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467
Waller L.J.
~,
[COURT OF APPEAL]
E
WaiverLandlord and tenantCovenantTenants of flats contributing. to landlords' costs of maintenance under terms of
leaseOral assurances by landlords to pay cost of roof repairs
Whether oral collateral contract or promissory estoppel
Q .
Whether waiver by landlords of strict legal rights under
leaseWhether benefit of waiver extending to assignees of
leases
pj
468
Brikom Investments v. Carr (C.A.)
[1979]
j)
"
469
1 Q.B.
A
n
"
470
Brikom Investments v. Carr (C.A.)
[1979]
Crawford v. White City Rink (Newcastle-on-Tyne) Ltd. (1913) 57 S.J.
357.
Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801; [1976] 2 W.L.R.
583; [1976] 2 All E.R. 5, C.A.
Heilbut, Symons & Co. v. Buckleton [1913] A.C. 30, H.L.(E.)
Hopgood v. Brown [1955] 1 W.L.R. 213; [1955] 1 All E.R. 550, C.A.
Mackley v. Nutting [1949] 2 K.B. 55; [1949] 1 All E.R. 413, C.A.
Steadman v. Steadman [1976] A.C. 536; [1974] 3 W.L.R. 56; [1974] 2
All E.R. 977, H.L.(E.).
Vandervell's Trusts (No. 2), In re [1974] Ch. 269; [1974] 3 W.L.R. 256;
[1974] 3 All E.R. 205, C.A.
Whitmore v. Lambert [1955] 1 W.L.R. 495; [1955] 2 All E.R. 147, C.A.
APPEALS from Judge Granville Slack sitting at Willesden County
Court.
The plaintiffs, Brikom Investments Ltd., landlords of blocks of flats
at Herga Court, Sudbury Hill, Harrow, began proceedings in January
1977 in the county court against, inter alia, Mrs. Theobisti Carr (formerly
Dufton), tenant of flat 14 under a 99-year lease dated March 20, 1972,
for breach of a covenant in the lease to pay the landlords in addition
to the rent a maintenance charge together with excess contribution calculated in accordance with clause 4 (2) of the lease and payable to the
landlords within 28 days of the service on the tenant of a certificate
prepared by the landlords' accountant. They claimed that the accountant's
certificate had been sent to the tenant in May 1976 but that the tenant
had failed to pay the excess contribution due under the covenants; and
they claimed possession of the flat; 264 75 balance of excess contributions for the period January 1 to December 31, 1974; and mesne profits
until possession. By her defence, as amended, the tenant/lessee while
admitting the terms of the lease, stated that 58 4 per cent, of the total
contribution claimed as " the roof repairs contribution " constituted what
would, but for the facts and matters detailed in " particulars of conduct
raising estoppel," be due to the landlords under the provisions of the
lease, but that the landlords were estopped from claiming the 58-4 per
cent, for roof repairs contribution for the following reasons. (1) In or
about January or February 1972 the tenant, who was an intending
purchaser of the flat (purchasing as a sitting tenant) was informed by
the landlords' selling agents or solicitors either orally or in writing that
the landlords would themselves be bearing the cost of the roof repairs
then urgently needed and would not be debiting the maintenance fund
as provided for in the lease. (2) On or about February 18, 1972, the
tenant, having been informed by the Herga Court Residents' Association,
of which she was a member, that the association was engaged in negotiations with the landlords over the condition of the roofs at Herga Court,
received a circular letter from the association stating, inter alia, that the
association had obtained an assurance from the landlords in the same
or similar terms and to the same effect as set forth in paragraph (1).
(3) That, induced by one or other or both of those representations she
had entered into the lease, as the landlords intended she should. In the
premises she claimed that she relied on and was entitled to rely on the
JJ
47:1
1 Q.B.
JJ
472
Brikom Investments v. Carr (C.A.)
[1979]
JJ
473
1 Q.B.
fj
474
Brikom Investments v. Carr (C.A.)
[1979]
and subsequently to take the lease thereof and on the faith of which the A
original lessee so acted; that despite the fact that she was not a tenant
of the flat when the assurance was given to Kavanagh she was nonetheless
enabled to defeat the landlords' claim by showing that she was the
assignee of the benefit of the assurance; and that the facts and matters
pleaded in her defence gave rise to a promissory estoppel from which
it would be inequitable to allow the landlords to resile in that (i) the
assurance was intended to affect and did affect the legal relations between B
the landlords and Kavanagh and as a direct consequence the legal relations between them and herself; and (ii) the assurance was intended by
the landlords to be so acted upon by Kavanagh and any person deriving
title from or under him such as herself.
