Promissory Estoppel

Sometimes the strict rules of consideration would lead to injustice. A promise may be made and relied on, but because of the lack of consideration, it is not legally enforceable. Where there is a promise or representation of fact or definite intention, given in circumstances where the promised person does not give consideration, the discretionary principle of promissory estoppel may apply.

If one party makes a statement of fact or a statement of his intention to another, which he realises or should realise the other will act on, and on faith of which the other acts to his detriment, then the courts may decide not to allow the first person to enforce the strict legal rights, if it would be inequitable in the circumstances.

There must be an unambiguous statement of fact or intention.  It must be relied on by the party to whom it is addressed.  The party, who acted to his detriment must have done so, by reason of the statement. It must be unfair or unconscionable not to enforce the promise.

Nature of Representation

The representation can be written or by conduct. Where a person acts by words or conduct, from which it is reasonable to infer and was in fact inferred that a certain position would hold and the other acts in reliance and takes steps to his detriment, the former will be denied from asserting the strict legal position.

Originally, the principle of estoppel was limited to statements of fact.  However, later cases have extended the principle to a representation of a future intention, on the basis that it may be equivalent to a fact.  There must be a definite commitment and representation. A representation by conduct is possible but is more difficult to prove.

A representation by conduct alone may be difficult to establish. Mere forbearance from reliance on strict legal rights, even on a number of occasions will not generally constitute a representation, that those rights have been waived.

It may be necessary in this case, for the party who seeks to invoke his strict legal rights, to give notice in order to re-establish reliance on them.

Limitations on Principle I

The extent of the principle of promissory is limited in several respects. It does not apply in every case where one party acts to his detriment in reliance on another’s statement. There must be something in the circumstances, which make it unjust for the person who made the statement to renege on it. The courts give relief, only to the extent necessary to alleviate injustice.

Promissory estoppel is generally available as a defence. It cannot be used as the basis of a claim in itself / an independent legal action. This principle has been reduced and narrowed in recent years. In some other jurisdictions, promissory estoppel can be used to bring an action.

Some Irish cases contemplate that promissory estoppel might be a cause of action in some cases. In some other jurisdictions, promissory and proprietary estoppel have been effectively merged into a single broader principle.

Internationally, some courts have broadened the principles of promissory estoppel and proprietary estoppel. They have sought to rest them on broader equitable principles and extend their application more generally.

Estoppel may be used in a claim where there is another separate legal basis for that claim.  It may also be available as an element in establishing a claim, which has its own separate basis.

Limitations on Principle II

There must be knowledge or intention on the part of the person who makes the statement/promise, that it will be relied on to affect an existing legal relationship. The person addressed must have relied on or acted to his detriment by reason of the representation.

The essence of estoppel is reliance on the representation. The addressee of the representation must rely on it and alter his position. In some cases, detrimental reliance has been required. In other cases, reliance alone has been sufficient.

There is usually some pre-existing “legal” relationship between the parties, such as landlord and tenant or as parties to an existing contract. The predominant view of the principle holds that this is a requirement. This usually requires an existing contractual or similar relationship between the parties.  Some cases have indicated that it is sufficient that there be an intention to contract.

In some modern cases, the courts have minimised or dropped the requirement for an existing legal relationship. Something similar to, but short of a prior legal relationship may suffice.

Requirement of Inequity

It must be inequitable for the person making the promise to withdraw from the promise because the other person has relied on it. Because of the requirement that it be inequitable for the promisor to go back on the representation, there will generally be some element of detriment incurred by the promisee in reliance on it.

There is no legal effect until the other person has acted to his detriment. This is equivalent to changing his position on the faith of the representation. On an alternative view, detrimental reliance is not always a necessary element for the application of promissory estoppel.

Nature of Equitable Rights

The essence of the claim is that it would be later unjust for the person making the promise or statement to deny or retract it. Where the court applies the principle of promissory estoppel, the party concerned may not be able to insist on his strict legal rights, if it would be inequitable have regard to the past dealings between the parties.

Unlike a breach of contract, estoppel may lead to a discretionary relief so as to prevent injustice. It does not create a right as such. The particular remedy, if any, is a matter for the court, in its equitable discretion. The remedy granted in a case of promissory estoppel will be tailored to the equity of the situation or injustice concerned.

Effect of Estoppel

The defendant is said to be “estopped” from asserting his strict legal rights. It is available as a defence only; it is said to be a shield and not a sword. Generally, the legal right is suspended, but not necessarily extinguished.  Where the reliance or detriment is extensive or irreversible, then the suspension of the legal rights may become perpetual. In this case, the effect is to change substantive rights.

Estoppel prevents the person who has made the promise from acting on his strict legal rights to the extent that it would be unjust and inequitable. He cannot claim or plead the matter concerned.

Rights may be extinguished or may be suspended only. If the suspension is indefinite, this may be tantamount to extinguishment.

Reversion to Strict Legal Position

It may be that the person “estopped” may be able to resile from his statement by giving reasonable notice that he intends to return to the strict position, as regards the future. In this case, it must be possible for the person promised to resume his former position and undo the detriment. If the person promised cannot resume his original position, the other’s promise may be final and irrevocable.

An example of the principle and its effect may arise in the context of a promised reduction in rent.   If the tenant relies on the promise of the reduced rent to his detriment, then the landlord may be precluded from recovering the full rent. However, the landlord may be able to give reasonable notice to resume the strict legal position, and collect the whole rent, after reasonable notice has been given.

Proprietary Estoppel I

The principle of estoppel has been expanded in the context of property. The principle of “proprietary estoppel” has been developed. There is more support for the proposition that proprietary estoppel, as opposed to promissory estoppel, may be the basis of an action and is not limited to being a defence.

A person may effectively obtain an interest in the property as a consequence. The principle may apply where a person has acted to his detriment on foot of a belief known or encouraged by another, that he has or will be granted rights over property.

In one type of case, a mistaken belief as to legal rights is involved. The detriment typically involves expenditure on the property by a person in the mistaken belief that he has rights to it. The person who knows the mistaken belief and stands by, may not be able to insist on his strict legal rights.

Proprietary Estoppel II

It must be unjust and inequitable that the property owner relies on his strict legal rights, in circumstances where the person has let the other person act to his detriment on foot of the mistaken belief. There must be a link between the inducement relied on and the conduct by which the person promised, has acted to the detriment. The detriment must be substantial and it must be based on the assurance.

Another instance of the proprietary estoppel may arise where a person promises or leads another to believe that he will make a gift or leave a property to the other. If the other acts on the faith of this promise to his detriment (for example sells his property, moves in and looks after the other) the principle may require that the promise be fulfilled.

If a person is let into possession of property and encouraged to spend money with the promise (short of a legal contract) of a lease, the principle may compel the landlord to give effect to the promise.

References and Sources

Irish Textbooks and Casebooks

Clark, R. Contract Law in Ireland 8th Ed. (2016) Ch .20

Friel, R. The Law of Contract 2nd Ed, (2000)

McDermott, P.  Contract Law (2001) 2nd Ed (2017) Ch. 2

Enright, M. Principles of Irish Contract Law (2007)

Clark and Clarke Contract Cases and Materials 4th Ed (2008)

English Textbooks and Casebooks

Poole, J. Casebook on contract law. (2014) 12th edition

Stone and Devenney, The Modern Law of Contract 10th Ed (2015)

McKendrick, Contract Law 10th Ed (2013)

Chen-Wishart, Contract Law 5th Ed (2015)

Anson, Reynell, Beatson, J., Burrows, Cartwright, Anson’s law of contract. 29th Ed (2010)

Atiyah and Smith, Atiyah’s introduction to the law of contract. 6th Ed.

Chen-Wishart, M. (2015) Contract law. 5th Ed.

Cheshire, Fifoot and Furmstons, Furmstons and Fifoot Cheshire, Fifoot and Furmston’s law of contract. OUP.

Duxbury, Robert (2011) Contract law. 2nd Ed.

Halson, Roger (2012) Contract law. 2nd Ed.

Koffman & Macdonald’s Law of Contract. 8th Ed. (2014)

O’Sullivan, Hilliard, The law of contract. 6th Ed. (2014)

Peel, and Treitel, The law of contract. 13th Ed. (2011).

Poole, J.Casebook on contract law. 12th Ed. (2014).

Poole, J.  Textbook on contract law. 12th Ed. (2014)

Richards, P Law of contract. 10th Ed. (2011)

Stone, R.  The Modern law of Contract. 10th Ed. (2013)

Treitel, G. H.  An outline of the law of contract. 6th Ed (2014).

Turner, C Unlocking contract law. 4th Ed. (2014).

Upex, R. V., Bennett, G Chuah, J, Davies, F. R. Davies on contract. 10th Ed. (2008).

UK Casebooks

Stone,Devenney, Text, Cases and Materials on Contract Law 3rd Ed (2014)

McKendrick, Contract Law Text, Cases and Materials 6th Ed (2014)

Stone, R, Devenney, J Cunnington, R Text, cases and materials on contract law. 3rd Ed (2014)

Burrows, A. S.  A Casebook on Contract. 4th Ed.

Beale, H. G., Bishop, W. D. and Furmston, M. P. Contract: cases and materials. 5th ed. (2008)

Blackstone’s Statutes on Contract, Tort & Restitution 2017 (Blackstone’s Statute Series)

UK Practitioners Texts

Chitty on Contracts 32nd Edition, 2 Volumes & Supplement (2016)

The above are not necessarily the latest edition.



Central London Property Trust Ltd v High Trees House Ltd

 [1947] KB 130

Denning J

held that the full rent was payable from the time that the flats became fully occupied in mid-1945.

If I were to consider this matter without regard to recent developments in the law, there is no doubt that had the plaintiffs claimed it, they would have been entitled to recover ground rent at the rate of £2,500 a year from the beginning of the term, since the lease under which it was payable was a lease under seal which, according to the old common law, could not be varied by an agreement by parol (whether in writing or not), but only by deed. Equity, however stepped in, and said that if there has been a variation of a deed by a simple contract (which in the case of a lease required to be in writing would have to be evidenced by writing), the courts may give effect to it as is shown in Berry v. Berry [1929] 2 K. B. 316. That equitable doctrine, however, could hardly apply in the present case because the variation here might be said to have been made without consideration. With regard to estoppel, the representation made in relation to reducing the rent was not a representation of an existing fact. It was a representation, in effect, as to the future, namely, that payment of the rent would not be enforced at the full rate but only at the reduced rate. Such a representation would not give rise to an estoppel, because, as was said in Jorden v. Money (1854) 5 H. L. C. 185, a representation as to the future must be embodied as a contract or be nothing.

But what is the position in view of developments in the law in recent years? The law has not been standing still since Jorden v. Money (1854) 5 H. L. C. 185. There has been a series of decisions over the last fifty years which, although they are said to be cases of estoppel are not really such. They are cases in which a promise was made which was intended to create legal relations and which, to the knowledge of the person making the promise, was going to be acted on by the person to whom it was made and which was in fact so acted on. In such cases the courts have said that the promise must be honoured. The cases to which I particularly desire to refer are: Fenner v. Blake [1900] 1 Q. B. 426, In re Wickham (1917) 34 T. L. R. 158, Re William Porter & Co., Ld. [1937] 2 All E. R. 361 and Buttery v. Pickard [1946] W. N. 25. As I have said they are not cases of estoppel in the strict sense. They are really promises – promises intended to be binding, intended to be acted on, and in fact acted on. Jorden v. Money (1854) 5 H. L. C. 185 can be distinguished, because there the promisor made it clear that she did not intend to be legally bound, whereas in the cases to which I refer the proper inference was that the promisor did intend to be bound. In each case the court held the promise to be binding on the party making it, even though under the old common law it might be difficult to find any consideration for it. The courts have not gone so far as to give a cause of action in damages for the breach of such a promise, but they have refused to allow the party making it to act inconsistently with it. It is in that sense, and that sense only, that such a promise gives rise to an estoppel. The decisions are a natural result of the fusion of law and equity: for the cases of Hughes v. Metropolitan Ry. Co. (1877) 2 App. Cas. 439 , 448, Birmingham and District Land Co. v. London & North Western Ry. Co. (1888) 40 Ch. D. 268 , 286 and Salisbury (Marquess) v. Gilmore [1942] 2 K. B. 38 , 51, afford a sufficient basis for saying that a party would not be allowed in equity to go back on such a promise. In my opinion, the time has now come for the validity of such a promise to be recognized. 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: and if the fusion of law and equity leads to this result, so much the better. That aspect was not considered in Foakes v. Beer (1884) 9 App. Cas. 605. At this time of day however, when law and equity have been joined together for over seventy years, principles must be reconsidered in the light of their combined effect. It is to be noticed that in the Sixth Interim Report of the Law Revision Committee, pars. 35, 40, it is recommended that such a promise as that to which I have referred should be enforceable in law even though no consideration for it has been given by the promisee. It seems to me that, to the extent I have mentioned, that result has now been achieved by the decisions of the courts.

