LLB 20503 : Estoppel I 18/12/2021

LEARNING OUTCOMES

• By the end of the topic students will be able :

1.To identify the different estoppels under the law of
equity
EQUITABLE ESTOPPEL (I) 2.To cite relevant case laws and statutory provisions
LLB 20503 – LAW & EQUITY governing each type of estoppel
SEM 1 – 2021-2022 3.To attempt to solve simple problems concerning
PUAN MURSHAMSHUL KAMARIAH MUSA estoppel.

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TOPIC OUTLINE INTRODUCTION

• INTRODUCTION • Originally , a CL principle wherein a person is prohibited

• COMMON LAW ESTOPPEL from denying a state of affairs which he had
• DIFFERENCE BETWEEN COMMON LAW & represented earlier.
EQUITABLE ESTOPPEL • More of rule of evidence rather than substantive law.
• ESTOPPEL BY REPRESENTATION • Originally functions as a cause of defense, nowadays
• PROMISSORY ESTOPPEL can be used as a cause of action.
• PROPRIETARY ESTOPPEL • Equity extended the application not only to
representation of existing facts but also to promises or
assertion.
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LLB 20503 : Estoppel I 18/12/2021

INTRODUCTION INTRODUCTION
• In simple terms, an estoppel is an equitable claim that prevents
• Maxim: ‘allegans contraria non est audiendus’ – a someone IN A LEGAL PROCEEDING, from denying the existence of a
person alleging contradictory facts should not b state of affairs in circumstances, where such denial would be
unconscientious.
heard.
• E.g. where ALI has induced BOB to believe that ALI will not insist
• MAXIM: HE WHO SEEKS EQUITY MUST DO EQUITY upon his strict legal rights under a contract that exists between
• The rationale of equitable estoppel is to prevent them.
‘persons from being victimised by other people’, • If BOB relies upon the assumption that BOB will not be exposed to
• Similar to other areas of equitable doctrine, the liability should BOB fail to perform his Obligations AS STIPULATED IN
THE CONTRACT, the law recognizes that it is unconscionable to
basic rationale underlying equitable estoppel is the allow ALI to subsequently sue BOB for breach of contract on those
prevention of conduct which is unconscionable; grounds.

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Common Law Estoppel Common Law Estoppel

• At common law the focus has been upon assumptions OR • Laid down in case of PICKARDS v SEARS (1837) 6 Ad
REPRESENTATIONS of facts. 469 where it was held :
• These could arise by means of judicial decision (estoppel by record or • “ Where a person by his words/ conduct willfully
issue estoppel), agreement by both parties (estoppel by deed or causes another to believe the existence of a certain
estoppel by convention), and also by representation made by one to the state of things and induces him to act on that belief,
other (estoppel by representation). so as to alter his own previous position, the former
• The general principle of common law estoppel was stated by Dixon J in is precluded from averring against the latter a
GRUNDT V GREAT BOULDER PTY GOLD MINES LTD (1937) 59 CLR 641, at different state of things as existing at the same
674 as being that, ‘the law should not permit an unjust departure by a time.”
party from an assumption of fact which he has caused another party to
adopt or accept for the purpose of their legal relations’
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Common Law Estoppel Common Law Estoppel

• i.o.w. if one has represented to another certain ESTOPPEL

facts, he should not be allowed to deny/repudiate
the effect of his representation, to the loss & injury
of the person acting upon it. ESTP IN ESTP BY ESTP BY
• Earlier confined to formal matters only i.e. recorded PAIS DEED RECORD
by deed (estoppel by deed) or by a conduct/action
(estoppel in pais).
• These two – basis of CL doctrine of estp by INTER
IN REM
representation as a rule of evidence. PARTES

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Common Law Estoppel Common Law Estoppel

• Classified into 3: 3. Estoppel by record – judicial records.

