go further than Lam Chi Kin to undermine the doctrine of consideration by using reliance to justify enforcement of an agreement which practically eliminates the need for consideration, perhaps at least in the context of contract modification.48
of consideration by supplementing gaps in promises where there is insufficient or no consideration is provided, arguments against using it as a ‘sword’ rest on the worries that this would allow parties to enforce promises without consideration.
This may be in line with the position of Singapore courts in the dilution of consideration which can be shown through the Court of Appeal case in Rainforest Trading Ltd v. State Bank of India Singapore which endorsed the statement of VK Rajah JC (as he then was) in Chwee Kin Keong v. Digilandmall.com Pte Ltd in that the “modern approach in contract law requires very little to find the existence of consideration”.49 This was also the position of willingness by the Singapore Court of Appeal in Gay Choon Ing.
However, this worry would not be justified and that there is no real threat to the doctrine of consideration. This is because consideration deals with the upholding of promises by providing it with a ‘badge of enforceability’ while promissory estoppel centres around the avoidance of detriment by providing a remedy. This should be reflected in difference in the damages awarded in claims relating to contract and promissory estoppel, the former resulting in expectation damages and the latter in reliance damages.
The Court of Appeal in Lam Chi Kin took an approach that promissory estoppel may be used as a tool to enforce promises, contrasting the more traditional position of the High Court in the same case that estoppel should play the equitable role of preventing or removing harm that may arise from reliance.50
Despite criticism that the use of promissory estoppel as a ‘sword’ will undermine the doctrine of consideration in contract, the judgment in The Commonwealth of Australia v. Verwayen (herein referred to as “Verwayen”) has been keen to stress that the “driving force” behind equitable estoppel is the prevention of “unconscionable conduct”- a noncontractual objective of equity.54 This was also reiterated in Waltons v. Maher by Brennan J.55
Professor Yeo Tiong Min (2012) argues that the Court of Appeal’s approach that is reminiscent of a “benefit/ detriment analysis of the doctrine of consideration” is flawed because of the lack of authority in supporting benefit-based estoppel since equity is to protect detrimental reliance.51 He further asserts that the Court of Appeal’s approach brings the doctrine of promissory estoppel closer to fulfilling the role of a substitute for consideration in the enforcement of a promise.52
TIME TO BE USED AS A ‘SWORD’? There has been significant criticism of the Australian decision in Waltons v. Maher, most significantly it has been argued that there is a “misconceived intermingling of the principles of promissory estoppel and proprietary estoppel leading to the unwarranted transplant of the use of estoppel as a cause of action from proprietary to promissory estoppel”.53 Further criticism lies in the fact that the use of promissory estoppel as a ‘sword’ may undermine the common law of contract, specifically that of consideration. While promissory estoppel may be said to mitigate the harshness Singapore Law” (2012) Yong Pung How Professorship of Law Lecture at [18].
48 49
Ibid., at [19].
Rainforest Trading Ltd v. State Bank of India Singapore [2012] SGCA 21 at [38], referring to Chwee Kin Keong v. Digilandmall.com Pte Ltd [2004] 2 SLR(R) 594 at [139].
50
Lam Chi Kin David v. Deutsche Bank AG [2011] 1 SLR 800, [2010] SGCA 42 at [35] and [40]; Lam Chi Kin David v. Detusche Bank AG [2010] 2 SLR 896, [2010] SGHC 50 at [57].
51
Yeo Tiong Min, “The Future of Promissory Estoppel in Singapore Law” (2012) Yong Pung How Professorship of Law Lecture at [12] and [13].
52 53
Ibid., at [14].
Yeo Tiong Min, “The Future of Promissory Estoppel in Singapore Law” (2012) Yong Pung How Professorship of Law Lecture at [22].
98
However, as mentioned earlier, the Singapore courts are leaning towards the dilution of the doctrine of consideration. While Lam Chi Kin indicates that courts may use the doctrine of promissory estoppel as a tool to enforce promises, this does not necessary entail that it may be used as a ‘sword’ to establish an independent cause of action or as a complete substitute for consideration in promises. Further, Lam Chi Kin also states that even if a promisee is unable to show detrimental reliance, the fact that a promisor may have received an advantage from the reliance may be adequate to invoke the doctrine of promissory estoppel.56 While proprietary estoppel may be used to establish an independent cause of action, it is difficult to argue why promissory estoppel may only be used defensively. The primary concern according to Professor Yeo Tiong Min (2012) is that there would be the undermining of the law of contract “if promises unsupported by consideration can be enforced”.57 An alternative argument would be that the use of promissory estoppel as only a shield may be based upon the origins of estoppel as a procedural rule whereby a person estopped is debarred from denying his representation.58 In addition, the courts are more inclined to use proprietary estoppel as a ‘sword’ since its origins lie in mistakes or assumptions as to rights.59 There is also a separate argument where the remedy in
54
The Commonwealth of Australia v. Verwayen (1990) 170 CLR 394 at 407, per Mason CJ.
55
Waltons Stores (Interstate) Ltd v. Maher (1988) 164 CLR 387 at 419-420.
56
Yeo Tiong Min, “The Future of Promissory Estoppel in Singapore Law” (2012) Yong Pung How Professorship of Law Lecture at [44].
57 58
Ibid., at [45].
59
Ibid.
162.
Roger J. Smith, Property Law (8th Edition, Pearson 2014),