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A Reappraisal of Quasi-Estoppel
Published online by Cambridge University Press: 16 January 2009
Extract
In a recent article in the Cambridge Law Journal, Dr. D. M. Gordon, q.c., sets out systematically to demolish the theory of quasi-estoppel propounded by Denning J. in Central London Property Trust Ltd. v. High Trees House Ltd. In his closely reasoned argument he seeks to prove that no authority is to be found in case-law, either before or after 1947, to support any principle of this type, which he believes has been totally discredited by dicta in the later case of Tool Metal Manufacturing Co. Ltd. v. Tungsten Electric Co. Ltd. He further goes on to assert that the results of the implementation of such a principle would be arbitrary and undesirable in contrast with what he believes to be the clear rule of law laid down in the two nineteenth-century cases of Jorden v. Money and Foakes v. Beer. In short, it appears to be his view that a creditor who promises to forgo contractual rights without consideration and then subsequently retracts his promise and seeks to enforce his strict legal rights is both legally and ethically justified in doing so.
These are sweeping allegations which call for an answer. The object of this paper is to examine the validity of these arguments and to reassert that not only does authority exist to support a principle of quasi-estoppel of the type outlined by the writer on a previous occasion, but also to suggest that the implementation of this principle is most desirable if the rule of law is to be brought into line with commercial expectation and commercial practice.
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References
1 [1963] C.L.J. 222.
2 [1947] K.B. 130. Hereafter referred to as the High Trees case.
3 (1950) 69 R.P.C. 108 (first action); [1954] 1 W.L.R. 862; [1954] 2 All E.R. 28 (C.A.) and [1955] 1 W.L.R. 761; [1955] 2 All E.R. 657 (H.L.) (second action).
4 (1854) 5 H.L.C. 185.
5 (1884) 9 App.Cas. 605.
6 “Recent Developments in Estoppel” (1951) 67 L.Q.R. 330.Google Scholar
7 (1877) 2 App.Cas. 439.
8 (1888) 40 Ch.D. 268.
9 The name of promissory estoppel is equally appropriate.
10 (1951) 67 L.Q.R. 330 at p. 349.
11 (1877) 2 App.Cas. 439.
12 (1888) 40 Ch.D. 268.
13 [1963] C.L.J. 222 at p. 232.
14 [1917] 2 K.B. 473.
15 [1963] C.L.J. 222 at p. 252.
16 (1951) 67 L.Q.R. 330 at p. 337. The second case referred to is Hughes v. Metropolitan Ry.
17 The identical point arises in the application of the consideration doctrine. In the majority of cases the same act which constitutes detriment to the promisee also results in benefit to the promisor. It is now clear, however, that both elements need not be present to render a promise enforceable.
18 (1877) 2 App.Cas. 439 at p. 448.
19 (1888) 40 Ch.D. 268 at p. 286.
20 [1963] C.L.J. 222 at p. 231.
21 These cases were: Fenner v. Blake [1900] 1 Q.B. 426; Re William Porter & Co. Ltd. [1937] 2 All E.R. 361; Re Wickham (1937) 34 T.L.R. 158; Buttery v. Pickard (1945) 174 L.T. 144; Salisbury v. Gilmore [1942] 2 K.B. 38.
22 [1942] 2 K.B. 38.
23 [1917] 2 K.B. 473.
24 [1963] C.L.J. 222 at p. 236.
25 [1893] 2 Q.B. 274.
26 Ibid. at p. 285.
27 [1904] 1 Ch. 305.
28 Ibid. at p. 312. It is interesting to note at p. 313 that it was Farwell J.'s view of Hughes that: “Nothing turned upon any equitable doctrine of relief against forfeiture.”
29 Ibid. at p. 314.
30 [1920] 3 K.B. 475.
31 Ibid. at p. 494.
32 See also Ogle v. Vane (1868) 3 Q.B. 373; Hickman v. Haynes (1875) 10 C.P. 598; Levey & Co. v. Goldberg [1922] 1 K.B. 688; Besseler v. S. Derwent Coal Co. [1938] 1 K.B. 408.
33 [1950] 1 K.B. 616.
34 See supra, note 3.
35 [1964] 1 W.L.R. 1326; [1964] 3 All E.R. 556.
36 [1963] C.L.J. 222 at p. 239.
37 In fact counsel for the plaintiff accepted the statement of principle made by McCardie J. in Hartley v. Hymans and cited above at p. 100.
38 [1963] C.L.J. 222 at p. 249.
39 (1950) 69 R.P.C. 108 at p. 112.
40 Singleton L.J. concurs in these jndgments without further comment.
41 (1950) 69 R.P.C. 108 at p. 116. At p. 115, Somervell L.J. remarked that he had “come to the conclusion that the principle as laid down by Lord Cairns and Bowen L.J. is applicable.”
42 Ibid. at p. 115.
43 Ibid at p. 116.
44 [1955] 2 All E.R. 657 at p. 661.