I am satisfied that a promise such as that to which I have referred is binding and the only question remaining for my consideration is the scope of the promise in the present case. I am satisfied on all the evidence that the promise here was that the ground rent should be reduced to £1,250 a year as a temporary expedient while the block of flats was not fully, or substantially fully let, owing to the conditions prevailing. That means that the reduction in the rent applied throughout the years down to the end of 1944, but early in 1945 it is plain that the flats were fully let, and, indeed the rents received from them (many of them not being affected by the Rent Restrictions Acts), were increased beyond the figure at which it was originally contemplated that they would be let. At all events the rent from them must have been very considerable. I find that the conditions prevailing at the time when the reduction in rent was made, had completely passed away by the early months of 1945. I am satisfied that the promise was understood by all parties only to apply under the conditions prevailing at the time when it was made, namely, when the flats were only partially let, and that it did not extend any further than that. When the flats became fully let, early in 1945, the reduction ceased to apply.

In those circumstances, under the law as I hold it, it seems to me that rent is payable at the full rate for the quarters ending September 29 and December 25, 1945.

If the case had been one of estoppel, it might be said that in any event the estoppel would cease when the conditions to which the representation applied came to an end, or it also might be said that it would only come to an end on notice. In either case it is only a way of ascertaining what is the scope of the representation. I prefer to apply the principle that a promise intended to be binding, intended to be acted on and in fact acted on, is binding so far as its terms properly apply. Here it was binding as covering the period down to the early part of 1945, and as from that time full rent is payable.

I therefore give judgment for the plaintiff company for the amount claimed.”

Combe v Combe

[1951] 2 KB 215

Denning LJ

“where one party has, by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then, once the other party has taken him at his word and acted on it, the one who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relations as if no such promise or assurance had been made by him. He must accept their legal relations subject to the qualification which he himself has so introduced, even though it is not supported in point of law by any consideration but only by his word.           ”

He stated the estoppel could only be used as a “shield” and not a “sword”. In the High Trees case, there was an underlying cause of action outside the promise. Here, promissory estoppel created the cause of action where there was none. In this case, the court could not find any consideration for the promise to pay maintenance. He further stated that the High Trees principle should not be stretched so far as to abolish the doctrine of consideration,

“the doctrine of consideration is too firmly fixed to be overthrown by a side-wind….it still remains a cardinal necessity of the formation of a contract”.       ”

Crabb v Arun District Council

[1975] EWCA Civ 7

Lord Denning MR.

“When Mr Millett, QC, for Mr Crabb said that he put his case on an estoppel, it shook me a little: because it is commonly supposed that estoppel is not itself a cause of action. But that is because there are estoppels and estoppels. Some do give rise to a cause of action. Some do not. In the species of estoppel called proprietary estoppel, it does give rise to a cause of action. We had occasion to consider it a month ago in Moorgate Mercantile v Twitchings [1975] 3 WLR 286 where I said that the effect of estoppel on the true owner may be that

“his own title to the property, be it land or goods, had been held to be limited or extinguished, and new rights and interests have been created therein and this operates by reason of his conduct – what he has led the other to believe – even though he never intended it.”

The new rights and interests, created by estoppel, in or over land, will be protected by the Courts and in this way give rise to a cause of action. This was cited in Spencer, Bower and Turner on estoppel by Representation, Second Edition (1966) at pages 279 to 282.

The basis of this proprietary estoppel – as indeed of promissory estoppel – is the interposition of equity. Equity comes in, true to form, to mitigate the rigours of strict law. The early cases did not speak of it as “estoppel”. They spoke of it as “raising an equity”. If I may expand that, Lord Cairns said: “It is the first principle upon which all Courts of Equity proceed”, that it will prevent a person from insisting on his strict legal rights – whether arising under a contract, or on his title deeds, or by statute – when it would be inequitable for him to do so having regard to the dealings which have taken place between the parties, see Hughes v Metropolitan Railway Co (1877) 2 AC 448. What then are the dealings which will preclude him from insisting on his strict legal rights? -If he makes a binding contract that he will not insist on the strict legal position, a Court of Equity will hold him to his contract. Short of a binding contract, if he makes a promise that he will not insist upon his strict legal rights – then, even though that promise may be unenforceable in point of law for want of consideration or want of writing – then, if he makes the premise knowing or intending that the other will act upon it, and he does act upon it, then again a Court of Equity will not allow him to go back on that promise, see Central London Property Trust v High Trees House (1947) KB 130: Richards (Charles) v Oppenhaim (1950) KB 616, 623. Short of an actual promise, if he, by his words or conduct, so behaves as to lead another to believe that he will not insist on his strict legal rights – knowing or intending that the other will act on that belief – and he does so act, that again will raise an equity in favour of the other: and it is for a Court of Equity to say in what way the equity may be satisfied. The cases show that this equity does not depend on agreement but on words or conduct. In Bamsden v Dyson (1866) LR 1 HL at page 170 Lord Kingsdown spoke of a verbal agreement “or what amounts to the same thing, an expectation, created or encouraged.” In Birmingham & District Land Co v The London & North Western Railway (1888) 40 Ch D at page 277, Lord Justice Cotton said that

“…. what passed did not make a new agreement but what took place …. raised an equity against him.”

And it was the Privy Council who said that

“…. the Court must look at the circumstances in each case to decide in what way the equity can be satisfied”

giving instances, see Plimmer v City of Wellington Corporation (1884) 9 AC 713-4.

Recent cases afford illustrations of the principle. In Inwards v Baker (1965) 2 QB 29, it was held that, despite the legal title being in the plaintiffs, the son had an equity to remain in the bungalow “as long as he desired to use it as his home.” Mr. Justice Danckwerts said (at page 38):

“Equity protects him so that an injustice may not be perpetrated.”

In ER Ives Investment Ltd v High (1967) 2 QB 379, it was held that High and his successors had an equity which could only be satisfied by allowing him to have a right of access over the yard, “so long as the block of flats has its foundations on his land.” In Siew Soon Hah v Wang Tong Hong [1973] AC 837, the Privy Council held that there was an “equity or equitable estoppel protecting the defendant in his occupation for 30 years”. In Bank Negara Indonesia v Philip Foallm (1973) 2 Malaya Law Journal the Privy Council held that, despite the fact that he had no protection under the Rent Acts, he had an equity to remain “so long as he continued to practise his profession.”

The question then is: were the circumstances here such as to raise an equity in favour of Mr. Crabb? True the Council on the deeds had the title to their land, free of any access at point B. But they led Mr. Crabb to believe that he had or would be granted a right of access at point B. At the meeting of 26th July, 1967, Mr. Alford and Mr. Crabb told the Council’s representative that Mr. Crabb intended to split the two acres into two portions and wanted to have an access at point B for the back portion: and the Council’s representative agreed that he should have this access. I do not think the Council can avoid responsibility by saying that their representative had no authority to agree this. They entrusted him with the task of setting out the line of the fence and the gates: and they must be answerable for his conduct in the course of it, see Attorney-General to the Prince of Wales v Collom (1916) 2 KB at page 207: Moorgate Mercantile v Twitchings (1973) 3 WLR at page 298 A-B.

The Judge found that there was “no definite assurance” by the Council’s representative, and “no firm commitment”, but only an “agreement in principle”, meaning I suppose that, as Alford said, there were “some further processes” to be gone through before it would become binding. But if there were any such processes in the mind of the parties, the subsequent conduct of the Council was such as to dispense with them. The Council actually put up the gates at point B at considerable expense. That certainly led Crabb to believe that they agreed that he should have the right of access through point B without more ado.

The Judge also said that, to establish this equity or estoppel, the Council must have known that Crabb was selling the front portion without reserving a right of access for the back portion. I do not think this was necessary. The Council knew that Crabb intended to sell the two portions separately and that he would need an access at point B as well as point A. Seeing that they knew of his intention – and they did nothing to disabuse him but rather confirmed it by erecting gates at point B – it was their conduct which led him to act as he did: and this raises an equity in his favour against them.

In the circumstances it seems to me inequitable that the Council should insist on their strict title as they did: and to take the highhanded action of pulling down the gates without a word of warning: and to demand of Crabb £3,000 as the price for the easement. If he had moved at once for an injunction in aid of his equity – to prevent them removing the gates – I think he should have been granted it. But he did not do so. He tried to negotiate terms, but these failing, the action has come for trial. And we have the question: In what way now should the equity be satisfied?

Here equity is displayed at its most flexible, see Snell’s Equity, 27th edition, page 568, and the illustrations there given. If the matter had been finally settled in 1967, I should have thought that, although nothing was said at the meeting in July 1967, nevertheless it would be quite reasonable for the Council to ask Crabb to pay something for the access at point B, perhaps – and I am guessing – some hundreds of pounds. But, as Millett pointed out in the course of the argument, because of the Council’s conduct, the back land has been landlocked. It has been sterile and rendered useless for five or six years: and Mr. Crabb has been unable to deal with it during that time. This loss to him can be taken into account. And at the present time, it seems to me that, in order to satisfy the equity, Mr. Crabb should have the right of access at point B free of charge without paying anything for it.

I would, therefore, hold that Crabb, as the owner of the back portion, has a right of access at point B over the verge on on to Mill Park Road and a right of way along that road to Hook Lane without paying compensation. I would allow the appeal and declare that he has an easement, accordingly.”

Scarman LJ.

“In such a case I think it is now well settled law that the Court, having analysed and assessed the conduct and relationship of the parties, has to answer three questions. First, is there an equity established? Secondly, what is the extent of the equity, if one is established? And, thirdly, what is the relief appropriate to satisfy the equity? See:- The Duke of Beaufort v Patrick (1853) 17 Beavan 60; Plimmer v Wellington Corporation (1884) 9 A.C. 699; and Inwards v Baker (1965) 2 Q.B. 29, a decision of this Court, and particularly the observations of the tester of the Rolls at page 37. Such therefore I believe to be the nature of the inquiry that the Courts have to conduct in a case of this sort. In pursuit of that inquiry I do not find helpful the distinction between promissory and proprietary estoppel. This distinction may indeed be valuable to those who have to teach or expound the law; but I do not think that, in solving the particular problem raised by a particular case, putting the law into categories is of the slightest assistance.


I turn now to the other two questions – the extent of the equity and the relief needed to satisfy it. There being no grant, no enforceable contract, no licence, I would analyse the minimum equity to do justice to the plaintiff as a right either to an easement or to a licence upon terms to be agreed. I do not think it is necessary to go further than that. Of course, going that far would support the equitable remedy of injunction which is sought in this action. If there is no agreement as to terms, if agreement fails to be obtained, the Court can, in my judgment, and must, determine in these proceedings upon what terms the plaintiff should be put to enable him to have the benefit of the equitable right which he’s held to have. It is interesting that there has been some doubt amongst distinguished lawyers in the past as to whether the Court can so proceed. Lord Kingsdown refers in fact to those doubts in a passage, which I need not quote, at page 171 of his speech in Ramsden v Dyson. Lord Thurlow clearly thought that the Court did have this power. Other lawyers of that time did not. But there can be no doubt that since Ramsden v Dyson the Courts have acted upon the basis that they have to determine not only the extent of the equity, but also the conditions necessary to satisfy it, and they have done so in a great number and variety of cases. I need refer only to the interesting collection of cases enumerated in Snell on Equity, 27th edition at pages 567 to 568: paragraph 2(b). In the present case the Court doe3 have to consider what is necessary now in order to satisfy the plaintiff’s equity. Had matters taken a different turn, I would without hesitation have said that the plaintiff should be put upon terms to be agreed if possible with the defendants, and, if not agreed, settled by the Court. But, as already mentioned by the Master of the Rolls and my Lord, Lord Justice Lawton, there has been a history of delay, and indeed highhandedness, which it is impossible to disregard. In January 1969 the defendants, for reasons which no doubt they thought good at the time, without consulting the plaintiff, locked up his land. They removed not only the padlocks which he had put on the gates at point B, but the gates themselves. In their place they put a fence – rendering access impossible save by breaking down the fence. I am not disposed to consider whether or not the defendants are to be blamed in moral terms for what they did. I just do not know. But the effect of their action has been to sterilise the plaintiff’s land; and for the reasons which I have endeavoured to give, such action was an infringement of an equitable right possessed by the plaintiff. It has involved him in loss, which has not been measured; but, since it amounted to sterilisation of an industrial estate for a very considerable period of time, it must surpass any sort of sum of money which the plaintiff ought reasonably, before it was done, to have paid the authority in order to obtain an enforceable legal right, I think therefore that nothing should now be paid by the plaintiff and that he should receive at the hands of the Court the belated protection of the equity that he has established. Reasonable terms, other than money payment, should be agreed: or, if not agreed, determined by the Court.”