Ronald Bernstein Q.C. and Richard Fernyhough for the landlords, Q
The appeals raise the question how far the doctrine of promissory estoppel,
enunciated in Central London Property Trust Ltd. V. High Trees House
Ltd. [1947] K.B. 130, extends as a defence to persons to whom a promise
was not made, where the original promise was in respect of an interest in
land. In the appeals the defendants rely not only on promissory estoppel,
the ground on which the judge decided in their favour, but also on a legal D
collateral warranty constituted by the oral promise as varying the maintenance clause in the lease in respect of the particular expenditure on the
roof repair. The exemption clause in the pre-lease contract (which excludes reliance on all promises, warranties, etc.) makes the defence of
collateral warranty difficult, though that clause may not present the same
difficulty for the equitable defence, since courts tend in such cases not to
give effect to such wide exemption clauses.
E
As a general proposition, both the defences relied on have been
developed mainly as defences in personam. In an ordinary commercial
contract such as that in J. Evans & Son (Portsmouth) Ltd. v. Andrea
Merzario Ltd. [1976] 1 W.L.R. 1078, it is open to the court to decide
that the contract was not confined to the written agreement but was partly
written and partly oral; but it is not so easy to apply that to a p
contract for an interest in land which has to be in writing and under
seal; under which the landlords have rights and remedies in rem, such as
distress and forfeiture; which is intended to be freely assignable; and
where future purchasers or their advisers should by looking at the written
document alone know what they are acquiring.
In the first case under appeal, that of the original lessee whose pleaded
defence was promissory estoppel through promises made in 1972 before ^
she entered into the contract or executed the lease, it was also argued
before the judge on collateral warranty. But an examination of the
evidence as a whole shows that she neither relied on the promises nor
acted on them since both she and her husband said that she would have
bought the lease whether or not the promise had been made. To establish
the defence of promissory estoppel the defendant must show an intention JJ
by the promisor that the promisee should act on the promise, that she
did act on it in a way she would not have done but for the promise, and
that she acted to her detriment: see Spencer Bower and Turner, Estoppel
475
1 Q.B.
"
JJ
by Representation, 3rd ed. (1977) pp. 388, 389-393: and the author of
the latest edition also indicates the view that the doctrine has no application where parties are not yet in a contractual relationship: see p. 378,
para. 349. [Reference was also made to Steadman V. Steadman [1976]
A.C. 536; Cheshire and Fifoot's Law of Contract, 9th ed. (1976), pp. 89
et seq. and Snell's Principles of Equity, 27th ed. (1973), pp. 562, 563,
footnotes 21 and 22.] On the authorities and the evidence the conditions
requisite to raise the equitable defence in Mrs. Carr's favour are therefore
not satisfied.
The second and third appeals raise the position of an assignee. Whether
the doctrine of promissory estoppel applies and whether its benefits are
transmitted by implication on an assignment is virgin territory. The
landlords say that in such cases the prerequisite to raising an equity,
namely, the combination of a promise intended to induce the promisee
to act on it and a change of position by the promisee to his detriment,
simply cannot apply. Two points arise on that: (1) whether the rights
which vest in a promisee are personal or are assignable; and (2) whether
the assignee can show that he himself has an equity which he can either
raise in his own right or which has been transmitted to him either expressly or by being attached to something transmitted to him.
In the case of the first assignees, Roddy, their affidavit does not show
whether they took the assignment in reliance on the existence of a promise
to the original lessee which he communicated to them when they viewed
the flat and saw the state of the roof. Again the questions arising are
whether the original promise was assignable or capable of being passed
on, or whether it was intended to be no more than a promise to the
original lessee. What was assigned was the balance of a 99-year lease.
If the benefit of the promise was to be assignable why did the landlords decline to put it into the original lease which both parties intended to be assignable and enforceable? In the absence of authority on the position of the
assignee a question for the court is whether as between landlord and
original lessee the promise was intended to be personal only or whether it
was intended to enure for the benefit of successors to the original lessee
who assigns the lease, and whether it is transmitted automatically or must
be express. In City and Westminster Properties {1934) Ltd. v. Mudd
[1959] Ch. 129, though no question of assignment arose, Harman J. held
that the benefit of a promise was personal to the promisee. The fact that
the relevant promise was not connected with the person of the promisee
but with urgently needed repairs to the roof is not a sufficient ground for
saying that the promise " ran with the land." Though the first assignees,
Roddy, have deposed that the landlords' promise was communicated to
them by the original lessee they have not shown that they acted on that
promise in a manner different from that in which they would have acted
without the promise. In any event, if it is a necessary ingredient of the
defence of promissory estoppel that the promisee acts on a promise by
the promisor and the evidence does not establish that the assignees relied
on a promise communicated to them, not by the landlord but by the
promiseethe original lesseethat is an end of their case. Justice does
not require the benefit of a promissory estoppel to be transmitted with
the land or be assignable by implication, for normal conveyancing practice
476
Brikom Investments v. Carr (C.A.)
