INTRODUCTION The doctrine of promissory estoppel was expounded upon by Denning J in the well known case of Central London Property Trust Ltd v. High Trees House Ltd,1 following the more obscure but leading case of Hughes v. Metropolitan Railway Co.2 One of the most well-known features of the doctrine is that it cannot be used to establish an independent cause of action i.e. it can only be used as a ‘shield’, and not a ‘sword’. However, there have been significant developments to the doctrine in the United Kingdom courts since then; in cases such as Collier v. P & M J Wright (Holdings) Ltd.3 The Australian High Court in Waltons Stores (Interstate) Ltd v. Maher altered the traditional position that originated in the UK courts,4 allowing the doctrine to be used as a ‘sword’ as well. This article seeks to trace the justification for the doctrine being used as an independent cause of action by comparing the position taken by the appellate courts in the UK, Hong Kong and, Australia. This article will further assess the suitability of adopting this ‘modern’ approach on promissory estoppel taken by the Australian High Court, in Singaporean courts.
PROMISSORY ESTOPPEL- THE DOCTRINE AND ITS ORIGINS Lord Cairns in Hughes v. Metropolitan Railway Co rejected the claim of the landlord to forfeit the lease on the ground that the tenant did not perform repairs. This was on the basis that if one party leads the other “to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties”.5 In essence, the doctrine stipulates that if within an existing legal relationship, A has made a promise to B not to exercise a strict legal right against B, and B has relied on that promise to his detriment, equity will restrain A from resiling from that promise to the extent that it would be inequitable for A to do so.6 This doctrine applies to arrangements which might have in the past been regarded as variations ineffective at common law for want of consideration.7
In summary, the doctrine of promissory estoppel has the following key requirements:8 i. There must be a “clear” or “unequivocal” promise of representation; ii. The promisee must have relied upon the promise; and iii. It must be inequitable for the promisor to go back on the promise. Further, the burden of proving the necessary facts is on the promisee.9 Aside from this, it has been suggested that the doctrine can apply where there is no legal relationship giving rise to rights and duties between parties, or where there may only be a putative contract between them.10 However, Chitty (2015) submits that these suggestions “mistake the nature of the doctrine, which is to restrict the enforcement by the promisor of previously existing rights against the promisee. Such rights can arise only out of a legal relationship existing between these parties before the making of the promise or representation.”11 To apply the doctrine where there is no such relationship would contravene the rule from Combe v. Combe that the doctrine does not create any new rights.12 There has often been said to be a further requirement of the promisee suffering some “detriment” in reliance on the promise but this is based on the analogy of estoppel by representation.13 There need not be detriment as long as the promisee has altered his position in reliance on the promise so that it would be inequitable to allow the promisor to act inconsistently with it.14 The effect of promissory estoppel is generally suspensory and this was evident in Hughes v. Metropolitan Railway Co where the landlord was not forever prevented from enforcing the covenant.15 This was also stressed in Tool Metal Manufacturing Co Ltd v. Tungsten Electric Co Ltd.16 The reason for this rule is that in equity, the effect of the said representation is to give courts the discretion to do what is equitable in all circumstances and in the two cases discussed, it would not be equitable or in accordance with the intention of the parties to wholly extinguish the representor’s or promisor’s rights.17 However, subsequent events may give promissory estoppel an extinctive effect and this leads to the result where it is impossible for the promisee to perform his original obligation, as in Birmingham & District Land Co v.
8 9 10
Ibid at paragraphs 3-081 – 3-085
11 12 13
Ibid.
The Post Chaser [1981] 2 Llyod’s Rep. 695 at 701.
6
14 15 16
7
17
1
Central London Property Trust Ltd v. High Trees House Ltd [1947] KB 130.
2 3
Hughes v. Metropolitan Railway Co (1877) 2 App Cas 439.
4 5
Waltons Stores (Interstate) Ltd v. Maher (1988) 164 CLR 387.
Collier v. P & M J Wright (Holdings) Ltd [2007] EWCA Civ 1329; [2008] 1 WLR 643.
448.
Hughes v. Metropolitan Railway Co (1877) 2 App Cas 439 at
Yeo Tiong Min, “The Future of Promissory Estoppel in Singapore Law” (2012) Yong Pung How Professorship of Law Lecture. Edwin Peel, Treitel: The Law of Contract (14th Edn, Sweet & Maxwell 2015) at paragraph 3-077.
Habib Bank Ltd v. Tufail [2006] EWCA Civ 374 at [21].
H.G. Beale, Chitty on Contracts (32nd Edn, Sweet & Maxwell 2015) at paragraph 4-089. Combe v. Combe [1951] 2 K.B. 215.
Meng Long Development Pte Ltd v. Jip Hong Trading Co Pte Ltd [1985] A.C. 511 at 524; Edwin Peel, Treitel: The Law of Contract (14th Edn, Sweet & Maxwell 2015) at paragraph 3-084. Hughes v. Metropolitan Railway Co (1877) 2 App Cas 439
Tool Metal Manufacturing Co Ltd v. Tungsten Electric Co Ltd [1955] 1 W.L.R. 761. Edwin Peel, Treitel: The Law of Contract (14th Edn, Sweet & Maxwell 2015) at paragraph 3-087.
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