Estoppel in English law is a doctrine that may be used in certain situations to prevent a person from relying upon certain rights, or upon a set of facts (e.g. words said or actions performed) which is different from an earlier set of facts.
Estoppel could arise in a situation where a creditor informs a debtor that a debt is forgiven, but then later insists upon repayment. In a case such as this, the creditor may be estopped from relying on their legal right to repayment, as the creditor has represented that he no longer treats the debt as extant. A landlord may tell his tenant that he is not required to pay rent for a period of time ("you don't need to pay rent until the war is over"). Until the war is over, the landlord would be "estopped" from claiming rents during the war period. Estoppel is often important in insurance law, where some actions by the insurer or the agent estop the insurer from denying a claim.
There are a huge array of different types of estoppel which can arise under English law. It has been judicially noted on more than one occasion that the link between them is often tenuous. Treitel on Contracts notes that "unconscionability ... provides the link between them", but they nevertheless have "separate requirements and different terrains of application". The English courts have generally abandoned any attempt to create a single general underlying rationale or principle; in First National Bank plc v Thompson Ch 231 CA Lord Millett said: "the attempt... to demonstrate that all estoppels... are now subsumed in the single and all-embracing estoppel by representation and that they are all governed by the same principle [has] never won general acceptance."First National Bank plc v Thompson Ch 231 CA 236
Reliance-based estoppels Under English law, estoppel by, promissory estoppel and proprietary estoppel are regarded as 'reliance-based estoppels' by Halsbury's Laws of England, Vol 16(2), 2003. Both Halsbury's and describe all three estoppels collectively as estoppels by representation. These estoppels can be invoked when a promisee/representee wishes to enforce a promise/representation when no consideration was provided by him. The court will only enforce this lack-of-consideration promise if and only if it would be "unconscionable" for the promisor/representor to rescind from his promise/representation ("it's not fair!"). Estoppel when invoked in such a manner is often considered a rival or alternative to the doctrine of consideration under contract law. Only proprietary estoppel can create a cause of action in English law, though the other two can act in support of a cause of action or a reply to a defence. Under American jurisprudence, equitable estoppel is available only as a defence, while promissory estoppel can be used as the basis of a cause of action.
The requirements of inducement and reliance are broadly the same for all reliance-based estoppels: (i) the representor must have intended (actual or presumed) the represent, or have been reasonably understood by the represent as having intended him, to act on the relevant representation (or promise), (ii) the form of reliance must have been reasonable or intended, and (iii) the representation must have caused the represent to act in such a way that it would be "unconscionable" for the representor to resile. Detriment is measured at the time when the promisor proposes to withdraw his promise, not at the time when the promise is made.
Estoppel by representation of fact and promissory estoppel are mutually exclusive: the former is based on representation of existing fact (or of mixed fact and law), while the latter is based on a promise not to enforce some pre-existing right (i.e., an intention as to the future). Proprietary estoppel can operate only between parties who, at the time of representation, were in a pre-existing relationship, while this is not a pre-requisite under estoppel by representation of fact.
English courts will consider unconscionability taking into account many factors, including the behaviour, state of mind, and circumstances of the parties. Generally, the following eight factors are determinative: how the promise/representation and reliance upon it were induced the content of the promise/representation relative knowledge of the parties parties' relative interest in the relevant activities in reliance nature and context of the parties' relationship parties' relative strength of position history of the parties' relationship steps, if any, taken by the promisor/representor to ensure he has not caused preventible harm.
Estoppel by representation "Estoppel by representation of fact" is a term coined by George Spencer Bower. This species of estoppel is also referred to as "common law estoppel by representation" in Halsbury's Laws of England, vol 16(2), 2003 reissue.
In at paragraph I.2.2, estoppel by representation of fact is defined as follows:
A second definition can be found at at paragraph 9.02:
A representation can be made by statement or conduct. Although the representation must be clear and unambiguous, a representation can be inferred from silence where there is a duty to speak or from negligence where a duty of care arises. Under English law, estoppel by representation of fact is not a cause of action, though it may be a defence or acts in support of a cause of action. There is some debate whether under English law courts will take into account unconscionability under estoppel by representation of fact, although Australian courts clearly do., para 9-03 at 444 per Deane J
Lord Justice Lewison, in his judgment as to the circumstances obtaining at the time of the withdrawal of employment tribunal (ET) proceedings did not draw the conclusion that the appellant, Dr Srivatsa, intended to concede the merits of his claim when withdrawing his ET action. In allowing the appeal of Dr Srivatsa against a prior judgement of a cause of action or issue estoppel, and in respectful disagreement with the judge of first instance, he said that the effect of that judge's decision was that, in the words of Mummery LJ in the case of Sajid v Sussex Muslim Society:
Equitable estoppel As noted above, under English law, promissory and proprietary estoppel are both species of equitable estoppel.