[1979]
would cover such situations. The obligation to repair the roof is in the
lease, as is also the obligation on the original lessee or assignee to pay
his proportion of the cost; and the normal conveyancer, told of the
promise by the landlords to the original lessee, would ascertain from the
landlords whether the benefit of the promise would extend to his client
before taking the assignment. Established conveyancing practice includes
the search procedure for registration of land charges and inquiries designed
to enable a purchaser of an interest in land to ascertain what rights and
liabilities he is acquiring. If assignable estoppels or oral waivers of
covenants in a lease are introduced into the law, it could throw the whole
conveyancing system into confusion.
In the third case, that of a second assignee, Miss Hickey, the evidence
is that when she took the assignment the repairs had been completed and
she knew nothing about the promise, so that any reliance by her on the
doctrine of promissory estoppel must fail unless it is held that the original
promise was not intended in personam and the benefit of it " ran with
the land " on assignment.
On the alternative defence of collateral contract or warranty, the judge
made no finding although it was argued before him. His decisions were
founded on promissory estoppel; and it would not be right for this court
to find a collateral warranty where the judge has not found it. It would
extend the doctrine of collateral warranty beyond De Lassalle v. Guildford
[1901] 2 K.B. 215, the Mudd case [1959] Ch. 129, and the Evans case
[1976] 1 W.L.R. 1078, where there were specific findings that the party
would not have entered into the contract without the representation or
promise. [Reference was made to Phipson on Evidence, 12th ed. (1976),
para. 1902; and Crawford v. White City Rink (Newcastle-on-Tyne) Ltd.
(1913) 57 S.J. 357].
[ROSKILL LJ. On the authority of Hughes v. Metropolitan Railway
Co. (1877) 2 App.Cas. 439, why in legal principle should not an assurance
by landlords not to claim the cost of outstanding repairs be enforceable
when he is executing a 99-year lease under which the tenant is to pay an
aliquot part of such repairs? Surely there is sufficient consideration, at
least in the case of the original lessee, in that she relied on the promise
and held her hand so far as her solicitors were concerned?]
Such a promise is not enforceable under the collateral warranty doctrine
unless the promisee shows that she acted on it and says that she would
not have taken the lease unless she had the promise. In light of her
evidence it is clear that she did not act on the promise. [Reference was
made to Heilbut, Symons & Co. V. Buckleton [1913] A.C. 30.]
/. E. Jacob for the defendants. The general proposition on promissory
estoppel is that where a statement or promise is made by one party to
the other which is intended to affect their respective rights and is acted
on, the parties' respective rights will be limited or increased in accordance
with the statement or promise. Alternatively an equity will be raised
against the promisor which may need to be satisfied in a number of ways,
including his rights in property. It has never been a requirement of the
doctrine that there should be detriment to the promisee who acts on the
promise. All that needs to be shown is that the representation had an
influence and was a factor. [Reference was made to Esso Petroleum Co.
*"
Gr
JJ
477
1 Q.B.
_,
"
Ltd. v. Mardon [1976] Q.B. 801 and Halsbury's Laws of England, vol. 9,
4th ed. (1974), paras. 334 and 347.] Moreover in the case of the original
lessee there was some detriment in that a promise about the roof repairs
made in January 1972, repeated in 1973, and not carried out until 1974
meant that the cost was much higher, and if she were required to pay
her proportion under the lease it would be much greater.
The representation: " We will do this particular repair at our own
cost" was intended to cover tenants and assignees during the whole of
the 99-year lease, for the representation was that the clause on maintenance and costs recoverable from tenants would not be enforced in
respect of those particular repairs.
Promissory estoppel does arise as a defence available to the first
assignees, Roddy, since the promise was made in his presence in 1973; and
in the case of Miss Hickey the promise was communicated to the first
assignee by the original lessee so that Miss Hickey could have claimed
against the first assignee McGregor from whom she took, under section
76 (1) (B) of the Law of Property Act 1925, since when she entered the
repairs had been done and she knew nothing about their history; McGregor
could have sued the tenant but the tenant could not have sued the landlords
on a promise without consideration. Therefore he would have suffered a
detriment, as it were, by " delayed action."
[ROSKILL L.J. These appeals are being complicated by reliance on
promissory estoppel. What is wrong in saying in each case: " The landlord said ' I won't enforce the covenant quoad these repairs' and thereupon that liability ceased to exist." There was in fact a waiver.]
