Estoppel

Insight | March 2017

Estoppel
Image: ‘Girl Interrupted at Her Music’ by Johannes Vermeer

‘Estoppel’ or by virtue of its purpose ‘interruption’, is a legal source of remedy often used in connection to land or property related matters, but is readily used in numerous fields of dispute. The concept behind this intervening doctrine is one that prevents a miscarriage of justice where through discourse and action, a party is found to suffer at the expense of another’s profit. Because this approach often falls outside of common law rules, it frequently requires equity to redress the balance in favour of a fair and reasoned settlement where proven as fact.

To date, there are distinct and overlapping forms of estoppel, and so the list below while no means definitive, aims to cover the more familiar (and unfamiliar) versions used within domestic and international law.

Promissory Estoppel (or Equitable Estoppel)

Founded within contract law, this form of estoppel relies upon the promise of one party to another that is later revoked and proven detrimental to the promisee. Naturally circumspect of the rules of contract, the essence remains equitably valid, and was best witnessed in Central London Properties v High Trees Ltdwhere Denning J remarked:

“The logical consequence, no doubt, is that a promise to accept a smaller sum in discharge of a larger sum, if acted upon, is binding notwithstanding the absence of consideration.”

Proprietary Estoppel

As founded and used most in property law, there are three main elements to qualifying action in proprietary estoppel, namely (i) that the landowner leads the claimant to believe he will accumulate some proprietary right, (ii) the claimant acts to his own detriment in reliance of the aforementioned right, and (iii) those actions are demonstrably in reliance of the expected right, where otherwise different choices might have been made. This was explained by Lord Scott of Foscote in Cobbe v  Yeoman’s Row Management Ltd who said:

“An estoppel bars the object of it from asserting some fact or facts, or, sometimes, something that is a mixture of fact and law, that stands in the way of some right by the person entitled to the benefit of the estoppel. The estoppel becomes a proprietary estoppel – a sub-species of a promissory estoppel – if the right claimed is a proprietary right, usually a right to or over land but, in principle, equally available in relation to chattels or choses in action.”

Estoppel within Public Law

This is often used where a member of a public body has issued assurances that (i) an action can be undertaken by  member of the public, or (ii) that the specific body will exercise its power to the benefit of the person enquiring. Where either fact has been proven correct, the designated department or authority is held liable to follow through on that action where reasonable, and in line with public interest, as was discussed in Southend-on-Sea Corporation v Hodgson (Wickford ) Ltd, although the applicable claim was never upheld after it was stressed by Lord Parker CJ  that:

“[I]t seems to me quite idle to say that a local authority has in fact been able to exercise its discretion and issue an enforcement notice if by reason of estoppel it is prevented from proving and showing that it is a valid enforcement notice in that amongst other things planning permission was required.”

Estoppel by (unjust) Conduct

This phrase is largely self-explanatory, but can be best surmised as visibly manipulative or unreasonable behaviour by one party toward another, for example when securing an annulment, as was explored in Miles v Chilton, where the groom falsely induced his fiancée into a marriage that was by all accounts, illegal, as the bride-to-be was in fact still married to her previous husband, despite his misleading her that the annulment had succeeded. The destructiveness of this self-created dilemma was explained by Dr. Lushington, who despite awarding in favour of the claimant, warned that:

“[H]ere the averment of marriage is made by the party having an opposite interest, and we well know that every one is bound by his admission of a fact that operates against him.”

Estoppel by Per rem Judicatam (or issue estoppel)

This is another family law approach, which translates that a judicial decision to grant nullity cannot be overturned after the fact, except in circumstances where the annulment is proven invalid, after which any party aside from the divorcing couple, can challenge the direction of the court. This form of estoppel can however, be found in criminal law cases, as was seen in Hunter v Chief Constable of the West Midlands Police and Others, where Lord Diplock commented that:

“The abuse of process which the instant case exemplifies is the initiation of proceedings in a court of justice for the purpose of mounting a collateral attack upon a final decision against the intending plaintiff which has been made by another court of competent jurisdiction in previous proceedings in which the intending plaintiff had a full opportunity of contesting the decision in the court by which it was made.”

