further proceedings may be brought on it to obtain some further relief. The difficulty, at any rate on one view, was that the doctrine of merger did not apply to foreign judgments so that if a judgment was given in a foreign court establishing a cause of action there was nothing to prevent the claimant bringing further proceedings in an English court on the same cause of action. This was obviously unsatisfactory and it was to remedy this deficiency in the common law that section 34 of the Civil Jurisdiction and Judgments Act 1982 was enacted.389 9.188  A leading decision on the application of section 34 is Republic of India v India Steamship Co Ltd390 in which a decision of an Indian court was held to operate as a cause of action estoppel which prevented later proceedings from being commenced or continued in an English court on what was substantially the same cause of action. It may be that had it not been for the enactment of section 34 in 1982, the decision would have had to be different because the necessary merger of the cause of action in India into a judgment would not have happened so leaving the cause of action to be raised again in later proceedings in an English court.

388 See para 9.67 et seq. 389 The analysis set out in this paragraph has not been universally accepted. Reference can be made to Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853 928 where Lord Hodson said: ‘It [an argument in the case] was based on the rule which subsists in English law, notwithstanding animadversions which had been passed on it, that the cause of action in a foreign case does not merge in the judgment but remains available to be sued upon, the foreign judgment being only evidence of the cause of action not, as in this country, that in which the cause of action is merged’. Having so stated the absence of merger of a cause of action by reason of a foreign judgment Lord Hodson added: ‘If the fact that the cause of action does not merge prevents the estoppel where issue estoppel is concerned it must similarly one would suppose do so where a cause of action is in question. No-one has suggested that the latter contention is sound’. 390 [1993] AC 410. The purpose of the English proceedings was to seek to obtain further damages for a former loss which, as though arising from the same general events, had not been awarded or claimed in the action in India.

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Foreign Judgments  9.191 9.189  The limitations which prevent a cause of action or issue estoppel arising as a result of a judgment in an English court apply in principle to judgments of foreign courts. Such judgments must, for example, be final and be sufficiently certain if they are to operate so as to create an estoppel in subsequent proceedings in an English court. The burden of establishing these matters is on the party who wishes to rely on the foreign judgment as constituting an estoppel. Because of differences in procedure and traditions between proceedings in foreign courts and those in English courts, a foreign judgment is likely to be investigated with careful scrutiny to ensure that it does possess those criteria which are necessary for an estoppel per rem iudicatam.391 9.190  A further limitation needs to be mentioned which may be particular to judgments of foreign courts. A previous judgment of any court is not of course prevented from operating as an estoppel in later proceedings merely because the later court disagrees with it or doubts its correctness. To hold otherwise would be to rob estoppel per rem iudicatam of much of its scope. However, as regards foreign judgment there has arisen a possible limitation of perversity when considering such judgments. In Simpson v Fogo,392 the decision in question was that of the Supreme Court of Louisiana. That Court had applied what it believed to be the common law applicable within its jurisdiction but that was at variance with the generally accepted rule of private international law which required foreign law, in that particular case English law as ascertained in the Louisiana court, to be applied to the proceedings before the court. This was described in the English court as a perverse and deliberate refusal to recognise the law of the country by which title had been validly conferred. This and any similar decision to the same effect have suffered later criticism, including academic ­criticism.393 The extent to which there is a separate limitation of perversity when considering foreign judgments as creating an estoppel per rem iudicatam is therefore uncertain.394 Lord Reid in the Carl Zeiss case considered that any such doctrine had no application to the facts of that case since the West German court had not refused to apply the law of East Germany but had applied what they thought was the law of East Germany.395 9.191  It has also been held that an English court will not be bound by reason of res iudicata by a decision of a foreign court where the effect of that decision is contrary to some aspect of public policy applicable in this country.396 A not dissimilar reasoning is found in a recent decision of the Court of Appeal to which it was said that on the ground of special circumstances they had power not to allow a judgment of a Dutch court to create an issue estoppel in proceedings in this country when the judgment of that court was that decisions of courts in the Russian Federation should not be recognised because the Russian decisions

391 See para 9.184. 392 Simpson v Fogo (1863) 1 H & M 195 (Page Wood V-C). A further decision to a similar effect is Kaufman v Gerson [1904] 1 KB 591 in which an English court refused to recognise a contract validly made in France on the ground that it was contrary to English principles of morality. It is stated in the next paragraph that a decision of a foreign court will not create an estoppel per rem iudicatam in an English court where the effect of the decision is contrary to public policy in England. Public policy and morality may be similar concepts. 393 See Aksionairnoye Obschestvo AM Luther v James Sagor and Co [1931] 3 KB 532, 558 (Scrutton LJ) citing the second edition of Dicey’s Conflict of Laws (1908). 394 See Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1971] 1 AC 853, 922. 395 ibid. 396 Vervaeke v Smith [1983] 1 AC 145 where the public policy was the circumstances in which an English court would recognise that a marriage was a nullity. See para 9.195 where this decision is examined in more detail.

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9.192  Estoppel by Record were tainted by a lack of independence and impartiality on the part of the Russian judiciary. The reasoning of the Court of Appeal was that the respect and comity normally due from one court to another precluded the acceptance of a decision of a court of a third country on the matter as an estoppel since such an acceptance would be an abdication of responsibility on the part of an English court. The basis of this residual power to refuse to allow what would otherwise be an issue estoppel to operate is uncertain.397

(I) Exceptions 1. Introduction 9.192  Stated in its simplest form, an estoppel per rem iudicatam has the result that when the existence of a cause of action has been established by a final judgment, that judgment binds the parties in any subsequent proceedings between them concerning the same cause of action and that when an issue has been determined by a final judgment that issue must be taken as binding the parties in any subsequent proceedings between them where the same issue may arise. These results happen as a matter of law once the elements of the estoppel are established and do not involve any discretion of the courts. The question here to be ascertained is whether there are any exceptions or limitations of a general character to this simple summary of the effect of both species of the estoppel. 9.193  One point is of course clear. The fact that in the subsequent proceedings a court considers that the previous judgment was wrong or doubts its correctness is not a reason for refusing to give effect to the estoppel. To hold otherwise would deprive an estoppel per rem iudicatam of its practical efficacy.398 9.194  Recent authorities suggest that neither cause of action estoppel nor issue estoppel are wholly absolute in their operation. There are limited and confined exceptions to both species of estoppel per rem iudicatam. The exception is somewhat wider in the case of issue estoppel. It is to be borne in mind that the justification for the estoppel is to achieve finality in litigation and to prevent a person being troubled twice before a court on the same matter. These purposes could not be achieved if there were general and wide exceptions to the operation of the estoppel. In examining the ambit of any exceptions to the estoppel one pertinent consideration may be to consider whether, in some limited circumstances, any injustice in operating the estoppel would outweigh the desirability of finality in litigation and the desirability of preventing parties having to re-litigate matters already decided between them. Even so, the fact that a court feels that in the factual circumstances before it there is an element of hardship or even of injustice in the operation of the estoppel is not a reason by itself to refuse to apply the estoppel. 9.195  Before turning to the two general exceptions there is one more specific exception which requires mention. In general, English courts recognise a judgment of a foreign court 397 Yukos Capital Sarl v OJSC Rosneft Oil Co (No 2) [2014] QB 458, para 158 et seq. Reliance on the issue ­estoppel failed because the issue in the Dutch court was said not to be the same as that in the English proceedings. See para 9.206 for a comment on the supposed special circumstances and exception to issue estoppel. 398 The Good Challenger [2003] EWCA Civ 1668, para 55.

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Exceptions  9.196 as being as capable of creating an estoppel per rem iudicatam in subsequent proceedings in an English court as can a judgment of an English court.399 The exception is that an English court will not allow a judgment of a foreign court to create an estoppel per rem iudicatam when the result of doing so would be to arrive at a decision which was contrary to public policy as applied in England.400

2.  The Two Exceptions 9.196  The two exceptions were established by the decision of the House of Lords in Arnold v Westminster Bank Plc.401 This decision concerned the correct interpretation and operation of a rent review clause in a lease. As in most leases, rent reviews were due at regular intervals through the term of the lease and the lease stated the basis of the ascertainment of the reviewed rent on each review date. On one review, the correct interpretation of the relevant provision in the lease was determined by Walton J.402 Subsequently, and in other cases concerning rent reviews between different parties under different leases but where the review clause was the same or similar to that considered in the decision of Walton J, the same issue of interpretation arose and courts including the Court of Appeal cast doubt on the correctness in law of the decision of the Judge. On a subsequent rent review under the lease, the question arose of whether the parties to the 399 See part (H) of this chapter. 400 The litigation in Vervaeke v Smith [1983] 1 AC 145 concerned a petition for a declaration that a marriage was a nullity and was long and complicated. It is sufficient for present purposes to say that the Petitioner who was at the time a Belgian citizen and a prostitute, entered into the marriage with an English citizen as a means of her obtaining citizenship in this country and a British passport. Neither of the parties had any intention of forming a permanent relationship. Some years later, an English court held that despite its circumstances the marriage was valid in law and not a nullity. The Petitioner then brought proceedings in a Belgian court and obtained from that court a judgment that the marriage was a nullity. The Belgian court held itself not to be bound by the English decision on the question of nullity since to hold a marriage entered into in the circumstances described as being a valid marriage would have been contrary to public policy in Belgium. The Petitioner then sought again to obtain a decree of nullity in an English court and relied on the decision in Belgium as creating an estoppel per rem iudicatam (her purpose was to secure the validity of a later marriage where her husband had died at a reception immediately following the marriage ceremony and by reason of which she stood to inherit a substantial sum of money). The House of Lords refused to treat the Belgian decision as creating an estoppel per rem iudicatam, since to hold a marriage to be invalid for the reasons put forward would have been contrary to public policy as applied in England. 401 [1991] 2 AC 93. It appears that prior to this decision there had been no decided case where issue estoppel had been held not to apply by reason that in the later proceedings a party had brought forward further relevant material which he could not by reasonable diligence have adduced in the earlier proceedings: ibid (at 108) (Lord Keith). However, in Miles v Cooper [1967] 2 QB 459, 468, Diplock LJ, in stating the principle of issue estoppel, qualified his description of the principle with the words ‘unless further material which is relevant to the correctness or incorrectness of the assertion and could not by reasonable diligence have been adduced by the party in the previous proceedings has since become available to him’. This statement appears to presage the exceptions which are here being explained. 402 The issue under the rent review clause was whether, for the purposes of the hypothetical lease which had to be assumed in order to ascertain the reviewed rent, that hypothetical lease was itself to contain provisions for a rent review at intervals equivalent to those contained in the actual lease. Walton J held that no rent review provisions were to be taken to exist in the hypothetical lease. Later decisions prior to the next rent review date showed that this was a wrong interpretation of rent review clauses of this nature: see Equity & Law Life Assurance Society Plc v Bodfield Ltd [1987] 1 EGLR 124, a decision of the Court of Appeal. The point was that a hypothetical lease without rent reviews would command a higher rent than one with rent reviews so resulting in an unfairly high reviewed rent.

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9.197  Estoppel by Record lease were bound by the judgment of Walton J on the interpretation of the rent review clause by reason of res iudicata notwithstanding the series of later decisions including a decision of the Court of Appeal. The situation was that by the time of the later review and the later proceedings the law had changed, or perhaps more accurately the understanding of the law had changed, as a result of the later decisions.403 The previous decision at first instance alleged to constitute an estoppel had therefore been shown to be wrong in law but, as just mentioned, that is not in itself enough to prevent the operation of an estoppel per rem iudicatam based on that decision. 9.197  The decision of Walton J was taken to be one which gave rise to an issue estoppel and not a cause of action estoppel. The causes of action in the earlier and later rent reviews were different, the establishment of an appropriate rent at each review date, but the issue which arose, the meaning of a particular provision within the rent review clause, was the same. On the ordinary understanding of the principle of issue estoppel, the decision at first instance would have brought about such an estoppel. It was in these circumstances that the House of Lords held that there were two limited and confined exceptions to the operation of estoppel per rem iudicatam, one applicable to cause of action estoppel and the other applicable to issue estoppel.

(i)  The First Exception: Cause of Action Estoppel 9.198 In Arnold, Lord Keith said that cause of action estoppel was ‘absolute in respect of all points decided unless fraud or collusion is alleged’.404 The exception in cause of action ­estoppel is that it is possible to challenge a previous decision on the existence or non-existence of a cause of action provided (a) that a new point is taken in subsequent proceedings relating to the same cause of action, and (b) that that new point could not reasonably have been taken in the previous proceedings.405 Thus, cause of action estoppel is not wholly absolute and is subject to this limited exception. The exception does not contradict the principle that in cause of action estoppel the estoppel is absolute in regard to points decided since the exception depends on a new point being first raised in the later proceedings. 9.199  The application of the exception is dependent on what is here meant by ‘a point’. Definitions of other expressions used in the area of estoppel per rem iudicatam have been discussed earlier. A cause of action is those minimum facts which must be proved by a party, if not admitted, if that party is to obtain a particular remedy in accordance with a general rule of law. An issue in the context of res iudicata has been said to be some condition which has to be fulfilled by a party if that party is able to sustain a cause of action.406 There has been some discussion on whether a specific question of fact, which is not the fulfilment 403 The theoretical position is that when a decision of law is corrected by a superior court in later proceedings the law is not changed but rather the law has always been that which the superior court has determined and any previous decision to a different effect was reached on a wrong understanding of the true law. 404 Arnold v National Westminster Bank Plc [1991] 2 AC 93, 104 (Lord Keith). The law as stated in this paragraph relies on what was said by Lord Keith in Arnold as explained and elaborated by what was said as to the effect of that decision by Lord Sumption in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160, a decision which is considered in detail later in para 9.207 et seq. See also In Re Waring (No 2) [1948] Ch 221; Hall v Simons [2002] 1 AC 615, 716. 405 Arnold v National Westminster Bank Plc [1991] 2 AC 93, 109. 406 Thoday v Thoday [1964] P 181. The relevant passage from the judgment of Diplock LJ is set out in para 9.90.

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Exceptions  9.200 of a condition in the above sense, can bring about an issue estoppel and the better view is that it can.407 The concept of a point is therefore different from a cause of action or an issue (including the determination as an issue of a matter of fact). A point appears to mean some separate and relevant argument or line of argument which was not in the previous proceedings put before a court when that court decided on the existence of a cause of action or on an issue.408 The only exception to the absolute effect of cause of action estoppel arising from an earlier judgment is therefore when a point in the above sense is taken in later proceedings on the same cause of action between the same parties and the point was not raised and could not reasonably have been raised in the earlier proceedings. There could be a number of reasons why a point could not reasonably have been taken in earlier proceedings, such as that some event had not then happened or that there was at the time no evidence to support the point although evidence later became unexpectedly available.

(ii)  The Second Exception: Issue Estoppel 9.200  There is a sometimes wider and different exception for issue estoppel. The greater width of the exception is justified by the fact that the underlying principles on which ­estoppel per rem iudicatam rests as a whole, public policy (finality in litigation) and justice to individuals (that nobody should be twice troubled in litigation on the same matter) can be said to have greater force in cause of action estoppel.409 In the case of issue estoppel, and unlike in cause of action estoppel, the estoppel is not absolute in relation to all points which have been decided in earlier proceedings between the parties. For the purposes of issue estoppel, a decision on an issue in earlier proceedings may not operate as an issue estoppel between the same parties in later proceedings between them when the same issue arises, provided that two specific conditions are fulfilled, these being (a) that there has become available to a party further material relevant to the correct determination of a point whether that point was raised in the earlier proceedings or not, and (b) that that material could not with reasonable diligence have been adduced in the earlier proceedings. It should be emphasised that in this case the exception can arise whether or not the point was raised in the earlier proceedings.410 Consequently, for the purposes of issue estoppel there is no rule that the previous judgment is absolute as to all points decided, and it is mainly in this that the exception for issue estoppel may be considered to be wider than the exception for cause of action estoppel.411 As with the cause of action estoppel exception there may be a degree

407 See para 9.105 et seq, and see what was said by Lord Reid by way of criticism of this passage in Carl Zeiss ­Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853, 916–17. 408 In Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160, para 51, Lord Neuberger appears to have equated a new point with a new argument when considering cause of action estoppel. The relevant passage from the judgment is set out in para 9.210. 409 Arnold v National Westminster Bank Plc [1991] 2 AC 93, 108 (Lord Keith). 410 ibid, 109. 411 In Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, [2014] AC 160, para 21, the matter as it stands after Arnold is summarised by Lord Sumption as being that ‘In the case of cause of action estoppel it was in principle possible to challenge the previous decision as to the existence or non-existence of the cause of action by taking a new point which could not reasonably have been taken on the earlier occasion: whereas in the case of issue estoppel it was in principle possible to challenge the previous decision on the relevant issue not just by taking a new point which could not reasonably have been taken on the earlier occasion but to reargue in materially altered circumstances an old point which had previously been rejected’. The ‘materially altered circumstances’

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9.201  Estoppel by Record of ­imprecision on what exactly is meant by ‘a point’. In Arnold, there was no new point since the point decided before Walton J was whether the hypothetical lease which had to be envisaged in order to operate the rent review was or was not to contain within it its own provisions for rent review equivalent to those in the actual lease. This question was both the point and the issue. The critical factor which permitted reliance on the exception was the new decisions on the issue which were the new material. 9.201  The operation of the second exception can be seen in Arnold v National Westminster Bank Plc. In that decision the issue was the correct meaning of the rent review clause, and the new material relevant to the issue sought to be put before the court in relation to the later rent review was the series of new decisions on that point which followed the decision alleged to create the estoppel. The new decisions showed that the decision of Walton J was wrong in law. Obviously, this new material could not have been put before the Judge in the previous proceedings since it did not then exist. 9.202  There does not appear to be any limit to the type of further material which may become available or to the materially altered circumstances to which reference may be made for the purposes of applying the issue estoppel exception. An obvious example of further material is a decision or decisions of appellate courts or of other courts of coordinate jurisdiction to that in which the first decision was made which show that the earlier decision was wrong in law, and that is what occurred in Arnold. A further example would be the discovery of new facts or the availability of important further evidence, always subject to the requirement that the new facts or the new evidence could not have been put before the court at the time of the previous decision if reasonable diligence had been applied. The contention that the new material had necessarily to be of a factual nature was rejected in the Arnold decision. It seems unlikely that the development of a new argument or a new way of putting a case and nothing else could be normally relied on as the further material if only because in most such cases the new argument could have been put forward by a party or its representatives at the time of the previous proceedings if reasonable diligence had been exercised. 9.203  There is an important distinction in the application of both exceptions between material in existence but not put before the court in the previous proceedings, and material which is new in the sense that it did not exist at the time of the previous proceedings. The decisions of subsequent courts, including that of the Court of Appeal on the interpretation of the rent review clause in the Arnold case, were after the previous decision of Walton J. Consequently, it would not have been possible to adduce those decisions before that Judge since they did not exist at the time of his decision. If these decisions had been available at the time of the previous decision but had not been put before the Judge due to inadvertence or due to a lack of diligence by the legal representatives of the parties, it seems that the issue estoppel exception could not have been established.412 Put another way, the exception is that if the relevant new material did not exist at the time of the previous decision on an issue then the second part of the exception, the requirement that the new material could have been discovered by reasonable diligence, obviously does not arise. are p ­ resumably equivalent to the ‘further material’ referred to by Lord Keith in Arnold. A further summary of the exceptions to both species of estoppel per rem iudicatam as stated by Lord Sumption is set out in para 9.205. 412 It may be relevant to note that as far as material in the form of existing decisions is concerned there is a duty on the legal representatives of both parties in litigation to bring before the court all relevant decisions whether or not any particular decision assists the case for that party.

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Exceptions  9.206

(iii)  Summary of the Exceptions 9.204  In summary, the exceptions to the normal operation of an estoppel per rem ­iudicatam are as follows. (i) In the case of cause of action estoppel once a point has been decided in a judgment the operation of the estoppel is absolute in respect of that point and the point cannot be reopened in any subsequent proceedings between the same parties relating to the same cause of action. (ii) In the case of cause of action estoppel a new point, not raised and decided in the previous proceedings, may be taken so as to challenge the previous decision on the cause of action provided that the new point could not reasonably have been taken at the time of the previous proceedings. (iii) In the case of issue estoppel the issue may be reopened in order that a point can be considered, whether or not that point was decided in the previous proceedings, provided (a) there is put forward further material not before the court at the time of the previous decision, and (b) that further material could not have been adduced in the previous proceedings by the exercise of reasonable diligence. 9.205  The question of exceptions to estoppel per rem iudicatam was examined again, in this case by the Supreme Court, in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd413 and this decision is examined below. In his judgment, Lord Sumption summarised the Arnold decision as being authority for certain propositions which he stated as follows.414 There is no suggestion in the Zodiac case that any part of the Arnold decision is not still good law: (1) Cause of action estoppel is absolute in relation to all points which had to be and were decided in order to establish the existence or non-existence of a cause of action. (2) Cause of action estoppel also bars the raising in subsequent proceedings of points essential to the existence or non-existence of a cause of action which were not decided because they were not raised in the earlier proceedings, if they could with reasonable diligence and should in all the circumstances have been raised. (3) Except in special circumstances where this would cause injustice, issue estoppel bars the raising in subsequent proceedings of points which (i) were not raised in the earlier proceedings or (ii) were raised but unsuccessfully. If the relevant point was not raised, the bar will usually be absolute if it could with reasonable diligence and should in all the circumstances have been raised.

9.206  Shortly before the Zodiac case, the Court of Appeal considered whether, when an issue estoppel would have otherwise arisen, there remained a residual discretion in a court to refuse to apply the estoppel in special circumstances.415 The Court held that there was such a discretion available but that it was not necessary to apply such a residual power since the Court had held for other reasons that reliance on an alleged issue estoppel failed.416 Even so, the Court stated that it would have applied the residual discretion and refused to operate an issue estoppel if the necessity to have recourse to this power had arisen. The Court described the ‘special circumstances’ exception as ‘amorphous’. This may seem a little harsh

413 [2013] UKSC 46, [2014] AC 160. 414 ibid, para 22. Subsequently in this narrative, this decision is sometimes called the Zodiac case. 415 Yukos Capital Sarl v OJSC Rosneft Oil Co (No 2) [2014] QB 458, para 158 et seq. The Yukos decision (21 June 2012) preceded the decision of the Supreme Court in the Zodiac case (3 July 2013) but it was not cited to the Supreme Court in the Zodiac case. 416 Reliance on an issue estoppel failed due to a lack of identity in the issue as decided by a Dutch court and the issue as before the English courts. See para 9.191.