1. Estoppel in pais/ conduct (before the public). - Narrative & proof of proceedings conducted in Court. A judgement
given is conclusive as to the existence of legal situation among
- Arises out of matters outside record/deed but the parties.
from conduct of parties. E.g. negligent conduct - ‘In rem’ – estop persons who are not parties/privies to action from
2. Estoppel by deed – applies to parties to deed aka challenging the judgement .e.g. decree of divorce.
estp by convention. - inter partes – estops a party in an action from denying a fact which
- Once a party entered into a solemn engagement has been decided in a previous judgement. E.g. admissions in
by deed as to certain facts, he and his successor previous litigation. It can operates as a cause of action
estp/issue estp. Almost similar to res judicata. Difference issue
is not permitted to deny such facts. estp applies in law of evidence, res judicata applies to CP.

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DIFFERENCE BETWEEN COMMON LAW & EQUITABLE DIFFERENCE BETWEEN COMMON LAW & EQUITABLE
ESTOPPEL ESTOPPEL

• It is commonly said - common law estoppel is a rule of evidence • In SILOVI PTY LTD v BARBARO (1988) 13 NSWLR 466;
while estoppel in equity may confer substantive rights. Priestley JA set a concise summary to clarify the law on
• Meaning - common law estoppel is a device used merely to estoppel:
determine the facts upon which the legal rights of the parties will
• 1. Common law and equitable estoppel are separate
then be determined by the court, whereas, in equity, rights flow
directly from the operation of estoppel in equity. categories, although they have many ideas in common.
• The scope of common law estoppel is confined to representations of • 2. Common law estoppel operates upon a representation of
fact, its true role is to establish which facts the court will adjudge. If existing fact, and when certain conditions are fulfilled,
the estoppel is successfully raised, then the representor will be establishes a state of affairs by reference to which the legal
precluded from denying the facts assumed by the representee. relation between the parties is to be decided.
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DIFFERENCE BETWEEN COMMON LAW &

BASIC EFFECT OF ESTOPPEL
EQUITABLE ESTOPPEL
• This estoppel does not itself create a right against • Binds the person who made the representation; restricts a
the party estopped. The right flows from the court’s person’s ability to “go back on” a belief or assumption that
decision on the state of affairs established by the they have induced in another person.
estoppel. • In favour of the person who was induced to change his
• 3. Equitable estoppel operates upon position.
representations or promises as to future conduct, • Generally operates as a defence against the claimant; as a
including promises about legal relations. When rule of evidence & part of substantive law.
certain conditions are fulfilled, this kind of estoppel • Cannot be used to hinder performance of statutory body.
is itself an equity, a source of legal obligation. • COMBE v COMBE [1951] 2 KB 215 Lord Denning : “estp acts
as a shield & not a sword”
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BASIC EFFECT OF ESTOPPEL

ESTOPPEL UNDER EQUITY

• Bowen CJ in LOWE v BOVERIE remarked that: EQUITABLE

“Estoppel is only a rule of evidence; you cannot
INITIATE an action on estoppel.” ESTOPPEL
• Lord Denning in MOORGATE MERCANTILE CO. LTD v
TWITCHINGS 1976 QB 225 states: “Estoppel is not a
rule of evidence. It is not a cause of action. It is a
principle of Justice and equity.”
PROMISSORY PROPRIETARY
ESTP ESTP

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ESTOPPEL UNDER EQUITY MODERN EQUITABLE ESTOPPEL

• Recognised by eqt = equitable estp. & wider than • Equitable estoppel is the result of bringing together the two
CL estp as it cover any acts/arguments/ contention significant forms of estoppel that existed in equity —
which is prevented by law of equity & good promissory estoppel and proprietary estoppel
conscious. (unconscionable & inequitable conduct) • Current types of estoppel are estoppel by representation,
promissory estoppel and proprietary estoppel.
• A flexible concept which was extended in 19th
Promissory
century not only to cover existing facts also estoppel
representations in futuro or promise. Proprietary
Estoppel by
• Usually used to describe promissory & proprietary Representation
estoppel
estp becoz they were principally developed in Court Modern
of Chancery. Estoppel