Estoppel through Acquiescence (or Laches or Silence)

As used in a number of fields, there are requisites that the party claiming estoppel has had their hand forced into complying with matters that they had in fact not been properly consulted upon, as was argued in Spiro v Lintern, where a husband was held to agree to the sale of his co-owned property, despite not having consented to his wife’s putting it up for sale, and the purchaser proving able to enforce the contract in his name through her individual representation. It is also applied in cases where a secondary party to a contract or notice, fails to challenge it within a reasonable period, after which estoppel of acquiescence can be used to deter any claim to the contrary, as was used in Kammins v Zenith Investments, where Lord Diplock again explained:

“[T]he party estopped by acquiescence must, at the time of his active or passive encouragement, know of the existence of his legal right and of the other party’s mistaken belief in his own inconsistent legal right. It is not enough that he should know of the facts which give rise to his legal right. He must know that he is entitled to the legal right to which those facts give rise.”

And in the U.S case Georgia v South Carolina, where it was held that:

“South Carolina has established sovereignty over the islands by prescription and acquiescence, as evidenced by its grant of the islands in 1813, and its taxation, policing and patrolling of the property. Georgia cannot avoid this evidence’s effect by contending that it had no reasonable notice of South Carolina’s actions. Inaction alone may constitute acquiescence when it continues for a sufficiently long period.”

Estoppel through Encouragement

Similar to acquiescence, this form of estoppel was discussed in Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd,  where Oliver J defined it in the following passage:

“The fact is that acquiescence or encouragement may take a variety of forms. It may take the form of standing by in silence whilst one party unwittingly infringes another’s legal rights. It may take the form of passive or active encouragement of expenditure or alteration of legal position upon the footing of some unilateral or shared legal or factual supposition. Or it may, for example, take the form of stimulating, or not objecting to, some change of legal position on the faith of a unilateral or a shared assumption as to the future conduct of one or other party.”

Estoppel by Convention

Often used in contract law, this principle comes into effect when two parties have relied upon an assumed true statement of fact, only to learn otherwise after the actions undertaken have been shown as unreasonable or unlawful. Any wrongful decision to then undo the damage is by definition, estopped on those grounds, as was discussed in Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd, where Denning LJ  eloquently concluded that:

“When the parties to a contract are both under a common mistake as to the meaning or effect of it – and thereafter embark on a course of dealing on the footing of that mistake – thereby replacing the original terms of the contract by a conventional basis on which they both conduct their affairs, then the original contract is replaced by the conventional basis.”

Estoppel by Representation (or Pais)

Again found in many contractual matters, this doctrine is bought into effect when a party that has agreed to a change in the terms of the relationship (often supported by a promise of trusted representation of their own) later chooses to renege on that statement, despite the other party altering their position to accommodate that express arrangement. This was found in Royal Bank of Scotland v Luwum, where Lord Justice Rimer outlined that:

“[T]he clear sense of the arrangement was that Mr Le Page was making a representation or promise to Mr Luwum that the Bank would hold its hand on enforcing its rights for three months, and Mr Luwum changed his position in reliance upon that by borrowing £260 from friends and family in order to make a payment to the credit of the account, which was the very purpose of the arrangement that was made. In my judgment those circumstances had the consequence of estopping the Bank from reneging on its promise and starting the proceedings it did before the expiry of the three-month period.”

Estoppel by Deed (or Agreement)

This doctrine is applied when two parties agree to contract with each other for whatever intended gain or purpose, in the knowledge that the terms of the contract (or in these instances deeds) are based upon fraudulent fact, and nothing more. It is suggested that the motivation for such covenants is one of singular gain on the pretence that should the truth out, those facts will remain unchallenged. It is this kind of clandestine deception that was explored in Prime Sight Ltd v Lavarello, where Lord Toulson JSC mused:

“If a written agreement contains an acknowledgement of a fact which both parties at the time of the agreement know to be untrue, does the law enable on of them to rely on that acknowledgement so as to estop the other from controverting the agreed statement in an action brought on the agreement?”

Estoppel by Contract

Again, the terms of the contract can themselves prevent enforcement between disputing parties, as was discussed in Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd, where it was said:

“Where parties express an agreement…in a contractual document neither can subsequently deny the existence of the facts and matters upon which they have agreed, at least so far as concerns those aspects of their relationship to which the agreement was directed. The contract itself gives rise to an estoppel…”

In closing, it must be iterated that the doctrine of estoppel exists as a rule of evidence and not a cause of action, therefore any idea that this principle can, and should, be wielded as a defence or prosecution, falls outside the intended design and usurps its undiluted use.