D & C Builders Ltd v Rees

[1965] EWCA Civ 3

Lord Denning MR

“In point of law payment of a lesser sum, whether by cash or by cheque, is no discharge of a greater sum.

This doctrine of the common law came under heavy fire. It was ridiculed by Sir George Jessel in Couldery v Bartram.[1] It was said to be mistaken by Lord Blackburn in Foakes v Beer.[2] It was condemned by the Law Revision Committee (1945 Cmd 5449), paras. 20 and 21 . But a remedy has been found. The harshness of the common law has been relieved. Equity has stretched out a merciful hand to help the debtor. The courts have invoked the broad principle stated by Lord Cairns in Hughes v Metropolitan Railway Co.[3]

“It is the first principle upon which all courts of equity proceed, that if parties, who have entered into definite and distinct terms involving certain legal results, afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties 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 when it would be inequitable having regard to the dealings which have taken place between the parties.”

It is worth noticing that the principle may be applied, not only so as to suspend strict legal rights, but also so as to preclude the enforcement of them.

This principle has been applied to cases where a creditor agrees to accept a lesser sum in discharge of a greater. So much so that we can now say that, when a creditor and a debtor enter upon a course of negotiation, which leads the debtor to suppose that, on payment of the lesser sum, the creditor will not enforce payment of the balance, and on the faith thereof the debtor pays the lesser sum and the creditor accepts it as satisfaction: then the creditor will not be allowed to enforce payment of the balance when it would be inequitable to do so. This was well illustrated during the last war. Tenants went away to escape the bombs and left their houses unoccupied. The landlords accepted a reduced rent for the time they were empty. It was held that the landlords could not afterwards turn round and sue for the balance, see Central London Property Trust Ltd v High Trees House Ltd.[4] This caused at the time some eyebrows to be raised in high places. But they have been lowered since. The solution was so obviously just that no one could well gainsay it.

In applying this principle, however, we must note the qualification: The creditor is only barred from his legal rights when it would be inequitable for him to insist upon them. 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. But he is not bound unless there has been truly an accord between them.

In the present case, on the facts as found by the judge, it seems to me that there was no true accord. The debtor’s wife held the creditor to ransom. The creditor was in need of money to meet his own commitments, and she knew it. When the creditor asked for payment of the £480 due to him, she said to him in effect: “We cannot pay you the £480. But we will pay you £300 if you will accept it in settlement. If you do not accept it on those terms, you will get nothing. £300 is better than nothing.” She had no right to say any such thing. She could properly have said: “We cannot pay you more than £300. Please accept it on account.” But she had no right to insist on his taking it in settlement. When she said: “We will pay you nothing unless you accept £300 in settlement,” she was putting undue pressure on the creditor. She was making a threat to break the contract (by paying nothing) and she was doing it so as to compel the creditor to do what he was unwilling to do (to accept £300 in settlement): and she succeeded. He complied with her demand. That was on recent authority a case of intimidation: see Rookes v. Barnard[5] and Stratford (JT) & Son Ltd v Lindley.[6] In these circumstances there was no true accord so as to found a defence of accord and satisfaction: see Day v McLea.[7] There is also no equity in the defendant to warrant any departure from the due course of law. No person can insist on a settlement procured by intimidation.

In my opinion there is no reason in law or equity why the creditor should not enforce the full amount of the debt due to him. I would, therefore, dismiss this appeal.”

Dillwyn v Llewelyn [1862] EWHC Ch 67

Lord Westbury LC held that the younger son did not have merely an incomplete gift, but was in fact entitled to call for a legal conveyance, and not merely of a life-estate, but of the whole fee-simple. He said the following.[1]

“About the rules of the court there can be no controversy. A voluntary agreement will not be completed or assisted by a court of equity, in cases of mere gift. If anything be wanting to complete the title of the donee, a court of equity will not assist him in obtaining it; for a mere donee can have no right to claim more than he has received. But the subsequent acts of the donor may give the donee that right or ground of claim which he did not acquire from the original gift. Thus, if A gives a house to B, but makes no formal conveyance, and the house is afterwards, on the marriage of B, included, with the knowledge of A, in the marriage settlement of B, A would be bound to complete the title of the parties claiming under that settlement. So if A puts B in possession of a piece of land, and tells him, ‘I give it to you that you may build a house on it,’ and B on the strength of that promise, with the knowledge of A, expends a large sum of money in building a house accordingly, I cannot doubt that the donee acquires a right from the subsequent transaction to call on the donor to perform that contract and complete the imperfect donation which was made…

The Master of the Rolls, however, seems to have thought that a question might still remain as to the extent of the estate taken by the donee, and that in this particular case the extent of the donee’s interest depended on the terms of the memorandum. I am not of that opinion. The equity of the donee and the estate to be claimed by virtue of it depend on the transaction, that is, on the acts done, and not on the language of the memorandum, except as that shews the purpose and intent of the gift. The estate was given as the site of a dwelling-house to be erected by the son. The ownership of the dwelling-house and the ownership of the estate must be considered as intended to be co-extensive and co-equal. No one builds a house for his own life only, and it is absurd to suppose that it was intended by either party that the house, at the death of the son, should become the property of the father. If, therefore, I am right in the conclusion of law that the subsequent expenditure by the son, with the approbation of the father, supplied a valuable consideration originally wanting, the memorandum signed by the father and son must be thenceforth regarded as an agreement for the soil extending to the fee-simple of the land. In a contract for sale of an estate no words of limitation are necessary to include the fee-simple; but, further, upon the construction of the memorandum itself, taken apart from the subsequent acts, I should be of opinion that it was the plain intention of the testator to vest in the son the absolute ownership of the estate. The only inquiry therefore is, whether the son’s expenditure on the faith of the memorandum supplied a valuable consideration and created a binding obligation. On this I have no doubt; and it therefore follows that the intention to give the fee-simple must be performed, and that the decree ought to declare the son the absolute owner of the estate comprised in the memorandum.

I propose, therefore, to vary the decree of the Master of the Rolls, and to declare, by virtue of the original gift made by the testator and of the subsequent expenditure by the Plaintiff with the approbation of the testator, and of the right and obligation resulting therefrom, the Plaintiff is entitled to have a conveyance from the trustees of the testator’s will and other parties interested under the same of all their estate and interest under the testator’s will in the estate of Hendrefoilan in the pleadings mentioned, and with this declaration refer it to the Judge in Chambers to settle such conveyance accordingly.”

Hughes v Metropolitan Railway Co

[1877] UKHL 1

Lord Cairns LC

“My Lords, it is upon those grounds that I am of opinion that the decision of the Court below is correct. It was not argued at your Lordships’ Bar, and it could not be argued, that there was any right of a Court of Equity, or any practice of a Court of Equity, to give relief in cases of this kind, by way of mercy, or by way merely of saving property from forfeiture, but it is the first principle upon which all Courts of Equity proceed, that if parties who have entered into definite and distinct terms involving certain legal results—certain penalties or legal forfeiture—afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties 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. My Lords, I repeat that I attribute to the Appellant no intention here to take advantage of, to lay a trap for, or to lull into false security those with whom he was dealing; but it appears to me that both parties by entering upon the negotiation which they entered upon, made it an inequitable thing that the exact period of six months dating from the month of October should afterwards be measured out as against the Respondents as the period during which the repairs must be executed.

In this instance the rights of the landlord were suspended only temporarily, allowing the tenant more time to repair.”

Baird Textile Holdings Ltd v Marks & Spencer Plc

[2001] EWCA Civ 274   [2001] CLC 999, [2001] EWCA Civ 274, [2002] 1 All ER (Comm) 737

The Vice Chancellor

“Counsel for M&S submits that the judge was wrong. He contends, amongst many and varied arguments, that a conclusion to that effect does not involve the reconciliation of numerous cases but the recognition that this court is, as the judge was, bound by three decisions of the Court of Appeal to conclude that the estoppel claim has no real prospect of success either. The three decisions and the propositions they respectively established are (1) a common law or promissory estoppel cannot create a cause of action, Combe v Combe [1951] 2 KB 215; (2) an estoppel by convention cannot create a cause of action either, Amalgamated Investment & Property Co. Ltd v Texas Commerce International Bank Ltd [1982] QB 84 and (3) accepting that a proprietary or equitable estoppel may create a cause of action it is limited to cases involving property rights, whether or not confined to land, Western Fish Products Ltd v Penwith District Council [1981] 2 AER 204, 217.

Counsel for Baird did not dispute that those cases established the propositions for which M&S contended. Rather, he submitted, it is wrong to categorise particular types of estoppel and then impose limitations in each category not applicable to one or more of the other categories. He suggested that English law permits some cross-fertilisation between one category and another. He contended that English law should follow where the High Court of Australia has led in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 and Commonwealth of Australia v Verwayen (1990) 170 CLR 394 and permit estoppel to create causes of action in non-proprietary cases. In reply counsel for M&S conceded that if the Australian cases, to the effect that promissory estoppel extends to the enforcement of voluntary promises, represent the law of England then the judge was right and the cross-appeal must fail.

Warnings against categorisation have been given by Robert Goff J and Lord Denning MR in Amalgamated Investment & Property Co. Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 103A-104E and 122B-D, by Scarman LJ in Crabb v Arun DC [1976] QB 179, 192H-193B and by Lord Bingham of Cornhill in Johnson v Gore Wood & Co [2000] All ER (D) 2293 at p.16. But dicta to the contrary effect are to be found in First National Bank v Thomson [1996] Ch. 2311, 236 per Millett LJ, McIlkenny v Chief Constable of the West Midlands [1980] 1 QB 283, 317 per Lord Denning MR and in Johnson v Gore Wood & Co [2001] 1 All ER p. 481, 507/8 per Lord Goff of Chieveley.

As in the case of the contractual claim, it is important to appreciate exactly what is being alleged and why. The material allegation in paragraph 15 is that M&S is estopped from denying that “the relationship with BTH could only be determined by the giving of reasonable notice”. But by itself this claim, which has undoubted echoes of Hughes v Metropolitan Railway Co. (1877) 2 App.Cas.439 and Central London Property Trust Ltd v High Trees House Ltd [1947] 1 KB 130, does not lead to the relief sought. For that purpose it is essential to establish an obligation by estoppel that, in the words of paragraph 12, “during the subsistence of the relationship Marks & Spencer would acquire garments from BTH in quantities and at prices which in all the circumstances were reasonable”. As counsel for Baird put it in their written argument “BTH contends that an equity generated by estoppel can be a cause of action”. They rely on a series of dicta as pointers in that direction contained in Amalgamated Investment & Property Co. Ltd v Texas Commerce International Bank Ltd [1982] QB 84, Taylor’s Fashions v Liverpool Trustees [1982] QB 133, Habib Bank v Habib Bank [1981] 1 WLR 1265, The Hendrik Sif [1982] 1 Ll.R. 456, Holiday Inns v Broadhead (1974) 232 EG 951, Re Basham [1986] 1 WLR 1498 and Gillett v Holt [2000] 3 WLR 815.