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9.207  Estoppel by Record when in the use of the expression ‘special circumstances’ in Arnold v National ­Westminster Bank Plc Lord Keith stated the ambit of the special circumstances with some precision where they created an exception to the operation of either cause of action estoppel or issue estoppel. In order to avoid wide-ranging and perhaps amorphous exceptions to the principles of estoppel per rem iudicatam, it may be best to confine the exceptions to those stated with such precision by the House of Lords in the Arnold case and by the Supreme Court in the Zodiac case.417

3. The Zodiac Decision (i)  The Substance of the Decision 9.207  As just mentioned, the judgment of Lord Keith in Arnold v National Westminster Bank Plc418 was carefully examined, and to an extent applied, by the Supreme Court in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd.419 The Zodiac case concerned a patent registered by the Claimants for a seating system of flat beds for use in long-haul aircraft. It was alleged that the design and sale of such beds by the Defendants was a breach of the patent for which damages were recoverable. 9.208  In order to explain what was decided it is necessary to summarise the complex procedural course of the action, complexity engendered largely by the parallel proceedings which took place before English courts and before the European Patent Office (EPO).420 The jurisdiction of the EPO in this country derived from the European Patents Convention, the principal provisions of which were given effect in this country by Part II of the Patents Act 1977. In May 2007, a patent relating to the seats was granted to the Claimants as the patentees out of the EPO. In July 2007, the Claimants issued proceedings against the Defendants in the High Court claiming damages for an infringement of this patent. The claim failed at first instance but in October 2009 was upheld by the Court of Appeal and in January 2010 that Court ordered an inquiry as to damages. Prior to the commencement of the inquiry, in September 2010, the Technical Appeal Board of the EPO amended the patent such that the actions of the Defendant did not constitute an interference with the amended patent. By article 68 of the European Patent Convention the amendment was retrospective such that the patent was deemed to have operated in its amended form from the outset. The Court of Appeal in February 2011 refused to discharge an order for the inquiry as to damages on the ground that its decision as to the validity of the patent and its infringement

417 The two general exceptions as stated by Lord Keith in the Arnold case apply equally to previous decisions of English and foreign courts which are alleged to bring about an estoppel. It may be possible to categorise three sets of circumstances which may prevent a judgment of a foreign court as creating an estoppel as more specific exceptions applicable only to foreign judgments. The first of the circumstances is where the foreign judgment was perverse (see para 9.190). The second is where the effect of the foreign judgment is contrary to public policy as  applied in this country (see paras 9.191 and 9.195). The third is where to accept that the foreign judgment was binding as an estoppel would be to abrogate some essential aspect of the jurisdiction of an English court (see para 9.191). 418 [1991] 2 AC 93. 419 [2013] UKSC 46, [2014] AC 160. 420 For a further summary in the Zodiac case, see paras 39–41 (Lord Neuberger).

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Exceptions  9.210 created an estoppel and had to be taken to be correct for the purposes of the inquiry as to damages and that this was unaffected by the subsequent decision of the Technical Appeal Board of the EPO. The appeal to the Supreme Court was against the refusal of the Court of Appeal to discharge the order for an inquiry into damages and involved the question of whether the reasoning of the Court of Appeal on the matter of res iudicata was in the circumstances correct. 9.209  The decision of the Court of Appeal of January 2010 that the Claimants’ patent was valid and had been infringed by the actions of the Defendants was a final judgment on the Claimants’ cause of action and would in the normal way have operated as a cause of action estoppel so that the decision could not be reopened in the remainder of the proceedings or in other proceedings between the same parties. Therefore, in the normal course of events the correctness of the judgment could not be challenged in the operation of the inquiry as to damages or as part of the subsequent application to discharge the order for an inquiry as to damages and, in the absence of such a challenge, there would be no ground for discharging that order. The issue before the Supreme Court was therefore whether the decision of the Technical Appeal Board in September 2010, with its retrospective effect, brought the case within the exception to the operation of cause of action estoppel. 9.210  The answer given by the Supreme Court was that the decision of the Technical Appeal Board could be taken into account and that the Court of Appeal should not in the circumstances have held itself bound by reason of cause of action estoppel to refuse to discharge its order for an inquiry into damages. It was possible to apply what had been described above as the first exception, that applicable to cause of action estoppel, as explained by Lord Keith in Arnold v National Westminster Bank Plc.421 The point as to the retrospective effect of the decision of the Technical Appeal Board of the EPO had not been raised or decided in the January 2010 decision of the Court of Appeal. Obviously, given its date, the decision of the Board and its effect could not have been raised and relied on before the Court of Appeal when that Court gave its judgment establishing the cause of action in January 2010. The essence of the matter is encapsulated in a short passage from the judgment of Lord Neuberger: They [the Court of Appeal] wrongly concluded that cause of action estoppel applied so as to preclude the alleged infringer from relying on the revocation of the patent in the assessment, because they failed correctly to formulate the point that the alleged infringer wished to take on the assessment. The alleged infringer was bound by strict cause of action estoppel from running any argument that it had run on validity or infringement, but there was no such strict rule to prevent it from contending that the patent had, as a matter of fact, been revoked. Not merely was that an argument which had not been run in the earlier proceedings; it was an argument which, ex hypothesi, could not have been run in the earlier proceedings. Accordingly, following the reasoning in Arnold’s case [1991] 2 AC 93, it was a fact which the court could at least have contemplated permitting the alleged infringer to rely on in the assessment.422

The same reasoning was advanced by Lord Sumption who said that the Defendants’ reliance on the retrospective amendment of the patent was a new point which was not raised



421 See

para 9.198. UKSC 46, [2014] AC 160, para 51; and see also para 54 of Lord Neuberger’s judgment.

422 [2013]

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9.211  Estoppel by Record before the Court of Appeal and could not have been so raised before that Court because the ­decision of the Technical Appeal Board retrospectively amending the patent was made after the order giving effect to the judgment of the Court of Appeal.423 9.211  The substance of the Zodiac decision is that it upholds and applies the exemption relating to cause of action estoppel as stated by Lord Keith in Arnold. Once the existence or otherwise of a cause of action has been finally decided, that decision may be deprived of its normal effect of a cause of action estoppel by a subsequent decision of a statutory body which has retrospective effect. The effect of the retrospective decision was plainly a new point and by reason of its date was not a point which could have been raised and decided in the earlier decision. One can see from comparing the Arnold case and the Zodiac case the flexibility in the concept of a ‘point’. In the Arnold case, there was no new point since the only point was the correct meaning of the rent review clause in the lease. Since the case was one of issue estoppel, no new point was necessary and the decision of other courts following the initial decision was not a new point. The Zodiac case concerned a cause of action estoppel such that the application of an exception to the res iudicata principle required that there was a new point. In this case, the decision of the Technical Appeal Board after the initial decision of the Court of Appeal was characterised as a new point.

(ii)  Other Matters 9.212  It is not wholly apparent whether, where the circumstances fall within either of the two exceptions to estoppel per rem iudicatam, a court in subsequent proceedings is bound to reopen a matter decided in previous proceedings or the court merely has a discretion whether to do so. The references in the Zodiac case to ‘materially altered circumstances’ or ‘further material relevant to the correct determination of a point’424 suggest that once the criteria for one or other of the exceptions have been satisfied, a later court must be prepared to reopen an earlier decision on a cause of action or issue which it would otherwise be precluded from doing by the operation of one of the species of estoppel per rem iudicatam. If the operation of the exceptions is discretionary, once the criteria which underlie the exceptions have been satisfied it might be necessary to lay down further principles to govern the exercise of that discretion. 9.213  There is an inevitable tension in estoppel per rem iudicatam between two matters. There are the considerations of finality in litigation and protection of parties against double vexation which justify the two species of the estoppel. As against this, the operation of the principles can on occasions seem harsh or unjust. It is the possibility of injustice which to an extent engendered the two limited exceptions to the operation of the principles which have been explained.425 In Arnold, Lord Keith thought that only a person of a strictly legalistic turn of mind would have regarded as just an operation of the principle of issue estoppel which resulted in the tenants being bound in successive five-yearly rent reviews under their

423 ibid, para 27. 424 See Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 40, [2014] AC 160, para 21. 425 See the various references to justice in the judgment of Lord Keith in Arnold at [1991] 2 AC 93, 108–09, and the passage in the judgment of Lord Neuberger in the Zodiac case, para 62.

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Exceptions  9.215 lease for a period of over 20 years to an operation of the review adverse to them which had been established in other cases to be founded on a misinterpretation of the meaning of the rent review clause.426 9.214  What certainly cannot be drawn from these invocations of injustice in support of limited exceptions to the estoppel is any wider principle that a court can refuse to apply either species of the estoppel merely because it seems harsh or unjust to do so in the particular circumstances before the court. Any such wide power for a court considering the operation of estoppel per rem iudicatam would be to abandon for this form of estoppel principles of law and to introduce in their stead what has been described as ‘some mix of judicial discretion, subjective views about which party “ought to win” … and “the formless void” of individual moral opinion’ which has been so eloquently rejected in the High Court of Australia in a passage concerning constructive trusts relied on in the House of Lords in connection with proprietary estoppel.427 Such an approach involving a general discretion in a court would impose on estoppel per rem iudicatam the concept of unconscionability which is a component of reliance-based estoppels.428 Fortunately, any temptation to introduce a formless void of this nature into estoppel per rem iudicatam has been rejected by the statement of Lord Neuberger in the Zodiac case,429 where he said: While seeking to justify a conclusion that, though it applies, res iudicata does not preclude a point being taken, it can be dangerous to invoke the observation of Lord Keith of Kinkel in Arnold v National Westminster Bank Plc [1991] 2 AC 93, 109B, that estoppel is intended ‘to work justice between the parties’, because it is only too easy to fall back on it as an excuse for an unprincipled departure from, or an unprincipled exception to, the rule.

The point is that the two exceptions are principled and carefully circumscribed and courts are not entitled to go beyond their limits. Of course, an amount of leeway is given if only in deciding what are materially changed circumstances and in deciding whether a point or different material could have been deployed in the previous proceedings by the exercise of reasonable diligence. 9.215  A further feature of the Zodiac case is that the decision of the Technical Appeal Board of the EPO which followed the decision of the Court of Appeal was by the terms of the European Convention rendered a judgment in rem, meaning that it bound the whole world and not just the parties to the proceedings before the Board.430 It should not be thought from this that only a judgment in rem following an earlier judgment can bring

426 Arnold v National Westminster Bank Plc [1991] 2 AC 93, 110E. 427 Muschinski v Dodds (1985) 160 CLR 583, 615–16, cited by Lord Scott in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752, para 17. See ch 7, para 7.95. 428 See ch 1, para 1.44 et seq. 429 [2013] UKSC 46, [2014] AC 160, para 62. Note, however, that in para 22 of his judgment when formalising the issue estoppel exception to res iudicata, Lord Sumption referred to the qualification of ‘Except in special circumstances where this would cause injustice’. The passage is set out in para 9.205. Note also that in Yukos Capital Sarl v OJSC Rosneft Oil Co (No 2) [2014] QB 458, the Court of appeal considered that it had power to refuse to apply an issue estoppel in ‘special circumstances’. See para 9.206 for this decision. 430 See, eg, para 58 of the Zodiac case (Lord Neuberger). For a general explanation of the difference between a judgment in rem and a judgment in personam, and its relevance to estoppel by record generally, see para 9.18 et seq.

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9.216  Estoppel by Record about an exception to the operation of res iudicata founded on the earlier judgment. In Arnold, the decisions subsequent to the judgment of Walton J were all judgments in personam between different parties. The importance of the later decisions, and the justification for treating them as creating an exception to the operation of an issue estoppel founded on the judgment of Walton J, was that the subsequent decisions enunciated a general principle applicable to a type of provision within rent review clauses which was of a common form found in such clauses and so demonstrated that the decision of Walton J was incorrect in law. 9.216  Certain particular points applicable to the way in which the Court of Appeal viewed an estoppel in the Zodiac case should be mentioned. Although these points are particular to that case they perhaps illustrate the type of situation in which the exception to cause of action estoppel can be operated. It was agreed that any injunction restraining the Defendants from infringing the patent granted in the English proceedings became ineffective or would have to be discharged following the decision of the Technical Appeal Board. It was pointed out that there was a logical difficulty in that the retrospective effect of the amendment of the patent by the Board could be relied on to discharge the injunction but could not be relied on when it came to the assessment of damages for an infringement of the patent.431 A further point was that even if the inquiry as to damages took place there would appear to have been nothing to have stopped the Defendants from contending that the damages must be either nil or nominal because by the time of that assessment the patent had ceased to exist in its original form and there was no infringement of the patent in its amended form. Such a conclusion would be in accordance with the general principle that when it comes to the assessment of damages all relevant facts and events which have occurred up to the time of the assessment can be taken into account. There is the technical point that the effect of a judgment establishing the existence of a cause of action is to merge that cause of action into the judgment so that the cause of action itself ceases to exist. Some reliance on the doctrine of merger was placed by the Claimants but it was said that that aspect did not take the questions in issue on the appeal any further.432 Lastly, there was some discussion as to what would have been the situation if the decision of the Technical Appeal Board amending the patent had occurred at a later time. It was said that the amendment would have had effect in relation to the assessment of damages, presumably reducing the damages to nil or a nominal sum, provided that the decision of the Board occurred before an order recording the judgment for the assessed damages had been drawn up and entered.433 This observation accords with the general rule that a court has an inherent power to alter or amend its own judgment up until a formal order recording the judgment has been sealed.434 The Supreme Court also touched on the question of what would have been the position if the damages had been assessed and paid prior to the decision of the Technical Appeal Board. Lord Neuberger was of the view that there might have been a claim in restitution for the recovery of the damages paid in these circumstances, but expressed no view on the strength of such a claim.435

431 The

Zodiac case, para 59. para 63. See para 9.67 et seq for the technical doctrine of merger. 433 The Zodiac case, para 66. 434 See para 9.35. 435 The Zodiac case, para 68. 432 ibid,

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The Rule in Henderson v Henderson  9.219

4.  The Patent Cases 9.217  The Supreme Court in the Zodiac case had to consider three previous decisions of the Court of Appeal involving patents in which a similar question had arisen. In two of these cases, after a decision but before the assessment of damages, the patent had been revoked in court proceedings in an English court.436 The third decision raised circumstances which were much the same as those considered in the Zodiac case since in that decision the validity of the patent and its infringement had been decided in an English court, but before the assessment of damages had taken place the validity of the patent was being considered in proceedings under the European patent procedure.437 The Court of Appeal had held in these cases that because of the operation of res iudicata, the effect of subsequent revocation or other proceedings should not be taken into account in the assessment of damages. These three decisions were overruled or disapproved in the Zodiac case.

(J)  The Rule in Henderson v Henderson 1.  The Nature and Status of the Rule 9.218  The rule in Henderson v Henderson is a principle of law that when a person in later proceedings wishes to raise a cause of action or a defence or an issue or a contention, that person may be prevented from doing so as being an abuse of the process of the court because the matter in question could have been and should have been raised in earlier proceedings on the same general subject matter to which that person, or someone to whom that person has a close connection, was a party. The power of a court to allow or disallow a matter to be raised in proceedings before it can be regarded as a part of the inherent power of a court to control its own procedure.438 Reference can also be made today in support of the rule to the overriding objective of the Civil Procedure Rules which is that of enabling the court to deal with cases justly and at proportionate cost.439 9.219  In this chapter, the rule in Henderson v Henderson is treated as the third of the main principles which together make up estoppel by record, the other two principles being cause of action estoppel and issue estoppel.440 The first and second principles are now widely regarded as the two species of estoppel per rem iudicatam441 and a question which inevitably arises is the relationship between the Henderson v Henderson rule and estoppel

436 Poulson v Adjustable Cover and Boiler Block Co [1908] 7 Ch 430; Coflexip SA v Stolt Offshore MS Ltd (No 2) [2004] EWCA Civ 213, [2004] FSR 708. 437 Unilin Beheer BV v Berry Floor NV [2007] Bus LR 1140. 438 This aspect of the inherent jurisdiction can be defined in summary as a reserve fund of powers available to a court to ensure the observance of the due process of law, to prevent vexation or oppression, to do justice between parties, and to secure a fair trial between them: see IH Jacob ‘The Inherent Jurisdiction of the Court’ (1970) 23 Current Legal Problems 23, 51. This definition in an extended form was approved and applied by the Court of Appeal of New Zealand in Taylor v Attorney General [1975] 2 NZLR 675. 439 CPR, Part 1.1(1). 440 See para 9.7. 441 See, eg, Thoday v Thoday [1964] P 181, 198 (Diplock LJ).

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9.220  Estoppel by Record per rem iudicatam. The unifying factor between the estoppel and the rule is that when both are applied in legal proceedings they depend on what was or was not raised and decided in earlier proceedings on the same or similar subject matter between the parties or between persons connected with the parties. That having been said, there are obvious differences between the Henderson v Henderson rule and estoppel per rem iudicatam. (a) The estoppel per rem iudicatam depends on the existence or non-existence of a cause of action or on an issue relevant to a cause of action having been decided between parties in an earlier final judgment of a court. The rule depends on a matter not having been raised or decided in previous proceedings. Therefore in a sense the underlying basis of the two principles of law rests on exactly opposite circumstances. (b) The estoppel depends on the facts giving rise to a cause of action or the nature of the issue in the previous and the subsequent proceedings being either the same or closely similar. The rule can operate when this criterion is not met provided there is a general similarity between the subject matters of the two proceedings. (c) The estoppel can apply only where the parties to the previous and the subsequent proceedings are the same or a party to the subsequent proceedings is a privy of a party to the previous proceedings. This requirement is applied with some strictness.442 The rule can apply where there is a relationship between the parties to the two proceedings which is close but which may not satisfy the strict privity requirement of the estoppel. (d) The estoppel does not involve any exercise of discretion or general consideration of what is just. Subject to its two limited exceptions, one applicable to cause of action estoppel and one applicable to issue estoppel, estoppel per rem iudicatam is a rule to be applied even when the result of its application may appear to be harsh.443 (e) The two principles of law may be applied successively by a court in relation to the same proceedings. A court may rule that there is no estoppel per rem iudicatam since the strict requirements for the operation of that principle are not satisfied but may then go on to consider whether a party may still be prevented from raising a matter by reason of the looser requirements of the rule in Henderson v Henderson.444 (f) Estoppel per rem iudicatam is best classified as a rule of substantive law, whereas the rule in Henderson v Henderson can be regarded as a procedural or adjectival rule.445 9.220  There is some discussion in the authorities on the exact classification of the rule in Henderson v Henderson and its relationship to estoppel per rem iudicatam. In his original description of the rule in his judgment in Henderson v Henderson Wigram V-C stated the rule as an aspect of the rule of res iudicata.446 More recently, Lord Hailsham LC described the rule in Henderson v Henderson as being both a rule of public policy and an application of the law of res iudicata.447 Among the most recent contributions to the subject is the analysis of res iudicata by Lord Sumption in the Zodiac case, in which the rule in 442 See para 9.121. 443 For these exceptions see part (I) of this chapter. 444 An example of this process is Mullen v Conoco Ltd [1998] QB 382 discussed in para 9.51. 445 See Johnson v Gore Wood & Co [2002] 2 AC 1, 39 (Lord Millett); Zodiac case, para 25 (Lord Sumption). This matter is discussed in the next paragraph. 446 (1843) 3 Hare 100, 114–16. ‘The plea of res iudicata applies, except in special cases, not only to points on which the court was actually required by the parties to form an opinion and pronounce judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time’. 447 Vervaeke v Smith [1983] 1 AC 145, 167.

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The Rule in Henderson v Henderson  9.221 Henderson v Henderson was classified as one of the five principles which together made up the portmanteau doctrine of res iudicata.448 Lord Sumption also described as a separate  principle the more general rule against abusive proceedings which he referred to as separate from the rule in Henderson v Henderson and as being the policy underlying most of the principles of res iudicata.449 He described the rule in Henderson v Henderson as probably the commonest form of res iudicata to come before the English courts.450 9.221  Other cases of high authority have classified the rule in Henderson v Henderson in various different ways. In one decision, Sir Thomas Bingham MR said that the rule was not based on the doctrine of res iudicata in a narrow sense nor on the strict doctrines of cause of action estoppel or issue estoppel.451 In what is probably the leading modern decision on the application of the rule in Henderson v Henderson, Johnson v Gore Wood & Co, Lord Bingham, as he had then become, stated in the House of Lords that: Henderson v Henderson abuse of process, as now understood, though separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter.452

The view of Lord Millett in the same case was that decisions following the judgment of Wigram V-C in 1843 had doubted the correctness of treating the Henderson v Henderson principle as an application of the doctrine of res iudicata, while describing it as an extension of the doctrine or as analogous to the doctrine. The view of Lord Millett on the question was as follows: While the exact relationship between the principle expounded by Sir James Wigram V-C and the defences of res iudicata and cause of action and issue estoppel may be obscure, I am inclined to regard it as primarily an ancillary and salutary principle necessary to protect the integrity of those defences and prevent them from being deliberately or inadvertently circumvented.453

Whatever the answer to the question here being discussed it cannot be doubted that the judgment of Wigram V-C has significantly affected the modern development of aspects of estoppel per rem iudicatam. For example, in Arnold v National Westminster Bank Plc Lord Keith, considering the two exceptions to the estoppel which operate today, and having cited the relevant passage from the judgment of Sir James Wigram, said that that passage appeared to have opened the door to the possibility that cause of action estoppel might not apply in its full vigour where the earlier decision did not in express terms decide, because

448 [2013] UKSC 46, [2014] AC 160, para 17. The other members of the Court agreed with Lord Sumption. 449 ibid. 450 ibid, para 18. 451 Barrow v Bankside Members Agency Ltd [1996] 1 WLR 257, 260. 452 [2002] 2 AC 1, 31. The view generally taken today is that res iudicata is a rule of substantive law whereas the rule in Henderson v Henderson with its greater flexibility is a procedural rule: see Johnson v Gore Wood & Co [2002] 2 AC 1, 59 (Lord Millett) and R (Gray) v Police Appeals Tribunal [2018] 1 WLR 1609. The status of estoppel as an overall doctrine, as either a rule of evidence or a rule of substantive law, is discussed in ch 2, part (C) where it is suggested that as a generality estoppel is a rule or rules of substantive law. As explained in ch 2, the distinction may be not without practical importance. Therefore if, as seems to be the case, the rule in Henderson v Henderson is to be properly regarded as an aspect of procedural or adjectival law it stands apart in this from the remainder of the law of estoppel including the law of estoppel per rem iudicatam. 453 Johnson v Gore Wood & Co [2002] 2 AC 1, 59.