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BASIC ESSENTIALS OF ESTOPPEL ESSENTIALS OF ESTOPPEL

• Generally 3 things must be satisfied b4 estp • Brennan J in WALTON'S STORES (INTERSTATE LTD) v MAHER
(legal/equitable) can invoked: 1988 (Aust) listed 6 requirements :
1.There must be a representation – clear & voluntary • 1. Assumptions of a legal relationship – must prove that
claimant assumed that a particular legal relationship either
2.The other person must have acted upon such exist or would exist in future between claimant & reptor.
representation • 2. Inducement – must prove that representor has
3.The action taken based on the representation must unconscionably induced the claimant to rely/adopt the
have been detrimental to the interests of person to assumption.
whom such representation has been made. • 3. Reliance – claimant must prove that he have acted in
reliance of the assumption; either by taking no action or by
doing an action. The act must have been reasonable acts.

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ESSENTIALS OF ESTOPPEL ESTOPPEL BY REPRESENTATION

• 4. Causation – the representation relied upon caused the • A type of ‘estoppel in pais’/common law estoppel as the
claimant to act in such a detrimental way. representation / assumption of an existing fact.
• 5. Knowledge – need to prove that reptor knew that • Definition: Where a person makes an unambiguous
claimant would have acted on such representation, representation of an existing fact; by words, or conduct, or by
regardless whether representor foresee such consequences silence (inaction), or negligence, and with the intention (actual
or not. or presumptive) and with the result of inducing another party
to alter his position to his detriment, in reliance of the
• 6. Detriment – must exist some sort of detriment, especially representation, the representor in any litigation which may
so if involves financial detriment. Others – mental stress, afterwards take place between him and the other person; is
worry, general inconvenience. not permitted to act (estopped), from making or to establish by
• It must be established that the representor has failed to act evidence, as against the other person, any averment
to avoid the detriment on the representee – then the estp inconsistent with that earlier representation, in whatever
may operate as a cause of action. manner the representation is made.
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ESTOPPEL BY REPRESENTATION ESTOPPEL BY REPRESENTATION

• It prevents a person/party (A) from departing from • In JORDEN v MONEY 1854 the HOL held that an estoppel
an assumption of existing fact where due to that should be limited to assumption / representation of existing
person/party’s (A) creation of such assumption, facts and not of intention.
another party/person (B) has relied on it, for the
purpose of their legal relations. • In MADDISON v ALDERSON 1883 8 App CasE Lord Selbourne
• It functions only as part of law of evidence & “The doctrine of estoppel by reptn, is applicable only to
nothing more. representations as to some state of facts alleged to be at the
• The BOP is on the person who raise the defence of time actually in existence, and not to promises de futuro,
estp that such reptn has in fact been made. which, if binding at all, must be binding as contracts.”

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Estoppel by representation – various definition