In my view English law, as presently understood, does not enable the creation or recognition by estoppel of an enforceable right of the type and in the circumstances relied on in this case. First it would be necessary for such an obligation to be sufficiently certain to enable the court to give effect to it. That such certainty is required in the field of estoppels such as is claimed in this case as well as in contract was indicated by the House of Lords in Woodhouse AC Israel Cocoa Ltd v Nigeria Produce Marketing Co Ltd [1972] AC 741 and by Ralph Gibson LJ in Troop v Gibson [1986] 1 EGLR 1, 6. For the reasons I have already given I do not think that the alleged obligation is sufficiently certain. Second, in my view, the decisions in the three Court of Appeal decisions on which M&S rely do establish that such an enforceable obligation cannot be established by estoppel in the circumstances relied on in this case. This conclusion does not involve the categorisation of estoppels but is a simple application of the principles established by those cases to the obligation relied on in this. I do not consider that any of the dicta in the line of cases relied on by Baird could entitle this court to decline to apply those principles.

Counsel for M&S was, at one stage, inclined to concede that if we considered that the House of Lords, after the facts had been found at a trial, might adopt the propositions formulated by Mason CJ, Wilson and Brennan JJ in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 then it might be said that there was a real prospect of succeeding on the estoppel issue so that judgment under CPR 24.2 should not be given at this stage. In reply he submitted that the possibility that the House of Lords might adopt those propositions was an inadequate reason for allowing a trial. I agree. If I am right in believing that English law, as it now stands, does not permit the enforcement of an estoppel in the form alleged in this case then it is the duty of this court to apply it, notwithstanding that it may be developed by the House of Lords, who are not bound by any of the cases relied on, in the future. As Mann LJ said in Hamid v Secretary of State for the Home Department [1993] Imm AR 216, 222 (a renewed application for leave to move for judicial review, from which, if rejected, there could be no appeal)

“This court has in effect been asked to grant leave on the basis that, regarding ourselves as bound by two previous decisions of this court, we should in due time contemplate whether or not this is a suitable case for leave to appeal to their Lordships’ House. In my judgment this court has to apply the law as it stands, and the law as it stands is as stated in the cases of Khan and Chan and upon that basis there is no ground for granting leave to move.”

To the like effect is the dictum of Mummery J in Bristol & West BS v Turner [1991] 2 EGLR 52, 54 that the duty of this court is to apply the law as it stands. See also Willoughby v Eckstein [1936] 1 All ER 650 and Derby v Weldon (No.3) [1989] 3 All ER 118, 124. It must follow that it cannot be a compelling reason for requiring the estoppel claim to be disposed of at a trial either.

In all these circumstances I do not agree with the judge that the estoppel claim has a real prospect of success. Nor do I agree that there are good reasons why this issue should be tried. I have accepted that there is a real prospect that the allegations will be established but if there is no real prospect that if established they will give rise to the relief claimed then there is no reason compelling or otherwise why they should be established at a trial. It follows that there can be no compelling reason for only disposing of the contract claim at a trial either.”

Judge LJ

“I agree with the judgment of the Vice Chancellor on the contractual issue generally, and in particular his analysis of the problems of ascertaining with any sufficient precision the parties’ mutual obligations, and also, by reason of the uncertainty, of establishing a mutual intention to create a legally enforceable relationship.

The interesting question therefore is whether equity can provide a remedy which cannot be provided by contract. It seems clear that the principles of the law of estoppel have not yet been fully developed, and during the course of the argument I was greatly attracted by the consideration that if summary judgment were entered against BTH under CPR 24.2 in a case such as this, the effect would be to stultify the possible development of the substantive law, or the correction of what Lord Hoffmann, in Kleinwort Benson Limited v Lincoln CC [1999] AC 349 described as “ancient heresies”.

Two specific aspects of the current principles of the law of estoppel which may be open for reconsideration need mention. First, it is possible to envisage that the different principles encapsulated under the heading, “Estoppel”, should cease to be treated as if they were individually compartmentalised. The most illuminating analysis of the disadvantages of rigidity was summarised by Robert Goff J in Amalgamated Investment v Texas Bank [1982] QB 84, where he said,

“Of all doctrines, equitable estoppel is surely one of the most flexible ….. it is no doubt helpful to establish, in broad terms, the criteria which, in certain situations, must be fulfilled before an equitable estoppel can be established; but it cannot be right to restrict equitable estoppel to certain defined categories, and indeed some of the categories proposed are not easy to defend….. Thus in Snell …. the editors isolate two categories of equitable estoppel, promissory estoppel and proprietary estoppel. It may be possible nowadays to identify the former with some degree of precision; but the latter is much more difficult to accept as a separate category ……. As a separate category, proprietary estoppel may be regarded as an amalgam of doubtful utility ……. It is not surprising, therefore, to discover a tendency in the more recent authorities to reject any rigid classification of equitable estoppel into exclusive and defined categories …….” (See also per Oliver J in Taylor’s Fashion Limited v Liverpool Victoria Trustees Co Limited noted at [1982] 1 QB 133 and further, per Lord Denning MR in Amalgamated Property Co v Texas Bank: but, see to the contrary, his earlier observations in McIlkenny v Chief Constable of the West Midlands [1980] 1 QB 283, and his description of the House “called Estoppel”, with its many rooms)

The less graphic, but equally trenchant comment by Millett LJ, as he then was, in First National Bank v Thomson [1996] Ch 231 at 236, summarises the opposite contention:

“…… (the) attempts to demonstrate that all estoppel other than estoppel by record are now subsumed in the single embracing estoppel by representation and that they are all governed by the same requirements has never won general acceptance.”

The removal of formal classifications would represent the starting point from which to consider the second possible development, consigning to history the misleading aphorism that estoppel is a shield, not a sword. In reality that principle has no application to what is described as a proprietary estoppel The cause of action founded on proprietary estoppel may, and should, so the argument runs, be extended generally in this jurisdiction, both in accordance with the recent decisions in the High Court of Australia in Waltons Stores (Interstate) Limited v Maher [1988] 164 CLR 387 and Commonwealth of Australia v Verwayen [1990] 170 CLR 394, and perhaps also by reference in this jurisdiction to Plimmer v Wellington [1884] 9 App CAS 699, which involved a contractual interest in a licence over land, and also on the basis that if the compartmentalisation of “estoppel” were broken down, the remedies provided for one form of estoppel (proprietary estoppel) would then be extended to the others.

These, very briefly summarised, were the considerations which led me to the preliminary view that although BTH’s argument in contract was unsustainable, the possible development of the law in relation to estoppel might properly justify allowing the case to proceed to trial.

If it did, however, both the trial judge and this court would be bound to hold that the principles relating to proprietary estoppel are limited to “rights and interests created in and over land” and, possibly “to other forms of property”. (Western Fish Products v Penwith DC [1981] 2 All ER 204, where in this specific context, Megaw LJ observed, at 218: “The question of new rights and remedies is a matter for Parliament, not the judges”.) Moreover, assuming for present purposes only that this authority could be distinguished, the difficulties arising from the underlying uncertainties referred to in the judgment of the Vice Chancellor extend to the estoppel as well as the contractual issue. (Woodhouse AC Israel Cocoa Limited SA v Nigerian Produce Marketing Co Limited [1972] AC 741.) In reality, BTH’s possible success in this litigation would depend on establishing liability against M & S in equity when it would not otherwise be liable in contract, and would represent a dramatic, if not indeed a revolutionary development of the legal principles governing the enforcement of private obligations.

On reflection, I am persuaded by the judgments of the Vice Chancellor and Mance LJ, and for the reasons given by them, that there is no real prospect of the claim succeeding unless and until the law is developed, or corrected, by the House of Lords. In my judgment however, such a possibility would not normally justify a case proceeding to, nor provide a compelling reason for trial. However settled the law may appear to be, one of its strengths is that the possibility of development, or change, remains. In my view, even for the purposes of CPR 24.2, we must apply the law as it is, not as it may possibly one day become (my emphasis).

I do not believe that this approach means that the development of the law is likely to be stultified. If for example, there were a significant conflict in the authorities, or if the law could reasonably be described as uncertain, or perhaps also, if there were a substantial body of academic or judicial opinion that the law as currently understood produced injustice and should be considered by the House of Lords, but simultaneously the essential facts were heavily in dispute, considerations such as these might provide a compelling reason for trial. Although the House of Lords in Barrett v Enfield LBC [1999] 3 WLR 79 has recently emphasised that the law should be developed on the basis of established rather than assumed facts, in this case, as I have explained, many of the essential facts are not in reality in dispute. If Morison J’s order were set aside, as I think it should be, without suggesting that this court should grant permission to appeal to the House of Lords, it would be open to BTH to seek permission either from this court, or if refused, directly from the House of Lords, which could then decide whether the principles of estoppel should be re-examined, and whether this case provides an appropriate vehicle for that examination.”

Yeoman’s Row Management Ltd & Anor v Cobbe

[2008] UKHL 55


“My Lords,


The essence of the problem to be resolved in this case can be quite shortly stated. A is the owner of land with potential for residential development and enters into negotiations with B for the sale of the land to B. They reach an oral “agreement in principle” on the core terms of the sale but no written contract, or even a draft contract for discussion, is produced. There remain some terms still to be agreed. The structure of the agreement in principle that A and B have reached is that B, at his own expense, will make and prosecute an application for the desired residential development and that, if the desired planning permission is obtained, A will sell the land to B, or more probably to a company nominated by B, for an agreed up-front price, £x. B will then, again at his own expense, develop the land in accordance with the planning permission, sell off the residential units, and, when the gross proceeds of sale received by B equals £2x, any further gross proceeds of sale will be divided equally between A and B. Pursuant to this agreement in principle B makes and prosecutes an application for planning permission for the residential development that A and he have agreed upon. B is encouraged by A to do so. In doing so B spends a considerable sum of money as well, of course, as a considerable amount of time. The application is successful and the desired planning permission is obtained. A then seeks to re-negotiate the core financial terms of the sale, asking, in particular, for a substantial increase in the sum of money that would represent £x. B is unwilling to commit himself to the proposed new financial terms and A is unwilling to proceed on the basis of the originally agreed financial terms. So B commences legal proceedings. The question for your Lordships is what relief, in the circumstances described, B should be granted, for, I believe, none of your Lordships considers that he would not be entitled to any.

A number of possible bases for the grant of relief to B need to be considered.

(i) First, there is proprietary estoppel. B has, with the encouragement of A, spent time and money in obtaining the planning permission and has done so, to the knowledge of A, in reliance on the oral agreement in principle and in the expectation that, following the grant of the planning permission, a formal written agreement for the sale of the property, incorporating the core financial terms that had already been agreed and any other terms necessary for or incidental to the implementation of the core terms, would be entered into. In these circumstances, it could be, and has been, argued, A should be held to be estopped from denying that B had acquired a proprietary interest in the property and a court of equity should grant B the relief necessary to reflect B’s expectations.

(ii) Second, there is constructive trust. In circumstances such as those described, equity can, it is suggested, give effect to the joint venture agreed upon by A and B by treating A as holding the property upon a constructive trust for himself and B, with A and B taking beneficial interests calculated to enable effect to be given to B’s expectations engendered by the agreement in principle.

(iii) Third, there is unjust enrichment. The grant of planning permission, obtained by B at his expense and through the deployment of his time and planning expertise, has increased the value of the property. So A has been enriched at the expense of B and, since it was A’s repudiation of the oral agreement in principle that frustrated the basis upon which B had been relying, perhaps unjustly enriched.

(iv) Fourthly, there is the question of a quantum meruit. B has supplied valuable services to A in obtaining planning permission for the benefit of A’s property. There is no question of the services having been provided gratuitously but no fee for the services was agreed between A and B. B’s reward was supposed to have been the conclusion of an enforceable contract. In these circumstances a quantum meruit, taking into account the amount of B’s expenditure of time and money and the value of the services, can, it could be argued, be fixed by the court.

(v) Fifthly, the arrangement between A and B for the sale of the property to B can be regarded as involving two stages. The first stage is the making and prosecution by B at his own expense of the application for the grant of planning permission. This stage constitutes, in effect, the consideration given by B to A in return for A’s promise, if planning permission is granted, to enter into a formal written contract of sale embodying, inter alia, the core financial terms that had already been agreed. A’s promise, being no more than an oral promise to enter into a written contract and, moreover, part of an incompletely negotiated agreement, is not contractually enforceable but A’s repudiation of that promise, after B had supplied his first stage consideration and the planning permission had been granted, would, it could be argued, constitute a complete failure of the consideration that A was to have given, and entitle B to a restitutionary remedy.