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9.222  Estoppel by Record they were not raised, points which might have been fatal to the existence or non-existence of a cause of action.454 9.222  It may be that discussion will continue on the exact relationship between estoppel per rem iudicatam and the rule in Henderson v Henderson, which Lord Millett thought to be possibly obscure, but now that the rule can be stated with reasonable clarity it is doubtful whether much is to be gained from any continued discussion. What does seem indisputable is that there are very substantial differences between the two principles,455 but that both principles are justified by the same desiderata of achieving finality of litigation, of protecting a party from having to deal in proceedings with matters which have been, or should have been, decided in previous proceedings, and in preventing abusive proceedings. Perhaps the best conclusion is that stated recently in the Supreme Court: Res iudicata and abuse of process are juridically very different. Res iudicata is a rule of substantive law, while abuse of process is a concept which informs the exercise of the court’s procedural powers. In my view, they are distinct though overlapping legal principles with the common underlying purpose of limiting abusive and duplicative litigation.456

2.  The Development of the Rule 9.223  Since the general articulation of the rule in Henderson v Henderson is now established, there is no purpose in an elaborate description of its genesis or development. It is still worth going back to the origin of the principle as stated in Henderson v Henderson itself.457 The proceedings centred around a dispute as to what was due between two brothers who had become business partners and one of whom was deceased. In proceedings in Newfoundland an account had been taken and judgment had been given as a result of the account of sums due from the surviving partner to the estate of the deceased partner. The surviving partner then began proceedings in England seeking an account alleging sums due to him from the estate of the deceased partner. The personal representatives of the deceased partner sought an injunction to prevent those proceedings relying on the principle of res iudicata. The now famous passage from the judgment of Sir James Wigram V-C is as follows: In trying this question, I believe I state the rules of the Court correctly, when I say, that where a given matter becomes the subject of litigation in and of adjudication by a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of a matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have from negligence, 454 [1991] 2 AC 93, 104–05. The exception to cause of action estoppel is explained in para 9.198 et seq and depends for the purposes of cause of action estoppel on a point not having been decided in previous proceedings. Cause of action estoppel is absolute, and admits of no exceptions, as regards a point which has been decided in previous proceedings. 455 The main differences are summarised in para 9.219. 456 Zodiac case, para 25 (Lord Sumption); see also Otkritie Capital International Ltd v Threadneedle Asset Management [2017] EWCA Civ 274, para 39; Johnson v Gore Wood & Co [2002] 2 AC 1, 59 (Lord Millett); R (Gray) v Police Appeals Tribunal [2018] 1 WLR 1609, para 57 (Sir Terence Etherton MR). 457 (1843) 3 Hare 100.

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The Rule in Henderson v Henderson  9.225 i­nadvertence, or even accident, omitted part of their case. The plea of res iudicata applies, except in special cases, not only to points on which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.458

9.224  It seems that the principle stated in Henderson v Henderson, while it did not wholly disappear from judicial cognisance, was rarely invoked in legal proceedings.459 The principle was not wholly lost sight of and it was expounded by Somervell LJ in 1947.460 The clearest resuscitation of the principle as stated by Wigram V-C was the decision of the Privy Council in Yat Tung Investment Co Ltd v Dao Heng Bank Ltd461 on appeal from Hong Kong. In that case a bank had exercised its power under a previous mortgage to sell the mortgaged property to A who in turn mortgaged the property to the bank. On default by A, the bank again exercised its power of sale and sold the property to B. A brought proceedings against the bank alleging that the sale to it was a nullity because it was a sham but failed in these proceedings. A then brought further proceedings against the bank and against B alleging that the sale to B pursuant to the powers under the mortgage was fraudulent. The Privy Council upheld the striking out of the second proceedings on the ground that the issue could have been raised by A in the earlier proceedings and in doing so applied what was said by Wigram V-C in Henderson v Henderson. 9.225  The leading modern exposition of the Henderson v Henderson principle is Johnson v Gore Wood & Co.462 The Plaintiff owned all but two of the issued shares in a company. 458 ibid, 114. In technical terms, what occurred was that the surviving partner filed a bill in equity in the Court of Chancery seeking an account. The personal representatives of the deceased partner filed a demurrer, contending that the matter had already been decided in the Newfoundland Court. The demurrer was upheld in accordance with the principle as stated by Sir James Wigram V-C. 459 Zodiac case, para 20. 460 Greenhalgh v Mallard [1947] 2 All ER 255, 257, where Somervell LJ said: ‘res iudicata for this purpose is not confined to the issues the court is actually asked to decide, but … it covers issues or facts which are so clearly part of the subject matter of the litigation, and so clearly could have been raised, that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them’. A principle similar to the rule in Henderson v Henderson was applied in In Re Koenigsberg [1948] Ch 727 in reliance on what had been said in the Privy Council in Hoystead v Commissioner of Taxation [1926] AC 155 and in reliance on a passage in Spencer Bower on Res Iudicata where the expression ‘res iudicata by implication’ was used to apply to circumstances where there was a determination of a particular question or issue although that determination was not declared on the face of the recorded decision. The decision of Wigram V-C in Henderson v Henderson was not cited in In Re Koenigsberg and the decision at first instance of Roxburgh J in In Re Koenigsberg was described by Lord Kilbrandon in Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] AC 581, 591, as ‘a hard case’, a view apparently shared by the Judge who decided it and who stated that he had struggled hard against reaching the conclusion which he felt he was bound to reach. In Re Koenigsberg was reversed on appeal at [1949] Ch 348. When the Henderson v Henderson principle is applied, as it is understood today there need be no such struggle, since in a hard case the power of the court can be used to avoid reaching a result which the court finds unacceptable or unjust. The expression ‘res iudicata by implication’ has not subsequently found favour as a description of the rule in Henderson v Henderson. 461 [1975] AC 581. See also Brisbane City Council v Attorney General for Queensland [1979] AC 411, 425, (Lord Wilberforce). Other modern decisions relevant to the redevelopment of the rule in Henderson v Henderson, and prior to a full examination of the rule in Johnson v Gore Wood & Co [2002] 2 AC 1, include Ashmore v British Coal Corporation [1990] 2 QB 338; House of Spring Gardens Ltd v Waite [1991] 1 QB 241; Arnold v Westminster Bank Plc [1991] 2 AC 93; Talbot v Berkshire County Council [1994] QB 290; C (A Minor) v Hackney LBC [1996] 1 WLR 789; Barrow v Bankside Agency LBC [1996] 1 WLR 257; Manson v Vooght [1999] BPIR 376; and Bradford and Bingley Building Society v Seddon [1999] 1 WLR 1482. 462 [2002] 2 AC 1. See also The Good Challenger [2003] EWCA Civ 1668, para 92, where a distinction was drawn between procedural abuse and re-litigation abuse. For a recent consideration of the Henderson v Henderson

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9.226  Estoppel by Record The company held an option to acquire an interest in land and instructed the Defendants, a firm of solicitors, to give notice exercising the option. The owners of the land disputed the validity of the notice but it was held in the Chancery Division that the notice was valid. The company sued the Defendants for damages for negligence in the drafting of the notice since, although the notice was held to be valid, the company were unable to recover the costs of the litigation against a party who was legally aided and suffered the effect of a drop in the property market. The action against the Defendants was compromised. It was said at the time of these proceedings that the Plaintiff might have a claim against the solicitors in his personal capacity. The Plaintiff then brought proceedings in his personal capacity against the solicitors claiming damages. A main issue in the second proceedings was whether this further claim should be struck out as an abuse of the process under the rule in Henderson v Henderson. It was held that the action should not be struck out. 9.226  That which clearly emerges from the Gore Wood decision is that the application of the Henderson v Henderson rule is not an absolute or automatic process. A reading of the rule as stated by Sir James Wigram V-C might suggest that if a matter could have been brought forward by a litigant in previous proceedings but was not brought forward, then that was an automatic bar on the matter being brought forward by that party in later proceedings, at any rate in the absence of what the Vice-Chancellor called ‘special circumstances’. In truth the application of the rule is not as rigid or automatic as this. A critical facet of what Lord Bingham stated in Gore Wood is his statement that: It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the actual question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before.463

The essence of the rule as a statement of principle may be (a) if a matter sought to be raised in later proceedings could not have been raised by a party in earlier proceedings then there is no question of the rule applying and preventing the party raising the matter in the later proceedings, (b) if a matter could have been raised by a party in previous proceedings and should have been so raised then the rule may apply so as to prevent that matter being raised by that party in later proceedings, and (c) that if the matter could and should have been raised in the previous proceedings the court in the later proceedings still has a power or discretion464 to allow the matter to be raised in those proceedings having regard to all ­ rinciple, see the decision of the High Court of Australia in Timbercorp Finance Pty Ltd v Collins (2017) 259 CLR p 212 in which a person was not prevented from bringing proceedings even though he had a previous connection with group proceedings dealing with the same matter. 463 Johnson v Gore Wood & Co [2002] AC 1, 31. 464 It may not be correct to describe this process as the exercise of a discretion, and a more accurate description has been said to be that it is a process of assessing all the relevant factors and applying the assessment where there can only be one correct answer: Aldi Stores Ltd v WSP London Ltd [2008] 1 WLR 748. See also Otkritie Capital International Ltd v Threadneedle Asset Management [2017] EWCA Civ 274. The distinction in law between the process just described and the exercise of a true discretion may be that in both cases all relevant circumstances should be taken into account, but in the latter cases there may be more than one way in which a power can then be exercised, none of which will be wrong in law unless it was manifestly unreasonable. See also below (n 478).

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The Rule in Henderson v Henderson  9.231 relevant circumstances including the exact reason why the matter was not raised in the earlier proceedings.465 If this is a correct description of the essence of the rule then, given that it is determined that a matter both could and should have been raised in previous proceedings, the furthest that any discussion of the rule can go is to examine particular circumstances which as a generality may be of importance in deciding how the power to prevent the matter being relied on in subsequent proceedings should be exercised.

3.  Aspects of the Application of the Rule 9.227  Some guidance is available, drawn in substantial part from Johnson v Gore Wood & Co, on how and in what circumstances the Henderson v Henderson rule should be applied. 9.228  An initial point is that the rule should be applied carefully and only in limited circumstances. It is one thing to refuse to allow a party to re-litigate a point which has been decided in proceedings in which that party was a litigant, ie, the ordinary operation of estoppel per rem iudicatam. It is a different thing to deny to a party an opportunity to rely on a point which has for whatever reason not been decided. It has been observed that the latter process is prima facie a denial of the citizen’s right of access to the court conferred by the common law and guaranteed by article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms of 1953.466 9.229  In principle the rule can be applied where the previous proceedings resulted in a judgment or ended by way of a compromise.467 9.230  It is not necessary in order to invoke the rule that some element such as dishonesty or a collateral attack on a previous decision must be shown but where such elements are present the later proceedings will be much more obviously abusive.468 9.231  It does seem that if a party knows of the possibility of a further claim relating to the same general subject matter as its claim before the court but makes no mention of the possible future claim, leaving the other party with the belief that all matters of liability were being finally dealt with, the bringing of further proceedings on the same general subject matter will in all likelihood be an abuse of the process.469 465 A summary of the relevant principles to be applied as derived from the authorities was given by Peter Gibson LJ in Dexter Ltd (In Administrative Receivership) v Vlieland-Boddy [2003] EWCA Civ 14, [2003] All ER (D) 221, para 49. The principles so stated were: (a) where A has brought an action against B, a later action against B or C may be struck out where the second action is an abuse of the process; (b) a later action against B is much more likely to be held to be an abuse of process than a later action against C; (c) the burden of establishing abuse of process is on B or C or as the case may be; (d) it is wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive; (e) the question in every case is whether, applying a broad merits-based approach, A’s conduct is in all the circumstances an abuse of process; and (f) the court will rarely find that the later decision is an abuse of process unless the later action involves unjust harassment or oppression of B or C. See also the summary of the principles to be derived from Johnson v Gore Wood & Co as set out by Clarke LJ in the same decision at paras 49–53. 466 Johnson v Gore Wood & Co [2002] 2 AC 1, 59 (Lord Millett). See also Henley v Bloom [2010] 1 WLR 1770, paras 25–26. 467 Johnson v Gore Wood & Co [2002] 2 AC 1, 32 (Lord Bingham), 59 (Lord Millett). 468 ibid, 31 (Lord Bingham). 469 ibid, 61 (Lord Millett). For a further comment on the desirability of at least mentioning in earlier proceedings the possibility of a new matter or claim being raised in later proceedings, see Aldi Stores Ltd v WSP London Ltd

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9.232  Estoppel by Record 9.232  The decision of the Court of Appeal in the Aldi Stores case has given rise to what has been called the ‘Aldi requirement’, at any rate in complicated commercial litigation. In the Aldi decision, Thomas LJ concluded his judgment as follows: [F]or the future, if a similar issue arises in complex commercial multi-party litigation, it must be referred to the court seized of the proceedings. It is plainly not only in the interest of the parties, but also in the public interest and in the interest of the efficient use of court resources that this is done. There can be no excuse for failure to do so in the future.470

A point which arises is whether, having regard to the mandatory nature of this direction, failure to comply with the requirement must result in subsequent proceedings being struck out as an abuse of the process. The requirement should not be applied in this rigid fashion and it will still be for the court, applying a merits-based approach, to refuse to strike out proceedings brought by a party even though that party has not previously observed the requirement.471 There are certain matters to be borne in mind as regards the operation of the Aldi guidelines. The so-called mandatory requirement was by its terms confined to ‘complex commercial multi-party litigation’. It is easy to see the importance of a party raising in such proceedings the possibility of a new claim in later proceedings where in the context of such litigation the parties are likely to be assisted by experienced legal representatives. The significance of not raising a matter in a set of proceedings may be more understandable within the context of more modest legal actions. In addition, the laying down of an inflexible rule would face understandably reluctant acceptance by courts in later cases faced with a multiplicity of different factual situations some of which could not have been anticipated at the time of laying down the inflexible rule. It is also difficult to accommodate such an inflexible rule with the merits-based approach commended by the House of Lords in ­Johnson v Gore Wood & Co. It is submitted that the best explanation of the matter is that given by Arden LJ in the Otkritie decision which was as follows: As to Mr Malek’s submission that once the judge found that Otkritie had acted in breach of the Aldi guidelines in Action 1, Action 2 was an abuse of process and should be struck out, in my judgment, that approach is clearly not consistent with Johnson v Gore Wood and its adherence to a broad merits-based assessment of whether a second action was an abuse of the process of the court. In my judgment, it is clear that the court in Aldi did not intend to depart from the decision in Johnson v Gore Wood. So there is no hard-edged rule of law that a claim, which a party could have raised in one set of proceedings is to be struck out if that party seeks to bring it in another set of proceedings. The Aldi guidelines are a facet of the principle of a ‘broad merits-based’ judgment as to whether that is the just outcome, which was established in Johnson v Gore Wood.472

[2008] 1 WLR 748, paras 29–31 (Thomas LJ). This is sometimes termed the ‘Aldi requirement’ and is discussed in the next paragraph. 470 Aldi Stores Ltd v WSP London Ltd [2008] 1 WLR 748, para 31. See also Stuart v Goldberg Linde [2008] 1 WLR 823; Henley v Bloom [2010] 1 WLR 1770; Clutterbuck v Cleghorn [2017] EWCA Civ 137 [2017] All ER (D) 222 (Mar); Gladman Commercial Properties v Fisher Hargreaves Proctor [2013] EWCA Civ 1466, para 65 (where it was said that the Judge was correct to regard a failure to follow the mandate in the Aldi guidelines as a relevant matter leading to a decision to strike out proceedings); Football Dataco v Stan James (Abingdon) Ltd [2014] EWHC 504 (Ch), [2014] All ER (D) 38 (Mar). 471 Otkritie Capital International Ltd v Threadneedle Asset Management [2015] EWHC 2329 (Comm), paras 25–28, [2015] All ER (D) 68, a decision upheld on appeal at [2017] EWCA Civ 274. 472 [2017] EWCA Civ 274, para 49.

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The Rule in Henderson v Henderson  9.236 To put the matter at its simplest, the so-called ‘mandatory’ requirement stated by Thomas LJ in the Aldi case can no longer be regarded as mandatory or absolute even as regards the limited category of litigation to which it was expressed to apply. 9.233  A question which could arise is whether the failure to raise some matter in earlier proceedings was due to lack of funds on the part of a litigant. It is said that this reason will not ordinarily excuse a failure to raise the matter in the earlier proceedings but is not to be regarded as necessarily irrelevant in the final exercise of its discretion by a court, particularly where the lack of funds has been caused by the party who wishes to rely on the Henderson v Henderson rule.473 9.234  It should be noted that the application of the rule considered in Johnson v Gore Wood & Co was against a party who was not a party to the earlier proceedings but was closely connected to that party. The close connection required is obviously akin to, but is not the same as, the connection between two parties which may make one the privy of the other for the purposes of res iudicata. Certain passages from the judgments of Lord Bingham and Lord Millett are referred to in the explanation of privity given earlier in this chapter.474 It is therefore possible that, given a sufficiently close connection between the parties concerned, the rule in Henderson v Henderson may be applied where either the claimant or the defendant in the previous proceedings may be different from that in the later proceedings in which the rule is sought to be applied. 9.235  It has been suggested earlier in this chapter that if the Henderson v Henderson rule can apply at all to judicial review proceedings, a court may be motivated not to prevent a point being raised in later proceedings by a public authority where the raising of the point is in the public interest and a failure to have the point litigated at all in either the previous or the later proceedings could cause prejudice to the public.475 Neither the rule in ­Henderson v Henderson not the principles of res iudicata operate to prevent an employer bringing successive disciplinary proceedings against an employee concerning the same conduct. The first proceedings are not an adjudication within the meaning of these rules of law.476 9.236  Vervaeke v Smith477 concerned an attempt to rely on a judgment of a Belgian court on nullity of marriage as an estoppel per rem iudicatam notwithstanding that a previous decision had been given by an English judge to the opposite effect on the same facts. It was said in the House of Lords that the attempt to claim recognition for the Belgian decree in these circumstances might have been defeated by the application of the rule in Henderson v Henderson.

473 Johnson v Gore Wood & Co [2002] 2 AC 1, 31. 474 See part (F) of this chapter. It was said in Aldi Stores Ltd v WSP London Ltd [2008] 1 WLR 748, para 10, that the fact that the Defendants in the two sets of proceedings were different was not a bar to the proceedings being struck out, but was a potential factor in the application of a broad merits-based approach. The list of circumstances relevant to the application of the rule given by Peter Gibson LJ in Dexter Ltd (In Administrative Receivership) v Vlieland-Boddy [2003] EWCA Civ 14, [2003] All ER (D) 221, para 49, included the possibility of a different defendant in the later proceedings. See above (n 465). 475 See para 9.159. 476 Christou v Haringey LBC [2014] QB 131. 477 [1983] 1 AC 145, 157 (Lord Hailsham LC).

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9.237  Estoppel by Record 9.237  The most usual current way of describing the application of the rule in Henderson v Henderson is to say that a court must apply a broad merits-based approach to its decision on whether the proceedings before it or any part of those proceedings should be struck out as an abuse of the process. The court should take into account all relevant matters and should not take into account any irrelevant matter. It is likely that an appellate court will allow an appeal if a decision has been reached in breach of this last principle.478 9.238  Where a decision has been given after a full trial it is not an abuse of the process for a party to seek in new proceedings a remedy against a legal representative on the allegation that the representative was guilty of negligence in the conduct of the case such that had there not been such negligence the decision might have been different. As Lord Hoffmann has put it: I see no objection on grounds of public interest to a claim that a civil case was lost because of the negligence of the advocate, merely because the case went to a full trial. In such a case the Plaintiff accepts that the decision is res iudicata and binding upon him. He claims, however, that if the right argument had been used or evidence called, it would have been decided differently.479

(K) Summary 9.239  The following summary is designed, as with the summaries at the end of earlier chapters, to provide a brief account of the essential elements of estoppel by record. Inevitably such a summary cannot include many detailed rules and what is stated may be subject to exceptions and on occasions may be subject to some dispute or uncertainty. The order of the summary generally follows the explanation of estoppel by record given earlier in this chapter.

1.  Nature of Estoppel by Record 9.240  Estoppel by record is one of the three estoppels mentioned by Coke in his Commentaries on Littleton in 1628. Its nature is that when a final judgment of a court has been given that judgment binds the parties to it in any subsequent proceedings between the same parties as to what was decided in the previous proceedings.

478 eg, an appeal was allowed where the Judge had failed to take into account the fact that a previous decision by a party not to commence certain proceedings at a particular time was sensible in the circumstances at that time: Aldi Stores Ltd v WSP London Ltd [2008] 1 WLR 748. Although in this case it was said that the ultimate decision of the Judge was not correctly characterised as the exercise of a discretion, nonetheless the principle applied by the Court of Appeal in deciding whether to allow the appeal, that is, a decision based on taking into account a wrong consideration (or failing to take into account a valid consideration), was the application of a test frequently applied by appellate courts when considering the exercise of a discretion, including the principles on which in public law a court will interfere with the discretion exercised by a public body in judicial review and similar proceedings. See also above (n 464). 479 Hall v Simons [2002] 1 AC 615, 705. cf Taylor Walton v David Eric Laing [2007] EWCA Civ 1146, applying Phosphate Sewage Co v Molleson (1879) 4 App Cas 801.

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Summary  9.247 9.241  The justification for estoppel by record is twofold, and is the interest of the state that there should be finality in litigation and the interest of a party to litigation that it should not be troubled twice on the same matter. 9.242  There is no universally agreed overall classification of the principles of estoppel by record. The classification adopted in this chapter, which enjoys significant judicial support, is that the doctrine contains three principles which are (a) cause of action estoppel, (b) issue estoppel, and (c) the rule in Henderson v Henderson which can also be seen as a part of a wider principle that a court will not permit an abuse of its process. The first two principles can be described as two species of estoppel per rem iudicatam or res iudicata. 9.243  The three essential elements of estoppel per rem iudicatam are therefore (a) a final judgment, (b) identity of subject matter in the cause of action or the issue in the previous and the later proceedings, (c) identity of parties or their privies in the previous and the later proceedings. 9.244  An estoppel by record must be distinguished from the possibility of an appeal from a judgment and from the operation of the law of binding precedent or stare decisis whereby a decision of a court establishing a principle of law may bind further courts in later proceedings whether or not the later proceedings are between the same parties or on the same subject matter. 9.245  Estoppel by record applies generally across the whole of civil law. There are two exceptions. (a) The estoppel does not apply to proceedings concerning children where the interests of the child are paramount. (b) There is some limited authority for saying that the estoppel does not apply to judicial review proceedings or other proceedings relating to the actions of public bodies acting under public duties and powers conferred by statute in the public interest or, that if it does apply to such proceedings, it does so in a limited way. The reason is said to be that such proceedings may involve issues which affect the interests of the public generally and not just the interests of the parties to the proceedings.