In substance that was the way the case was put for the defendants in the
court below, though waiver was not mentioned. Certainly in the first case
there was a clear collateral warranty as between the original lessee and the
landlords before she signed the contract or the lease.
In the second case of the assignees Roddy, the promise made in
February 1972 to the residents' association was repeated in January 1973
when the lease had already been assigned to them, so that it was a
promise or representation made to them and intended to cover not only
original lessees but also assignees for the duration of the leases.
Where there has been a promise that the maintenance clause in the
lease will not include these particular repairs to the roof there is a waiver
of a right the landlord would otherwise have or alternatively a representation of an existing fact that is intended to cover tenants and assignees
during the duration of the lease. It was also intended to and did affect
the legal relations of the parties, and the judge has so found. So just as
a collateral warranty would affect legal relations between landlord and
tenant, it would affect them between landlord and assignee. The difficulties which have arisen are only because the landlord went back on his
word.
[CUMMING-BRUCE L.J. It will open up a new field of inquiry in every
transaction by deed if purchaser and vendor have to look beyond the deed
to find out if any promise has been made by A to B.]
That has been the position for many years without affecting the practice
of conveyancing, where all manner of inquiry has to be made. The
situation might be different where the landlord has to assent to an
478
Brikom Investments v. Carr (C.A.)
[1979]
"
j]
479
1 Q.B-
LORD DENNING M.R. This case concerns four blocks of flats at Herga
Court, Sudbury Hill, Harrow. There are 102 flats altogether. In 1974 the
landlords expended over 15,000 in repairing the roofs. They say that under
a clause in the leases each of the tenants is bound to pay a contribution
towards the expenditure, each according to the rateable value of his
flat. The amount of the contribution ranges from 50 to 250. The
landlords sued the tenants in the county court for their contributions.
The tenants disputed the claim because they said that the landlords had
told them that they would repair the roofs at their own cost. The
landlords contended that the express clause in the leases had priority
over anything the tenants were told: and that they were entitled to
the sums claimed. The judge heard the case for seven days. He decided
in favour of the tenants, relying on the principle stated in Central London
Property Trust Ltd. v. High Trees House Ltd. [1947] K.B. 130, and
the cases that have followed it. The landlords appeal to this court,
saying that that principle does not apply for several reasons. It is these
that we have to consider. But before I come to them, I must state the
facts in more detail.
In the years before 1971, the landlords had let the flats to tenants at
rack rents. But in 1971 they decided to offer long leases of 99 years each
to the sitting tenants of the flats. Many accepted the offer: and after
meetings, correspondence and contracts, leases were signed. They were
all in standard form. They provided that the tenants should pay rent,
and by way of additional rent, a maintenance charge, together with an
excess contribution. Each lease contained an express covenant by the
landlords that they would repair and maintain the main structure of
the building, " including the principal internal timbers and the exterior
walls and the foundations and the roofs thereof." But each lease also
contained an express stipulation that the tenant would pay a maintenance
charge: and, in addition, the tenant would pay an annual contribution
in respect of all the excess expenses which the landlords incurred. The
amount of the contribution was to be ascertained by a certificate prepared
by the landlords' accountant. It was to be paid by the tenants within
28 days of the service of the certificate. So, on the terms of the lease,
the landlords could charge a contribution against each of the tenants on
getting a certificate as to the amount, and serving it on the tenant.
Everything was done to satisfy the terms of the lease. In 1974 the
landlords repaired the roof at a cost of over 15,000. In 1976 the accountants issued their certificates. These were served on the tenants. But in
some cases the original tenants had assigned their leases. The landlord then
claimed against the assignees.
480
Lord Denning M.R.
[1979]
481
1 Q.B.
482
Lord Denning M.R.
[1979]
The landlords claimed that they were entitled to a contribution from each
of the tenants in regard to their part of this 15,000.
Many of the tenants refused to pay. The landlords no doubt took
legal advice. As a result they selected the defendants carefully. They did
not sue those tenants to whom they had given a written undertaking
that they would repair the roofs at their own cost. They only sued those
tenants who did not have anything in writing, but to whom they had
given an oral promise. It is quite plain that that distinction is bad in B
point of law. If the landlords are debarred in the cases where they gave
a written undertaking, equally they are debarred where they gave an oral
promise.
In discussing the law, three cases were taken before us. Each had a
separate point. The first was that of Mrs. Dufton. In the autumn of
1971 she was engaged to be married to a Mr. Carr. She was anxious to Q
take Flat No. 14a top flat. It had stains on the ceiling where water
had come through. She raised the question with Mr. Stacpoole, the
landlords' agent. He told her that the landlords would be paying the
cost of repairing it and that letters would be going out to other tenants
to that effect. She agreed to buy the 99 year lease for 10,750 and signed
the contract on January 19, 1972. In her evidence she said:
"she had Mr. Stacpoole's assurance about the roof in mind when
she signed the contract and relied on it, even though she would still
have gone ahead if she had not been told this about the roof."