(vi) Finally, in circumstances such as those described the possibility of a remedy in damages for the tort of deceit must be kept in mind. If A represented to B that he was willing to enter into a written agreement, or regarded himself as bound by an oral agreement embodying the core financial terms that had already been agreed, and so represented at a time when he, A, had already decided to repudiate those terms and demand better ones, B, if and to the extent that he had acted on those false representations and thereby suffered loss, would have an action in deceit for damages.

Two features of these possible remedies are worth noticing. First, both the proprietary estoppel claim and the constructive trust claim are claims to a proprietary interest in the property. The other remedies do not require proprietary claims but follow upon in personam claims for compensation or restitution. Second, a proprietary estoppel claim and a constructive trust claim would constitute, if successful, a means whereby B could obtain a remedy providing him with a benefit more or less equivalent to the benefit he expected to obtain from the oral and inchoate agreement; in effect a benefit based on the value of his non-contractual expectation. By way of contrast, an unjust enrichment remedy, a quantum meruit remedy and a consideration that has wholly failed remedy are essentially restitutionary in character, concentrating not at all on the value of the expected benefit of which B has been deprived but, as the case may be, on the extent of A’s enrichment at B’s expense, on the value of B’s services or on the amount or value of the consideration provided by B to A. And a tortious remedy for deceit would concentrate on the loss caused to B in acting on A’s false representation and would seek to restore him to the position in which he would have been if the false representation had never been made. One of the main issues for your Lordships to decide on this appeal is, in my opinion, whether B should be held entitled to a proprietary remedy based on the extent of his disappointed expectations or to an in personam remedy of, using the adjective fairly loosely, a restitutionary character. The question of a remedy in deceit does not arise, for no allegation of fraudulent misrepresentation has been made, but the conceptual possibilities of such a claim are useful to keep in mind. It is very well established that the remedy for a fraudulent misrepresentation inducing a contract is, besides rescission of the contract if the victim so elects, a tortious action in deceit for damages for any loss thereby caused; and that, unless the representation has become a term of the contract, the victim is not entitled to claim damages measured by the loss of the benefit he would have obtained if the representation had been true, i.e. he is not entitled to contractual damages.

The Facts Proprietary estoppel

Both the learned judge and the Court of Appeal regarded the relief granted as justified on the basis of proprietary estoppel. I respectfully disagree. The remedy to which, on the facts as found by the judge, Mr Cobbe is entitled can, in my opinion, be described neither as based on an estoppel nor as proprietary in character. There are several important authorities to which I want to refer but I want first to consider as a matter of principle the nature of a proprietary estoppel. 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 claimed 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. So, what is the fact or facts, or the matter of mixed fact and law, that, in the present case, the appellant is said to be barred from asserting? And what is the proprietary right claimed by Mr Cobbe that the facts and matters the appellant is barred from asserting might otherwise defeat?

The pleadings do not answer these questions. The terms of the oral “agreement in principle”, the second agreement, relied on by Mr Cobbe are pleaded but it is accepted that there remained still for negotiation other terms. The second agreement was, contractually, an incomplete agreement. The terms that had already been agreed were regarded by the parties as being “binding in honour”, but it follows that the parties knew they were not legally binding. So what is it that the appellant is estopped from asserting or from denying? The appellant cannot be said to be estopped from asserting that the second agreement was unenforceable for want of writing, for Mr Cobbe does not claim that it was enforceable; nor from denying that the second agreement covered all the terms that needed to be agreed between the parties, for Mr Cobbe does not claim that it did; nor from denying that, pre 18 March 2004, Mr Cobbe had acquired any proprietary interest in the property, for he has never alleged that he had. And what proprietary claim was Mr Cobbe making that an estoppel was necessary to protect? His originally pleaded claim to specific performance of the second agreement was abandoned at a very early stage in the trial (see para.8 above) and the proprietary claims that remained were claims that the appellant held the property on trust for itself and Mr Cobbe. These remaining proprietary claims were presumably based on the proposition that a constructive trust of the property, with appropriate beneficial interests for the appellant and Mr Cobbe, should, by reason of the unconscionable conduct of Mrs Lisle-Mainwaring, be imposed on the property. I must examine that proposition when dealing with constructive trust as a possible means of providing Mr Cobbe with a remedy, but the proposition is not one that requires or depends upon any estoppel.

It is relevant to notice that the amendments to Mr Cobbe’s pleaded prayer for relief, made when the specific performance and damages for breach of contract claims were abandoned, include the following :

“(4) Alternatively, a declaration that [the appellant and Mrs Lisle-Mainwaring] are estopped from denying that [Mr Cobbe] has such interest in the Property and/or the proceeds of sale thereof as the Court thinks fit.”

This is the only pleaded formulation of the estoppel relied on by Mr Cobbe and, with respect to the pleader, is both meaningless and pointless. Etherton J concluded, in para.85 of his judgment, that the facts of the case “gave rise to a proprietary estoppel in favour of Mr Cobbe”, but nowhere identified the content of the estoppel. Mummery LJ agreed (paras.60 and 61 of his judgment, concurred in by Dyson LJ (para.120) and Sir Martin Nourse (para.141)), but he, too, did not address the content of the estoppel. Both Etherton J and Mummery LJ regarded the proprietary estoppel conclusion as justified by the unconscionability of Mrs Lisle-Mainwaring’s conduct. My Lords, unconscionability of conduct may well lead to a remedy but, in my opinion, proprietary estoppel cannot be the route to it unless the ingredients for a proprietary estoppel are present. These ingredients should include, in principle, a proprietary claim made by a claimant and an answer to that claim based on some fact, or some point of mixed fact and law, that the person against whom the claim is made can be estopped from asserting. To treat a “proprietary estoppel equity” as requiring neither a proprietary claim by the claimant nor an estoppel against the defendant but simply unconscionable behaviour is, in my respectful opinion, a recipe for confusion.

Deane J, in Muschinski v Dodds (1985) 160 CLR 583, in a judgment concurred in by Mason J, drew attention to the nature and function of constructive trusts in the common law. His remarks, at 612 to 616 repay careful reading but I would respectfully draw particular attention to a passage at 615 relevant not only to constructive trusts but equally, in my opinion, to proprietary estoppel. He said this:

“The fact that the constructive trust remains predominantly remedial does not, however, mean that it represents a medium for the indulgence of idiosyncratic notions of fairness and justice. As an equitable remedy, it is available only when warranted by established equitable principles or by the legitimate processes of legal reasoning, by analogy, induction and deduction, starting from the conceptual foundations of such principles … Under the law of this country – as, I venture to think under the present law of England … proprietary rights fall to be governed by principles of law and not by some mix of judicial discretion, subjective views about which party ‘ought to win’ … and the ‘formless void’ of individual moral opinion …”

A finding of proprietary estoppel, based on the unconscionability of the behaviour of the person against whom the finding was made but without any coherent formulation of the content of the estoppel or of the proprietary interest that the estoppel was designed to protect invites, in my opinion, criticism of the sort directed by Deane J in the passage cited. However, Mr Ivory QC, counsel for Mr Cobbe both in the Court of Appeal and before your Lordships, has relied on authority and to that I must now turn.

Oliver J (as he then was) stated the requirements of proprietary estoppel in a “common expectation” class of case in a well-known and often cited passage in Taylors Fashions Ltd v Liverpool Victoria Trustees Co. Ltd [1982] QB 133 at 144 :

“if A under an expectation created or encouraged by B that A shall have a certain interest in land, thereafter, on the faith of such expectation and with the knowledge of B and without objection by him, acts to his detriment in connection with such land, a Court of Equity will compel B to give effect to such expectation.”

Note the reference to “a certain interest in land”. Taylors Fashions was a case where the “certain interest” was an option to renew a lease. There was no lack of certainty; the terms of the new lease were spelled out in the option and the lessees’ expectation was that on the exercise of the option the new lease would be granted. The problem was that the option had not been registered under the Land Charges Act 1925 and the question was whether the freeholders, successors in title to the original lessors who had granted the option, could be estopped from denying the right of the lessees to exercise the option. But what is the comparable expectation and the comparable “certain interest” in the present case? Mr Cobbe’s expectation, encouraged by Mrs Lisle-Mainwaring, was that upon the grant of planning permission there would be a successful negotiation of the outstanding terms of a contract for the sale of the property to him, or to some company of his, and that a formal contract, which would include the already agreed core terms of the second agreement as well as the additional new terms agreed upon, would be prepared and entered into. An expectation dependent upon the conclusion of a successful negotiation is not an expectation of an interest having any comparable certainty to the certainty of the terms of the lessees’ interest under the Taylors Fashions option. In the Taylors Fashions case both the content of the estoppel, i.e. an estoppel barring the new freeholders from asserting that the option was unenforceable for want of registration, and the interest the estoppel was intended to protect, i.e. the option to have a renewal of the lease, were clear and certain. Not so here. The present case is one in which an unformulated estoppel is being asserted in order to protect Mr Cobbe’s interest under an oral agreement for the purchase of land that lacked both the requisite statutory formalities (s.2 of the 1989 Act) and was, in a contractual sense, incomplete.

A reference to the expectation of “a certain interest in land” had appeared in the speech of Lord Kingsdown in Ramsden v Dyson (1866) LR 1 HL 129 at 170

“If a man, under a verbal agreement with a landlord for a certain interest in land, or, what amounts to the same thing, under an expectation, created or encouraged by the landlord, that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord, and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation.”

Lord Kingsdown went on to say, at 171, that even if there were uncertainty as to the terms of the contract a court of equity could nevertheless interfere in order to prevent fraud but that it was unclear what, in that case, the remedy should be. The choices, he said, were between the grant of a specific interest in the land and the grant of a restitutionary remedy such as monetary compensation. This is an issue to which I must return but it suffices for the moment to notice that Lord Kingsdown’s remarks at 171 show that, when referring at 170 to “a verbal agreement … for a certain interest in land”, he was referring to an agreement that was complete, with no uncertainty as to its terms.

Lord Kingsdown’s requirement that there be an expectation of “a certain interest in land”, repeated in the same words by Oliver J in the Taylors Fashions case, presents a problem for Mr Cobbe’s proprietary estoppel claim. The problem is that when he made the planning application his expectation was, for proprietary estoppel purposes, the wrong sort of expectation. It was not an expectation that he would, if the planning application succeeded, become entitled to “a certain interest in land”. His expectation was that he and Mrs Lisle-Mainwaring, or their respective legal advisers, would sit down and agree the outstanding contractual terms to be incorporated into the formal written agreement, which he justifiably believed would include the already agreed core financial terms, and that his purchase, and subsequently his development of the property, in accordance with that written agreement would follow. This is not, in my opinion, the sort of expectation of “a certain interest in land” that Oliver J in the Taylors Fashions case or Lord Kingsdown in Ramsden v Dyson had in mind.

Mr Ivory cited, also, a number of other authorities in support of his proprietary estoppel case. In Plimmer v Mayor of Wellington (1884) 9 App. Cas. 699, a Privy Council case, the question was whether the appellant, Mr Plimmer, had a sufficient “estate or interest” in land to qualify for statutory compensation when the land became vested in the Wellington Corporation. Plimmer had occupied the land under a revocable licence from the Corporation’s predecessor-in-title and at the request of that predecessor-in-title had made extensive improvements to the land. The Judicial Committee held that these circumstances “were sufficient to create in his [Plimmer’s] mind a reasonable expectation that his occupation would not be disturbed…” In effect, the owner of the land became estopped from asserting that the licence remained revocable. That was sufficient to constitute the licence an “estate or interest” for compensation purposes. The Plimmer case does not, in my opinion, assist Mr Cobbe, whose expectation was that of further negotiations leading, as he hoped and expected, to a formal contract. To the extent that he had an expectation of a “certain interest in land”, it was always a contingent one, contingent not simply on the grant of planning permission but contingent also on the course of the further contractual negotiations and the conclusion of a formal written contract.