2. Judgments 9.246  A judgment of a court must satisfy certain criteria before it or a part of it can create an estoppel per rem iudicatam. (a) The judgment must be final, meaning that, leaving aside a possible appeal to a higher court, the judgment cannot be reconsidered by the court which gave it or by a different court of coordinate jurisdiction. (b) The judgment must not be one of a purely procedural nature, often involving the exercise of a discretion, such as the ordering of security for costs or the striking out of an action for want of prosecution. Such judgments can generally be reconsidered by the court as circumstances and facts may change. (c) The judgment must not be vitiated by fraud or collusion or bias of the court giving it. (d) The judgment must be given by a court of competent jurisdiction. 9.247  In order for it to work an estoppel, the judgment need not be ‘on the merits’ if that expression is taken to mean a judgment reached after disputed evidence and arguments. Thus, a judgment by consent or on an agreed assumption or a judgment given in default of pleadings may in principle create an estoppel. The discontinuance of an action does not create an estoppel since there is no judgment. 871

9.248  Estoppel by Record 9.248  The ordinary principles of estoppel by record apply to judgments in personam which are judgments which bind the parties to the action in future proceedings. Certain judgments affecting the status of a person or a thing are judgments in rem and are binding on the whole world. An example of a judgment in rem is a decree of divorce which establishes the status of the parties to the proceedings as unmarried. 9.249  Judgments which can create an estoppel by record are not just judgments given in the ordinary system of civil courts. Judgments of other bodies exercising judicial functions can have this effect even if they are not technically courts of record. Thus, judgments of administrative tribunals, of domestic tribunals and of ecclesiastical courts, can create an estoppel by record. Statute provides that an award of an arbitral tribunal can create an ­estoppel, here sometimes known as estoppel per rem arbitratam.

3.  Cause of Action Estoppel 9.250  Cause of action estoppel is an estoppel which prevents a party to an action from asserting or denying, as against the other party, the existence of a particular cause of action, the non-existence or existence of which has been determined in previous proceedings between the same parties. The previous determination is conclusive of the matter. 9.251  The operation of a cause of action estoppel can be summarised in three propositions. (a) If A in proceedings establishes a cause of action against B, A cannot thereafter bring further proceedings on the same cause of action against B, for instance to obtain some greater damages. (b) If A in proceedings fails to establish a cause of action against B, A cannot thereafter bring further proceedings against B on the same cause of action. (c) If A in proceedings establishes a cause of action against B, both A and B are bound in any subsequent proceedings between them to accept the existence of the cause of action. 9.252  The operation of the first of the three principles is technically brought about by the doctrine of merger, which states that when a judgment has been obtained so as to establish a cause of action that cause of action merges into the judgment. The result is that the cause of action ends and that all that can be enforced in the future is the judgment. 9.253  There are therefore two essential elements in a cause of action estoppel. The first is that the cause of action in the previous and the subsequent proceedings is the same and the second is that the parties to the previous and subsequent proceedings are the same. 9.254  A cause of action means the minimum facts which a party must plead, and prove if not admitted, in order for that party, in accordance with a principle of law, to obtain the particular relief claimed in the proceedings. Facts and circumstances in the two proceedings need not be exactly the same for there to be a cause of action estoppel but they must be at least very similar. 9.255  The requirement of the identity of the parties in the two proceedings is strictly applied. Subject to the rule as to a person being privy to a party to an action, which is summarised below, the parties in the two proceedings must be wholly identical if there is to be a cause of action estoppel and it is not enough, for example, that one person or entity is in reality behind what are separate parties to the two proceedings. 872

Summary  9.263 9.256  A cause of action estoppel does not prevent new proceedings to enforce a new cause of action which arises from a continuing wrong. For example, if a cause of action for a trespass or for an infringement of a right of light is established by a judgment, a new cause of action will in principle arise each day that the trespass or infringement continues following the judgment, such that each new cause of action may be the subject of new proceedings. In practice, a situation of this type is resolved by a court using its power to award ‘equitable damages’ in place of an injunction where the damages can include all future and continuing losses. 9.257  If a cause of action is decided in a judgment at a particular date, and if, under some statutory or other procedure, a court is required to reconsider the cause of action at a later date and on the facts as at that later date, the first judgment does not operate as an estoppel in the later proceedings on the new facts. 9.258  It is possible that a cause of action estoppel which would otherwise operate in subsequent proceedings as a result of a judgment in previous proceedings is in fact prevented from doing so by reason of some other form of estoppel which arose from or at the time of the previous proceedings, such as an estoppel by convention that the earlier judgment would not prevent later proceedings on the same cause of action. This situation has been described as a cross-estoppel.

4.  Issue Estoppel 9.259  An issue estoppel arises when a specific and particular issue is decided in proceedings but when that issue does not by itself decide a cause of action. If in proceedings on a cause of action a separate issue of law or of fact or of mixed law and fact is decided, either upon evidence or upon an admission, neither party can in the same or subsequent proceedings between the same parties assert the contrary of what has been decided on that particular issue. 9.260  There has been some suggestion that an issue estoppel can only arise from the determination of an issue and cannot arise from the determination of some fact or facts relevant to that issue. The better view is that an issue estoppel can arise from the determination of any fact or facts relevant to the proceedings before a court so that a determination of a fact is binding as an issue estoppel on the same parties in any subsequent proceedings between them. 9.261  As with cause of action estoppel, the two essential elements of an issue estoppel are that the issue determined in the previous proceedings is the same as that which arises in the subsequent proceedings and that the parties to the two proceedings are the same. 9.262  The view has been expressed that the requirement of an identity of issue is stricter for issue estoppel than for cause of action estoppel and that an issue estoppel only arises when the issues in the two sets of proceedings are precisely the same. There seems to be no logical reason for a stricter rule as regards issue estoppel and it may be sufficient for the establishment of an issue estoppel that the two issues are the same or at least very similar. 9.263  The strict rule as to identity of parties is the same for issue estoppel as it is for cause of action estoppel. 873

9.264  Estoppel by Record 9.264  The determination of an issue in previous proceedings will only operate as an issue estoppel in subsequent proceedings if that issue was fundamental and not merely collateral to a question before the court in the previous proceedings, and is fundamental and not merely collateral to a question before the court in the subsequent proceedings. 9.265  It is said that while the determination of an issue in previous proceedings may create an issue estoppel for the purposes of subsequent proceedings between the same parties, the reasons for the decision on the issue in the previous proceedings are not a part of the estoppel. 9.266  Provided that an issue has been determined in previous proceedings, it may operate as an issue estoppel in subsequent proceedings between the same parties even though the purpose and general subject matter of the two proceedings are different. The issue estoppel may operate even though the parties have different roles in the two proceedings; for example a party in the previous proceedings may be a plaintiff and in the subsequent proceedings may be a defendant or a third party.

5.  Parties and Privies 9.267  The underlying rule is that the parties to subsequent proceedings must be the same as the parties to previous proceedings if there is to be an estoppel per rem iudicatam, either a cause of action estoppel or an issue estoppel. However, a party to subsequent proceedings will also be bound by what was decided in previous proceedings, or may also take the benefit of what was decided in earlier proceedings, if that party is a privy of a party to the earlier proceedings. 9.268  Privity falls into three categories. (a) Privy of blood, for instance an ancestor and heir under the old law of inheritance. (b) Privity of title or estate, where a person after a judgment acquires property the subject matter of the judgment. (c) Privity of interest. A further category of privity by law is sometimes used to describe certain relationships, such as that between a testator and an executor of a will and a bankrupt and a trustee in bankruptcy which also create privity. 9.269  There is no exact definition of what constitutes privity of interest. The general principle is that, having regard to the subject matter of the dispute, there must be a sufficient degree of interest between a party to previous proceedings and a party to subsequent proceedings to make it just that the party to the subsequent proceedings should be taken to be the privy of the party to the previous proceedings.

6.  Foreign Judgments 9.270  At common law judgments of foreign courts, which for these purposes generally means all courts outside England, Wales and Northern Ireland, are capable of giving rise to an estoppel by record. 9.271  There are two statutory provisions which relate to the common law principle. The first is section 8 of the Judgments (Recognition and Enforcement) Act 1933 which states 874

Summary  9.276 that judgments of foreign courts shall be conclusive between the parties to the judgment in all proceedings in the United Kingdom founded on the same cause of action. This provision repeats the rules at common law. 9.272  The second statutory provision is section 34 of the Civil Jurisdiction and Judgments Act 1982 which provides that no proceedings can be brought by a person in a court in England, Wales and Northern Ireland on a cause of action in which a judgment has been given in his favour in proceedings brought by the same person or his privies in Scotland or in an overseas country. This provision overrides the rule that cause of action estoppel did not prevent further proceedings on a cause of action in this country by a person who had succeeded in establishing that cause of action in a foreign judgment, since the application of that aspect of cause of action estoppel in this country depends on the technical principle of merger, that is the principle that a cause of action merges in a judgment which establishes it and so ends and cannot be sued upon again. The principle of merger did not apply to foreign judgments, leading to the result that this aspect of cause of action estoppel did not apply to foreign judgments in subsequent proceedings in English courts. 9.273  The general rules as to the type of judgment which can create an estoppel govern foreign judgments as they do judgments in this country so that, for example, the foreign judgment must be final and certain before it can operate as an estoppel in this country and there must be the same identity of subject matter and of parties if a judgment of a court in a foreign country is to operate as an estoppel in subsequent proceedings in this country.

7. Exceptions 9.274  The general principle is that an estoppel per rem iudicatam, once its essential elements have been established, is absolute in its effect. A court does not have any general discretion not to apply the estoppel. Nonetheless, there are two general but limited exceptions, one applicable to cause of action estoppel and the other applicable to issue estoppel. 9.275  In summary, the exceptions are as follows. (i) In the case of cause of action ­estoppel once a point has been decided in a judgment, the operation of the estoppel is absolute in respect of that point and that point cannot be reopened in any subsequent proceedings relating to the same cause of action between the same parties and their privies. (ii) In the case of cause of action estoppel, a new point, not decided in the previous proceedings, may be taken so as to challenge the previous decision on the cause of action provided that the new point could not reasonably have been taken at the time of the previous proceedings. (iii) In the case of issue estoppel, a point may be reopened, whether or not the point had been decided in the previous proceedings, provided (a) there is some further material not before the court at the time of the previous decision, and (b) the further material could not have been discovered in the previous proceedings by the exercise of reasonable diligence. 9.276  There is a further specific rule that an English court will not allow a judgment of a foreign court to operate as an estoppel per rem iudicatam when the effect of that judgment is contrary to public policy in England. 875

9.277  Estoppel by Record

8.  The Rule in Henderson v Henderson 9.277  The rule in Henderson v Henderson derives from the judgment of Wigram V-C in the decision of that name in 1843. It is a principle of law that where a party in later proceedings wishes to raise a cause of action or a defence or an issue or some other matter or contention, that party may be prevented from doing so on the basis that to do so would be an abuse of the process of the court where the matter could and should have been raised in earlier proceedings on the same general subject matter to which that person, or some other person with whom he has a close connection, was a party. 9.278  If it is shown that the matter in question both could and should have been raised in previous proceedings, the exclusion from reliance on the matter in later proceedings is not automatic and there will only be an exclusion of the matter if the later court, having considered all of the circumstances, decides that it is proper for there to be an exclusion of the matter. The function of the court is to apply a broad merits-based approach taking into account all relevant considerations. 9.279  There has been some discussion in the authorities on whether the rule in ­Henderson v Henderson is a principle of res iudicata or is a separate principle. Perhaps the best analysis is that the rule and res iudicata are distinct though overlapping legal principles with a common underlying purpose of limiting abusive and duplicative litigation.

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GLOSSARY The purpose of this glossary is to provide a short definition or explanation of legal words and expressions which feature frequently in this book. A fuller explanation is given in the text of relevant chapters in all or nearly all cases. The doctrine of estoppel is a subject which spans most of civil law and can sometimes only be understood by reference to expressions used in the context of other areas of law to which an estoppel is or may be applied. Consequently, the definitions in this glossary can be divided into two categories, namely (a) words and expressions which are mainly confined to the law of estoppel which constitute the greater part of the glossary, and (b) a few words and expressions used in other areas of law but which need to be explained if the effect of estoppel, particularly as regards those other particular areas of law, is to be understood. The main descriptions commonly given to forms of estoppel are given in this Glossary. A fuller description of the 23 names sometimes used to describe forms or groups of estoppels is provided in chapter one, paragraph 1.6 et seq. Abandonment

A rule of law whereby a party who suffers repeated breaches of covenant, such as breaches of a restrictive covenant, over a long period, usually a period of 20 years or more, but takes no action to assert its rights is held to have impliedly and permanently abandoned those rights so as to make them unenforceable in the future. One way of describing this rule is to call it a process of waiver.

Accord and satisfaction

Where B owes a specific obligation to A and A promises to accept some different form of performance of the obligation as the satisfaction of it there can be said to be an accord and satisfaction which discharges the original obligation, the accord being the promise to accept the substituted performance and the satisfaction being the performance of the substituted obligation. If there is consideration for the promise of A the accord and satisfaction constitutes an enforceable contractual variation. If there is no consideration for the promise by A then there is no enforceable promise in accordance with the law of contract so that there is no accord and satisfaction. It is possible in the latter case that if B acts in reliance on the promise to his detriment there would arise a promissory estoppel under which A is bound to his promise despite the absence of consideration.

Acquiescence

Passive conduct, such as the absence of protest or action, by the owner of legal rights which are infringed by another party. The acquiescence may constitute an implied assurance and so a form of assurance which is an essential element of proprietary estoppel. Proprietary estoppel is sometimes called estoppel by acquiescence but may also often be founded on an express assurance such as an express promise or representation.

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Glossary Admiralty action in rem

In an action claiming damages against the owner of a ship the claimant may detain the ship, or another ship of the same owner, to stand as a security for the payment to the claimant of any sum ordered in the action. For the purposes of estoppel per rem iudicatam the action is taken to be an action against the owner of the ship and not against the ship itself. This may be significant for the requirement of identity of parties in such an estoppel.

Approbate or reprobate

A description of the giving effect to the principle of equitable election.

Assurance

A statement, which may be an express or implied promise or representation, or may be an inference from acquiescence, which, subject to the satisfaction of other elements of the estoppel, brings about a proprietary estoppel.

Bare licence

A licence granted otherwise than in return for valuable consideration.

Cause of action

The minimum or essential facts which must be proved or admitted if a party is to obtain, in accordance with a principle of law, some remedy or relief from a court.

Cause of action estoppel

A principle of estoppel by record which operates when a court has decided that a cause of action either does or does not exist in favour of one party against another and which then prevents both parties from asserting the contrary of the decision in any further proceedings between them. It is to be contrasted with issue estoppel.

Civil Procedure Rules (CPR)

The Civil Procedure Rules are the rules of procedure which since 1999 have governed the procedure in the Court of Appeal, the High Court and the county court. They replaced the former Rules of the Supreme Court (RSC).

Clean hands

A principle under which a party is refused a discretionary equitable remedy such as an injunction because of unmeritorious conduct by that party in connection with the subject matter of the legal proceedings.

Coke on Littleton

A part of the legal writings of Sir Edward Coke, an eminent lawyer in the seventeenth century. In 1628 he published an elaborate Commentary on Littleton’s Tenures which contained a reference to the forms of estoppel which then existed, namely estoppel in pais (from which estoppel by representation was developed), estoppel in writing (from which estoppel by deed was developed) and estoppel by record. Sir Thomas Littleton published in 1481 his account of Tenures of Land, written in Law French.

Common assumption

An assumption of law or fact held in common by the parties to an existing transaction or relationship between them. The assumption becomes a shared assumption when it has crossed the line so that each party is aware that the same assumption is held by the other party or parties. A shared assumption is an essential element of an estoppel by convention.

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Glossary Common law election

A principle to the effect that when a party has two or more inconsistent rights or remedies, and chooses to exercise one of them and communicates that decision to the other party or parties, the party who has made the choice is then prevented from asserting any other of the alternative rights or remedies.

Common law estoppels

The four forms of estoppel which were mentioned by Coke in his Commentaries on Littleton’s Tenures or which are derived from one of those forms of estoppel, namely estoppel by representation, estoppel by deed, estoppel by convention and estoppel by record.

Consideration

A promise, unless contained in a deed, is only enforceable as a part of a contract if it is supported by consideration which moves from the promisee. The consideration is either a benefit to the promisor or a detriment to the promisee.

Constructive knowledge

Knowledge of some matters is an essential requirement for the operation of certain principles, an example being that an election by a landlord on whether to enforce a right of forfeiture for breach of covenant by a tenant can only have effect if the landlord knows of the breach. In such cases actual knowledge is obviously sufficient but so is constructive knowledge which means that knowledge which would be available to a person who had carried out reasonable investigations. Imputed knowledge is also usually sufficient in such circumstances.

Constructive trust

A category of trusts where the trust is not expressly created and as to which no comprehensive description of the circumstances which give rise to the trust can be given. The two forms of constructive trust which may be important for an aspect of proprietary estoppel are joint venture and common intention constructive trusts.

Contractual estoppel

A contract may contain a provision that a particular fact, or possibly a principle of law, is to be taken to apply to the operation of the contract. Such a provision is enforceable under the ordinary law of contract but the giving effect to the provision is sometimes described as a contractual estoppel or an estoppel by contract.

Contractual licence

A licence given for valuable consideration and so as a part of a contract.

Court of record

Court of records were formerly courts, such as the old Court of King’s Bench and the old Court of Common Pleas, where a formal record on parchment was kept of the court proceedings and judgments and where the Court had power to fine or imprison persons for contempt. Today a variety of courts and tribunals, such as county courts and the Upper Tribunal, are designated courts of record by statute. The designation of a court of record may once have been important for the purposes of the judgments of the court operating by way of an estoppel per rem iudicatam, but today such an estoppel can arise from judgments of courts and tribunals even where they are not technically a court of record.

879

Glossary Covenant

A promise contained in a deed. A covenant is enforceable even if not supported by valuable consideration.

Cross-estoppel

When an estoppel by record arises from a judgment of a court or tribunal which would otherwise bind the parties in any further proceedings between them, a further form of estoppel, such as an estoppel by convention, may arise which has the effect that the estoppel by record does not operate. The further form of estoppel is called a cross-estoppel.

Crossing the line

An estoppel by convention depends on the existence of an assumption which is common to the parties to an existing transaction or relationship between them in the sense that all parties hold the same assumption. For the assumption to found an estoppel by convention it is also necessary that each party becomes aware that the other party or parties hold the same assumption. The process or communication which brings about the sharing of the assumption in this sense is called the crossing of the line.

Crystallisation

The result of an order of a court which gives effect to the rights of a party who can establish a proprietary estoppel. The order may be for the grant of an interest in property to that party or some other order such as the payment of a sum of money to that party.

Deed

A written document which complies with certain formalities such as sealing by a company or signing and witnessing if by an individual person. The essential requirements of a deed are now contained in section 1 of the Law of Property (Miscellaneous Provisions) Act 1989. A valid deed is essential if there is to be an estoppel by deed. A promise made in a deed (a covenant) is enforceable even if not supported by valuable consideration.

Detriment or prejudice

Detriment means an actual or potential adverse effect which has been or may be suffered by a party as a result of the conduct of that party in reliance on a statement made to it. Prejudice has the same meaning. Detriment is an essential element of reliance-based estoppels.

Doctrine of merger

A technical doctrine under which when a party has obtained a judgment in its favour establishing a cause of action the cause of action is merged in the judgment. The merger is said to prevent the subsequent assertion of the same cause of action against the same party and so constitutes an aspect of cause of action estoppel. The doctrine of merger is sometimes described as ‘judgment recovered’.

Equitable damages

Damages assessed in place of a discretionary equitable remedy such as an injunction. Equitable damages have the characteristic that they take into account likely events in the future which will amount to an unlawful act and so a continuation or repetition of an initial wrong, such as a continuing trespass or a continuing infringement of a right of light.

880

Glossary Equitable election

A principle of equity to the effect that when a party receives a gift such as under a deed of gift or under a will, and where that gift has some burden attached to it to be put into effect by the donee or beneficiary, that donee or beneficiary must elect either to accept what has been given and give effect to the burden (that is to approbate the gift) or to refuse the gift in its entirety and not suffer the burden (that is to reprobate the gift).

Equitable estoppel

An expression which describes proprietary estoppel and promissory estoppel, both of which have their origins wholly or partly in the principles developed by the former Court of Chancery.

The ‘equity’

An expression which denotes the right or rights of a person who can establish the essential elements of one of the two forms of equitable estoppel. The court has a wide discretion over how to give effect to the equity, especially in the case of proprietary estoppel. The relief awarded by the court is said to be that which will ‘satisfy’ the equity.

Estoppel

A general doctrine of law under which a party is in limited circumstances bound to the correctness of a statement, such as a statement of fact or a promise or an assurance, which that party has made to another party. The doctrine is applied in five main forms of estoppel, estoppel by representation, estoppel by deed, estoppel by convention, promissory estoppel and proprietary estoppel. Each of these forms of estoppel has a somewhat different requirement which has to be satisfied before the party who has made a statement is bound by virtue of the estoppel to the correctness of that statement. Estoppel by record is a further form of estoppel which stands outside the above description and depends upon a party being bound by a judgment of a court in proceedings to which it was a party in any later proceedings between the same parties.

Estoppel by acquiescence

A description which is sometimes used as a name for proprietary estoppel.

Estoppel by convention

A form of estoppel which arises when parties to an existing transaction or relationship have a shared assumption of law or of fact relating to that transaction or relationship and one party to the transaction or relationship acts in reliance on the assumption such that it would be unconscionable to allow the other party to resile from the correctness of the assumption.

Estoppel by deed

A form of estoppel which arises when a statement of fact or of mixed law and fact is contained in a deed such that a party to the deed is then bound by the truth of that statement as regards any other party to the deed.

Estoppel by expectation

A further description which is sometimes applied to proprietary estoppel.

Estoppel by negligence

A form of estoppel by representation when the representor has acted negligently in stating, or more usually in failing to state, some matter.

881

Glossary Estoppel in pais

One of the three forms of estoppel described by Coke in his Commentaries on Littleton’s Tenures published in 1628. It means literally estoppel in the country and binds a party to the correctness of some formal action such as a partition of a property or the acceptance of an estate. Estoppel by representation developed out of estoppel in pais.

Estoppel per rem iudicatam

A compendious description of the two main principles of estoppel by record, namely cause of action estoppel and issue estoppel. The two principles are sometimes described as res iudicata.