(It is by reason of that evidence that the landlords say she cannot avail
herself of the High Trees principle [1947] K.B. 130). Her fiance\
Mr. Carr, attended the meeting on February 14, 1972, and reported to E
her that the landlords had agreed to repair the roofs at their own cost:
and they both saw the circular of February 18, 1972. She signed the
lease on March 20, 1972. She is being sued for 264-75.
Mr. Bernstein, for the landlords, submitted that Mrs. Dufton (now
Mrs. Carr) could not rely on the principle in the High Trees case [1947]
K.B. 130, because it was essential that she should have acted on the F
representation: and here she had not acted on it. On her own admission,
he said, she would have gone on and taken the lease even if she had
not been told about the roof. In all the cases, Mr. Bernstein said, the
courts had said that the party must have " acted " on the promise or
representation in the sense that he must have altered his position on the
faith of it, meaning that he must have been led to act differently from
what he would otherwise have done: see W. J. Alan & Co. Ltd. v. G
El Nasr Export and Import Co. [1972] 2 Q.B. 189, 213. This argument gives, I think, too limited a scope to the principle. The principle
extends to all cases where one party makes a promise or representation,
intending that it should be binding, intending that the other should rely
on it, and on which that other does in fact relyby acting on it, by
altering his position on the faith of it, by going ahead with a transaction JJ
then under discussion, or by any other way of reliance. It is no answer
for the maker to say: "You would have gone on with the transaction
anyway." That must be mere speculation. No one can be sure what he
483
1 Q.B.
484
Lord Denning M.R.
[1979]
took an assignment of the lease of that flat from Mr. Kavanagh. During
Mr. McGregor's tenancy in 1974 the landlords finished the work of
repairing the roof. It was a long time before the accountants got out
the certificate. Eventually in May 1976 the certificate was made out
certifying that a contribution of 81 "02 was payable by Mr. McGregor.
It was served on Mr. McGregor. The 28 days expired on June 7. So,
if the money was payable at all, it was payable on June 7. A month
later, on July 12, 1974, Miss Hickey took an assignment from Mr.
McGregor of the lease. By then the roof was completely repaired. She
had no idea that there would be any charge on her for repairs to the
roof. Mr. McGregor said nothing to her about it. She knew nothing.
Then, to her surprise, she found herself to be one of the defendants
against whom it is sought to charge a contribution towards the expense
of repairing the roofs.
The judge put this case, too, quite simply. He said: " Now I have to
consider whether Miss Hickey is entitled to set up an estoppel against
the landlords. I think that, in these circumstances, she is."
Mr. Bernstein submitted that the doctrine of promissory estoppel (as
enunciated in the High Trees case [1947] K.B. 130) was personal to the
person to whom the representation or promise was made. So the original
tenantsMr. Harris (in the Roddy case) and Mr. Kavanagh (in Miss
Hickey's case) could rely on the estoppel, but no one else. Mr. Bernstein
said that the assignees could not rely on it. They took their assignments
in the usual conveyancing way. They take the benefit and burden of the
covenants in the lease itself which run with the land at law or in equity,
but not of estoppels such as this.
The judge did not accept that contention. We have had it elaborately
argued before us today. It was suggested that if assignees are able to
rely on an oral or written representation (not contained in the deeds)
it would cause chaos and confusion among conveyancers. No one buying
property would know where he stood.
I am not disturbed by those forebodings. I prefer to see that justice
is done: and let the conveyancers look after themselves. Suppose that
the landlords here (before or after doing the repairs to the roof) had
assigned their reversion to a purchaser: and then that purchaser sought
to recover the contribution from the tenantscontrary to the promise
made by the original landlords. Surely the assignee of the reversion
would be bound by the promise made by the original landlords. It would
be most unjust and unfair if he could go back on the promise. Equity
would not allow him to do it.
Now if the assignee of the reversion takes subject to the burden of
the estoppel, so also the assignee of the tenant should take subject to
the benefit of it. As Lord Coke said long ago in his Commentary upon
Littleton, vol. II, p. 352, a.b. " . . . every estoppel ought to be reciprocal
. . . privies in estate, as the feoffee, lessee &c. . . . shall be bound and take
advantage of estoppels; . . ." So when the original tenant assigns the lease
over to an assignee, the benefit of the promise passes to the assignee.
