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Estoppel

Previous: Duress

Estoppel is an equitable doctrine preventing the withdrawal of a promise if it has been relied upon, in number of different types of situation. It should be noted that estoppel is only relevant if there has been no consideration provided for the promise in question.

Promissory Estoppel

The first type of estoppel, promissory estoppel, was recognised in the landmark case of Central London Property Trust v High Trees House [1947]. It was said that promissory estoppel became relevant where an unambiguous representation had been relied upon and where it would be inequitable for the promisor to go back on their promise. In this case, a lessee had relied upon a lessor’s promise to reduce rental fees during the war where occupation of a block of flats was very low. Recovery of higher fees was allowed once full occupation had resumed after the war. It was inequitable for the lessor to demand fees of the higher rate during times of lower occupation rates following the promise. In other words, the lessor was estopped from recovering fees during low occupancy times.

In Collier v Wright [2007], a promisor was estopped from demanding a full debt where the promisee had relied upon a representation to pay on 1/3 back. This was ruled non-contradictory to Foakes v Beer [1884] as equity should prevail according to Lord Denning’s judgment in Central London Property Trust v High Trees House [1947].

However, estoppel cannot be a claim in it’s own right. You cannot claim that someone should be estopped from revoking their promise. Estoppel is a defence mechanism only. As such, in Combe v Combe [1951], a wife could not enforce her estranged husband’s promise to pay maintenance to her. It is often said that estoppel is “a shield, not a sword”.

Estoppel by convention

When two parties proceed upon an assumption which is incorrect, it can be ruled unjust for the parties to revoke that assumption. It was defined in the case of Amalgamated Investments and Property Co v Texas Commerce Bank [1982].

Proprietary estoppel

Another type of estoppel, and the last one we shall deal with it that of proprietary estoppel. It concerns the situation where an owner of land has led another to believe that they have an interest in the land. As such, the owner may be prevented from denying such an interest legally.

A simple case is that of Dillwyn v Llewelyn [1862]. The claimant’s late father had allowed the claimant to build his own house on his father’s land. The father’s estate denied the claimant an interest in ‘his’ house. The son was granted a life interest in the land. More recently, the case of Inwards v Baker [1965] was a similar situation: a life interest was granted. It should be noted that estoppel requires that the claimant has invested in the land to which he believes he has an interest. In Pascoe v Turner [1979], decorating constituted such an investment.

In recent years, and the case of Cobbe v Yeoman’s Row Management [2008], it was ruled that estoppel will not be effective between two experienced businessmen, where they both intent to complete a contract. However, estoppel may apply in a more personal situation, such as in Thorner v Major [2009], where a late farmer’s estate was estopped from denying the claimant’s interest in the farm. The claimant has worked tirelessly on the farm and the farmer had made many remarks suggesting that the claimant would inherit the farm.

Consideration and estoppel

As previously mentioned, there can only be estoppel if there has been no consideration. However, in the case of Waltons Stores v Maher [1988, Australia], a contract had not even be signed and estoppel prevented a lessee not signing a lease agreement.

Next: Privity of contract

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