L. & N.W. Ry.18 The defensive nature of promissory estoppel and the expression by saying that it operates as a shield and not as a sword arose in Combe v. Combe.19 The normal effect of promissory estoppel is to protect the promise against enforcement of the original obligation but the metaphor has misled by suggesting that the equitable doctrine can assist a claimant no less than a defendant.20 The equitable doctrine can also assist the promisee as claimant by preventing a promisor from relying on a defence which would have been available to him, but for the promise.21 The effect of the doctrine is to merely prevent the promisor from relying on some circumstance which would, if the promise had not been made, destroy the promisee’s original cause of action.22 A plaintiff cannot rely solely on promissory estoppel to sue and by relying on an independent cause of action, can use promissory estoppel to prevent the defendant from denying an element of the claim or from asserting an element of defence.23
DEVELOPMENT OF THE DOCTRINE IN ENGLISH LAW The case of Collier v. P & M J Wright (Holdings Ltd) (herein referred to as “Collier v. Wright”), reflects the current thinking of the English judiciary with respect to promissory estoppel.24 From the onset, it is crucial to recognise that all that was decided by the Court of Appeal in that case is that there was a triable issue i.e. promissory estoppel is arguable based on the facts. The facts of that case was similar to that of Foakes v. Beer where it was held that the part payment of a debt cannot be considered as good consideration for the discharge of the entire debt.25 The Court of Appeal in Collier v. Wright was also bound by the decision in Re Selectmove Ltd, holding that the reasoning of practical benefits constituting good consideration from Williams v. Roffey could not apply to a Foakes v. Beer scenario.26 In Collier v. Wright, Arden LJ did not think that the application of the doctrine was inconsistent with a Foakes
18
Birmingham & District Land Co v. L. & N.W. Ry (1888) 40 Ch. D. 268.
19 20
Combe v. Combe [1951] 2 K.B. 215 at 224.
21 22 23
Ibid.
Edwin Peel, Treitel: The Law of Contract (14th Edn, Sweet & Maxwell 2015) at paragraph 3-089. Ibid.
Yeo Tiong Min, “The Future of Promissory Estoppel in Singapore Law” (2012) Yong Pung How Professorship of Law Lecture.
24
Collier v. P & M J Wright (Holdings) Ltd [2008] 1 WLR 643; [2007] EWCA Civ 1329.
25 26
Foakes v. Beer (1884) 9 App Cas 605.
Re Selectmove Ltd [1995] 1 WLR 474; Williams v Roffey Bros & Nicholls (Contractors) Ltd [1990] 2 WLR 1153.
96
v. Beer factual situation.27 Most significantly, Arden LJ relies on the dictum of Lord Denning MR in the case of D & C Builders Ltd v. Rees in holding that there is an arguable case for promissory estoppel:28 “Where there has been a true accord, under which the creditor voluntarily agrees to accept a lesser sum in satisfaction, and the debtor acts upon that accord by paying the lesser sum and the creditor accepts it, then it is inequitable for the creditor afterwards to insist on the balance.” Professor Yeo Tiong Min (2012) argues that the approach of Lord Denning MR from that passage in D & C Builders Ltd v. Rees “conflates the principles of promissory estoppel with the principles of contract law”.29 He argues further that while reliance may be a condition for enforcement, “the interest protected appears to be the expectation endangered by the promise, not the harm ensuing from the reliance”.30 Collier v. Wright does not raise the issue of whether promissory estoppel can be used to create an independent cause of action and English law is settled on the traditional view. This was evident in Baird Textiles Holdings Ltd v. Marks & Spencer plc where the Court of Appeal noted that only the House of Lords (now known as the Supreme Court) could decide if promissory estoppel can be used to raise an independent cause of action.31 Thus, it is settled in England and Wales that promissory estoppel cannot create an independent cause of action, and only the Supreme Court will be able to change the status quo.
MODERN APPROACH IN AUSTRALIAN COURTS Every law student would be familiar with the famous case from the High Court of Australia in Waltons Stores (Interstate) Ltd v. Maher (herein referred to as “Waltons v. Maher”).32 In essence, the parties were involved in negotiations for a leasing and construction project. The claimant was the owner of land which he had hoped to lease out to the defendants. Negotiations reached an advance stage with contracts being sent to the defendants which the claimant believed would shortly be exchanged and completed. Due to this belief and the urgent nature of the project, the claimant began to demolish the building on his land whilst the defendants started to have second thoughts and instructed their solicitors to ‘go slow’ despite being aware that work had begun onsite. After a substantial amount of work had been completed,
27
Collier v. P & M J Wright (Holdings) Ltd [2008] 1 WLR 643; [2007] EWCA Civ 1329 at [30].
28
Collier v. P & M J Wright (Holdings) Ltd [2008] 1 WLR 643; [2007] EWCA Civ 1329 at [39]; D & C Builders Ltd v. Rees [1966] 2 QB 617 at 625.
29
Yeo Tiong Min, “The Future of Promissory Estoppel in Singapore Law” (2012) Yong Pung How Professorship of Law Lecture at [17].
30 31
Ibid., at [19].
32
Waltons Stores (Interstate) Ltd v. Maher (1988) 164 CLR 387.
Baird Textiles Holdings Ltd v. Marks & Spencer plc [2002] 1 All ER 737 at [39], [55], and [99].