The burden and the benefit run down the line of assignor and assignee
on each side. Especially in this case, because it is plain (as the judge
485
1 Q.B.
found) that when the landlords made this promise they intended it to
be for the benefit of all those from time to time holding the leases,
realising that each in turn would tell his successor that the landlords were
going to repair the roofs at their own expense. The landlords, having
made a representation of that kind, knowing that it would be passed on,
cannot escape from it by simply saying: " These people are assignees."
So it seems to me that the judge was quite right in the way he put
B the case. He held that in all these cases the landlords could not go back
to the strict rights under the lease. They had given the tenants their
promise or representation to repair the roofs at their own cost, and the
tenants relied on it. That gives rise to an equity which makes it unjust
and inequitable for the landlords to seek to charge the tenants for a
contribution; and the benefit of this equity avails the assignees of the
tenants also.
r
But I may say there is another way in which the case can be put
which seems to me equally valid. Although this is called a " promise "
or " representation," it seems to me that it might also qualify for what
we call a " collateral contract" or " collateral warranty." On the faith
of it these tenants signed the leases. After the first day in the county
court, Miss Hickey and Mr. and Mrs. Roddy pleaded that they took
D from their predecessors an assignment of the benefit of the collateral
contract or warranty. That enables them to take advantage of it as
against the landlords. This seems to me a roundabout way of reaching
the same result as the High Trees principle [1947] K.B. 130. It is a
technical way of overcoming technical difficulties. I prefer the simple
way which is the way the judge put it. I would like to pay tribute to
P him for the careful way in which he analysed the evidence and for his
statement of the law, which I think was correct. I would, therefore,
dismiss the appeal.
ROSKILL L.J. I have found this case more difficult than Lord Denning
M.R. While I agree this appeal should be dismissed, I wish, with
respect, to make plain that my reasons differ from those of the judge
F given in his judgment. I do not rest my decision on any question of
promissory estoppel; and I do not think it necessary on the facts of
this case to investigate the jurisprudential basis of that doctrine in order
to arrive at what I conceive to be the right decision. It is necessary to
do no more than to apply that which was said by the House of Lords
and especially by Lord Cairns L.C. in Hughes v. Metropolitan Railway
Co. (1877) 2 App.Cas. 439.
G
I adopt what was said by Sir Alexander Kingcome Turner in Spencer
Bower and Turner, Estoppel by Representation, 3rd ed. (1977), p. 383.
He referred to what Lord Denning M.R. said in Crabb v. Arun District
Council [1976] Ch. 179; and added, at pp. 383-384:
" This case " that is, Crabb" was really an acquiescence case; but
j]
Lord Denning's judgment canvassed also the doctrine of promissory
estoppel, and in this passage the Master of the Rolls said: ' If
I may expand what Lord Cairns L.C. said in Hughes v. Metropolitan
Railway Co., 2 App.Cas. 439, 448: "it is the first principle
486
Roskill L.J.
[1979]
487
1 Q.B.
Roskill LJ.
As Lord Denning M.R. said, one has first to look at the leases in
question. There can be no doubt that if one has regard to, and only to,
those leases, the landlords on their true construction have an unanswerable claim. Events have happened which give rise to the tenants' liability.
The roof, although belatedly, has been repaired. The certificate, even
more belatedly, has been issued. Unless the lessees or their assignees can
somehow find a defence, they must be liable for the sums due under the
B respective leases.
When these cases came before the county court, they were most
carefully tried by Judge Granville Slack. But, as Cumming-Bruce L.J.
pointed out, the defendantsthe lessees or assigneesought to have
opened the case. The burden was wholly upon them; and it was for
them to show that they had a defence to what, if one has regard only
r to the leases, was an undefendable claim.
What then is the defence which it is sought to advance? It was put
in various ways. I make no criticism of that fact because this was a
complex case. The pleadings were amended and re-amended from time
to time. But in the end I think Mr. Jacob came to rest on two main
defences. Oneat any rate in relation to the first of these caseswas a
defence of collateral contract or collateral warranty, as it is sometimes
^ called. He also in all three cases relied upon the doctrine of promissory
estoppel. The judgeand like Lord Denning M.R. I would pay tribute
to the care he took over the findings of fact in his judgmentdealt, if
he will forgive my saying so, with the issues of law with a brevity which
leaves me in doubt as to what the principle was on which he decided
these cases in favour of the defendants. In the case of Mrs. Carr he
E simply said: " The landlords should not be allowed to go back on these
assurances." In the case of Mr. and Mrs. Roddy he said:
" I have come to the conclusion that in all the circumstances of this
case, it would be unjust and inequitable to allow the landlords to
recover as against Mr. and Mrs. Roddy when they could not have
recovered against Mr. Harris had there been no assignment."