Estoppel by record

A form of estoppel which arises from a judgment of a court or tribunal and which prevents the parties to the proceedings and their privies from contradicting the effect of the judgment in any further proceedings between them. Estoppel by record consists of three principles which are (a) cause of action estoppel, (b) issue estoppel, and (c) the rule concerning abuse of process called the rule in Henderson v Henderson. The last principle stands outside the other two principles in that it normally applies so as to prevent a party to proceedings from raising some matter which that party could and should have raised in previous proceedings between the same parties.

Estoppel by representation

A form of estoppel which arises when (a) A makes a representation of an existing matter to B, (b) B acts in some way to its detriment on reliance on the representation, and (c) it would be unconscionable to allow the representor to resile from the correctness of the representation.

Estoppel by silence

An estoppel which arises when there can be inferred from the silence of a party a representation or a promise or an assurance. Such an inferred statement will usually arise when the person against whom the estoppel is alleged has a duty, either legal or moral, to disclose some matter but fails to do so. An estoppel by silence is therefore a variety of either estoppel by representation or promissory estoppel or proprietary estoppel. For the purposes of proprietary estoppel silence or inactivity is often called acquiescence.

Expectation and entitlement

It is fundamental to the law of proprietary estoppel as currently understood that a person claiming the benefit of such an estoppel must show that as a result of an assurance given that person was reasonably led to hold an expectation of an entitlement to an interest or rights in land.

Final judgment

An estoppel per rem iudicatam can be founded only on a final judgment of a court or tribunal. A judgment is final when it cannot be varied, reopened, or set aside by the court which decided it or by a court of coordinate jurisdiction. A judgment may be final in the above sense if it is final on a particular matter, such as on a preliminary issue, even if other matters remain to be determined in the proceedings as a whole.

882

Glossary The five probanda

The five requirements which, according to the formulation of Fry J in Willmott v Barber (1880) 15 Ch D 96, have to be satisfied if a legal interest in land is to be removed or overridden in accordance with a principle of equity. The probanda are not today regarded as a rigid requirement for the operation of proprietary estoppel but merely as a guide.

Forfeiture

A process by which the interest or rights of a party are determined at the election of another party usually by reason of a breach of some obligation by the first party. Forfeiture is a way by which a lease may be determined as a consequence of a breach of obligation by the tenant. A right of forfeiture may be lost by the operation of common law election and the detailed rules which govern that form of election have to some extent been developed as the result of the law of forfeiture. An election not to forfeit a lease is often described as a waiver of forfeiture.

Implied trust

An expression which may mean (a) a resulting trust or a constructive trust, or (b) only a resulting trust.

Imputed knowledge

Knowledge of some matters is an essential requirement of the operation of certain principles, an example being that an election by a landlord on whether to enforce a right of forfeiture of a lease for breach of covenant by the tenant can only take place if the landlord knew of the breach. In such circumstances actual knowledge is obviously sufficient but so is imputed knowledge which means knowledge by a person acting for the landlord, such as an agent or an employee, where that person has a duty to pass on what is known to his principal or employer. Constructive knowledge is also usually sufficient.

Inchoate right

An expression used to denote the entitlement of a person who has satisfied the essential elements of a proprietary estoppel but has not yet obtained an order of the court which gives effect to the estoppel such as by the vesting of an interest in that person. An order of a court giving effect to the estoppel is said to crystallise the inchoate right.

Issue estoppel

A principle of estoppel by record which applies when a court has decided a specific issue between parties to proceedings which then prevents the parties and their privies from challenging the correctness of that decision in any further proceedings between them. It is to be contrasted with cause of action estoppel.

Iura in re aliena

Rights in or over land, not involving a right to possession of the land, owned by persons such as a right of way or the right to enforce a restrictive covenant against land. Such rights are sometimes called third-party rights. They are also sometimes called incorporeal hereditaments.

Judgment in personam

A final judgment of a court which operates as an estoppel per rem iudicatam as between the parties to the proceedings and their privies but does not bind other persons who are known as strangers to the proceedings.

883

Glossary Judgment in rem

A final judgment of a court which binds not only the parties and their privies but also binds the whole world because it establishes the status of some person or thing, for example a decree of divorce.

Judgment recovered

An expression which denotes that a cause of action which has been established in a final judgment of a court is merged in that judgment, the process sometimes being described by the Latin expression ‘transit in rem iudicatam’. Judgment recovered is a description for the operation of the doctrine of merger.

Judicial review

A procedure, now governed by Part 54 of the Civil Procedure Rules, whereby the High Court can quash or otherwise deal with decisions and actions of administrative bodies and inferior courts and tribunals, usually by reason of an error of law or a procedural irregularity. Judicial review is to be distinguished from an appeal.

Laches

The principle by which a party is deprived of a discretionary equitable remedy such as an injunction or specific performance because of the delay of that person in seeking the remedy.

Land registration and land charges

Two statutory systems under which interests or rights in land have to be registered on a centrally administered register such that failure to register an interest or right may render it unenforceable against a purchaser of the land involved. The first system is registration of encumbrances as land charges against the name of the estate owner of the land under the Land Charges Act 1972. The second system is registration of title and of encumbrances under the Land Registration Act 2002. Registration or a failure to register may be important when it comes to the assertion of an estoppel, particularly a proprietary estoppel, against successors in title to land.

Licence

A permission given by the owner of an interest in land which allows another person to enter or occupy the land but without the creation of any proprietary interest in the land.

Minimum equity

A principle which indicates that when a court gives effect to a promissory or proprietary estoppel it will decide on the minimum order in favour of a claimant to the estoppel which satisfies the requirements of justice and prevents an unconscionable result.

Mixed law and fact

An imprecise expression which denotes a statement which contains components of both law and fact. It was formerly considered that a common law estoppel by representation had to be founded on a statement of fact or of mixed law and fact but recent authority suggests that a statement of pure law may be sufficient. An estoppel by deed can arise only from a statement in the deed of fact or of mixed law and fact.

Mutuality

It was said by Coke that all estoppels are mutual. The main practical example of this characteristic is that a final judgment of a court which creates an estoppel per rem iudicatam operates so as to bind all parties to the proceedings whether they have or have not succeeded in the proceedings.

884

Glossary Objective test

The ascertainment of some matter, such as the intention of a party making a statement or the meaning of a statement, by asking what intention or meaning would be concluded to exist by a reasonable person with knowledge of all relevant facts. An objective test is applied to a number of matters in the law of estoppel. The correctness of some matter, so objectively determined, may be different from the actual and subjective intention of the maker of a statement.

Practical consideration

A theory that a promise may be enforceable even in the absence of consideration in the normal sense if the promisor thinks that he may obtain some practical benefit from the promise. For instance, a creditor may agree to accept a sum less than the whole amount due to him because he believes that this will be more beneficial to him than an attempt to recover the full amount. Such an approach appears to subvert well-established principles such as the rule in Pinnel’s Case and recent observations in the Supreme Court suggest that the whole question needs to be looked at again by that Court.

Privy

A person who has such a close connection to a party to a judgment of a court or tribunal that that person obtains the same benefit or bears the same burden of the operation of estoppel per rem iudicatam as does the party to the judgment. Privies are either (a) by blood (ancestor and heir), (b) by estate or title (for example, successors in title to land or the executors of a will), or (c) by interest (some close connection with the previous proceedings in which the judgment was given or with a party to those proceedings).

Promise

A statement by a party as to future conduct by that party intended to be taken seriously. A promise may in certain circumstances be the foundation of a promissory estoppel or a proprietary estoppel. It is to be distinguished from a representation which is a statement of some existing matter or past event.

Promissory estoppel

A form of equitable estoppel which arises when a party to a transaction or relationship containing legal rights promises not to enforce, or not fully to enforce, such a right against the other party and the other party acts to its detriment or prejudice in reliance on the promise such that it would be unconscionable to allow the promisor to resile from the promise.

Proprietary estoppel

A form of equitable estoppel which arises when A, the owner of land, gives an assurance to B that creates in B an expectation of an entitlement to an interest in or a right over the land and B in reliance on the assurance acts to his detriment or prejudice such that it would be unconscionable to allow A to resile from the assurance. A court may give effect to the estoppel by ordering that an interest in the land or rights in the land are vested in B or that some other recompense is made to B. It is probable that a proprietary estoppel can also operate in respect of rights in chattels and other rights.

885

Glossary Proprietary interest

An interest or rights in or over land which are in principle, and subject sometimes to land registration, binding on successors in title of the land affected.

Pro tanto operation

The possibility that an estoppel by representation may operate so as to prevent the representor from resiling from a part of the representation made but allowing him to resile from the remainder of it. A pro tanto operation of the estoppel in this sense is likely to arise where it would be unconscionable to allow the representor to resile from the whole of his statement but not unconscionable to allow him to resile from a part of it.

Quasi-estoppel

A description, not generally used today, which has been sometimes given to promissory (and possibly proprietary) estoppel.

Ratio decidendi

A principle of law established and applied by a court for the purposes of reaching a decision on a case before the court. The ratio decidendi may be binding in any further proceedings under the doctrine of precedent or stare decisis. A ratio decidendi is to be contrasted with an obiter dictum which is a statement made in a judgment not necessary for the decision which the court has to make. An obiter dictum is not binding as a precedent.

Representation

A statement of some existing matter or past event which may form the foundation of an estoppel by representation. It is to be distinguished from a promise, which necessarily looks to the future and may be the foundation of a promissory estoppel, and an assurance, which may take the form of a promise or representation and which may found a proprietary estoppel.

Reliance

The causal relationship between the conduct of a party who asserts a reliance-based estoppel and the statement which forms the foundation of that estoppel. The statement must be at least one of the factors which influenced the conduct.

Reliance-based estoppels

The forms of estoppel, being estoppel by representation, estoppel by convention, promissory and proprietary estoppel, where conduct in reliance on a representation or promise or assurance or shared and communicated assumption is an essential element of the estoppel.

Repudiation

A principle under which a party to a contract obtains a right to treat the contract as at an end by reason of a serious breach of contract by the other party. A party may decide to affirm, rather than repudiate, the contract and if this decision is communicated to the other party it operates as a common law election preventing the innocent party from thereafter treating the contract as repudiated. The principle of common law election is often illustration by decisions on repudiation of a contract.

Res iudicata

An expression which has the same meaning as estoppel per rem iudicatam.

886

Glossary Restitution

A principle or principles of law under which a sum of money or other asset may be recovered even in the absence of any contractual right of recovery, an example being the recovery of money paid under a mistake of fact or law. The principle is sometimes called unjust enrichment or quasi-estoppel.

Resulting trust

A trust which arises for the benefit of a person who has created an express trust when the purposes for which that trust was created fail.

Shared assumption

An assumption of law or fact held in common by the parties to an existing transaction or relationship where the assumption is communicated between the parties, that is has crossed the line, such that it obtains the status of a shared assumption and so can be the foundation of an estoppel by convention.

Stare decisis (or precedent) Under the English system of precedent the ratio decidendi of a decision of a court may be binding in later cases before other courts. The doctrine is sometimes called stare decisis (to stand by what has been decided). Substantiality

A rule, probably of general application, that when some matter of fact has to exist in order for there to be an estoppel that matter must reach a minimum or threshold level of significance if the estoppel is to be made out. Examples are the significant influence of a statement as a cause of conduct following the statement, or a significant level of detriment, or a significant risk of future detriment, needed to found certain estoppels. There is no overall articulation of this rule and slightly different language is applied to the requirement of substantiality in this sense for the purposes of different components of different estoppels. Substantiality is a description of this rule as used in this book.

‘Sword or shield’

A supposed rule that estoppel can be used only in defending or resisting a claim (as a shield) as opposed to asserting a claim (as a sword). The true rule is that an estoppel, apart from a proprietary estoppel, cannot be used as constituting by itself a cause of action but can be used either in support of or in resisting a separate cause of action. Proprietary estoppel alone can be used as a cause of action in and by itself.

The rule in Henderson v Henderson

A rule, originating in the decision of Wigram V-C in Henderson v Henderson (1843) 3 Hare 100, where on grounds of public policy or an abuse of the process a party to legal proceedings is prevented from relying on some matter which that party could have raised in previous proceedings but which was not so raised. It is treated in this book as one of the three principles which constitute estoppel by record.

The rule in Pinnel’s Case

A rule, based on the decision in Pinnel’s Case (1602) 5 Co Rep 117a, that when A owes a specific sum of money to B, a promise by B to accept a lesser sum in discharge of the whole sum is unenforceable so that B may sue for any part of the sum which has not been paid. The reason is that there is no consideration for the promise of B. In certain circumstances the promise by B may become enforceable by virtue of a promissory estoppel.

887

Glossary The rule in Stilk v Myrick

A rule, based on the decision in Stilk v Myrick (1809) 2 Camp 317, that when B owes a legal obligation to A and A promises some additional benefit to B in return for the performance of that obligation B cannot thereafter enforce that promise against A. The reason is that there is no consideration for the promise by A since the performance or promise of performance of an existing obligation is not valuable consideration.

Tenancy at will

A tenancy of land for no specific duration but which may be determined at any time and immediately by notice given by either party.

Third-party rights

An expression which usually bears the same meaning as iura in re aliena.

Unconscionability

A situation which must be established as that which would arise if the maker of a statement is permitted to resile from the correctness of what has been stated. Unconscionability in this sense is an essential element of the four reliance-based estoppels. Unconscionability is usually established by the fact that the recipient of the statement has acted in reliance on that statement such that that person would suffer detriment or prejudice if the maker of the statement could resile from it. There is no exact description of unconscionability but it is usually taken to be that which is morally reprehensible or would shock the conscience of the court. That which is unconscionable may be distinguished from that which is merely unreasonable.

Waiver

A word which usually means (a) any giving up of a legal right by reason of the operation of some separate principle of law, whether estoppel or some other principle, or (b) the effect of the principle of common law election. It is uncertain whether there is some further separate principle of waiver which does not fall within either of these two categories.

888

INDEX abandonment of estoppel by deed, 4.56 abandonment of rights, 2.109 common law election, 8.119, 8.141 waiver, 1.68, 2.204, 2.211 implied abandonment, 2.206, 2.215 abuse of process: common law election, 8.28 estoppel by record, 9.7, 9.11, 9.58 see also rule in Henderson v Henderson accord and satisfaction: rule in Pinnel’s Case, 6.47 acquiescence: estoppel by acquiescence, 1.6, 1.8, 1.24 see also proprietary estoppel estoppel by convention, 5.60–5.61 proprietary estoppel: assurance by estopped party, 7.113–7.116 Actionstrength case, 2.141–2.144 admiralty actions in rem, 9.23–9.27, 9.30 admissions: estoppel by representation, 3.70–3.73, 3.230 administrative law, see public law agency by estoppel, 1.7, 3.46 estoppel by representation, relationship with, 1.17 see also apparent authority Amalgamated Property Co v Texas Bank, 5.9–5.11 apparent authority, 3.46 see also agency by estoppel appeals: estoppel by record, 9.5 time limits, 9.5 precedent and, 9.5 proprietary estoppel, 7.307 reliefs, form of, 7.307 statements of fact and of law, 3.26 approbate and reprobate doctrine: common law election, 8.9, 8.27–8.28 equitable election, 1.37, 8.1, 8.9 validity of bills of sale, 2.149 arbitration proceedings: election, doctrine of, 8.54 estoppel by record, 9.16, 9.169–9.170 issue estoppel, 9.98 moral duty to provide information, 3.60–3.64, 6.132

assumed statement of facts or of law: estoppel by convention, 5.5, 5.22 assumption and contract distinguished, 5.43 assumption and promise distinguished, 5.43 assumption that agreement is binding, 5.30–5.36 clarity requirement, 5.40 method of proof, 5.41–5.42 nature of the assumption, 5.28–5.40 need for specific assumption, 5.37 proof of assumption, 5.40–5.43 reason for assumption, 5.38–5.39 relating to existing transaction, 5.44–5.51 shared assumption, 5.5, 5.22, 5.23, 5.68 acquiescence, 5.60–5.61 ‘crossing the line rule’, 5.52–5.59 foreseeability, 5.67 intention, 5.65–5.66 mental component, 5.62–5.68 assurance: burden of proof, 7.195–7.204 certainty of land and of interest, 7.183–7.185 certainty of interest, 7.192–7.194 extent of land, 7.186–7.191 clarity: clear enough test, 7.141–7.147 detriment: benefit to maker of assurance, 7.238–7.242 expectation created: agreements ‘in honour only’, 7.135 entitlement, 7.125–7.131 events following an assurance, 7.136–7.137 expectation of interests in land, 7.121–7.124 reasonable expectation, 7.138–7.140 subject to contract agreements, 7.132–7.134 knowledge of giver of assurance, 7.156–7.157 knowledge of claimant’s actions, 7.162–7.168 knowledge of claimant’s mistake, 7.169 knowledge of detriment, 7.170 knowledge of expectation, 7.161 knowledge of rights, 7.158–7.160 necessary knowledge, 7.171–7.172 objective test, 7.148, 7.155 intention of giver of assurance, 7.149–7.150 meaning of assurance, 7.151–7.154 proprietary estoppel, 1.53–1.54, 7.104 acquiescence, 7.113–7.116

889

Index assurance of law, 7.112 burden of proof, 7.195–7.204 certainty of land and of interest, 7.183–7.194 clarity, 7.141–7.147 expectation created, 7.121–7.140 express assurance, 7.107 implied assurance, 7.107 intention of giver of assurance, 7.117–7.7.120, 7.149–7.150 knowledge of giver of assurance, 7.156–7.172 limitations, 7.109–7.110 objective test, 7.148–7.155 principal and agent, 7.108 revocation, 7.173–7.182 time of assurance, 7.111 types of assurance, 7.105–7.108 purpose of proprietary estoppel, 7.266–7.269 revocation, 7.173–7.175, 7.179–7.182 time of revocation, 7.176–7.178

reliance, 7.217–7.228 standard of proof, 7.195 reliance, 7.217–7.228 capacity: estoppel by record, 9.126 mental incapacity, 2.158 minors, 2.157 causation, 6.182 estoppel by representation, 3.114 cause of action estoppel, 1.6, 9.64–9.66 counter-estoppels, 9.88 cross-estoppels, 9.84–9.87 exceptions, 9.198–9.199 identifying subject matter, 9.71 categories of decisions, 9.82 continuing breaches, 9.72–9.73 defences, 9.83 judgments on facts at a specific time, 9.79–9.81 meaning, 9.74–9.78 merger doctrine, 9.67 see also estoppel by record causes of action: separate causes of action, 1.62, 2.3, 2.13–2.36 sword or shield question, 2.13–2.16 see also sword or shield question chattels: bailments of chattels, 4.98 estoppel by representation: ownership of chattels, 2.273–2.275 proprietary estoppel, 2.198, 2.250 child protection: estoppel by record, 9.140, 9.160 Civil Jurisdiction and Judgments Act, 9.186–9.191 Civil Procedure Rules (CPR), 3.71, 8.45 ‘clean hands’ doctrine, 7.61, 7.294 Cobbe v Yeoman’s Row Management Ltd, 7.33–7.38 collusion, see fraud common assumption: crossing the line, 1.19, 1.40, 5.23, 5.42, 5.52–5.59 estoppel by convention, 2.168, 5.5–5.6, 5.23, 5.42, 5.43 India Steamship case, 5.18 estoppel by representation: contractual estoppel, 3.197, 3.202 public policy, 2.164 uniform doctrine of estoppel, 2.164, 2.168. 2.174–2.177 see also shared assumption common law: estoppel, conflict with, 2.159–2.160 public policy, 2.161–2.164

bare licences: proprietary estoppel, 7.304–7.306 bills of sale: statutory provisions and estoppel, conflict between, 2.149 blameworthiness, 9.95 breach of duty: silence and promises, 6.128–6.129 breach of duty of care: estoppel by negligence, 3.209 breach of duty to speak, 3.55, 3.58, 3.60–3.64 promissory estoppel, 6.128–6.129 legal duty of disclosure, 6.130–6.131 moral duty to speak, 6.132 breach of legal duty, 3.58 silence and promises, 6.130–6.131 breach of moral duty: silence and promises, 3.60–3.64, 6.132 burden of proof: assurance, 7.195–7.204 common law election: decision to elect, 8.61 knowledge, 8.76, 8.85–8.86 estoppel by record, 9.15 estoppel by representation, 3.83 intention of the representor, 3.108–3.109 unconscionability, 3.146 promissory estoppel, 6.187–6.189 methods of proof, 6.190 reliance, 6.187–6.189, 6.235 standard of proof, 6.187–6.189 proprietary estoppel, 1.60, 7.195, 7.328–7.329 assurance, 7.195–7.204 detriment, 7.249 matters requiring proof, 7.196–7.204