Estoppel by representation –
definition
• Lord Tomlin defined the essential factors of this estoppel • In NIPPON MENKWA KABUSHIKI KAISHA v DAWSON’S
in GREENWORD v MARTIN BANKS LTD [1933] AC 51 as - BANK LTD (1935) 51 Llyod. Report 147 Lord Killowen
1. A representation / conduct amounting to a representation defines it as being a rule of evidence which comes into
intended to induce a course of conduct on the part of the
operation if:-
person to whom the representation is made,
2. An act / omission resulting from the representation 1. A statement of the existence of a fact has been made by
whether actual or by conduct, by the person to whom the the representor / an authorized agent of his to the
representation is made. representee / someone on representee’s behalf.
3. Detriment to such person as a consequence of the act / 2. With the intention that the representee should act on the
omission.
faith of the statement, and
3. The representee does act upon the faith of the statement
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ESTOPPEL BY REPRESENTATION –
Estoppel by Representation – components
COMPONENTS
• Components of estp by reptn are: • Representation :
a. Representation - It contradicts in substance the true state of things i.e. 2
conflicting versions on one set of facts.
- a statement / communication /ascertaining of fact made - Can be in any form/means of communication; can be
by one party to a contract to another. If due to through conduct, silence, inaction
overhearing/ which is actually a private document – not • Representation - Unambiguous
reptn. • Must be certain to every intent. must be clear,
- A statement which purports to affirm, deny, describe/
unambiguous & not subjected to such saving clauses
e.g.: “to the best of my knowledge”. It must be a
relates to any existing fact/ circumstances/ thing OR any definitive statement.
past event. It can be made before or at the time of the • It has not been negative by subsequent conduct/reptn.
contract, or of some matter relating to it.
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Estoppel by Representation –
Estoppel by Representation – components
components
• Representation -Conduct • b. Existing fact
• It is not easy to determine what course of conduct - Only representation of an existing fact is acceptable.
Intention or belief is not on existing fact. Facts that might
would amount to representation. It might vary with
become reality in future are unacceptable. Reason – all
each particular case. The conduct must also be these might be liable to change in future. Existing – must be
unequivocal or certain. of continuous nature – past event, included.
• c. Another party had acted, in reliance of the representation
to his detriment.
• It can only be used as a defense only by the person acting on
it and not by anybody else. The party acting on the
representation is not under any duty to inquire about its
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Estoppel By Representation Estoppel in the Evidence Act 1950: S115

• The representation must be communicated to the other party, i.e. • As a rule of evidence rather than a cause of action .
communication made by a representor to a representee, if not • Relates more to estp by representation
brought to notice of representee, it is no effect. • Chapter VIII Sec. 115 : When one person has by his
• Representation under this class of estoppel refers only to any declaration, act or omission intentionally caused or
statement which purports to affirm, deny, describe or which permitted another person to believe a thing to be true and
otherwise relates to, any existing fact, circumstance, or thing, or to act upon such belief, otherwise than but for that belief he
would have acted, neither he nor his representative in
any past events, amounts in law to a representation.
interest shall be allowed in any suit or proceeding between
• A statement which was intended / expressed by the parties to himself and that person or his representative in interest to
constitute ‘a promise’ only – is not a representation of existing deny the truth of that thing.
facts under this heading.

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Estoppel in the Evidence Act 1950: S115 Estoppel in the Evidence Act 1950

• Illustration :A intentionally and falsely leads B to believe • Sec. 116 – application of estp in landlord & tenant relationship.
that certain land belongs to A and thereby induces B to buy • Sec. 117 – position of a bailee, agent or licensee.
and pay for it. The land afterwards becomes the property of • In VEERIAH’s case Mohamed Azmi J cited 7 prerequisites to bring a
A and A seeks to set aside the sale on the ground that at the case within sec.115 of Evidence Act from “Sarkar on Evidence
time of the sale he had no title. He may not be allowed to (12the Ed.)” He also pointed out compared to Indian Evidence Act
on estp, in Malaysia – an innocent/ mistaken representation may
prove his want of title
not operate as an estoppel.
• Sec. 115 – incorporates the general doctrine. Though from • Principle from VEERIAH: A representation made innocently or
equitable principles; it is a rule of evidence used in Court. mistakenly with no intention to induce the other party, cannot be
pleaded as estoppel.

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Estoppel By Representation – Veeriah’s case: Estoppel By Representation – Veeriah’s case: S 115 OF

S 115 OF EVIDENCE ACT. EVIDENCE ACT.

• P was employed as a charge man with the D since 1941. P • D claimed estoppel by representation .Although D agreed that the date
claimed that he was unlawfully been asked to retire of birth should be 26 June 1921 they claimed that P should be estopped
compulsorily when he was not of the compulsory retirement from denying his earlier birth date. The court rejected Def’s plea of
age of 55 and further that he be reinstated to his former job. estoppel.