Finally in the case of Miss Hickey he said: "Now I have to consider
whether Miss Hickey is entitled to set up an estoppel against the landlords. I think that in these circumstances, she is."
It seems to me, with great respect to the judge, that this case
requires more detailed legal analysis.
I consider, first, the case of Mrs. Carr, which is in some respects the
G easiest, for there the question arises between the original lessor and
the original lessee, and there is no question of devolution by assignment
or reassignment. The question is whether Mrs. Carr has a defence to
this claim. The judge set out the facts with the utmost care. I gratefully
adopt his findings without repeating them. They seem to me to be well
justified by the judge's note of the evidence. When I look at that note,
JJ and in particular passages to which Mr. Bernstein drew our attention
(and I am not overlooking the passage to which Mr. Jacob asked Mr.
Bernstein to draw to our attention), I entertain no doubt flooking at the
totality of the evidence and not just picking out from the judge's note
488
Roskill LJ.
[1979]
one sentence which points one way and another sentence which points
the other) that there was a perfectly clear agreement between the landlords and Mrs. Carran agreement arrived at, first, because of what
Mr. Stacpoole said as their agent and, secondly, because of what Mr.
Jarvis saidthat those who took these 99-year leases from the landlords
would not be liable for their share of the cost of repairing the roofs
if the time ever came to do those repairs.
It seems to me impossible, with all respect to Mr. Bernstein's argument, for his clients nowI make no comments about their ethics; the
judge made enough comments about themto claim that they will not
pursue those claims where there were written assurances given but are
entitled to pursue those claims where there were oral assurances given.
1 do not see how the landlords can escape from the bond of the
promises which were given and which seem to me to have been given
for perfectly good consideration. This case seems to me to fall within
the principle laid down by this court in De Lassalle v. Guildford [1901]
2 K.B. 215. I will read a passage from the judgment of A. L. Smith M.R.,
at p. 222:
"The next question is, Was the warranty collateral to the lease so
that it might be given in evidence and given effect to? It appears to
me in this case clear that the lease did not cover the whole ground,
and that it did not contain the whole of the contract between the
parties."
_.
And later on: "The present contract or warranty by the defendant was
entirely independent of what was to happen during the tenancy."
When two parties are about to enter into an agreement for a lease E
a lease which imposes upon the lessee a very burdensome obligation in
respect to repairsI can see no reason why one party cannot say to the
other, " In relation to those outstanding matters, whatever may be our
legal position under the terms of the lease, we will not as landlords
enforce that obligation against you." I see no reason why effect should
not be given to such a position. I think the evidence shows that that p
was the position here; there was a perfectly good collateral contract
between these two parties.
But if I am wrong about that, I think in relation to Mrs. Carr's case
and this applies equally to the other two casesthere was a plain
waiver by the landlords of their right to claim the cost of these repairs
from these tenants. Let me take this example, which I think Lord
Denning M.R. mentioned during the argument: Suppose the landlords G
were now seeking to recover from the assignees the last two instalments
of rent due from an assignee or lessee, having said earlier that they
would not seek to recover those two instalments from him. If that were
the position as between the landlords and Mrs. Carr, and the landlords,
having given that assurance, then sought to recover those two instalments of rent from Mrs. Carr, I think that their claim must fail without JJ
more on the ground that there was there the plainest waiver of the right
to recover that rent. If that be right, then it seems to me that that waiver
subsists notwithstanding any subsequent assignment of the lease to
489
1 Q.B.
Roskill LJ.
assignees and sub-assignees from the first assignee; because what was
then assigned and reassigned was a lease, the relevant obligation in
which had before assignment been waived by the landlords.
I think it necesary to go no further than what Lord Cairns L.C. said
in Hughes v. Metropolitan Railway Co., 2 App.Cas. 439 where the matter
was put not as one of promissory estoppel but as a matter of contract law
or equity (call it which you will), at p. 448:
" 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 resultscertain penalties or
legal forfeitureafterwards 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."
JJ
For my own part, I would respectfully prefer to regard that as an illustration of contractual variation of strict contractual rights. But it could
equally well be put as an illustration of equity relieving from the consequences of strict adherence to the letter of the lease.
But, whichever is the right way of putting it, ever since Hughes v.
Metropolitan Railway Co., through a long line of cases of which there
are many examples in the books, one finds that where parties have made
a contract which provides one thing and where, by a subsequent course
of dealing, the parties have worked that contract out in such a way that
one party leads the other to believe that the strict rights under that
contract will not be adhered to, the courts will not allow that party who
has led the other to think the strict rights will not be adhered to,
suddenly to seek to enforce those strict rights against him. That seems
to me to be precisely what the landlords are trying to do here. Having
said both through their solicitors and Mr. Jarvis to various inquiring
solicitors of intending purchasers of the leases, and to Mr. Rowe, the
chairman of the residents' association, and through their agent Mr.