890

Index  common law election, 1.7, 1.38, 8.2, 8.3, 8.101–8.104, 8.133–8.141 acceptance of a repudiatory breach of contract, 8.4, 8.11 continuing and repeated breaches, 8.18–8.20 future rights, 8.18 application, 8.4, 8.12 communication of the decision, 8.87 clear and unequivocal communication, 8.88–8.92 inactivity, 8.94–8.96 reservation of rights, 8.97–8.99 silence, 8.94–8.96 termination of a contract, 8.93 contractual provisions affecting election, 8.105 contractual rights of termination, 8.110–8.115 express provisions on election, 8.106–8.109 Crown, against the, 8.17 decision to elect: burden of proof, 8.61 communication of the decision, 8.87–8.99 intention, 8.56–8.60 need for decision, 8.55 objective test, 8.56–8.60 detriment, 8.100 essential elements, 8.24–8.26 inconsistent rights and remedies, 8.31–8.39 remedies, 8.31–8.53 rights and remedies, distinguishing between, 8.40–8.42 statutory provisions, 8.54 time of election, 8.43 estoppel by record, relationship with, 8.23 expanding the doctrine, 8.27–8.30 inference of new contract/relationship, 8.22 irrevocability, 8.21 knowledge, 8.62 burden of proof, 8.76, 8.85–8.86 constructive knowledge, 8.68–8.71, 8.82–8.84 imputed knowledge, 8.72–8.75, 8.82–8.84 knowledge of facts, 8.63–8.76 knowledge of rights, 8.77–8.86 rule of law, 8.63–8.67, 8.77–8.81 loss of rights, 8.116–8.120 origins, 8.13 promissory estoppel, relationship with, 8.121–8.128 public authorities, against, 8.17 reliance, 8.100 remedies, 8.53 ambit of election, 8.50–8.52 inconsistent rights and remedies, 8.31–8.39 procedural steps, 8.45–8.49 rights distinguished, 8.40–8.42 time of election, 8.43 waiver defined, 8.4

waiver of forfeiture, 2.204, 2.206, 2.208, 8.4, 8.11 waiver, as a form of, 8.16 see also election, doctrine of common law estoppels, 1.6, 1.14, 1.36 estoppel by convention, see estoppel by convention estoppel by deed, see estoppel by deed estoppel by record, see estoppel by record estoppel by representation, see estoppel by representation promissory estoppel, relationship with, 6.31 statements of fact and of law, 6.31–6.33 conduct: estoppel by representation, 1.15 estoppel by silence, 3.55–3.64 false statements, 3.64 proprietary estoppel, 1.15, 7.294–7.296 consent: cause of action estoppel, 9.103 conferring jurisdiction, 2.103, 2.107–2.108, 2.116, 9.60–9.61 estoppel by record: cause of action estoppel, 9.103 issue estoppel, 9.103 judgments by consent, 9.44–9.45, 9.56, 9.57, 9.247 judgments by default, 9.49–9.50 limitation of consent, 9.48 orders by consent, 9.46 evidence that consent was given, 2.47–2.48 judgments by consent, 9.44–9.45 orders by consent, 9.46 see also deeds consideration, doctrine of, 6.40, 6.69, 2.10 ‘practical’ consideration, 6.61–6.66 promissory estoppel, 1.21, 6.70 public policy, 2.161 relationship with, 6.52–6.54 Stilk v Myrick principle, 6.67–6.68 rescission of contracts, 6.41–6.46 rule in Pinnel, 6.47–6.51 Stilk v Myrick principle, 6.55–6.60 promissory estoppel, relationship with, 6.67–6.68 uniform doctrine of estoppel, 2.161, 2.218 variation of contracts, 6.41–6.46 constructive knowledge, 2.230, 6.153, 7.167 common law election, 8.68–8.71, 8.74–8.75, 8.82–8.84, 8.137 see also knowledge constructive trusts, 7.70 ‘common intention’ trusts, 7.72–7.74 joint venture trusts, 7.71 proprietary estoppel and, 7.54 case law, 7.79–7.83 overlap, 7.75–7.78

891

Index courts and tribunals: estoppel and jurisdiction, relationship between, 2.105, 2.111–2.112 see also jurisdiction estoppel by record, 9.161–9.162 arbitrations, 9.169–9.170 courts of record, 9.163 domestic and disciplinary tribunals, 9.166–9.168 ecclesiastical courts, 9.168 tribunals, 9.164–9.165 jurisdiction, 2.102–2.103 conferring jurisdiction, 2.103, 2.107–2.108, 2.116, 9.60–9.61 see also jurisdiction role, 2.102 statements of law and of fact, 2.104 courts of record, 9.163 merger, doctrine of, 9.68 cross-estoppels: estoppel by record, 9.24, 9.30, 9.48, 9.84–9.87, 9.258 ‘crossing the line’ rule, 1.19, 1.40, 5.5, 5.23, 5.42, 5.52–5.59 crystallisation, 2.223 transfer of the burden: after crystallisation, 2.242–2.246, 2.251 discretion of the court, 2.247 prior to crystallisation, 2.233–2.241, 2.251 transfer of the burden prior to crystallisation: general rule, 2.233–2.239, 2.251 registration, 2.240–2.241 current forms of estoppel, 1.11 cause of action estoppel, see cause of action estoppel estoppel by convention, see estoppel by convention estoppel by deed, see estoppel by deed estoppel by record, see estoppel by record estoppel by representation, see estoppel by representation issue estoppel, see issue estoppel promissory estoppel, see promissory estoppel proprietary estoppel, see proprietary estoppel

statutory provisions and proprietary estoppel, conflict between, 7.63–7.83 resolving the conflict, 7.84–7.93 writing requirement, 7.65, 7.66 see also Law of Property (Miscellaneous Provisions) (s.2) contract law, 2.136–2.137 capacity: mental incapacity, 2.158 minors, 2.157 consideration, see consideration doctrine contracts and estoppel, relationship between: Actionstrength case, 2.141–2.144 disposition of interests in land, 2.138–2.140 estoppel distinguished, 6.70–6.71 minors, 2.157 promissory estoppel, 1.3 see also promissory estoppel proprietary estoppel, relationship with, 7.61–7.62 rescission of contracts, 6.41–6.46 variation of contracts, 6.41–6.46 waiver, 2.205 agreed variation of contract, 2.206, 2.207 contractual estoppel, 1.6, 1.27 estoppel and jurisdiction, relationship between, 2.111–2.112 estoppel by deed, relationship with, 3.205, 4.52–4.56, 4.95 estoppel by representation, relationship with, 3.9 freedom of contract principle, 3.186–3.189, 3.251 illegality and, 3.191 limitations, 3.190 statute, conflict with, 3.191 increasing practice of, 3.192–3.194 justification for contractual estoppel, 3.203 no inducement clauses, 3.195–3.197 no representation clauses, 3.195–3.197 origins of expression, 3.185 other forms of estoppel compared, 3.202 status, 3.198–3.206 uncertainty, 3.204 see also estoppel by representation contractual licences, 2.120, 7.304–7.306 transfer of the benefit, 2.248 contradicting statements: estoppel by representation, 3.65–3.69 copyright: common law election, 8.27 privity of interest, 9.133 proprietary estoppel, 2.250, 7.111, 7.114, 7.231, 7.258 see also intellectual property counter-estoppels: estoppel by record, 9.88

declaratory judgments: estoppel by record, 9.33 deeds, 4.93–4.95 applicable law, 4.10 common law, 4.13 defects, 4.16–4.18 delivery, 4.9 formalities of a deed, 4.9–4.11 nature of deeds, 4.12–4.15 promises, exclusion of, 4.22 rectification, 4.17–4.18 rescission, 4.17

892

Index  division of estoppel, 1.3, 2.172, 2.179 doctrine of consideration, see consideration, doctrine of doctrine of election, see election, doctrine of doctrine of merger, see merger, doctrine of duty of care, breach of: estoppel by negligence, 3.209 duty to speak: breach of, 3.55, 3.63 legal duty of disclosure, 3.58, 6.130–6.131 moral duty to speak, 3.60–3.64, 6.132 promissory estoppel, 6.128–6.132 duty to correct a mistake, 3.63 estoppel by representation, 3.55–3.64 estoppel by silence, 3.55–3.64 false statements, 3.64 inferred from silence, 3.59 legal duty to speak, 3.58, 6.130–6.131 moral duty to speak, 3.60–3.64, 6.132

‘signed, sealed and delivered’, 4.11 statements in deed polls, 4.14–4.15 detriment, 1.47 common law election, 8.100 compensation for detriment: proprietary estoppel, 7.270–7.272 estoppel by convention, 5.77–5.81 estoppel by representation, 3.121–3.125 amount of detriment, 3.135 loss of a chance, 3.133–3.134 pro tanto effect, 3.133–3.134 risk of detriment, 3.129–3.132, 3.180 rule of law, 3.121–3.125 time of detriment, 3.126–3.128 promissory estoppel, 6.25, 6.191–6.193, 6.205–6.208 additional detriment, 6.197–6.199 amount of detriment, 6.204 risk of detriment, 6.200–6.203 time of detriment, 6.196 unconscionability, relationship with, 6.194–6.195 proprietary estoppel, 7.326 amount of detriment, 7.234–7.236 benefit to maker of assurance, 7.238–7.242 burden of proof, 7.249 compensation for detriment, 7.270–7.272 general nature, 7.232–7.233 knowledge of detriment, 7.170 location of detriment, 7.247 loss of opportunity, 7.248 need for, 7.229–7.231 risk of detriment, 7.234–7.236 sufferer, 7.243–7.244 time of detriment, 7.247 work/services for reward, 7.245–7.246 risk of detriment, 1.56–1.58 estoppel by representation, 3.129–3.132, 3.180 promissory estoppel, 6.24, 6.25, 6.200–6.203 proprietary estoppel, 7.234–7.236 substantiality, 1.55–1.58, 3.136–3.137 unconscionability, relationship with, 6.194–6.195 uniform doctrine of estoppel, 2.197 disposition of interests in land: contracts and estoppel, relationship between, 2.138–2.140 estoppel by deed, 4.22 Law of Property (Miscellaneous Provisions) Act, 1.66, 2.1, 7.62, 7.64 constructive trusts and, 7.54 written requirement, 2.127, 2.137, 2.151, 2.155, 4.22, 6.165, 7.65, 7.79, 7.87, 7.89–7.92 part performance, 2.143–2.144, 7.15, 7.18

ecclesiastical courts: estoppel by record, 9.161, 9.168 election defined, 1.7, 8.1 see also common law election; election, doctrine of; equitable election election, doctrine of, 1.81 applicability, 8.15 characteristics in common with estoppel, 8.5, 8.14 common law election, 1.7, 1.38, 8.2, 8.3, 8.133–8.141 application, 8.4 waiver, 2.204, 2.206, 2.208, 8.4 see also common law election equitable election, 1.38, 8.2, 8.131–8.132 approbate and reprobate, doctrine of, 1.38, 8.9 see also equitable election estoppel by representation, relationship with, 3.10 promissory estoppel, relationship with, 6.35, 6.155–6.156 entire agreement clauses: estoppel by convention, 5.51 estoppel by representation, 3.79–3.81 equitable damages, 8.42, 9.73, 9.256 equitable election, 1.38, 8.2, 8.6, 8.131–8.132 approbate and reprobate, doctrine of, 1.38, 8.9 gift distinguished, 8.8 mistake, 8.7 see also election, doctrine of equitable estoppels, 1.3, 1.20, 1.36 promissory estoppel, see promissory estoppel proprietary estoppel, see proprietary estoppel equity: estoppel, conflict with, 2.159–2.160 public policy, 2.161–2.164

893

Index estoppel by acquiescence, 1.6, 1.8, 1.24, 2.169, 2.187, 5.8, 5.60 common law election, 8.116 estoppel by silence compared, 1.29 see also proprietary estoppel estoppel by conduct, 1.6. 1.8, 1.15, 3.4, 3.213 estoppel by silence, 1.29, 3.55–3.64 implication and inference, 3.42 estoppel by contract, see contractual estoppel estoppel by convention, 1.3, 1.6, 5.94–5.95 assumed statement of facts or of law, 5.5, 5.22, 5.96–5.98 assumption and contract distinguished, 5.43 assumption and promise distinguished, 5.43 assumption that agreement is binding, 5.30–5.36 clarity requirement, 5.40 method of proof, 5.41–5.42 nature of the assumption, 5.28–5.40 need for specific assumption, 5.37 proof of assumption, 5.40–5.43 reason for assumption, 5.38–5.39 relating to existing transaction, 5.44–5.51 burden of proof, 1.60 common law application, 1.19, 1.36 duration, 5.89–5.92 effect, 5.104–5.106 partial effect, 5.86–5.88 parties, 5.85 elements, 5.6–5.7 assumed statement of facts or of law, 5.5, 5.22 shared assumption, 5.5, 5.22, 5.23 unconscionability, 5.5, 5.22 equity application, 1.19 estoppel by deed, relationship with, 4.57–4.60 estoppel by representation, relationship with, 3.7, 5.25 intention, 1.51 objective test, 1.53–1.54 origins, 1.19, 5.1–5.2, 5.8 Amalgamated Property Co v Texas Bank, 5.9–5.11 India Steamship case, 5.17–5.20 Keen v Holland, 5.12–5.16 promissory estoppel, relationship with, 5.26–5.27, 6.31 proprietary estoppel, relationship with, 5.27 reasonableness, 1.52 reliance-based nature, 1.10 ‘crossing the line’ rule, 5.3, 5.24 Republic of India v India Steamship Co Ltd, 5.4, 5.17–5.20 shared assumption, 5.5, 5.22, 5.23, 5.68, 5.99–5.101 acquiescence, 5.60–5.61 ‘crossing the line rule’, 5.52–5.59

foreseeability, 5.67 intention, 5.65–5.66 mental component, 5.62–5.68 status, 5.21 substantiality, 1.55–1.59 third parties, 2.222 unconscionability, 5.102–5.103 detriment, 5.77–5.81 injustice requirement, 5.69–5.84 overall test, 5.82–5.84 prejudice, 5.77–5.81 reliance, 5.72–5.76 estoppel by deed, 1.6, 1.18, 4.90–4.92 common law application, 1.36 deeds, 4.93–4.95 applicable law, 4.10 common law, 4.13 defects, 4.16–4.18 delivery, 4.9 formalities of a deed, 4.9–4.11 nature of deeds, 4.12–4.15 promises, exclusion of, 4.22 rectification, 4.17–4.18 rescission, 4.17 ‘signed, sealed and delivered’, 4.11 statements in deed polls, 4.14–4.15 essential requirements, 4.19, 4.61–4.62 claims/actions on the deed, 4.38–4.41 clear and unambiguous statements, 4.25–4.31, 4.99, 4.103 detriment, 4.45–4.48 implied statements, 4.26–4.28 injustice, 4.45–4.48 reliance, 4.46–4.48 statements as the agreed basis, 4.32–4.37 statements of fact, 4.20–4.24 statements of party alleged to be estopped, 4.42–4.44 estoppel by contract compared, 4.52–4.56, 4.95 estoppel by representation, relationship with, 3.6 interests in land, 4.63–4.66, 4.88, 4.96–4.98, 4.103–4.107 equitable interests, 4.85–4.87 ‘feeding the estoppel’, 4.66 separate doctrines, 4.67–4.84 tenancy by estoppel, 4.65 origins, 4.1–4.7 other estoppels, relationship with, 4.49–4.51 estoppel by contract, 4.52–4.56 estoppel by convention, 4.57–4.60 promissory estoppel, relationship with, 6.31 third parties, 2.281–2.284, 4.101 privies, 2.285–2.286 transfer of the benefit, 2.287 transfer of the burden, 2.287–2.288

894

Index  estoppel by encouragement, see proprietary estoppel estoppel by expectation, 1.6, 1.8, 1.25 see also proprietary estoppel estoppel by forbearance, 1.6, 1.8 estoppel by negligence, 1.6, 1.8, 1.24, 1.28, 3.4, 3.207–3.208, 3.213–3.214, 3.253 breach of duty of care, 3.209, 6.129 duty to provide information, 3.55 examples, 3.210–3.212 inferred representation, 6.129 negligent misrepresentation, 1.70 negligent misstatement, 3.208 see also estoppel by representation estoppel by record, 1.6, 1.82, 9.1, 9.240–9.245 abuse of process, 9.7, 9.11, 9.58 admiralty actions in rem, 9.23–9.27 appeals, 9.5 time limits, 9.5 binding effect: precedent doctrine compared, 9.6 burden of proof, 9.15 cause of action estoppel, 1.33, 2.43, 9.7, 9.8, 1.6, 9.64–9.66, 9.250–9.258 categories of decisions, 9.82 continuing breaches, 9.72–9.73 counter-estoppels, 9.88 cross-estoppels, 9.84–9.87 defences, 9.83 exceptions, 9.198–9.199 identifying subject matter, 9.71–9.83 judgments on facts at a specific time, 9.79–9.81 meaning, 9.74–9.78 merger doctrine, 9.67 common law application, 1.36 common law election, relationship with, 8.23 courts and tribunals, 9.161–9.162 arbitrations, 9.169–9.170 courts of record, 9.163 domestic and disciplinary tribunals, 9.166–9.168 ecclesiastical courts, 9.168 tribunals, 9.164–9.165 estoppel per rem iudicatam, 1.31, 1.32, 2.43, 9.4 estoppel by record, 1.31–1.33 judgments by consent, 9.165 third parties, 2.224 exceptions, 9.192–9.198, 9.204–9.206, 9.274–9.276 cause of action estoppel, 9.198–9.199 issue estoppel, 9.200–9.203 patent cases, 9.217 Zodiac case, 9.207–9.216 final judgments, 9.28 clarity, 9.36 declaratory judgments, 9.33 interlocutory orders, 9.29–9.32

res judicata, 9.35 truncated proceedings, 9.34 findings of fact, 9.105–9.109 identity of the issue, 9.93–9.99 previous decisions, 9.104 purpose of later proceedings, 9.113–9.115 reasons for decisions, 9.110–9.111 rule in Henderson v Henderson, 9.117 types of decision, 9.112 foreign judgments, 9.171–9.175, 9.270–9.273 Civil Jurisdiction and Judgments Act, 9.186–9.191 common law, 9.176–9.179 Judgments (Reciprocal Enforcement) Act, 9.180–9.185 issue estoppel, 1.6, 2.43, 9.7, 9.9–9.10, 9.89–9.92, 9.259–9.266 collateral issues, 9.100–9.103 common law election compared, 9.118 exceptions, 9.200–9.203 judgments, 9.16, 9.246–9.249 admiralty actions in rem, 9.23–9.27 clarity, 9.36 declaratory judgments, 9.33 discontinuance of actions, 9.44 discretion, 9.53 final judgments, 9.28–9.36 finality of judgment, 9.17, 9.35 foreign judgments, 9.171–9.191 fraud/collusion, 9.37–9.41 interlocutory orders, 9.29–9.32, 9.52 judgment in default, 9.49–9.51 judgments by consent, 9.44, 9.45–9.46 judgments given on an agreed assumption, 9.44, 9.47–9.48 judgments in personam and in rem distinguished, 9.18, 9.21 judgments in personam, 9.18 judgments in rem, 9.19–9.20, 9.22 judgments obtained by fraud/collusion, 9.17 judgments on procedural rules, 9.17 judgments on the merit, 9.42–9.43 judgments striking out a claim, 9.44, 9.54 judgments without jurisdiction, 9.17 procedural orders, 9.44–9.57 res judicata, 9.35 secondary facts, 9.53 summary judgements, 9.44, 9.55–9.56 jurisdiction, lack of, 9.59–9.63 justification, 9.3 origins, 9.2 parties, 9.119–9.125 capacity, 9.126 privies of the party, 9.12, 9.127–9.128, 9.267–9.269

895

Index privity: privity of interest, 9.132–9.139 privity of title or of estate, 9.129–9.131 procedure: estoppel as a preliminary issue, 9.14 striking out as abuse of process, 9.14 summary judgments, 9.14 protection of children, 9.160 public law, 9.142–9.144 judicial review, 9.145–9.159 public policy, 9.7, 9.11, 9.58 res judicata, 1.31, 1.33, 9.35 rule in Henderson v Henderson, 1.32, 2.43, 9.117, 9.218–9.226, 9.277–9.279 application, 9.227–9.238 third parties, 2.224 estoppel by representation, 1.3, 1.6, 3.11 burden of proof, 1.60 causation, 3.114 common law application, 1.12, 1.14, 1.36, 3.216 ‘common law estoppel’, 1.14, 3.126 contractual estoppel: freedom of contract principle, 3.186–3.192, 3.251 increasing practice of, 3.192–3.194 no inducement clauses, 3.195–3.197 no representation clauses, 3.195–3.197 origins of expression, 3.185 status, 3.198–3.206 detriment component of unconscionability, 3.121–3.125 amount of detriment, 3.135 loss of a chance, 3.133–3.134 pro tanto effect, 3.133–3.134 risk of detriment, 3.129–3.132, 3.180 time of detriment, 3.126–3.128 effect, 3.147–3.151, 3.245–3.246 case law, 3.152–3.173, 3.247 current law, 3.178–3.184 general effect, 3.179, 3.245–3.246 pro tanto effect, rejection of, 3.181, 3.248–3.249 pro tanto effect, return of, 3.182–3.184, 3.248–3.249 restitution, 3.173–3.177, 3.350 risk of detriment, 3.180 election, doctrine of: relationship with, 3.10 entitlement of representee to a monetary sum, 3.148–3.149 de minimis principle, 3.150 restitution and, 3.151 unjust requirement, 3.151 estoppel by conduct, 1.6, 1.15, 3.4 estoppel by contract, relationship with, 3.9 estoppel by convention, relationship with, 3.7

estoppel by deed, relationship with, 3.6 estoppel by negligence. 3.4, 3.207–3.208, 3.213–3.214, 3.253 breach of duty of care, 3.209 examples, 3.210–3.212 estoppel by silence, 1.29, 3.4, 3.50–3.54, 3.226 duty to speak, 3.55–3.64, 3.226–3.228 estoppel in pais, 1.6, 1.12, 1.13 equity application, 1.12, 1.14 ‘evidential estoppel’, 1.16, 3.4 false statements, 3.15–3.17, 3.218 knowledge of falsity, 3.95–3.96, 3.232 foreseeability of reliance on the representation, 3.92–3.94, 3.235 intention of the representor, 1.51, 3.11, 3.84–3.85, 3.218, 3.231, 3.232–3.233 burden of proof, 3.108–3.109 knowledge of subsequent acts, 3.104–3.107, 3.237 objective test, 3.87–3.91, 3.234 type of act intended, 3.97–3.103, 3.236 mutuality, 3.13 objective test, 1.53–1.54, 3.48–3.49, 3.87–3.91 origins, 1.12, 3.1–3.3 ostensible agency, 1.17 pro tanto effect, 3.133–3.134, 3.169–3.172 Fung Kat Sun v Shan Fut Hing, 3.154 Greenwood v Martins Bank Ltd, 3.155 Howlett case, 3.157–3.163 Ogilvie v West Australian Mortgage and Agency Corporation Ltd, 3.153 post-Howlett case law, 3.164–3.168 probability of reliance on the representation, 3.92–3.94 promissory estoppel, relationship with, 3.5, 6.31 proprietary estoppel, relationship with, 3.8 reasonableness, 1.52, 3.115–3.120 reliance component of unconscionability, 3.112–3.113 causation, 3.114 reasonableness of actions, 3.115–3.120 reliance-based nature, 1.10 representation of an existing matter, 3.11, 3.220–3.221 admissions, 3.70–3.73, 3.230 burden of proof, 3.83 clarity, 3.38–3.41, 3.223 contradicting statements, 3.65–3.69, 3.229 entire agreement clauses, 3.79–3.82 false statements, 3.15–3.17 identity of representee, 3.74–3.78 inferred representations, 3.42–3.47, 3.224, 3.225 no oral modification clauses, 3.81–3.82 objective test, 3.48–3.49 promises, 3.34–3.36, 3.222 statements of law and of fact, 3.18–3.31 statements of opinion, 3.31–3.33, 3.222 withdrawal of statements, 3.65–3.66