• P’s record of service indicated his date of birth as 26 June • Held:-for the Def to succeed on defense of estoppel there must be
ignorance on their part as to the real date of birth of plf. When both
1916 and thus by June, 26, 1971 he had reached the age of
parties have equal means of knowledge of the fact, there can be no
55. P, in line with D’s practice to allow its employees to estoppel.
rectify their record of birth, has taken action to recover his
true date of birth by writing to the Indian High Commission • One of the necessary elements of a valid estoppel by reptn is that the
reptn should be of a nature to induce i.e. the reptn should be made with
some 17 months earlier, in March 1970. P on 31 March 1971
the intention of inducing the person pleading estoppel to alter his
informed D of his true date of Birth, 26 June 1921 as per position to his detriment. No evidence has been adduced to prove such
confirmation from the Indian authority. intention could be inferred.
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Estoppel By Representation – Veeriah’s Case :SEC. 115 Estoppel By Representation – Veeriah’s Case :SEC. 115
OF EVIDENCE ACT. OF EVIDENCE ACT.

1. VEERIAH v K.T.M 1974 1 MLJ 201- 7 prerequisites to bring a case • iv. There must have been belief on the part of the other party of
within the scope of estoppel under Sec 115 of Evidence Act:- its truth
• i. There must be a reptn, by a person / party or authorized agent • V. There must have been action on the faith of that declaration /
to another person / party in any form – declaration, act or act / omission, that is to say, the declaration / act / omission must
omission. have actually caused another to act on the faith of it, and to alter
his former position to his prejudice or detriment.
• Ii. The reptn, must have been of the existence of a fact and not of
promises de futuro or intention which might / not be enforceable • Vi. The misrepresentation / conduct / negligence must have been
the proximate cause of leading the other party to act to his
in contract.
prejudice.
• Iii. The reptn, must have been meant to be relied upon i.e. it must
• Vii. The person claiming the benefit of an estoppel must show that
have been made under the circumstances which amounted to an he was not aware of the true state of thing. If he was aware of
intention causing or permitting belief in another. The proof of the the real state of things, there can be no estoppel.
intent might be direct / circumstantial.
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CASES Cases

• PICKARD v SEARS 1837 6 Ad & El 469 (conduct amounted to • ROBERTSON v MINISTER OF PENSIONS 1949 1 KB 227
representation) (representation relied upon causing detriment. ) Colonel
• Regarded as the locus classicus on the law on estoppel by Robertson claimed from the Minister a military pension. His
representation. application was refused by the Pensions Tribunal on the
grounds that his disability was not shown to be attributable
• P’s property was seized while in the possession of 3rd party under to military service
an execution order against the 3rd party. It was sold to the D. P
• He appealed and submitted in support of his case a letter
claimed for the return of his property. Held: P’s conduct of not
(March 1941)which he had received from the Director of
informing the executor of the judgment creditor or by his non
Personal Services which had accepted his disability as
assertion of ownership over his own property estopped him from
attributable to military service. It appeared that the letter
claiming other wise, later on. Thus is because he had represented
was written after careful consideration by all the concerned
to the world at large that he had no interest in the property.
departments of the War Office, but without consultation
with Minister of Pensions department.
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Cases CASES

• Relying on that letter, Colonel Robertson did not take steps, which he • SYKT BAKTI LTD v GURBACHAN SINGH 1966 2 MLJ 269 (silence
would have done otherwise, to obtain a full independent medical does not means representation) P applied for a declaration and to
opinion on his own behalf. He contended that the Ministry was evict D as a trespasser on their piece of land, Lot No. 4759, Mukim
estopped from denying otherwise by virtue of that letter from the Batu, Kuala Lumpur. P had purchased the land from the
Director of Personal Services. administrator of the estate of Jamiah (dec) on 25 Nov 1965.
• Held: the statement was an authoritative decision (reptn) intended to • D claimed that he had been a lawful tenant of the property ever
be binding and acted upon. The Crown, though the Minister of since 1954 and he had been paying rents to an agent of the
Pensions must administer if it to honor all assurances given by or on
administrator since then. D argued that as the administrators had
behalf of the Crown. Colonel R. in reliance of the statement had
kept silent for 10 years, their conduct would also bind P as new
dispensed with an independent medical opinion to his detriment.
owner.

