Estoppel Notes

Emergence of the Doctine of Estoppel

Central London Property Trust v High Trees House (KB 1946)

Facts

• The defendants were renting flats from the plaintiffs and subletting them.

• Due to conditions during the war, they were unable to make the rent agreed and so the plaintiffs agreed to allow discharge of debt for part payment and the rent was lowered.

• In friendly proceedings, in order to clear up their legal position the plaintiffs sued for the full amount of the debt.

Issue

• Promissory Estoppel

Judgment (Denning J)

• Where the parties enter into an agreement intending to create legally binding relations and in that agreement one party makes a promise to another that he knows will be acted upon and which is in fact acted upon, the promise must be honoured in so far as prevents the promisor from acting contrary to it.

Cullen v Cullen (HC 1961)

Facts

• The parties were a family who had been having a number of disputes over the years.

• The father agreed to allow the wife erect a portable home on the lands that he owned, but subsequently sued to have it removed.

Issue

• Promissory Estoppel

Judgment (Kenny J)

• The plaintiff was estopped from suing to remove the house as the promise he made was relied upon by the defendants – Central London Property Trust v High Trees applied.

• It does not appear to be possible proceeding from High Trees to allow the plaintiff use estoppel to possess the land.

Revenue Commissioners v Moroney (SC 1971)

Facts

• The defendants had an agreement with their father for the conveyance of certain leasehold premises in return for a certain sum of money.

• The money was never paid, nor was it intended that it should be, however upon the death of the father, the Revenue insisted that the defendants pay it to the father's estate.

Issue

• Promissory Estoppel

• Limitations – Pre-existing contractual relations

High Court Judgment (Kenny J)

• Whether or not this money is payable depends upon whether the father had a right to bring an action against his sons for the sum.

• The father would have been estopped in this case, having led his sons to change their position as a result of his representations – the doctine of promissory estoppel is not limited to situations where there is an agreement not to enforce existing contractual rights, but also representation as to contractual rights that are to come into force.

Supreme Court Judgment

• The defendants never owed any money to the father, hence there was no contractual right he could be estopped from asserting.

• per Walsh J

• The issue of promissory estoppel will only arise in a case such as this where there is an actual debt – as there is no such debt then there is no need to express an opinion on the applicability of the doctrine in this case.

D&C Builders v Rees (CA 1965)

Facts

• The defendants were in debt to the plaintiffs when the plaintiffs were in dire financial straits.

• The defendants offered them a part payment of a debt as a full settlement and, having no choice, the plaintiffs settled.

• The plaintiffs later sued for the full amount.

Issue

• Promissory estoppel – Equitable conduct

Judgment (Lord Denning MR)

• Promissory estoppel applies in cases where a creditor represents that he will accept a part payment of debt in full satisfaction of the balance and the debtor acts on this representation in good faith – in such cases the court will stop the enforcement of the creditors legal rights.

• However for the court to do this it must be equitable to do so, the creditor must have voluntarily entered into a true accord.

• On the facts there is no true accord and no equity – by telling the plaintiffs that they would get nothing except the lesser sum, she was putting undue pressure on them to do something they were unwilling to do .

Danckwerts LJ concurred, Winn concurred on different grounds

Jorden v Money (HoL 1854)

Facts

• The defendant's son had given a bond and a warrant of attorney in order to secure a repayment of money, both of which had come into the hands of the plaintiff, who was a friend of the defendant as well as a personal representative of the original possessor.

• The defendant informed the plaintiff that he would end a conveyance that had been made to her a number of years ago as a voluntary conveyance, if they abandoned an action on the bond.

• There was later an action brought on the bond.

Issue

• Common Law Estoppel – Contrast to Equity

Judgment

• Estoppel only arises when there is a misrepresentation as to fact, not intention – when someone declares their intention not to enforce a legal right, it does not mean that they have undertaken to relinquish it, merely that they will never act on it.

• per Lord St. Leonards dissent

• It is immaterial whether the misrepresentation is of fact or an intention to do or refrain from doing something so as to induce an action on the part of the other person – it is still a misrepresentation as to the circumstances which exist.

• If the representation had been that she had cancelled or burnt the bond and that had been a lie, the plaintiff would have succeeded in equity – it is an absurdity that in the present situation, where the effect is the same that there is no remedy.

Detriment

WJ Alan v El Nasr (CA 1972)

Facts

• The defendants were buying coffee from the plaintiffs and paid for it in sterling, which the plaintiffs accepted despite the fact that it was contrary to the conditions of the contract.

• Sterling was later devalued and the plaintiffs sued the defendants for payment in Kenyan shillings.

Issue

• Estoppel – Whether the defendants must incur a detriment in their reliance

Judgment

• Lord Denning MR

• There is no authority to suggest that the defendant must act to his detriment, it is enough that he change his position based on the actions or representations of the plaintiffs for an estoppel to be raised.

• Megaw LJ

• Stephenson LJ

The other Lord Justices reached their decision on the validity of the...

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