896

Index  false statements: estoppel of representation, 3.15–3.17, 3.218 knowledge of falsity, 3.95–3.96, 3.232 final judgments: estoppel by record, 9.28 clarity of judgments, 9.36 declaratory judgments, 9.33 interlocutory orders, 9.29–9.32 judgments and orders distinguished, 9.35 truncated proceedings, 9.34 five probanda, 7.26–7.29 foreign judgments: estoppel by record, 9.171–9.175, 9.270–9.273 Civil Jurisdiction and Judgments Act, 9.186–9.191 common law, 9.176–9.179 Judgments (Reciprocal Enforcement) Act, 9.180–9.185 foreseeability: estoppel by convention, 5.67 promissory estoppel, 6.143–6.145 reliance on the representation, of, 3.92–3.94, 6.143–6.145 forfeiture: breach of contract, 3.190 detriment, 7.235 election, doctrine of, 8.4, 8.13, 8.16, 8.20, 8.32–8.35, 8.39 loss of opportunity, 7.248 promissory estoppel, 6.9–6.10 waiver, 2.208, 6.155, 8.4, 8.11, 8.13, 8.16, 8.20, 8.32–8.35, 8.39 forfeiture clauses, 6.155, 8.4, 8.20, 8.70, 8.82, 8.91, 8.99, 8.115 fraud: estoppel by record collusion/bias, 9.40–9.41 fraud/perjury, 9.37–9.39 fraudulent misrepresentation, 1.70, 2.157, 3.51, 3.55 fraudulent misstatement, 3.208 frivolous actions: striking out, 9.54

restitution and, 3.151, 3.173–3.177 statements of law and of fact, 2.54–2.55, 3.18–3.25 distinction, 3.26–3.29 mixed law and fact, 3.30 substantiality, 1.55–1.59 third parties, 2.222, 2.261 chattels, 2.273–2.275 insolvency, 2.275–2.278 interests in land, 2.268–2.272 transfer of the benefit, 2.267 transfer of the burden, 2.262–2.266 unconscionability, 3.11, 3.110, 3.218, 3.244 burden of proof, 3.146 detriment, 3.121–3.135, 3.242–3.243 injustice requirement, 3.138–3.142, 3.238–3.239 potential harm to third parties, 3.144 reliance and detriment components, 3.111 reliance, 3.112–3.120, 3.240 substantiality, 3.136–3.137 estoppel by silence, 1.6, 1.29, 3.4 conduct, 3.55–3.64 duty to speak, 3.55–3.56, 3.226–3.228 moral duty, 3.60–3.64, 6.132 questions arising, 3.57–3.59 general principle, 3.50–3.54 estoppel in pais, 1.6, 1.8, 1.9, 1.12, 1.13, 3.2, 3.216, 6.6 see also estoppel by conduct; estoppel by representation estoppel per rem iudicatam, 1.6 estoppel by record, 1.31, 1.33, 9.35 see also estoppel by record events following initial statements, 1.42, 1.45, 7.136–7.137 evidential estoppel, 1.6, 1.8, 1.16 see also estoppel by representation expectation and entitlement: estoppel by expectation, 1.6, 1.8, 1.25 legitimate expectation, 2.92 audi alteram partem rule, 2.94 limitations, 2.96 national security defence, 2.95 natural justice, 2.94 origins, 2.93, 2.97 public law, 2.69–2.71, 2.95, 2.97 see also legitimate expectation doctrine proprietary estoppel: agreements ‘in honour’, 7.135 entitlement, 7.125–7.131 events following assurance, 7.136–7.137 expectation of interests in land, 7.121–7.124 reasonable expectation, 7.138–7.140 reasonableness, 7.138–7.140 subject to contract agreements, 7.132–7.134 extinguishment, 6.85, 7.38, 7.257

gift: election, doctrine of, 1.37 equitable election distinguished, 8.8–8.9, 8.131 estoppel by deed, 2.284 giving effect to estoppel, 1.43, 1.79 events following initial statement, 1.42 initial statement, 1.39, 1.40–1.41 promissory estoppel, 6.235 proprietary estoppel, 7.266–7.269 relief, 7.310 written requirement, 2.138

897

Index habeas corpus: estoppel by record, 9.149 High Court: supervision of solicitors, 2.113–2.114 High Trees case, 6.12–6.13, 6.21 Howlett case, 3.157–3.163 post-Howlett case law, 3.164–3.168

part performance, 2.143–2.144, 7.15, 7.18 written requirement, 2.127, 2.137, 2.151, 2.155, 4.22, 6.165, 7.65, 7.79, 7.87, 7.89–7.92 estoppel by deed, 4.63–4.66, 4.88, 4.96–4.98 equitable interests, 4.85–4.87 ‘feeding the estoppel’, 4.66 separate doctrines, 4.67–4.84 tenancy by estoppel, 4.65 estoppel by representation, 2.268–2.272 privity of interest, 9.132–9.139 privity of title or of estate, 9.129–9.130 proprietary estoppel, 2.226 expectation of interests in land, 7.121–7.124 registration of land, 2.230 transfer of the benefit of rights, 2.225 transfer of the burden of obligations, 2.225 interlocutory orders: estoppel by record, 9.29–9.32 issue estoppel, 1.6, 2.43, 9.7, 9.9–9.10, 9.89–9.92 collateral issues, 9.100–9.103 common law election compared, 9.118 exceptions, 9.200–9.203 findings of fact, 9.105–9.109 identity of the issue, 9.93–9.99 previous decisions, 9.104 purpose of later proceedings, 9.113–9.115 reasons for decisions, 9.110–9.111 rule in Henderson v Henderson, 9.117 types of decision, 9.112 see also estoppel by record iura in re aliena, 7.254

implied trusts, 7.68 imputed knowledge, 6.153, 7.167, 8.72–8.75 constructive and imputed knowledge, 8.82–8.84, 8.137 inchoate rights, 2.146, 2.236, 2.238, 2.240, 4.85, 7.77, 7.179 incorporeal hereditaments, 7.254 India Steamship case, 5.17–5.20 inferred representations: estoppel by representation, 3.42–3.47 injustice, see unconscionability innocent misstatement, 3.208 insolvency, 2.12, 2.147 estoppel by representation, 2.275–2.278, 2.291 intellectual property: proprietary estoppel, 2.177, 2.250, 7.254, 7.258, 7.314 intention: common law election decision to elect, 8.56–8.60 estoppel by convention, 5.65–5.66 estoppel by representation: intention of the representor, 1.51, 3.11, 3.84–3.85, 3.87–3.91, 3.218, 3.231, 3.232–3.233 objective test, 3.87–3.91 intention of the representor, 1.51, 3.11, 3.84–3.85, 3.218, 3.231, 3.232–3.233 burden of proof, 3.108–3.109 knowledge of subsequent acts, 3.104–3.107, 3.237 objective test, 3.87–3.91, 3.234 type of act intended, 3.97–3.103, 3.236 promissory estoppel, 6.139–6.142 foreseeability, 6.143–6.145 reliance, 6.143–6.145 proprietary estoppel: assurance by estopped party, 7.117–7.120 reliance-based estoppels, 1.51 interests in land, 2.227–2.229 disposition of interests in land: constructive trusts and, 7.54 contracts and estoppel, relationship between, 2.138–2.140 estoppel by deed, 4.22 Law of Property (Miscellaneous Provisions) Act, 1.66, 2.1, 2.127, 2.137, 2.151, 2.155, 4.22, 6.165, 7.54, 7.62, 7.64, 7.65, 7.79, 7.87, 7.89–7.92

judgments: estoppel by record, 9.16 admiralty actions in rem, 9.23–9.27 clarity, 9.36 declaratory judgments, 9.33 final judgments, 9.28–9.36 finality of judgment, 9.17, 9.35 interlocutory orders, 9.29–9.32 judgements in rem, 9.19–9.20, 9.22 judgments in personam and in rem distinguished, 9.18, 9.21 judgments in personam, 9.18 judgments obtained by fraud/collusion, 9.17 judgments on procedural rules, 9.17 judgments without jurisdiction, 9.17 procedural orders, 9.44–9.57 res judicata, 9.35 judgments by consent, 9.44–9.45, 9.56, 9.57, 9.247 judgments by default, 9.49–9.50 judgments in personam and in rem distinguished, 9.18, 9.21 procedural orders: judgment in default, 9.49–9.51

898

Index  judgments by consent, 9.44, 9.45–9.46 judgments given on an agreed assumption, 9.44, 9.47–9.48 judgments striking out a claim, 9.44, 9.54 summary judgements, 9.44, 9.55–9.56 Judgments (Reciprocal Enforcement) Act, 9.180–9.185 judgments by consent, 9.44–9.45, 9.56, 9.57, 9.247 judgments by default, 9.49–9.50 judgments in personam, 9.18 judgments in rem distinguished, 9.18, 9.21 judgments in rem: judgments in presonam distinguished, 9.18, 9.21 judgment recovered defence, 9.67–9.68 see also merger, doctrine of judicial review: certiorari, 9.145 estoppel by record, 9.145–9.159 issue estoppel, 9.148 mandamus, 9.145 jurisdiction: courts and tribunals, 2.102–2.103 estoppel and jurisdiction, relationship between, 2.105, 2.126 estoppel by contract, 2.111–2.112 estoppel by record, 9.59–9.63 foreign judgments, 9.186–9.191 High Court: supervision of solicitors, 2.113–2.114 impact of different jurisdictions, 1.75 jurisdictional and procedural requirements, 2.115–2.119 distinguishing between, 2.120–2.125 time limits, 2.118 waiver, 2.116–2.119 rule of law, 2.107–2.112 extending jurisdiction, 2.110 parties conferring jurisdiction, 2.107–2.108 parties losing statutory protections, 2.109

intention of the representor, of, 3.104–3.107 proprietary estoppel, 7.156–7.157 knowledge of actions of claimant, 7.162–7.168 knowledge of detriment, 7.170 knowledge of expectation, 7.161 knowledge of mistake of claimant, 7.169 knowledge of rights, 7.158–7.160 necessary knowledge, 7.171–7.172 laches: proprietary estoppel, 7.53, 7.55, 7.114 land charges, 2.146, 2.241, 2.251 registration, 2.230, 2.231, 2.246, 2.256, 2.288, 7.147, 7.212 law of estoppel (generally), 1.84–1.86 classification of estoppel, 1.36, 1.78, 2.169 common law estoppels, 1.9 equitable estoppels, 1.9 reliance-based estoppels, 1.10 differences between forms of estoppel, 2.172 clear boundaries, 2.178–2.181 initial statements, 2.173–2.175 subject matter, 2.177 use, 2.176 general principle, 1.1–1.2, 1.8 defining estoppel, 1.38 morality principle, 1.3 uniform doctrine of estoppel, 1.67, 2.8, 2.165–2.168, 2.170, 2.182 case law, 2.183–2.187 detriment, 2.197 form, 2.189 function of law, 2.192 lack of support for, 2.193, 2.199 limitations, 2.190–2.191, 2.195 reliance-based estoppels, 2.196, 2.199 substantiality, 2.196–2.197 theory, 2.188–2.192 unconscionability, 2.194 see also individual forms of estoppel law of torts, see torts Law of Property (Miscellaneous Provisions) Act (s.2(1)): constructive trusts, see constructive trusts part performance doctrine, 2.143, 7.15, 7.18, 7.65 proprietary estoppel, conflict between, 7.63–7.65, 7.94 constructive trusts, 7.66–7.93 written requirement, 1.66, 2.1, 2.127, 2.138, 2.148, 2.151, 2.155, 7.54 estoppel by deed, 4.8, 4.10–4.11 estoppel by representation, 3.20 promissory estoppel, 6.165 legal history, 1.5, 1.72–1.73 common law election, 8.13

Keen v Holland, 5.12–5.16 knowledge: common law election, 8.62 burden of proof, 8.76, 8.85–8.86 constructive knowledge, 8.68–8.71, 8.82–8.84 imputed knowledge, 8.72–8.75, 8.82–8.84 knowledge of facts, 8.63–8.76 knowledge of rights, 8.77–8.86 rule of law, 8.63–8.67, 8.77–8.81 constructive knowledge, 8.68–8.71, 8.82–8.84, 8.137 false statements, of, 3.95–3.96, 3.232 imputed knowledge, 6.153, 7.167, 8.72–8.75 constructive and imputed knowledge, 8.82–8.84, 8.137

899

Index contractual estoppel: origins of expression, 3.185 estoppel by convention, 1.19, 5.1–5.2, 5.8 Amalgamated Property Co v Texas Bank, 5.9–5.11 India Steamship case, 5.17–5.20 Keen v Holland, 5.12–5.16 estoppel by deed, 4.1–4.7 estoppel by record, 9.2 estoppel by representation, 1.12, 3.1–3.3 contractual estoppel, 3.185 legitimate expectation doctrine, 2.93, 2.97 promissory estoppel, 1.21, 6.1–6.5, 6.219–6.222 Birmingham and District Land Company v London and North Western Rly Co, 6.10–6.11 Hughes v Metropolitan Rly Co, 6.8–6.9 proprietary estoppel, 1.23 legitimate expectation doctrine, 2.92 limitations, 2.96 national security defence, 2.95 natural justice: audi alteram partem rule, 2.94 origins, 2.93, 2.97 public law, 2.69–2.71 non-availability of estoppel, 2.95, 2.97 limitation periods: inferred promises, 6.117–6.118 limitations: assurance: proprietary estoppel, 7.109–7.110 estoppel by record: limitation of consent, 9.48 freedom of contract principle, 3.190 inferred promises, 6.117–6.118 legitimate expectation doctrine, 2.96 public authority limitations on use of estoppel, 2.67 uniform doctrine of estoppel, 2.190–2.191, 2.195

unjust enrichment: mistaken payments, 3.151 mixed law and fact, 1.40–1.41, 6.28 estoppel by convention: assumptions, 5.19, 5.96 estoppel by deed, 1.18, 1.71, 2.281, 3.205, 4.1, 4.19, 4.20–4.24, 4.61, 4.93, 7.112 estoppel by record: issue estoppel, 9.112, 9.259 estoppel by representation, 1.12, 1.71, 2.54, 2.198, 3.19, 3.22–3.23, 3.27, 3.30, 3.220, 5.19, 7.112 fraudulent misstatement, 3.208 innocent misstatement, 3.208 negligent misstatement, 3.208 proprietary estoppel, 7.109 mutuality, 1.48–1.49, 9.120 estoppel by convention, 5.2 estoppel by representation, 3.13 negligence, see estoppel by negligence negligent misrepresentation, 1.70 see also estoppel by negligence negligent misstatement, 3.208 see also estoppel by negligence no oral modification clauses: estoppel by representation, 3.79, 3.81–3.82 promissory estoppel, 6.65 non-statutory principles: estoppel, conflict with, 2.159–2.164 public policy conflict, 2.161–2.164 objective test: common law election: decision to elect, 8.56–8.60 estoppel by representation, 3.48–3.49 importance, 1.54 intention of the representor, 3.87–3.91 interpretation of language, 1.53 reliance-based estoppels, 1.53 subjective test distinguished, 1.53 promissory estoppel: clear and unequivocal promise, 6.133–6.138 justification for objective test, 6.136–6.138 proprietary estoppel, 1.53–1.54 assurance of the estopped, 7.148–7.155 intention of the giver of assurance, 7.149–7.150 meaning of assurance, 7.151–7.155 ostensible agency, see agency by estoppel

mental incapacity: contract and estoppel, 2.158 merger, doctrine of: estoppel by record, 9.24, 9.67–9.70, 9.252 Civil Jurisdiction and Judgments Act, 9.186–9.188, 9.272 cross-estoppels, 9.85–9.86 minimum equity, 5.87 promissory estoppel, 6.113, 6.212, 6.215–6.216 proprietary estoppel, 7.265, 7.273–7.275, 7.330 minors: contract and estoppel, 2.157 mistake: duty to correct a mistake, 3.63 equitable election, 8.7 proprietary estoppel, 7.156–7.157 knowledge of mistake of claimant, 7.169

part performance doctrine, 2.143–2.144 proprietary estoppel, 7.3, 7.15–7.18, 7.64–7.65 patent cases: estoppel by record, 9.217 ‘practical consideration’: promissory estoppel, 6.61–6.66, 6.67, 6.69

900

Index  precedent doctrine, 2.191 estoppel by record, 9.5–9.6, 9.244 prejudice, see detriment privies of the party: estoppel by deed, 2.285–2.286 estoppel by record, 9.12, 9.127–9.128 privity: privity of interest, 9.132–9.139 privity of title or of estate, 9.129–9.131 pro tanto effect: estoppel by representation, 3.133–3.134, 3.169–3.172 Fung Kat Sun v Shan Fut Hing, 3.154 Greenwood v Martins Bank Ltd, 3.155 Howlett case, 3.157–3.163 Ogilvie v West Australian Mortgage and Agency Corporation Ltd, 3.153 post-Howlett case law, 3.164–3.168 rejection of, 3.181 return of, 3.182–3.184 promises, 6.223–6.227 contractual and non-contractual promises, 6.121–6.124 estoppel by representation, 3.34–3.36 silence and promises, 3.58, 3.60–3.64, 6.125–6.127 breach of duty, 6.128–6.129 breach of legal duty, 6.130–6.131 breach of moral duty, 6.132 see also promissory estoppel promissory estoppel, 1.3, 1.6, 6.36–6.39, 6.218 burden of proof, 1.60 clear and unequivocal promise, 6.24, 6.25, 6.102–6.103 need for a promise, 6.104–6.106 need for clarity, 6.107–6.111 objective test, 6.133–6.138 withdrawal of promise, 6.112 common law election, 1.7, 6.35 common law estoppels, relationship with, 6.31 statements of fact and of law, 6.31–6.33 consideration doctrine, 6.40, 6.69 ‘practical consideration’, 6.61–6.66 promissory estoppel, relationship with, 6.52–6.54 promissory estoppel and Stilk v Myrick principle, 6.67–6.68 rescission of contracts, 6.41–6.46 rule in Pinnel, 6.47–6.51 Stilk v Myrick principle, 6.55–6.60 variation of contracts, 6.41–6.46 contract distinguished, 6.70–6.71 detriment, 6.191–6.193, 6.205–6.208 additional detriment, 6.197–6.199 amount of detriment, 6.204 risk of detriment, 6.200–6.203

time of detriment, 6.196 unconscionability, relationship with, 6.194–6.195 development, 6.14–6.17 Australia, 6.18–6.19 discretion, 6.99–6.101 effect, 6.235 duration, 6.72 permanent removal of rights, 6.80–6.85 permanent v suspensory effect, 6.72–6.73, 6.90–6.96 suspension of rights, 6.86–6.89 election, doctrine of: relationship with, 6.35, 6.155–6.156 enforcement of contractual rights, 6.74–6.76 equity, as a principle of, 6.6–6.7, 6.219 High Trees case, 6.12–6.13, 6.21 estoppel by convention, relationship with, 6.31 estoppel by deed, relationship with, 6.31 estoppel by representation, relationship with, 3.5, 6.31 estoppel by silence, 1.29 flexible interpretation, 6.99–6.101 inferred promises, 6.114 inferences test, 6.115–6.116 limitation periods, 6.117–6.118 mere silence, 6.120 negotiations, 6.117–6.118 pleadings, 6.119 intention, 1.51 knowledge of rights, 6.147–6.148 justification, 6.149–6.154 mental state of promisor, 6.139–6.146 foreseeability, 6.143–6.145 intention, 6.139–6.142 reliance, 6.143–6.145 objective test, 1.53–1.54 origins, 1.21, 6.1–6.5, 6.219–6.222 Birmingham and District Land Company v London and North Western Rly Co, 6.10–6.11 Hughes v Metropolitan Rly Co, 6.8–6.9 permanent removal of rights, 6.80–6.85 postponement of payment, 6.97–6.98 proprietary estoppel, relationship with, 6.34, 7.56–7.58 quasi-estoppel, 1.26 reasonableness, 1.52 reliance: burden of proof, 6.187–6.189, 6.235 meaning, 6.182–6.184 methods of proof, 6.190 reasonableness of actions, 6.185–6.186 requirement, 6.180–6.181 standard of proof, 6.187–6.189 reliance-based nature, 1.10

901

Index relief available, 6.209–6.212 minimum equity, 6.215–6.216 resumption of position, 6.213–6.214 requirements: clear and unequivocal promise, 6.24, 6.25 detriment, 6.25 existing transactions, 6.24. 6.25 reliance, 6.24, 6.25 risk of detriment, 6.25 seriousness of promise, 6.25 unconscionability, 6.24 rights in land: transfer of the benefit, 2.257–2.258 transfer of the burden, 2.253–2.256 rights under an existing transaction, 6.157–6.160 promise that contract exists, 6.164–6.169 promises in advance of contract, 6.161–6.163 public law, 6.170–6.171 status, 6.27–6.30 substantiality, 1.55–1.59 suspension of rights, 6.86–6.89 third parties, 2.223, 2.252 rights in land, 2.253–2.260 transfer of the benefit, 2.257–2.258 transfer of the burden, 2.253–2.256 trespassers, 6.172–6.173 unconscionability, 6.217, 6.229–6.233 detriment, relationship with, 6.194–6.195 reliance, 6.180–6.190 relief available, 6.209–6.216 minimum equity, 6.215–6.216 showing unconscionability, 6.174–6.179 waiver, 2.204, 2.206, 2.209 proprietary estoppel, 1.6, 1.22, 7.1–7.2, 7.45–7.47, 7.311, 7.312–7.314 assurance by estopped party, 7.104–7.204 acquiescence, 7.113–7.116 assurance of law, 7.112 certainty, 7.183–7.194 clarity, 7.141–7.147 expectations created, 7.121–7.140 intention, 7.117–7.120 knowledge of giver of assurance, 7.156–7.172 limitations, 7.109–7.110 objective test, 7.148–7.155 principal and agent, 7.108 revocation, 7.173–7.182 time of assurance, 7.111 types of assurance, 7.105–7.108 written or oral, 7.106–7.107 burden of proof, 1.60, 7.195, 7.328–7.329 detriment, 7.249 matters requiring proof, 7.196–7.204 reliance, 7.217–7.228 standard of proof, 7.195

categories, 7.48–7.50 causes of action, 2.22–2.25 certainty, 7.183–7.185 certainty of interest in property, 7.192–7.194 extent of the land, 7.186–7.191 fluctuations in extent of land, 7.188–7.191 time of the assurance, 7.186–7.187 conduct, 1.15, 7.294–7.296 constructive trusts, law of, 7.54 contract, relationship with, 7.61–7.62 detriment: amount of detriment, 7.234–7.236 benefit to maker of assurance, 7.238–7.242 burden of proof, 7.249 general nature, 7.232–7.233 location of detriment, 7.247 loss of opportunity, 7.248 need for, 7.229–7.231 risk of detriment, 7.234–7.236 sufferer, 7.243–7.244 time of detriment, 7.247 work/services for reward, 7.245–7.246 development, 7.3–7.4 case law, 7.5–7.13 characteristics, 7.14 Cobbe v Yeoman’s Row Management Ltd, 7.33–7.38 Dilwyn v Llewelyn, 7.19 establishment as an estoppel, 7.30–7.32 ‘five probanda’, 7.26–7.30 part performance, 7.15–7.18 Plimmer v Mayor, etc of Wellington, 7.22–7.25 Ramsden v Dyson, 7.20–7.21 Thorner v Major, 7.39–7.44 equitable rights, 7.53 essential elements, 7.98–7.99, 7.315 assurance by estopped party, 7.104–7.204, 7.316–7.322 components, 7.100, 7.323–7.324 detriment, 7.229–7.249, 7.326 reliance, 7.205–7.228, 7.325 unconscionability, 7.250–7.253, 7.328 estoppel by acquiescence, 1.24 estoppel by expectation, 1.25 estoppel by representation, relationship with, 3.8 estoppel by silence, 1.29 expectations created: agreements ‘in honour’, 7.135 entitlement, 7.125–7.131 events following assurance, 7.136–7.137 expectation of interests in land, 7.121–7.124 reasonable expectation, 7.138–7.140 reasonableness, 7.138–7.140 subject to contract agreements, 7.132–7.134 financial position of parties, 7.289–7.290

