Estoppel Flashcards
Central London Property Trusts v High Trees
The claimants let block of flats to the defendants, in September 1937, for a term of 99 years at a rented the 500 pounds per year. A few years later, due to wartime conditions and fear bombing raids, many of the flats were not left. The claimants agreed, in 1940, to reduce the defendants rent to 1250. When the war ended in 1945, the flats were no longer empty, And the claimants want to claim the full rent (i.e. 2500 pounds) from the defendants. In order to test whether they could claim the full rate, retrospectively, for the period when many of the fonts were empty, the claimant’s claimed the full rent for the last two quarters in 1945.
Justice Denning held in favour of the claimant’s argument on the basis that the agreement to accept a lower rent was intended only to cover the period when many of the flats were empty. As this was no longer the case by the second half of 1945, the claimants were entitled to go back to charging the defendants the full rent that had been agreed originally between the parties in 1937. What is significant about the judgment, however, is his opinion that any attempt by the claimants to recover the full rent for the period between 1940 and 1945 would not be successful. In other words, apparently contrary to the established rule in Foakes v Beer, the claimants would not be permitted to go back on the promise made to the defendants (in 1940), to accept a lesser rent, whilst wartime conditions prevailed, and many flats remained empty.
Jorden v Money
The difficulty with estoppel, as a means of evading the common-law rule, was that it was held in Jorden v Money that the doctrine applied only to a representation of existing fact, whereas in High Trees representation made by the claimants, in relation to reducing the rent, was one of intention, rather than of existing fact (i.e. a promise).
Hughes v Metropolitan Rly Co
Lord Denning argued that the equitable principle had not been considered in Foakes v Beer, and instead he chose to rely on another House of Lords decision: Hughes v Metropolitan Rly Co.
a landlord gave his tenant six months notice to repair the premises. The tent faced forfeiture of the lease if he did not comply with the notice. The tenant agreed to do the repairs but also suggested that the landlord might wish to purchase the lease. The tenant indicated that he would not start the repairs whilst negotiations for the sale of the lease were in progress. One month after giving him the notice to repair, the landlord began negotiations with the intent for the purchase of the lease, but these proved fruitless and were discontinued the following month. The tenant had, meanwhile, failed to repair the premises. When six months have passed from the date of giving the tenant notice to repair, the landlord tried to treat the lease as forfeited.
The House of Lords rejected the landlord’s claim. The tenant was entitled to relief in equity against forfeiture. By starting negotiations for the purchase of the lease the landlord had led the tenant to believe that he would not enforce a strict legal rights while the negotiations continued. He would have been unfair to allow the landlord to go back on this implied promise. Once the negotiations did break down, he should have given the tenant reasonable time to do the repairs. Accordingly, the six months notice was to run from when the negotiations were broken off.
Combe v Combe
By itself, promissory estoppel does not create a cause of action; if it did, it would be very difficult to reconcile with the doctrine of consideration.
In Combe v Combe, A husband agreed to pay his wife 100 pounds a year (free of tax) at the time of their divorce. He failed to make any payment and she sued him, after six years, for 600 pounds arrears. She gave no consideration for her husband’s promise. She chose not to apply to the divorce court for maintenance; she did not refrain from doing so at her husband’s request. In fact, she had a greater annual income than her husband. However, the trial judge, by applying the doctrine of promissory estoppel, held that the husband’s promise was enforceable. The husband had made a clear promise, which she intended to be binding and to be acted upon, and which was acted upon by his wife.
The Court of Appeal allowed the husband’s appeal, and Lord Denning was quick to dispel fears that promissory estoppel posed such a threat to the doctrine of consideration. He explained that the High Trees principal did not create new causes of action where none previously existed. It operated only to prevent the person from insisting on his or her strict legal rights, when it would be unjust for him or her to do so in view of the dealings which had taken place between the parties. To this extent only was promissory estoppel intended to modify the legal requirement of consideration.
The limitation of promissory estoppel means only that the promissory estoppel cannot stand alone as giving a cause of action.