Inwards v Baker [1965] 2 QB 29 was the case in which an indulgent father had encouraged his son to build a bungalow on his, the father’s, land. The son had done so in the expectation, encouraged by the father, that he, the son, would be permitted to remain in occupation. The Court of Appeal held that the son had an equity entitling him to live in the bungalow as long as he wished. In effect the father, and after his death the trustees of his will, were estopped from denying that the son’s licence to occupy the land was an irrevocable one. The case was on all fours with Plimmer’s case, which was relied on both by Lord Denning M.R. (36/37) and by Danckwerts LJ (38) in their respective judgments. The principle that, if A, an owner of land, encourages B to build on his, A’s, land on the footing that B will be entitled thereafter to occupy the new buildings for as long as he wishes and B, taking A at his word, then acts accordingly, A will be estopped from denying the right of B to continue to occupy the new buildings, is undoubted good law but is a principle of no assistance to Mr Cobbe in the present case. Crabb v Arun D.C. [1976] Ch 179 is likewise of no assistance to Mr Cobbe. The case was one in which the DC had led Mr Crabb to believe that he could have access to his land via a road belonging to the DC. In reliance on that promise Mr Crabb allowed his land to become otherwise landlocked. He was held entitled by way of proprietary estoppel to a right of way as promised. The DC was estopped from denying that he had the right of way.

Closer to home, so far as support for Mr Cobbe’s promissory estoppel claim is concerned, is the line of cases in which a claimant has expended money on land on the basis of an informal or incomplete agreement and in the expectation that, in due course, a binding agreement would be forthcoming. The present case, if the proprietary estoppel claim is to succeed, must be brought within this line of cases. Laird v Birkenhead Railway Co. (1859) Johns.500 is an early example. The plaintiff applied to the defendant railway company for permission to construct and use a private branch line connecting with the railway company’s main line. Agreement was reached for the plaintiff to do so “on reasonable terms, which were to be afterwards settled” (per Page Wood V-C at 513). The plaintiff, acting on this agreement, constructed and used the branch line and for some two and a half years paid tolls at an agreed rate to the railway company. Agreement in principle was reached on the details of the plaintiff’s user of the branch line but a formal agreement was never signed. The railway company gave notice to the plaintiff to cease his user of the branch line. The Vice-Chancellor said that the railway company had allowed the plaintiff “to expend his money on the faith that he would be permitted to join their line on reasonable terms” (513) and that the tolls agreed upon and paid by the plaintiff for his past user must be assumed to represent reasonable terms. “It must”, said the Vice-Chancellor, “be inferred, from the nature of the transaction, that the privilege of using the line was not to be determinable …” (511). The Vice-Chancellor’s ability, by inference from the nature of the transaction and from the basis on which the plaintiff for the past two and a half years had been using the branch line, to fill in the gaps in the parties’ contractual agreement is not an ability that has its counterpart in the present case. The court could not have made complete the inchoate second agreement. On none of the three outstanding matters referred to in paragraph 6 above would the court have been able to infer the contractual terms that further negotiations would or might have produced and Etherton J, quite rightly, did not attempt to do so.

Holiday Inns Inc. v Broadhead (1974) 232 EG 951, 1087 has been treated as, but correctly analysed is in my opinion not, a case of proprietary estoppel. The plaintiffs, Holiday Inns, and the defendant, Mr Broadhead, agreed, in effect, on a joint venture, the essential ingredients of which were that a site in the vicinity of Heathrow Airport would be identified as suitable for an hotel. Mr Broadhead, or a company nominated by him, would acquire the site, Holiday Inns would apply for the requisite planning permission and, if planning permission were granted, the site would be leased to Holiday Inns under a lease the terms of which the parties had agreed. A suitable site was identified and was then purchased by a company owned or controlled by Mr Broadhead. Holiday Inns, at their own expense, applied for and obtained planning permission for the building of the hotel. But Mr Broadhead then entered into negotiations for a lease with another hotel group and granted a lease to a company in that group before Holiday Inns could intervene. Whatever equity Holiday Inns had against Mr Broadhead could not have been asserted against the lessee, which had taken the lease without notice of any such equity. Holiday Inns sued Mr Broadhead. The judge, Goff J, accepted that the Holiday Inns executives who had dealt with Mr Broadhead thought that they and he had reached “a gentleman’s agreement which would be honoured” and that Mr Broadhead’s “failure to inform them of his true state of mind was deceitful and unconscionable” (1089). He held that Holiday Inns were “clearly entitled to relief” (1094) and declared that Mr Broadhead’s company, which had purchased the site and granted the lease to the rival hotel group, held the land subject to the lease upon trust to sell it and to divide the net proceeds of sale, after discharging various expenses incurred by the respective parties, between itself and Holiday Inns in equal shares. The relief was granted, therefore, by imposing, or recognising, a constructive trust over the property. Whether, if Mr Broadhead had not pre-empted the choice of relief by granting the lease before any restraining injunction could be obtained, Holiday Inns’ expectation of a lease would have been recognised by an order that they were entitled to a lease on the terms already agreed is an open question. It does not appear from the report of the case that anything remained to be negotiated between Mr Broadhead and Holiday Inns. The terms of the intended lease had been agreed. In the event, however, the relief granted by Goff J was on the same footing as that granted in the joint venture cases to which, starting with Pallant v Morgan, I will later refer, namely, that where a joint venture involves the acquisition by one of the joint venturers of the property intended for the purposes of the joint venture and the pursuit of the joint venture then becomes impracticable or impossible, the acquirer is not entitled to retain the property for his own benefit but must be taken to hold the property upon trust for himself and the other joint venturers jointly. Before leaving the Holiday Inns case, it is to be noted that the judge, Goff J, was Sir Reginald Goff, and not Sir Robert Goff, later Lord Goff of Chieveley, as was erroneously stated at 122F in the judgment of the Board (of which, oddly, Lord Goff was a member) delivered by Lord Templeman in Attorney-General of Hong Kong v Humphreys Estate (Queen’s Gardens) Ltd [1987] AC 114.

The Humphreys Estate case was one in which a written agreement, expressed to be “subject to contract”, for the purchase of development property had been signed. The agreement said that the terms could be varied or withdrawn and that any agreement was subject to the documents necessary to give legal effect to the transaction being executed and registered. In short the parties had made it clear that neither of them was for the time being legally bound. The Hong Kong government, the intended purchaser, was permitted to take possession of the property and to spend money on it. The owners of the property then decided to withdraw from the transaction and gave notice terminating the government’s licence to occupy the property. In the litigation that ensued, the government contended that the owners were barred by proprietary estoppel from exercising their legal right to withdraw from the transaction (see the submissions of counsel referred to by Lord Templeman at 121). The proprietary estoppel relied on was that which had been enunciated by Lord Kingsdown in Ramsden v Dyson. The government lost in the courts in Hong Kong and appealed to the Privy Council but lost there too. Lord Templeman explained why at 127H

“It is possible but unlikely that in circumstances at present unforeseeable a party to negotiations expressed to be ‘subject to contract’ would be able to satisfy the court that the parties had subsequently agreed to convert the document into a contract or that some form of estoppel had arisen to prevent both parties from refusing to proceed with the transaction envisaged by the document. But in the present case the government chose to begin and elected to continue on terms that either party might suffer a change of mind and withdraw.”

The reason why, in a ‘subject to contract’ case, a proprietary estoppel cannot ordinarily arise is that the would-be purchaser’s expectation of acquiring an interest in the property in question is subject to a contingency that is entirely under the control of the other party to the negotiations (see also British Steel Corporation v Cleveland Bridge and Engineering Co. Ltd [1984] 1 AER 504 per Robert Goff J at 511; Walton Stores (Interstate) Ltd v Maher [1988] 164 CLR 387; London & Regional Investments Ltd v TBI Plc. [2002] EWCA 355 per Mummery LJ at para.42 and Pridean v Forest Taverns (1996) 75 P&CR 447). The expectation is therefore speculative.

Both Etherton J and Mummery LJ in the Court of Appeal recognised that, in cases where negotiations had been made expressly subject to contract and a contract had not in the end been forthcoming, it would be very difficult for a disappointed purchaser to establish an arguable case for a proprietary estoppel. Etherton J, having referred to the relevant authorities, accepted the improbability that in a subject-to-contract case a proprietary estoppel might arise (paras. 119 and 120), but distinguished the present case on the footing that Mrs Lisle-Mainwaring had encouraged Mr Cobbe to believe that if he succeeded in obtaining planning permission the second agreement would be honoured even though not legally binding (para.123) and, also, I think, that nothing equivalent to a subject-to-contract reservation had ever been expressed (para.119) and that no issue likely to cause any difficulty had been raised in the negotiations that culminated in the second agreement (para.122). In the Court of Appeal Mummery LJ dealt with the subject-to-contract point in paragraphs 53 to 57. The second agreement, he said, “was never expressly stated to be ‘subject to contract’ either by use of that well known expression or by other language to the same effect” (para.57). He agreed with Etherton J that

“proprietary estoppel could be established even where the parties anticipated that a legal binding contract would not come into existence until after planning permission had been obtained, further terms discussed and agreed and formal written contracts exchanged.”

My Lords, I can easily accept that a subject-to-contract reservation made in the course of negotiations for a contract relating to the acquisition of an interest in land could be withdrawn, whether expressly or by inference from conduct. But debate about subject-to-contract reservations has only a peripheral relevance in the present case, for such a reservation is pointless in the context of oral negotiations relating to the acquisition of an interest in land. It would be an unusually unsophisticated negotiator who was not well aware that oral agreements relating to such an acquisition are by statute unenforceable and that no express reservation to make them so is needed. Mr Cobbe was an experienced property developer and Mrs Lisle-Mainwaring gives every impression of knowing her way around the negotiating table. Mr Cobbe did not spend his money and time on the planning application in the mistaken belief that the agreement was legally enforceable. He spent his money and time well aware that it was not. Mrs Lisle-Mainwaring did not encourage in him a belief that the second agreement was enforceable. She encouraged in him a belief that she would abide by it although it was not. Mr Cobbe’s belief, or expectation, was always speculative. He knew she was not legally bound. He regarded her as bound “in honour” but that is an acknowledgement that she was not legally bound.

The reality of this case, in my opinion, is that Etherton J and the Court of Appeal regarded their finding that Mrs Lisle-Mainwaring’s behaviour in repudiating, and seeking an improvement on, the core financial terms of the second agreement was unconscionable, an evaluation from which I do not in the least dissent, as sufficient to justify the creation of a “proprietary estoppel equity”. As Mummery LJ said (para.123), she took unconscionable advantage of Mr Cobbe. The advantage taken was the benefit of his services, his time and his money, in obtaining planning permission for the property. The advantage was unconscionable because immediately following the grant of planning permission, she repudiated the financial terms on which Mr Cobbe had been expecting to be able to purchase the property. But to leap from there to a conclusion that a proprietary estoppel case was made out was not, in my opinion, justified. Let it be supposed that Mrs Lisle-Mainwaring were to be held estopped from denying that the core financial terms of the second agreement were the financial terms on which Mr Cobbe was entitled to purchase the property. How would that help Mr Cobbe? He still would not have a complete agreement. Suppose Mrs Lisle-Mainwaring had simply said she had changed her mind and did not want the property to be sold after all. What would she be estopped from denying? Proprietary estoppel requires, in my opinion, clarity as to what it is that the object of the estoppel is to be estopped from denying, or asserting, and clarity as to the interest in the property in question that that denial, or assertion, would otherwise defeat. If these requirements are not recognised, proprietary estoppel will lose contact with its roots and risk becoming unprincipled and therefore unpredictable, if it has not already become so. This is not, in my opinion, a case in which a remedy can be granted to Mr Cobbe on the basis of proprietary estoppel.

There is one further point regarding proprietary estoppel to which I should refer. Section 2 of the 1989 Act declares to be void any agreement for the acquisition of an interest in land that does not comply with the requisite formalities prescribed by the section. Subsection (5) expressly makes an exception for resulting, implied or constructive trusts. These may validly come into existence without compliance with the prescribed formalities. Proprietary estoppel does not have the benefit of this exception. The question arises, therefore, whether a complete agreement for the acquisition of an interest in land that does not comply with the section 2 prescribed formalities, but would be specifically enforceable if it did, can become enforceable via the route of proprietary estoppel. It is not necessary in the present case to answer this question, for the second agreement was not a complete agreement and, for that reason, would not have been specifically enforceable so long as it remained incomplete. My present view, however, is that proprietary estoppel cannot be prayed in aid in order to render enforceable an agreement that statute has declared to be void. The proposition that an owner of land can be estopped from asserting that an agreement is void for want of compliance with the requirements of section 2 is, in my opinion, unacceptable. The assertion is no more than the statute provides. Equity can surely not contradict the statute. As I have said, however, statute provides an express exception for constructive trusts. So to Mr Cobbe’s constructive trust claim I must now turn.”