Proprietary estoppel
Proprietary estoppel arises when A purports to give but fails to effectively convey, or promises to give property or an interest in property, to B, while being generally aware (Crabb v Arun District Council) that B will expend money or otherwise act to his detriment in reliance of the supposed or promised gift, so much so that it would be "unconscionable" not to enforce the expectation (Taylor Fashions v Liverpool Victoria Trustees).Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd (1982) QB 133
For example, in Dillwyn v Llewelyn in Chancery, a father promised a property to his son, who took possession, expended a large sum of money on the house and otherwise improved the property. The father never actually gifted the property to the son. After his death the son, claiming to be the equitable owner, obtained a court judgment forcing the trustees to convey the land to him.
Similarly in Inwards v Baker, a father encouraged his son to build a house on his own land, promising to leave that land to the son in his will. Subsequently, the son built a house and lived there for some 30 years. No transfer of land was made in the father's will when he died. It was held that despite this the personal representatives of the father were estopped from evicting the son.
While the courts will generally uphold the expectations of parties, if the parties are themselves not clear about their expectations the court's starting point will be the detriment incurred by the parties (per Robert Walker LJ Jennings v Rice). Proprietary estoppel claims, therefore do not necessarily result in the transfer of the property to the claimant; in Jennings v Rice itself, there was a monetary award.
In June 2008 the House of Lords re-visited the doctrine of proprietary estoppel, and in the process was quite fierce in describing its limits. In that light, it must be very doubtful that Mr Jennings would have got the result he did: properly understood, Jennings v Rice is a bit of a muddle, probably concerning promissory estoppel, with a bit of quantum meruit thrown in for good measure.
In Cobbe v Yeoman's Row Management Ltd the House overturned the decision of a fairly heavy-weight Court of Appeal on the very issue of estoppel, thereby illustrating the level of confusion about the meaning of the doctrine. Lord Scott of Foscote, with whom the other Lords agreed, described at length that someone who seeks to rely on proprietary estoppel must establish an actual or certain interest in the property to which he claimed a right. Without that, he is not off the starting blocks.
In particular he remarked that the following rationes of Deane J in the Australian case of Muschinski v Dodds "repay careful reading" (his Lordship said they applied to proprietary estoppel as they do to constructive trusts):
Lord Scott added:
He then found that that was exactly what the Court of Appeal, no less, had done. Once the proprietary right is established, then and only then will the court consider the conduct of the party seeking to deny the right and if that conduct is wanting, will estop him from denying the right. The court should not begin with an examination of a party's behaviour.
Promissory estoppel (contract law) Promissory estoppel is the doctrine that prevents a party from acting in a certain way because the first party promised not to, and the second party relied on that promise and acted upon it. In English law, a promise made without consideration is generally not enforceable, and is known as a gratuitous promise. For example, a car salesman promises not to sell a car over the weekend, but does so, the promise cannot be enforced. If however, the car salesman accepts one pound in consideration for the promise, the promise is binding and enforceable in court. Estoppel is one of the exceptions to this rule.
The doctrine of promissory estoppel was first developed in Hughes v Metropolitan Railway Co but was lost for some time until it was resurrected by Lord Denning in the leading case of Central London Property Trust Ltd v High Trees House Ltd.Central London Property Trust Ltd v High Trees House Ltd KB 130
In this case, the claimants let a block of flats to the defendants at an annual rent of £2,500. However, they agreed to accept a reduction in rent to £1,250, because the defendants were unable to find enough tenants due to the evacuation of London during World War II. This promise to accept a lesser rent was unsupported by consideration. At the end of the war the flats became fully let, and the claimants demanded the return to payment of full rent. Denning J held that they were entitled to this from the last two quarters of 1945. Denning mentioned in an obiter dictum that had the plaintiffs tried to be reimbursed for the full amount they would have been estopped from doing so even though no consideration was present. This is because the plaintiff represented that he would accept half the rent and the defendant acted upon this.
Promissory estoppel requires (1) an unequivocal promise by words or conduct, (2) a change in position of the promisee as a result of the promise (not necessarily to their detriment), (3) inequity if the promisor were to go back on the promise. Estoppel is "a shield not a sword" – it cannot be used as the basis of an action on its own. It also does not extinguish rights. In High Trees the plaintiff company was able to restore payment of full rent (although estopped back rent was lost) from early 1945, but would have been able to restore full rent at any time after the initial promise provided a suitable period of notice had been given.