45 This seems clear from the following extract from his judgment: “A return to the former policy of exacting compensation in accordance with the deed of 1938 would have such far-reaching effects on T.E.C.O.'s production policy and would involve decisions of such importance by those in charge of the management of the company that a notification by T.M.M.C. of their intention to revert to the old régime must at least be communicated in unequivocal terms.” [1954] 2 All E.R. 28 at p. 40.
46 Cited above at p. 103.
47 [1951] 2 K.B. 215.
48 [1955] 2 All E.R. 657 at p. 660.
49 Ibid. at p. 675
50 [1964] 1 W.L.R. 1326; [1964] 3 All E.R. 556.
51 Consisting of Lords Morris, Hodson and Guest.
52 [1964] 3 All E.R. 556 at p. 559.
53 (1884) 9 App.Cas. 605.
54 Emmanuel Ayodeji Ajayi v. R. T. Briscoe (Nigeria) Ltd. [1964] 3 All E.R. 556.
55 (1951) 67 L.Q.R. 330 at p. 348.
56 Namely in Robertson v. Minister of Pensions [1948] 2 All E.R 769 and Combe v. Combe [1951] 2 K.B. 215.
57 [1948] 2 All E.R. 769.
58 (1951) 67 L.Q.R. 330 at p. 346.
59 [1964] 3 All E.R. 556.
60 (1952) 15 M.L.R. 1.
61 Ibid. at p. 5.
62 The most important of these later cases are Perrott & Co. Ltd. v. Cohen [1950] 2 All E.R. 939; Rickards v. Oppenhaim [1950] 1 K.B. 166; Mitas v. Hyams [1951] 2 T.L.R. 22; and Lyle-Mellor v. Lewis & Co. (Westminster) Ltd. [1956] 1 All E.R. 247. Its theory was also apparently accepted by Atkinson J. in Ledingham v. Bermejo Estancia Ltd. [1947] 1 All E.R. 749 and by Buckley J. in Beesley v. Hallwood Estates Ltd. [1960] 2 All E.R. 314.
63 (1950) 69 R.P.C. 108 at p. 115. Cohen L.J. (at p. 116) thought that detrimental reliance was a matter of res ipsa loquitur.
64 [1963] C.L.J. 222 at p. 253.
65 Ibid at p. 254.
66 Examples are compositions with creditors. Haigh v. Brooks (1839) 10 Ad. & E. 309, Shadwell v. Shadwell (1860) 9 C.B.(n.s.) 159, De la Bere v. Pearson [1908] 1 K.B. 280.
67 See infra at p. 112.
68 Sixth Interim Report of the Law Revision Committee (1937).
69 [1963] C.L.J. 222 at p. 233.
70 Lord Cairns in Hughes (1877) 2 App.Cas. 439 at p. 448, Bowen L.J. in Birmingham (1888) 40 Ch.D. 268 at p. 286.
71 Spencer Bower, Estoppel by Representation.
72 For this reference I am indebted to a paper presented at the 1963 conference of the Australasian Universities Law Schools Association by the Hon. Sir Alexander Turner, judge of the Court of Appeal, New Zealand.
73 (1876) 1 C.P.D. 120 at p. 134.
74 [1904] 1 Ch. 305 at p. 314.
75 [1920] 3 K.B. 475 at p. 494. Italics added.
76 [1951] 1 All E.R. 767 at p. 770.
77 [1950] 1 K.B. 616.
78 [1956] N.Z.L.R. 785.
79 “An Equity to Perfect a Gift” (1963) 79 L.Q.R. 238.
80 (1862) 4 De G.F. & J. 517.
81 [1964] 3 All E.R. 556 at p. 559.
82 [1963] C.L.J. 222 at p. 260.
83 Ibid. at p. 247.
84 (1952) 15 M.L.R. 1 at p. 5.
85 An attempt was made to trace this distinction in a previous article: (1958) 32 Tulane L.R. 371.
86 It is an odd coincidence that many of the waiver cases cited above also involved questions arising under the Statute of Frauds.
87 Cmnd. 1616.
88 [1963] C.L.J. 222 at p. 250.
89 Foot Clinics (1943) Ltd. v. Cooper's Gowns Ltd. [1947] K B. 506; Dean v. Bruce [1952] 1 K.B. 11; Re Venning (1947) 63 T.L.R. 394.
90 Ledingham v. Bermejo Estancia Co. Ltd. [1947] 1 All E.R. 749.
91 [1963] C.L.J. 222 at p. 259.
92 Ibid. at p. 252.
93 Foakes v. Beer (1884) 9 App.Cas. 605 at p. 622, where he pointed out that “all men of business, whether merchants or tradesmen, do every day recognise and act on the ground that prompt payment of a part of their demand may be more beneficial to them than it would be to insist on their rights and enforce payment of the whole.” For this reason he had doubts whether the decision in the case was justified.
94 Sixth Interim Eeport of the Law Revision Committee (1937). See the comments of Hamson: (1938) 54 L.Q.R. 233.
95 [1947] K.B. 130 at p. 134.
96 [1963] C.L.J. 222 at p. 246.
97 [1947] K.B. 606.