Revenue Commissioners v. Moroney

 [1972] IR 372

Kenny J.          The Supreme Court

“In the course of the hearing I asked whether the sons could succeed on a plea that the parent was estopped from claiming any part of the “purchase” money. Counsel for the defendants did not show any enthusiasm for this point and so I did not have the advantage of hearing counsel for the plaintiffs on it. Despite this, I think that in an action by the parent against the sons they would succeed on what is now called promissory estoppel.

 This doctrine first appeared in  Hughes v. Metropolitan Railway Co. 2 which was a claim that a lease be forfeited on the ground that the lessee was in breach of a covenant to effect certain required repairs within six months from the date on which the lessee received from the lessor a notice specifying the defects. The landlord gave notice of the breaches on the 22nd October, 1874, and the tenant’s solicitors wrote that the repairs would be commenced immediately but that they proposed to postpone them until they heard whether the landlord wished to purchase the tenant’s interest. The landlord’s solicitors replied asking whether the tenant was the owner of other adjoining property and was willing to give immediate possession of it and stating that, when they had this information, their client would consider whether he would acquire the tenant’s interest. The attempt to negotiate a settlement broke down on the 31st December and the question in the case was whether the six months ran from that date or from the

22nd October, for the repairs had been carried out within the period of six months from the 31st December. The case was decided before the law was altered by s. 14 of the Conveyancing Act, 1881. In the course of his speech the Lord Chancellor, Lord Cairns, said at p. 448 of the report: “. . . it is the first principle upon which all Courts of Equity proceed, that if parties who have entered into definite and distinct terms involving certain legal results  certain penalties or legal forfeiture  afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties 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.” Lord Justice Bowen in  Birmingham & District Land Co. v. London & North Western Railway Co. 3 showed that the principle was not confined to forfeiture cases but was of general application; at p. 286 of the report he said: “. . . if persons who have contractual rights against others induce by their conduct those against whom they have such rights to believe that such rights will either not be enforced or will be kept in suspense or abeyance for some particular time, those persons will not be allowed by a Court of Equity to enforce the rights until such time has elapsed, without at all events placing the parties in the same position as they were before.”

 The doctrine got little attention in the textbooks until it was revived in striking fashion by Mr. Justice Denning (as he then was) in  Central London Property Trust Ltd. v.High Trees House Ltd. 4 In that case the landlords had let a block of flats for 99 years at an annual rent of £2,500. The tenants found difficulty in letting them and in 1940 the landlords agreed to reduce the rent to £1,250. There was no consideration given for this nor was any period for the reduction agreed. From then the tenants paid the reduced rent until September, 1945, when the landlords demanded the full amount of £2,500 and the arrears for the period during which the lower rent had been paid. Mr. Justice  Denning held that the rent of £2,500 could not be recovered for any period before September, 1945. In the course of his judgment he said at p. 134 of the report:”There has been a series of decisions over the last fifty years which, although they are said to be cases of estoppel are not really such. They are cases in which a promise was made which was intended to create legal relations and which, to the knowledge of the person making the promise, was going to be acted on by the person to whom it was made, and which was in fact so acted on. In such cases the courts have said that the promise must be honoured . . . The courts have not gone so far as to give a cause of action in damages for the breach of such a promise, but they have refused to allow the party making it to act inconsistently with it.” In  Combe v. Combe 5 the same judge said that the doctrine “only prevents a party from insisting upon his strict legal rights, when it would be unjust to allow him to enforce them, having regard to the dealings which have taken place between the parties.” These cases were discussed by Viscount Simonds in  Tool Metal Manufacturing Co. Ltd. v. Tungsten Electric Co. Ltd. 6 in which he said at p. 764 that the gist of the equity lies in the fact that one party has by his conduct led the other to alter his position; this aspect was emphasised by Mr. Justice McVeigh in  Morrow v. Carty 7; see also  Cullen v. Cullen 8and  Inwards v. Baker. 9

 In  Ajayi v. R. T. Briscoe (Nig.) Ltd. 10 the advice of the Privy Council, given by Lord Hodson, was that the doctrine is confined to cases where the representation relates to existing contractual rights. At p. 1330 of the report Lord Hodson said: “Their Lordships are of opinion that the principle of law as defined by Bowen L.J. has been confirmed by the House of Lords in the case of Tool Metal Manufacturing Co. Ltd. v. Tungsten Electric Co. Ltd. 6 where the authorities were reviewed and no encouragement was given to the view that the principle was capable of extension so as to create rights in the promisee for which he had given no consideration. The principle,  which has been described as quasi estoppel and perhaps more aptly as promissory estoppel, is that when one party to a contract in the absence of fresh consideration agrees not to enforce his rights an equity will be raised in favour of the other party. This equity is, however, subject to the qualifications (1) that the other party has altered his position, (2) that the promissor can resile from his promise on giving reasonable notice, which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position, (3) the promise only becomes final and irrevocable if the promisee cannot resume his position.” This, if correct, would conclude this case in favour of the plaintiffs as any promissory estoppel arises here because the parent before the deed was signed represented by his conduct and by what he said to his sons that he would not require payment of any part of the”purchase” price. Until the deed was signed, there were no legal relations to be effected.

 In my view there is no reason in principle why the doctrine of promissory estoppel should be confined to cases where the representation related to existing contractual rights. It includes cases where there is a representation by one person to another that rights which will come into existence under a contract to be entered into will not be enforced. This is the way in which the doctrine is stated at p. 627 of Snell’s Principles of Equity (26th ed. 1966) which has the considerable authority of having had Mr. Megarry (as he then was) as one of its co-editors:”Where by his words or conduct one party to a transaction makes to the other a promise or assurance which is intended to affect the legal relations between them, and the other party acts upon it, altering his position to his detriment, the party making the promise or assurance will not be permitted to act inconsistently with it.” It seems to me that the parent represented to his sons that he would never seek payment of any part of the consideration of £16,000 and that they acted on this by signing the assignment. Each of them altered his position to his detriment because by signing each took on a legal liability to pay two-thirds of the consideration which they would not otherwise have assumed. Although they got the benefit of the interest in the joint tenancy, it seems to me to be probable that if they had refused to sign the deed in the form in which it was they would have got this without payment. The assumption of the legal liability created by the deed was in my opinion sufficient to raise the equity against the parent and the representation has become final because the sons cannot be restored to their original position unless the view is taken that there never was a debt. This equity does not affect the rights of other parties who would be entitled to rely on the deed, but this does not assist the plaintiffs. Their claim can succeed only if the parent would have succeeded in a claim against his sons.

 In my view the plaintiffs’ claim fails because the parent would not have got judgment against the sons for any part of the “purchase” price if he had sued them for it. It was argued that the appointment of the sons as executors was a forgiveness of any debt but Mr. Cooke rightly replied that, if it were, estate duty would be payable on the amount: see s. 32 of the Finance Act, 1941.

Daly v. Minister for the Marine

Fennelly J The Supreme Court

[2001] IESC 77 [2001] 3 IR 513

The Law Relating to Promissory Estoppel

40. The applicant relied at the hearing of the appeal also on the doctrine of promissory estoppel, though without citing any of the relevant authorities other than the well-known passage

from the judgment of Finlay C.J. ( Webb) treating legitimate expectation as an “aspect of the well-recognised equitable concept of promissory estoppel (which has been frequently been applied by our courts) whereby a promise or representation as to intention may in certain circumstances be held binding on the representor or promisor.” (page 384)

41. Mr Gerard Hogan, Senior Counsel contended that this was either an exceptionally generous application of promissory estoppel or a new doctrine of promissory estoppel. In either event he contended that he did not have to point to any act of reliance on the promise which formed the basis of his case. It is not unfair tocharacterise that as a daring submission, striking, as it does, at the root of the concept of equitable estoppel. The passage cited was clearly not intended to convey that the doctrine of legitimate expectation is coextensive with promissory estoppel. It clearly is not. The learned Chief Justice, in the passage in question cited, as authority, a judgment ofDenning M.R. which proceeded precisely from the fact that the parties had “conducted the dealings between them..” on foot of an underlying assumption. It is the fact that it would be unconscionable for one party to be permitted to depart from a position, statement or representation, upon which the other party has acted to his detriment, that justifies the courts in intervening to restrain him from doing so. If the recipient of a promise or representation, is to be dispensed from any obligation to demonstrate reliance, the doctrine would be more than exceptionally generous. It would be a virtually ungovernable new force affecting potentially not only equity but the laws of contract and property and, as here, the exercise of administrative powers.

42. This Court explained the doctrine of promissory estoppel very clearly in Doran v Thompson [1978] I.R. 222, where Griffin J said (at page 230):

“ Where one party has, by his words or conduct, made to the other a clear and unambiguous promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, and the other party has acted on it by altering his position to his detriment, it is well settled that the one who gave the promise or assurance cannot afterwards be allowed to revert to their previous legal relations as if no such promise or assurance had been made by him, and that he may be restrained in equity from acting inconsistently with such promise or assurance.”

43. Kenny J, at page 233, cited as being correct the statement of the law on promissory estoppel at page 563 of the 27th edition (1973) of Snell’s Principles of Equity which reads:—

“Where by his words or conduct one party to a transaction makes to the other an unambiguous promise or assurance which is intended to affect the legal relations between them (whether contractual or otherwise) and the other party acts upon it, altering his position to his detriment , the party making the promise or assurance will not be permitted to act inconsistently with it. ” (emphasis added in each case).

44. Turning to the facts of the present case, I think the letter of 1 st October 1993 is well capable of qualifying as the type of unambiguous promise or assurance contemplated by the doctrine of promissory estoppel. It told the applicant simply and directly that his vessel would be acceptable for replacement purposes. The applicant does not, however, satisfy the second requirement. The facts to which I have referred in rejecting his claim based on legitimate expectations apply with greater force in the present context.

45. The applicant frankly accepted at all stages that he had not acted on foot of this letter. He did not change his position in any material way. It was not inequitable, therefore, for the Minister to withdraw the offer contained in that letter to treat the applicant as being part of the demersal sector and entitled to use his tonnage for replacement.

46. I would accordingly dismiss the appeal.

Cullen v. Cullen [1962] IR 268

Kenny J.         

“It seems to me that this was a statement of intention by the plaintiff of what he proposed to do. He offered to do this because he wanted to retain his liberty and to avoid arrest under the order made under the Mental Treatment Act, 1945. Mr. Matheson has relied on the decision in  Dillwyn v. Llewelyn (1) as an authority for the proposition that the Court should now compel the plaintiff to transfer the lands and premises at Adamstown to Mrs. Cullen. The case is an authority for the proposition that a person claiming under a voluntary agreement will not be assisted by a Court of equity but that the subsequent acts of the donor may give the donee a ground of claim which he did not acquire from the original gift. In that case a father had told his son (the plaintiff) that he should live near him and had offered him a farm in order that the plaintiff might build a house: there was a written memo in which the father confirmed that it was his wish that his widow should give the lands to his son so that he would have a house. The plaintiff expended a large sum of money in building a house on the lands. Lord Westbury held that the making of the promise to give the lands coupled with the knowledge that the plaintiff had spent a considerable sum of money in building the house on the lands gave the plaintiff an equity to call on those claiming through the father to complete the gift. In this case, however, the only act relied on by Mrs. Cullen to create the equity is the putting of £403 into the business on Mr. Lawton’s suggestion; she has, however, been in receipt of the profits of the business since the 6th June, 1959, and these are considerably more than the sum which she paid in. Moreover, the balance sheet of the business as at the 31st December, 1960, shows a sum of £680 16s. 2d. to the credit of the bank account (I assume that this is the bank account in her name) and she could at any time since January, 1960, have repaid out of the profits of the business the monies advanced by her. The equity referred to by Lord Westbury is a discretionary one and when I consider the circumstances in which the plaintiff made the statement that he was about to transfer the property at Adamstown to his wife and that he made it because he believed that it was the only way by which he could remain free, I have no doubt whatever that it would be grossly inequitable to regard Mrs. Cullen as being entitled to a transfer of the property at Adamstown or as having acquired any proprietary interest, legal or equitable, in the property as a result of what was said. The use by Mrs. Cullen of her own monies for the running of the business, particularly when she could have repaid this advance at any time, does not, in my opinion, create any claim in conscience or in equity  which the Court should enforce or give any ground for disregarding the general principle that equity will not aid an imperfect gift. As Mrs. Cullen has no proprietary interest in the property the defendants cannot shelter behind her permission to them or her employment of them in the business. A further ground relied on was that the plaintiff made no provision for Mrs. Cullen when he left, that she had to run the business to provide maintenance for herself and that she was accordingly entitled to employ the defendants and to license them to reside in the premises. In the circumstances I think that she was entitled to conduct the business when the plaintiff left, but she had no authority to employ either of the defendants in the business or to license them to reside in the premises after the letters of the 14th September.