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Cases Cases

• P argued that the administrators were only appointed in • BBMB v PURNAMA INDUSTRIES 1989 - The D charged 2
January ’55 and the letter of administration was given to pieces of land to the P (Bank) as security for a loan granted
them on 1 July 1955. Thus, the agent could not have been to them. The D, with the consent of P apply for sub-division
lawfully in existence before the administrator received their of these lands, which later failed due to the existence of a
authority. caveat by a 3rd party.
• Held: Mere silence in this case is not a type of • D defaulted in payments of installments and P proceeded
representation. D was only a tenant, given a license to stay with legal action and subsequently for application to sell the
on monthly basis. It ends when the present owner (P) gave 2 pieces of land.
notice ending it. Then D became a trespasser. • D contended as P had given them consent to sub-divide;
there is an implied agreement / understanding that P will be
repaid upon the land being sold off to individual purchaser.

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Cases Cases

• P should be estopped from claiming otherwise. • KERAJAAN MALAYSIA v MOHD MOKHTAR ALI 1995 4
MLJ 601- D was a government servant who resigned
• Held: Before there could arise an estoppel there should be a from his job. D had earlier obtained a loan from P. By a
representation, whether by words or conduct on P’s part to D letter in 1983, P agreed to a variation in the loan
that D no longer need to service the loan. There was none of it in repayment method by D which will be by postal order
money.
the case.
• D failed to pay and P initiated recovery action. D argued
• It must also be proved that the D had acted to their detriment that P was estopped from doing so by virtue of the 1983
because of the alleged representation by P. From the facts, the D letter.
did not suffer any detriment, in fact by P’s consent, if the sub- • Held : No representation was made to the D as D had
division were approved, D would benefited tremendously. not relied on the representation made by to P to resign
his position as he left his job on his own accord.
Estoppel rejected.
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Cases CASES

• Held : P was not stopped from enforcing the terms of • BOUSTEAD TRADING (1985) v ARAB MALAYSIAN
the charge as P had earlier merely allowed the MERCHANT BANK BERHAD [1995] 3 MLJ 331, FC.
continuing of the loan on same terms and conditions. • -Concerns assignment of debt (diy)
• MUTHIAH v LEE KOR FAN 1966 1 MLJ 105 - Mac Intyre J
held that one of the necessary elements of estp. by
reptn, is that the reptn, should be a nature to induce i.e.
that the reptn, should be made with the intention of
inducing the person pleading estoppel to alter his
position to his detriment.

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Conclusion References

• Estoppel can be either legal or equitable. Estp by • Zuraidah Ali et al – Equity & Equitable remedies in
representation is a type of legal estoppel whereas Malaysia, chapter 5.
promissory & proprietary estp are equitable estp.
• Mohsin Hingun & Wan Azlan– Equity & Trusts in
• 3 elements of an estoppel – representation Malaysia – Chapter VIII
(facts/future promises);action taken based on the
representation made; detriment due to the said • Snell’s on Equity – Chapter 10
action taken. • Hanbury & Maudsley – Modern Equity, pp 882-896.
• Generally estoppel by representation is used more • Mallal’s Digest
as an evidentiary rule of defense.
• Sec. 115-117 of Evidence Act 1950 discusses about • NEXT TOPIC : Promissory and proprietary estoppel
estoppel as an evidentiary principle.
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