Global Law

Insight | February 2017

Global Law
Image: ‘Unity’ by Unknown Artist

The idea of a ratified ‘global law’ is a concept that once seemed fantastical, and yet by all accounts, appears now like the primary ingredient to social, industrial and civil equilibrium.

But how does this happen, and what steps might be needed to preserve the needs of the many from the wants of the few? To date, the concept of a single law is more convincing than any suggestion that genuine efforts are being taken to construct a jurisdiction without physical bounds, however it fails to prevent visionaries from imagining such a world, or pondering what form that framework might take.

Giuliana Ziccardi Capaldo, Full Professor of International Law at the University of Salerno Italy, discussed her idea of global law in 2015, and chose to use a web-like hierarchy to describe how each individual player would forge alliance with the next, because in her opinion:

“Global law is elastic enough to integrate the heterogeneous elements of the various and different legal orders into a unitary framework. It is up to the community of international legal scholars/lawyers to manage the complexity in the unit of the web of the global law system; the unitary framework retains the flexibility to allow for respecting the diversity of the plurality of embodied legal orders.”

Yet regardless of how one might perceive an ideology, the sheer scale of expectation asked of legal mega-firms and governmental bodies still seems disproportionate to the discipline required to undertake it. Having investigated current online debate, the results are discouraging to say the least, and when the world’s highest grossing law firm Latham & Watkins LLP offers no visible research, or even discussion of a unitary law, it suggests that perhaps the practice industry think-tanks are predisposed to monitoring investment strategies, over any notion that we may well be walking headlong into dispensation of justice from a centralised platform.

On a smaller scale, the benefits of a singular jurisdiction were recently implemented in October 2016 within Northern Ireland, and while not exactly a transcontinental shift, the objectives become evident, even if only from an administrative level, as was explained in a document published by the Northern Ireland Courts and Tribunal Service (NICTS), which said:

“There will no longer be County Court Divisions or Petty Sessions Districts and all relevant court documents have been amended to reflect this. The words “County Court Division of….” And “Petty Sessions District of……”will no longer appear on any court order or other documentation as court templates have been adapted.”

Whereas in the United Kingdom, we have a groundswell of opposition to the presence of Sharia laws, and if there was ever a reason for the unification of law, this concept would surely warrant a compelling body of evidence against the secular nature of unregulated doctrine.

Formed as part of this resistance, the website onelawforall.org.uk, is built upon a collective determination to remove the propagation of inequality through religious laws, in hope of the reestablishment of democratic values. This growing objection has been defined through a powerful rhetoric, claiming simply that:

“Sharia law is discriminatory and unjust, particularly against women and children.
Sharia courts in Britain are a quick and cheap route to injustice and do nothing to promote minority rights and social cohesion.”

It is suggested that the oppressive effects of this ancient law have been felt through gender specificity, which is not an ideology that could ever hope to find its way into the annals of any ‘new world’ law; and yet because there is no such codification, legal splinter factions are left free to flourish within the confines of domestic legislature.

In India, the application of a single industry law appears to provide huge benefits to small-scale factory owners, desperately trying to navigate the legal loopholes that strangle economic growth and preserve monopolisation.

With the design of improving manufacturing processes, the labor ministry created new legislation in order to overcome the problems faced by the nations entrepreneurs and workers alike, as explained by Mahendra Singhi, in her article for the Times of India:

“At present, small units have to comply with 44 Central labour laws and over 100 state laws…which discourages them to hire workers from the organized sector, and thus denying them basic rights…the government hopes that a single unified law will ensure less cost to the owner and better minimum wages, bonus and maternity benefits to the workers.”

It would seem for now at least, that while unitary rule and governance is constitutionally, commercially and quasi-socially acceptable, the thought of, or preclusion to, entrustment of a law written to serve a race of people, is both a bridge too far and paradoxically swept from the agenda; which while sounding trite in its definition, ought not mislead readers into believing a world law of some kind is not too far beyond our horizon.

This then raises the question of were a unitary law to become a reality, then how would those changes begin to materialise? Will a spark of legal renaissance ignite from within the people, or will the centralisation of power emanate from the core of contributory states?

Contrastingly, does commerce now helm the wheel of judicial evolution, or is politics driving that bus? In the latter event, it seems that the lines frequently blur, so recipients of information inevitably become less concerned with socio-political commentary than the motives underlying it, although whichever sector pushes first for answers, the time for such legal reimagining is overly ripe for discourse.