 A further justification pleaded in para. 8 is that the plaintiff made an oral contract with Patrick Cullen in 1954 under which Patrick Cullen agreed to reside in the dwelling-house at Adamstown and to work in the business and that the contract has not been terminated by the plaintiff. There was no evidence to support this and I decline to infer such a contract.


I come now to deal with the ownership of the site on which the house, won by Mrs. Cullen in the competition in the “Sunday Press,” had been erected. However unfortunate the Cullens may have been in their domestic relations, they have been singularly fortunate in competitions; Sean had won a substantial prize in the Hospitals Sweepstake and in March or April, 1959, Mrs. Cullen had won a fully furnished portable house. She gave this house to Martin and the plaintiff knew this in April, 1959. Martin intended to erect the house on his lands at Coolnagreine and, when representatives from the”Sunday Press” visited Adamstown in April, 1959, a site on his farm at Coolnagreine was selected. Shortly after this, Martin began to prepare the site for the house and did some work on the foundations. He had offered the house to his father before the 6th June, 1959, as he thought that his father did not approve of the position selected for it, but the offer was not accepted. When the plaintiff left Adamstown on the 6th June, Mrs. Cullen decided that she would like to have the house erected on the farm at Adamstown and, when she was speaking to Mr. Lawton, she told him this and sought her husband’s permission for it. Mr. Lawton said that he did not see why the permission was necessary as the property at Adamstown would be transferred to her; she persisted and Mr. Lawton undertook that he would write to Father Kavanagh and would telephone to her when he got a reply. A few days afterwards Mr. Lawton wrote to Father Kavanagh who discussed the matter with the plaintiff. The plaintiff told him that it was not necessary to discuss the matter because he was making over the place at Adamstown to Mrs. Cullen and that she could put the house where she liked. This discussion took place on the 13th or 14th June. Father Kavanagh gave this information to Mr. Lawton who then telephoned Mrs. Cullen and told her that she could go ahead with “the project as mentioned” and put the house up wherever she liked. Mrs. Cullen sent a message to Martin that he was not to go on with the preparation of the site on his farm and was to put up the house on the lands at Adamstown. He then stopped the preparation of the site on his own lands and began to work on a site for the house at Adamstown. He employed a man to work with him and spent about £200 in installing a water supply and building the foundations. The house arrived at the end of July and was assembled and erected in August. Some time after it was erected Martin heard that his father objected to its being placed at Adamstown and in August, 1960, Martin, who was about to get married, wrote to his father asking him to attend the wedding, and added:””I am hoping that you will give me the site the bungalow is on and your blessing.”

 I am satisfied that Martin would have erected the house on his own lands if the plaintiff had not given Mrs. Cullen permission to put up the house at Adamstown and that he erected the house on the lands at Adamstown because he relied on the permission given. I am convinced that the plaintiff knew at all times that Mrs. Cullen had given the house to Martin and that the house was being erected for Martin to live in. It would cost £700 at least to take it down now and to lay foundations for it elsewhere; the cost of the decoration of the house which would be made necessary by its removal would be all additional £100. It has been submitted on the authority of  Ramsden v. Dyson (1) that Martin Cullen has acquired a right to compel the plaintiff to transfer to him the site on which the house now stands. That case decides that if a stranger begins to build on land which he thinks is his and the real owner, seeing the mistake, abstains from correcting it and leaves him to continue, equity will not afterwards allow the real owner to assert his title to the land; but that if a stranger builds on land knowing it to be the

 property of another, equity will not prevent the real owner from claiming the lands afterwards. In this case, however, Martin knew that the land belonged to the plaintiff and his letter written in August, 1960, supports this view. In my opinion the argument based on  Ramsden v. Dyson (1) is incorrect.

 I am of opinion, however, that the plaintiff is estopped by his conduct in giving consent to the erection of the house at Adamstown when he knew that the house had been given to Martin and that the plaintiff cannot now assert any title to the site on which the house has been erected. There was a representation by him that he consented to this and that representation was acted on by Martin who spent £200 at least in erecting the house and gave a considerable amount of his time to this work. It seems to me that the principle stated by Denning J. in  Central London Property Trust, Ltd. v. High Trees House, Ltd. (2) and affirmed by the same Judge when he was a Lord Justice of Appeal in  Lyle-Meller v. Lewis & Co. (Westminster), Ltd. (3) applies to this aspect of the case and that the plaintiff cannot withdraw the permission which he gave for the erection of the house on the lands at Adamstown and cannot now assert a title to the site on which the house stands or to the house. While the estoppel created by the plaintiff’s conduct prevents him asserting a title to the site, it does not give Martin a right to require the plaintiff to transfer the site to him: if I had jurisdiction to make such an order I would do so, but I do not think I have. However, neither the plaintiff nor any person claiming through him can now successfully assert a title to the lands on which the house is built by any proceedings and, at the end of the twelve-year period from the date when the erection of the bungalow commenced, Martin will be able to bring a successful application under s. 52 of the Registration of Title Act, 1891, for his registration as owner. If this case goes further, I hope that it will be held that I was wrong in deciding that I had no power to order the plaintiff to transfer the site to Martin. There is a claim in the pleadings that Martin has acquired a lien on the lands but this was not argued. I must accordingly dismiss the counterclaim.

 There will be judgment on the plaintiff’s claim for £50, damages, against Patrick Cullen and for £50, damages, against Martin Cullen, both up to this date.

 I have considered the question of costs. The plaintiff claimed an injunction and has failed on that part of his claim. Much of the time which the hearing of the action took was

Smyth v. Halpin [1997] 2 ILRM 38

Geoghegan J.

“The plaintiff does not and indeed cannot ground his action upon contract. He does not suggest that there was any agreement on his part to confer any benefit on his father in return for making over the dwelling house. The fact that the plaintiff has not tried to make that very convenient case is to his overall credit in my view when assessing the credibility of his evidence. It might have been easy for him to have suggested that the father indicated that it would suit him if the plaintiff could look after him and his wife in their old age and that in return for that he would allow him build an extension to the house for immediate living in and give him the entire house in due course along with the land. Although such an agreement would not have been in writing or indeed evidenced by writing, it might have been quite a simple matter to establish it through acts of part performance. However, none of that arises. The plaintiff does not suggest that there was a contract. His claim to have the reversionary interest transferred to him is an equitable claim based on the principle of proprietary estoppel. The question I have had to consider therefore is whether in the light of the authorities on proprietary estoppel the facts of this case give rise to a proper recourse to that principle and if so, whether the application of the principle of proprietary estoppel in this case actually requires that this Court make an order directing a transfer of the reversionary interest. The granting of the latter remedy would effectively involve permitting the estoppel to be used as a sword and not merely a shield and would also be an exceptional inroad into the well established principle that equity will not complete an uncompleted gift.

The kind of proprietary estoppel invoked in this case has its origins in Dillwyn v. Llewelyn (1862) 4 De GF & J 517 . In that case a father had placed a son in possession of land and at the same time signed a document which was intended to be a conveyance of the land to him but proved not to be sufficient for the purpose. The son, with the full approval of the father, built a house on the land and occupied it as his own residence. After the father’s death, he claimed and obtained a court declaration that he was beneficially entitled to the land and an order requiring the trustee to whom the father had devised the land under his will to convey it to him. Two important principles emerged from that case. First of all the extent of the estate to be handed over was determined not by what was in the document but by the nature of the transaction and the entitlement then to that estate arose by reason of the expenditure acquiescence. The same principle has been applied in a number of other English cases. In Inwards v. Baker [1965] 1 All ER 446 , for instance, the Court of Appeal held that in a case where a father had suggested to his son that he build on his land which the son then did largely at his own expense, the son had an equity to remain in the house for the rest of his life notwithstanding that the father in fact left all his property to a lady with whom he had lived for some years and the two children he had by her. The son who lived in the house in that case was unmarried and the court took the view that a life interest was sufficient. The following passage from the judgment of Lord Denning MR at p. 449 illustrates the position:

In this case, it is quite plain that the father allowed an expectation to be created in the defendant’s mind that this bungalow was to be his home. It was to be his home for his life or, at all events, his home as long as he wished it to remain his home. It seems to me that, in the light of that equity, the father could not in 1932 have turned to the defendant and said ‘you’re to go, it is my land and my house’ . Nor could he at any time thereafter so long as the defendant wanted it as his home.

Counsel for the plaintiffs put the case of a purchaser. He suggested that the father could sell the land to a purchaser who would get the defendant out but I think that any purchaser who took with notice would clearly be bound by the equity. So here, too, the plaintiffs, the successors in title of the father, are clearly themselves bound by this equity. It is an equity well recognised in law. It arises from the expenditure of money by a person in actual occupation of land when he is led to believe that, as a result of that expenditure he will be allowed to remain there. It is for the court to say in what way the equity can be satisfied. I am quite clear in this case that it can be satisfied by holding that the defendant can remain there as long as he desires to use it as his home.

The important sentence in that passage is:

It is for the court to say in what way the equity can be satisfied.

As I understand the authorities, the court is at large as to how best it will protect the equity and of course it has to consider what the equity is. In this case the clear expectation on the part of Mr Smyth was that he would have a fee simple in the entire house. The protection of the equity arising from the expenditure therefore requires in this case that an order be made by this Court directing a conveyance of that interest to him. The same principle is well enunciated in the judgment of Cumming-Bruce LJ in Pascoe v. Turner [1979] 2 All ER 945 at p. 950 where the following passage appears:

So the principle to be applied is that the court should consider all the circumstances and the counter-claimant having at law no perfected gift or licence other than a licence revocable at will, the court must decide what is the minimum equity to do justice to her, having regard to the way in which she changed her position for the worse, by reason of the acquiescence and encouragement of the legal owner. The defendant submits that the only appropriate way in which the equity can here be satisfied is by perfecting the imperfect gift as was done in Dillwyn v. Llewelyn .

Later on in the judgment at p. 951, Cumming-Bruce LJ had this to say:

We are satisfied that the problem of remedy on the facts resolves itself into a choice between two alternatives; should the equity be satisfied by a licence to the defendant to occupy the house for her lifetime or should there be a transfer to her of the fee simple?

The main consideration pointing to a licence for her lifetime is that she did not, by her case at the hearing, seek to establish that she had spent more money or done more work in the house than she would have done had she believed that she had only a licence to live there for her lifetime. But the court must be cautious about drawing any inference from what she did not give in evidence as the hypothesis put is one that manifestly never occurred to her. Then it may be reasonably held that her expenditure and effort can hardly be regarded as comparable to the change of position of those who have constructed buildings on land over which they had no legal rights.

The court went on to take the view that the equity established in that case could only be satisfied by granting a remedy which ensured to the defendants security of tenure and quiet enjoyment. The court therefore ordered that the gift be perfected by the execution of the appropriate conveyance.

In my view, the plaintiff has clearly established that he falls within these principles. The only remaining question to be considered is the right of way. I am entirely satisfied that having regard to all the surrounding circumstances of the case, the right of way being referred to in the will is the way which has been used by the plaintiff close to the house. It is unfortunate that there is now bad feeling between the plaintiff on the one hand and his mother and sister on the other hand who are occupying the original part of the house. I would hope therefore that the plaintiff would be as considerate and tactful as he can in the use of the right of way but I will declare his entitlement to it as I do not find it credible that the way referred to in the will is the other right of way for the benefit of the farm.

I will direct that an appropriate deed or instrument be executed to effect the vesting of the remainder interest in the house in the plaintiff and I will discuss further with counsel as to the nature of that document and as to who are to be the parties to it.”