Date: Thu, 10 Apr 2003 07:39:09 -0400

From: Jason Neyers

Subject: Estoppel in the HL

I post this on behalf of Adam Kramer:

It seems to me that estoppel needs separating out into various different strands along something like the following lines:

1) Estoppel as contract: sometimes estoppel is basically a stand-in for contract law and allows the enforcement of promises in much the same way as contracts do. This covers the cases of contractual modification (at present, only waiver) and could be got rid of if we abolished the requirement of consideration for contractual modifications. The legal response to these types of estoppel must be enforcement of the promise. Birks, in (1996) 26 West. Aust. L Rev 1, identifies this, and only this, use of estoppel.

2) Estoppel as enforcing informal property transfers (rather than promises to transfer property) when it would be unfair not to do so: This covers many cases of proprietary estoppel and some constructive trusts. The legal response to these types of estoppel must be recognition of the property transfer, which is of a similar pattern to enforcement of the promise but it is not the convention of promising that is being upheld per se.

3) Estoppel as tort: recognising a duty not to cause reasonable detrimental reliance through promise-making (cf. Seavey (1951) 64 Harvard L Rev 913; McBride (1994) 14 LS 35). If the fault requirement is a duty to take reasonable care, then the tort would fit within the tort of negligence (assumption of responsibility etc.) but if not then it is a new tort (or, perhaps more accurately, wrong). This covers some cases of so-called proprietary estoppel, and the non-UK doctrine of estoppel as sword, except that: the legal response to these types of estoppel must be an award of compensatory damages measuring the detrimental reliance, and not specific performance or damages at the expectation/ performance measure, since the detrimental reliance (as in Hedley Byrne type cases) is the harm wrongfully caused. I agree with Jason on this, although as Paul rightly points out, Australia has moved away from the reliance measure. Yet it seems to me that this is the answer in the Actionstrength case: as a tort sounding in damages measuring the detrimental reliance (supplying workers but ultimately not being paid to do so) this action would not be enforcing the guarantee as a promise or as a contract, and the Statute of Frauds would not be subverted (as Jason observes). Of course, the HL didn't see things (or even look at things) this way.

Adam Kramer

Lecturer in Law
Department of Law
Durham University

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