Baird v Marks and Spencer
BairdHad been a leading supplier of garments to Marks and Spencer for 30 years, when Marks and Spencer suddenly notified them of its decision not to place any more orders. This led to an action by Baird claiming that Marks and Spencer were precluded, both by contract and estoppel, from ending this long-term commercial relationship without reasonable notice. The lack of certainty in the alleged agreement between the parties meant that the claim in contract failed. Baird Try to establish an “equity generated by estoppel” to protect its reliance interest, arguing that the doctrine of estoppel is a flexible one. Although the court expressed some interest in the potential development of estoppel and its flexibility, he rejected Baird’s claim. It held that the alleged obligation lacked certainty and that the law, as it stands, does not enable the creation of recognition by estoppel of an enforceable right of the type in the circumstances relied on in this case.
Tool Metal v Tungsten Electric
Tool Metal owned the patents of certain hard metal alloys and, under a contract in 1938, they granted Tungsten Electric license to manufacture and sell these metals. The agreement provided that the standard royalty to be paid by Tungsten Electric was 10%, but that a higher rate of 30% (described as “compensation”) was payable if Tungsten Electric used more than a specified amount of the alloys in any month. After the outbreak of war, Tungsten Electric stopped paying compensation to Tool Metal at the higher royalty rate, and Tool Metal agreed (in the national interest) not to enforce their right to 30%, and to allow payment at the basic rate of 10%. In 1944, Tool Metal proposed a new agreement which include compensation payments once again, but this was rejected by Tungsten Electric. In 1945, Tool Metal sought compensation (i.e. the waived 20%) in respect of the material used by Tungsten Electric since June 1945. The Court of Appeal held that, under the principle of Hughes v Metropolitan Rly Co, Tool Metals agreement to suspend compensation payments was finding equity until proper notice was given of their intention to resume insistence upon their strict legal rights. (The draft agreement of 1944 did not amount to reasonable notice.) In 1950, Tool Metal claim compensation from Tungsten Electric dating from January 1947. Had Tool Metal given reasonable notice to Tungsten Electric of their intention to insist once more on their strict legal rights?
The House of Lords held in favour of Tool Metals claim to compensation. They had effectively revoked their promise, made during the war, to suspend their strict legal rights. The first action, brought in 1945, constituted reasonable notice of their intention. The case suggests that the promisor’s strict legal rights are merely suspended, and can be resumed by giving adequate notice to the other party.
Ajayi v Briscoe
The privy Council stated a number of limitations on promissory estoppel. Amongst them was the qualification that the promisor is able to go back on his or her promise, on giving reasonable notice, providing the promisee with a reasonable opportunity of resuming his or her position, and the line has been taken that it is only if it is not possible for the promisee to resume his or her position, that the promise would be irrevocable.
Collier v P
Although the effect of the doctrine is usually suspense very only, the creators right to recover the debt may be extinguished in circumstances where to go back on the promises merely “sufficiently inequitable.”
IMT Shipping and Chartering v Chanson Shipping
It was also stated that the promise must be intended to affect the parties legal relations and must be understood to be a promise that will be acted upon by the promisee.
Northstar Land v Maitland Brooks
It was stressed that the promise (by words or conduct) has to be a “clear, unequivocal, unambiguous promise or assurance which was intended to affect the legal relations between them or was reasonably understood by the other two have that effect.”
D and C Builders v Rees
The principle is equitable in nature and therefore it should not be used to help the promisee or debtor, was behaved in an unconscionable or inequitable way.
In D and C Builders v Rees, The defendant took advantage of the financial hardship of his creditor, little choice but to accept the defendant’s offer of a lesser sum in full settlement of the debt. The decision of the Court of Appeal was consistent with the common-law rule in Foakes v Beers; the creditor was entitled to go back on his promise and sue successfully for the balance of the debt. Lord Denning’s reason for finding in favour of the creditor was that the defendant had behaved inequitably and, therefore, should not be allowed to rely on the equitable defence.
Emery v UCB
It is unlikely that “detriment” is a strict requirement, and it may be inequitable to allow the promisor to go back on his promise even in the absence of detrimental reliance. It may simply be that it is just more likely to be inequitable to allow a promisor to resile from his or her promise for the other party is acted on the problems, not only in reliance, but also to his or her disadvantage for “detriment.”
Spence v Shell
… Which is intended to affect the legal relationship between the parties
W J Alan v El Nasr
Promisee must have acted in reliance on the promise