902

Index  intention, 1.51 knowledge of giver of assurance, 7.156–7.157 knowledge of actions of claimant, 7.162–7.168 knowledge of detriment, 7.170 knowledge of expectation, 7.161 knowledge of mistake of claimant, 7.169 knowledge of rights, 7.158–7.160 necessary knowledge, 7.171–7.172 laches, relationship with, 7.55 Law of Property (Miscellaneous Provisions) Act (s.2), 7.63–7.65 constructive trusts, 7.66–7.94 see also constructive trusts; Law of Property (Miscellaneous Provisions) Act (s.2) objective test, 1.53–1.54, 7.148–7.155 origins, 1.23 promissory estoppel, relationship with, 6.34, 7.56–7.58 property other than land, 7.254–7.256 case law, 7.257–7.259 purpose of the estoppel, 7.264–7.265, 7.278–7.279 compensation for detriment, 7.270–7.272 giving effect to the assurance, 7.266–7.269 minimum equity, 7.273–7.277 quasi-estoppel, 1.26 reasonableness, 1.52 relief, 7.260–7.263, 7.330–7.332 appeals, 7.307 considerations, 7.287–7.796 events after the order, 7.297 forms of order, 7.280–7.286 giving effect to order, 7.310 purpose of estoppel, 7.264–7.279 refusal of relief, 7.308 rights of occupation, 7.298–7.307 wish of the claimant, 7.309 reliance: burden of proof, 7.217–7.228 meaning, 7.208–7.212 need for, 7.205–7.207 reasonableness, 7.214–7.216 time of reliance, 7.213 reliance-based nature, 1.10 restitution, relationship with, 7.59–7.60 revocation, 7.173–7.175, 7.181–7.182 other circumstances, 7.179–7.180 time of revocation, 7.176–7.178 social security benefits, 7.291–7.292 status, 7.51–7.52 statutory provisions, conflict with, 2.146 substantiality, 1.55–1.59 taxation considerations, 7.293 third parties, 2.223, 2.226, 2.231–2.232 chattels, 2.250 discretion of the court, 2.247

effect on, 7.288 intellectual property, 2.250 rights in land, 2.250 transfer of the benefit, 2.248–2.249, 2.251 transfer of the burden after crystallisation, 2.242–2.246, 2.251 transfer of the burden prior to crystallisation, 2.233–2.241, 2.251 transfer of the benefit, 2.248–2.249, 2.251 transfer of the burden: after crystallisation, 2.242–2.246, 2.251 prior to crystallisation, 2.233–2.241, 2.251 unconscionability, 7.97–7.97, 7.250–7.253 unjust enrichment, relationship with, 7.59–7.60 proprietary interests: form of relief, 7.281–7.282 protection of occupation of property, 2.134–2.135 public authorities, 2.5, 2.63, 2.98–2.101 activities of public authorities, 2.71–2.76 ancillary activities, 2.71 core public functions, 2.71 application of estoppel as it applies to private individuals, 2.66, 2.68 estoppel by record: judicial review, 9.145–9.159 legitimate expectation, 2.69–2.71 non-availability of estoppel, 2.95, 2.97 see also legitimate expectation doctrine limitations on use of estoppel, 2.67 non-delegation principle, 2.65 public authorities/bodies defined, 2.77 unlawful contracts, 2.64 see also public law public law, 1.64, 2.5, 2.98–2.101 case law, 2.78 conflicting case law, 2.79–2.85 private law actions of public authorities, 2.83–2.85 public functions – estoppel allowed, 2.80–2.82 public functions – estoppel refused, 2.79 reconciling conflicting case law, 2.86–2.88 Reprotech case, 2.89–2.91 estoppel by record, 9.142–9.144 judicial review, 9.145–9.159 legitimate expectation doctrine, 2.69–2.71, 2.92–2.97 non-availability of estoppel, 2.95, 2.97 see also legitimate expectation doctrine private law distinguished, 2.61–2.63 promissory estoppel, 6.170–6.171 see also public authorities public policy, 2.6 estoppel by record, 9.7, 9.11, 9.58 statutory provisions and estoppel: conflict between, 2.153–2.155, 2.161–2.164 waiver, 2.6

903

Index quasi-estoppel, 1.6, 1.26, 2.169, 7.45 see also promissory estoppel questions of principle, 1.61 alteration of statutory jurisdiction of courts/ tribunals, 1.65, 2.6, 2.102–2.126 estoppel as a rule of evidence, 1.63, 2.4, 2.37–2.60 estoppel as a rule of substantive law, 1.63, 2.4, 2.37–2.60 estoppel as a separate and independent cause of action, 1.62, 2.3, 2.13–2.36 estoppel in public law, 1.64. 2.5, 2.61–2.101 statutory provisions, conflict with, 1.66, 2.7, 2.127–2.164 successors in title, 1.69, 2.11–2.12, 2.219–2.298 sword or shield question, 1.62, 2.3, 2.13–2.36 third parties, 2.219–2.298 uniform doctrine of estoppel, 1.67. 2.8, 2.165–2.199 waiver principle, 1.68, 2.9–2.10, 2.200–2.218

reliance-based estoppels, 1.6, 1.10, 1.35, 1.36 equitable estoppels: promissory estoppel, see promissory estoppel proprietary estoppel, see proprietary estoppel estoppel by convention, 1.10 see also estoppel by convention estoppel by representation, 1.10 see also estoppel by representation general features, 1.50 burden of proof, 1.60 intention, 1.51 objective test, 1.53–1.54 reasonableness, 1.52 substantiality, 1.55–1.59 promissory estoppel, 1.10 see also promissory estoppel proprietary estoppel, 1.10 see also proprietary estoppel threshold test, 1.59 uniform doctrine of estoppel, 2.196, 2.199 relief: forms of order, 7.280 payment of sums of money, 7.285–7.286 proprietary interest, 7.281–7.282 right to occupy land, 7.283–7.284 proprietary estoppel, 7.260–7.263, 7.330–7.332 appeals, 7.307 considerations, 7.287–7.796 events after the order, 7.297 forms of order, 7.280–7.286 giving effect to order, 7.310 purpose of estoppel, 7.264–7.279 refusal of relief, 7.308 rights of occupation, 7.298–7.307 wish of the claimant, 7.309 remedies: common law election, 8.53 ambit of election, 8.50–8.52 inconsistent rights and remedies, 8.31–8.39 procedural steps, 8.45–8.49 rights distinguished, 8.40–8.42 time of election, 8.43 Reprotech case, 2.89–2.91 repudiation: election, doctrine of, 8.110–8.115 repudiatory breach of contract, 6.153, 8.110–8.115, 8.119 res iudicata, see estoppel per rem iudicatam rescission: estoppel by contract, 3.9 misrepresentation, for, 2.203, 3.96, 3.195, 3.198, 3.204 promissory estoppel: rescission of contracts, 6.41–6.46

ratio decidendi, 6.73, 9.6 see also precedent doctrine reasonableness, 1.47 estoppel by representation: reasonableness of actions, 3.115–3.120 promissory estoppel: reasonableness of actions, 6.185–6.186 proprietary estoppel: reasonable expectation, 7.138–7.140 reliance, 7.214–7.216 reliance-based estoppels generally, 1.52 rectification, 2.236, 2.238 deeds, 4.17–4.18 estoppel by convention, 5.47 shared assumption, 5.40 promissory estoppel, 6.138 reliance: causation, 3.114 common law election, 8.100 estoppel by convention, 5.72–5.76 estoppel by representation, 3.11, 3.110, 3.112–3.120 reliance and detriment components, 3.111 promissory estoppel, 6.24, 6.25, 6.143–6.145 burden of proof, 6.187–6.189 meaning, 6.182–6.184 methods of proof, 6.190 reasonableness of actions, 6.185–6.186 requirement, 6.180–6.181 standard of proof, 6.187–6.189 proprietary estoppel, 7.325 burden of proof, 7.217–7.228 meaning, 7.208–7.212 need for, 7.205–7.207 reasonableness, 7.214–7.216 time of reliance, 7.213 reasonableness of actions, 3.115–3.120

904

Index  restitution: estoppel by representation, 3.151, 3.173–3.177 proprietary estoppel, relationship with, 7.59–7.60 see also unjust enrichment restrictive covenants: abandonment of rights, 2.109 common law election, 8.119, 8.141 implied abandonment, 2.206, 2.215 waiver, 1.68, 2.204, 2.206, 2.211, 2.215 acquiescence, 7.114 causes of action, 2.47 deeds, 4.17, 4.38 election, doctrine of, 8.19, 8.119 transfer of burden/benefit, 2.225, 2.288 use of land, 2.163 waiver, 2.211 resulting trusts, 7.69 revocation: proprietary estoppel: assurance by estopped party, 7.173–7.182 time of revocation, 7.176–7.178 right to occupy land proprietary estoppel, 7.283–7.284, 7.298 appeals, 7.307 leases, 7.302 licences, 7.303–7.306 life interests, 7.300–7.301 rights in land: promissory estoppel, 2.253–2.260 transfer of the benefit, 2.257–2.258 transfer of the burden, 2.253–2.256 proprietary estoppel, 2.250 transfer of the benefit, 2.248–2.249, 2.251 transfer of the burden after crystallisation, 2.242–2.246, 2.251 transfer of the burden prior to crystallisation, 2.233–2.241, 2.251 transfer of the benefit: promissory estoppel, 2.257–2.258 proprietary estoppel, 2.248–2.249, 2.251 transfer of the burden: after crystallisation, 2.242–2.246, 2.251 prior to crystallisation, 2.233–2.241, 2.251 promissory estoppel, 2.253–2.256 proprietary estoppel, 2.233–2.246, 2.251 rule in Henderson v Henderson: estoppel by record, 1.32, 1.82, 9.277–9.279 application, 9.227–9.238 development, 9.223–9.226 issue estoppel, 2.43, 9.117 nature and status, 9.218–9.222 rule in Pinnel’s Case, 6.16, 6.40, 6.47–6.51, 6.66, 6.69, 6.73 rule in Stilk v Myrick, 6.55–6.60, 6.69 promissory estoppel and, 6.67–6.68

rule of substantive law, 2.45, 2.60 estoppel as a, 1.63, 2.4, 2.37–2.40, 2.50–2.53 case law, 2.42–2.44 causes of action, 2.46–2.49 statements of law and of fact, 2.54–2.55 rules of evidence. 2.45 estoppel as a, 1.63, 2.4, 2.37–2.40, 2.60 case law, 2.41 causes of action, 2.46–2.49 inhibiting operation of estoppel, 2.57 rejection of evidential status of estoppel, 2.50–2.53 statements of law and of fact, 2.54–2.55 statutory context, 2.59 rules of law: election, doctrine of: communication of decisions, 8.87 knowledge of facts, 8.63–8.67 knowledge of rights, 8.77–8.81 estoppel by deed: statements of fact, 4.25 estoppel by record: cause of action estoppel, 9.71 estoppel by representation: detriment, 3.121–3.125 intention of the representor, 3.84–3.86 reliance, 3.112–3.113 jurisdiction, 2.107–2.112 rules of morality distinguished, 1.1 rules of morality: rules of law distinguished, 1.1 settlement agreements, 9.46 shared assumptions: acquiescence, 5.60–5.61 crossing the line, 1.19, 1.40, 5.52–5.59, 5.23, 5.42 estoppel by convention, 2.168, 5.5–5.6, 5.23, 5.42, 5.43 foreseeability, 5.67 India Steamship case, 5.18 intention, 5.65–5.66 mens rea element, 5.62–5.68 estoppel by representation: contractual estoppel, 3.197, 3.202 public policy, 2.164 uniform doctrine of estoppel, 2.164, 2.168. 2.174–2.177 silence: breach of duty, 6.128–6.129 breach of legal duty, 3.58, 6.130–6.131 breach of moral duty, 3.60–3.64, 6.132 common law election: communication of the decision, 8.94–8.96 duty to speak, 3.55–3.64, 3.226–3.228 inferred from silence, 3.59

905

Index estoppel by silence, 1.6, 1.29, 3.4, 3.50–3.54, 3.226–3.228 duty to speak, 3.55–3.54 moral duty, 3.60–3.64, 6.132 questions arising, 3.57–3.59 general principle, 3.50–3.54 inferred promises, 6.120 promises and, 6.125–6.132 social security benefits: proprietary estoppel, 7.291–7.292 solicitors: supervision by the High Court, 2.113–2.114 standard of proof: promissory estoppel, 6.187–6.189, 6.234 proprietary estoppel, 7.195 see also burden of proof stare decisis, 2.191 estoppel by record, 9.5–9.6, 9.244 statements leading to estoppel, 1.40–1.41 statements of law and of fact: estoppel by deed, 4.20–4.24 estoppel by representation, 2.54–2.55, 3.18–3.25 distinction between law and fact, 3.26–3.29 mixed law and fact, 3.30 mixed law and fact, 1.40–1.41, 6.28 estoppel by convention, 5.19, 5.96 estoppel by deed, 1.18, 1.71, 2.281, 3.205, 4.1, 4.19, 4.20–4.24, 4.61, 4.93, 7.112 estoppel by record, 9.112, 9.259 estoppel by representation, 1.12, 1.71, 2.54, 2.198, 3.19, 3.22–3.23, 3.27, 3.30, 3.208, 3.220, 5.19, 7.112 fraudulent misstatement, 3.208 innocent misstatement, 3.208 negligent misstatement, 3.208 proprietary estoppel, 7.109 promissory estoppel, 6.31–6.33 statements of opinion: estoppel by representation, 3.31–3.33, 3.42, 3.222 statutory jurisdiction of courts/tribunals, 1.65, 2.6, 2.118 foreign judgments, 9.186–9.191 High Court, 2.114 High Court of Chancery, 2.102 Lands Chamber of the Upper Tribunal, 2.103, 2.108 Senior Courts Act, 2.102 statutory provisions, 2.150–2.152 common law election, relationship with, 8.54 conflict with estoppel, 1.66, 2.7, 2.127–2.129, 2.133 express provision in a statute on agreements, 2.131–2.132 litigation on bills of sale, 2.149 prevention of contracting out, 2.130 proprietary estoppel, 2.146, 2.148, 7.63–7.94 protection of occupation of property, 2.134–2.135

qualifications, 2.153–2.156 tax legislation, 2.147 contracts and estoppel, relationship between: Actionstrength case, 2.141–2.144 foreign judgments, 9.171–9.175, 9.270–9.273 Civil Jurisdiction and Judgments Act, 9.186–9.191 Judgments (Reciprocal Enforcement) Act, 9.180–9.185 jurisdiction of courts/tribunals, 2.102 Law of Property (Miscellaneous Provisions) Act, 1.66, 2.1, 7.62, 7.64 constructive trusts and, 7.54 written requirement, 2.127, 2.137, 2.151, 2.155, 4.22, 6.165, 7.65, 7.79, 7.87, 7.89–7.92 striking out, 2.43 estoppel by record, 9.246 judgments striking out a claim, 9.44, 9.54 striking out as abuse of process, 9.14 frivolous actions, 9.54, 9.57 rule in Henderson v Henderson, 9.58, 9.224 vexation actions, 9.54, 9.57 substantiality: degree of, 1.59 detriment, of, 1.55 risk of detriment, 1.56–1.58, 3.129–3.132 estoppel by representation, 3.136–3.137 threshold test, 1.59 uniform doctrine of estoppel, 2.196–2.197 substantive law doctrine, 2.4, 2.42–2.44, 2.50–2.51, 2.60 successors in title, 1.69, 2.11–2.12, 2.219, 2.228 binding effect of estoppel, 1.73, 2.227, 2.230, 2.239, 2.268, 2.288, 2.292–2.293 deeds, 4.6 estoppel by record, 2.290 privies, 2.285 privity of title or of estate, 9.129 transmissibility of burden/benefit of rights, 2.251, 2.296 election, doctrine of, 8.3 promissory estoppel: transfer of the burden, 2.255 see also third parties ‘sword or shield’ question, 2.13–2.16, 2.36 cause of action and estoppel, relationship between: causes of action, 2.26 proprietary estoppel exception, 2.26 separate and independent cause of action, 2.26 causes of action, 2.26 case law, 2.27–2.31, 2.35 Newport City Council v Charles, 2.33 Smithkline Beecham Plc v Apotex Europe Ltd, 2.34 White v Riverside Housing Association, 2.32 general rule, 2.17–2.21 proprietary estoppel, 2.22–2.25, 2.26

906

Index  taxation considerations: proprietary estoppel, 7.293 statutory provisions and estoppel, conflict between, 2.147 tenancies at will, 7.106, 8.22 tenancies by estoppel, 4.2, 4.65–4.66, 4.69–4.70 terminology, 1.70–1.71 third parties, 2.219–2.221, 2.291–2.298 estoppel by convention, 2.222, 2.279–2.280 estoppel by deed, 2.281–2.284 privies, 2.285–2.286 transfer of the benefit, 2.287 transfer of the burden, 2.287–2.288 estoppel by record, 2.224, 2.289–2.290 estoppel by representation, 2.222, 2.261 chattels, 2.273–2.275 insolvency, 2.275–2.278 interests in land, 2.268–2.272 transfer of the benefit, 2.267 transfer of the burden, 2.262–2.266 estoppel per rem iudicatam, 2.224 interests in land, 2.227–2.229 proprietary estoppel, 2.226 registration of land, 2.230 transfer of the benefit of rights, 2.225 transfer of the burden of obligations, 2.225 promissory estoppel, 2.223, 2.252 rights in land, 2.253–2.260 transfer of the benefit, 2.257–2.258 transfer of the burden, 2.253–2.256 proprietary estoppel, 2.223, 2.226, 2.231–2.232 chattels, 2.250 discretion of the court, 2.247 effect on, 7.288 intellectual property, 2.250 rights in land, 2.250 transfer of burden after crystallisation, 2.242–2.246, 2.251 transfer of burden prior to crystallisation, 2.233–2.241, 2.251 transfer of the benefit, 2.248–2.249, 2.251 successors in title, 1.69, 2.11–2.12, 2.219, 2.228 binding effect of estoppel, 1.73, 2.227, 2.230, 2.239, 2.268, 2.288, 2.292–2.293 deeds, 4.6 estoppel by record, 2.290 privies, 2.285 privity of title or of estate, 9.129 transmissibility of burden/benefit of rights, 2.251, 2.255, 2.296, 8.3 promissory estoppel, 2.255 third-party rights, 7.254 Thorner v Major, 7.39–7.44 time limits: estoppel by convention, 5.89–5.92

estoppel by record, 9.5 appeals, 9.5 jurisdictional and procedural requirements, 2.118 promissory estoppel, 6.72 title by estoppel, 4.66 transfer of the benefit of rights: estoppel by deed, 2.287 estoppel by representation, 2.267 interests in land, 2.225 promissory estoppel, 2.257–2.258 proprietary estoppel, 2.248–2.249, 2.251 transfer of the burden of obligations: estoppel by deed, 2.287–2.288 estoppel by representation, 2.262–2.266 interests in land, 2.225 promissory estoppel, 2.253–2.256 proprietary estoppel: after crystallisation, 2.242–2.246, 2.251 prior to crystallisation, 2.233–2.241, 2.251 trespass: continuing breaches, 9.72 licences, 7.303 promissory estoppel, 6.172–6.173 tribunals, see courts and tribunals unconscionability, 1.3 avoiding rules and formulations, 1.47 central role in establishing estoppel, 1.46 defining unconscionability, 1.44–1.45 determining appropriate remedy, 1.46 estoppel by convention: detriment, 5.77–5.81 injustice requirement, 5.69–5.84 overall test, 5.82–5.84 prejudice, 5.77–5.81 reliance, 5.72–5.76 estoppel by representation, 3.11, 3.110 burden of proof, 3.146 detriment, 3.121–3.135 injustice requirement, 3.138–3.142 potential harm to third parties, 3.144 reliance and detriment components, 3.111 reliance, 3.112–3.120 substantiality, 3.136–3.137 importance, 1.45 moral justification for estoppel, 1.45 promissory estoppel, 6.24, 7.327 detriment, relationship with, 6.194–6.195 reliance, 6.180–6.190 showing unconscionability, 6.174–6.179 uniform doctrine of estoppel, 2.194 uniform doctrine of estoppel, 1.67, 2.8, 2.165–2.168, 2.170, 2.182 case law, 2.183–2.187 detriment, 2.197

907

Index form, 2.189 function of law, 2.192 lack of support for, 2.193, 2.199 limitations, 2.190–2.191, 2.195 reliance-based estoppels, 2.196, 2.199 substantiality, 2.196–2.197 theory, 2.188–2.192 unconscionability, 2.194 unjust enrichment, 2.16, 2.53 estoppel by representation: mistaken payments, 3.151 proprietary estoppel, relationship with, 7.59–7.60 see also restitution

jurisdictional and procedural requirements, 2.116–2.119 law of contract, 2.205 promissory estoppel, 2.204, 2.206, 2.209 public policy, 2.6 separate and independent principle of waiver, 2.214–2.217 use of, 2.204 abandonment of rights, 2.206, 2.211 agreed variation of contract, 2.206, 2.207 common law election, 2.206, 2.208 other form of estoppel, 2.206, 2.210 promissory estoppel, 2.206, 2.209 unilateral giving up of benefits, 2.206, 2.212–2.213 voluntary requirement of actions, 2.203

vexatious actions: striking out, 9.54, 9.57

Zodiac case: estoppel by record, 9.207–9.216

waiver, 1.68, 2.9–2.10, 2.200–2.202, 2.218 common law election, as, 2.204, 2.206, 2.208

908