Stacpoole at lunch with Mrs. Carr, "We will do these repairs at our
expense," they then subsequently, as it would seem as a reprisal because
of disapproval of opposition by these lessees in attempting to prevent
the landlords getting planning permission to add another storey to these
flats, belatedly tried to enforce against one of these lessees, and in the
other two cases against assignees, the strict letter of the contract. I do
not think that the common law or equity will allow them to take that
step; and for my part, with profound respect to Lord Denning M.R., I
490
Roskill LJ.
Brikom Investments v. Can- (C.A.)
[1979]
do not think it is necessary in order to reach that result to resort to the .
somewhat uncertain doctrine of promissory estoppel.
For those reasons which I have given at some length in deference
to the arguments to which we have listened, I would dismiss this appeal.
CUMMING-BRUCE L.J. I agree that the appeals should be dismissed
for the reasons stated by Roskill LJ. I add a word of my own as the
appeals have given rise to a discussion of some controversial problems of
legal analysis.
The first appeal is the case of Mrs. Carr. Before she signed her
contract, to which the draft lease was annexed, she received an assurance
that the grantors who became her landlords under the lease would not
enforce against her a covenant imposing upon her the burden of paying
for repairs to the roof of the building in which she was proposing to
become their tenant. Relying upon that assurance, she entered into an
agreement for a lease. Before she signed the lease, the landlords by their
agent repeated the assurance. Relying thereon, she entered into the lease.
Those facts establish a contract collateral to the agreement for a lease
and collateral to the lease itself. Consideration moved from Mrs. Carr
because she entered into the agreement for a lease and then made the
deed in reliance upon the assurance. Looking back on the transaction
she said in evidence that she would have entered into the lease anyway:
nonetheless on her evidence the inducement of the landlords' promise was
one of the factors that she relied upon. That is enough without giving
rise to the necessity of assessing the weight or quantum of each of the
factors that between them induced her to agree to enter into the lease.
After she had taken possession under the lease she was minded to take
action to make the landlords repair the roof as was their obligation under
the lease. She stayed her hand because the landlords were still assuring
all the tenants that they were going to pay for the roof repairs themselves. A long time afterwards they changed their mind about that,
apparently out of resentment over the line taken by some tenants in
connection with a planning application. The principle declared in Hughes
V. Metropolitan Railway Co., 2 App.Cas. 439 is in point. If I am wrong
in holding that she can rely upon the contract collateral to her lease, she
then acted to her detriment in reliance upon the landlords' promise that
they would not enforce a covenant in the lease, and equity will not
allow them to enforce their legal right.
In the cases of Mr. Roddy and Miss Hickey there was no promise
given by the landlords to them as assignees. The promises were given in
both cases to the first purchasers of the leases, which leases were assigned
by the tenants. So Mr. Roddy stands at one remove, and Miss Hickey
at two removes from the promises given by the landlords to the original
lessees. I do not see how an assignee can claim the benefit of an estoppel
founded on a promise made to somebody else, even though that other
person is the assignor who is assigning the unexpired term of the lease,
Nor is there any collateral contract between the assignees and the original
grantor of their leases. But in both these cases the landlords by their
declarations at the time when the leases were granted communicated to
JJ
491
1 Q.B.
Cumming-Bruce LJ.
the lessees that they waived the lessees' covenant to pay for repairs so
far as repairs to the roof were required at the date of lease. Having
waived the right to recover the cost of such repairs from the original
lessees, their obligation to pay for those repairs came to an end. There
is nothing in the evidence to suggest that the landlords intended their
assurances to be personal to any individual tenant. On the contrary it is
clear that when those lessees passed on the content of the landlords'
B assurances about the cost of roof repairs to their assignees they were
behaving exactly as the landlords had expected and intended them to do.
When the facts found by the judge are considered, they point to an
overwhelming inference that the landlords acted in such a way as to
lead the original lessees to believe that they had the right to assign an
estate unencumbered by any obligation to pay for the repairs to the roof
r, which were necessary at the time when the leases were granted. On those
facts the landlords' waiver operated so that the lessees' obligation to
which it related came to an end once and for all, and did not revive upon
the accidental contingency of a first or second assignment.
For those reasons I concur in the order that the appeal should be
dismissed.
D
[COURT OF APPEAL]
Robert Goff J.
Lord Denning M.R., Ormrod and
Geoffrey Lane L.JJ.