Equitable Estoppel

Introduction

 Generally, equitable estoppel is a bar to a party from asserting a legal claim or defense
that is contrary or inconsistent with his or her prior action of conduct.
 There are three types:
1) Estoppel by Representation [shield] - Common Law - Evidence Act 1960
2) Promissory Estoppel [shield]
3) Proprietary Estoppel [sword]
 It can be invoked by either plaintiff (to supplement cause of action) or defendant (as a
defence).
 So it equitable estoppel a sword or a shield?
 In the first two types of estoppel, it can be used as a shield not a sword but the last
estoppel, it can be used as a sword.

Estoppel by Representation

 Definition: Where a person makes an unambiguous representation by words or by

conduct or by silence or negligence of an existing fact and causes another party to act to
his detriment in reliance on the representation, he is not permitted to act, inconsistently
with that representation in whatever manner the representation is made.
 Applicable as a rule of evidence under Section 115 of the Evidence Act 1960: “When one
person has by his declaration, act or omission intentionally caused or permitted another
person to believe a thing to be true and to act upon such belief, otherwise than but for that
belief he would have acted, neither he nor his representative in interest shall be allowed
in any suit or proceeding between himself and that person or his representative in interest
to deny the truth of that thing”.
 Elements: (1) Unambiguous representation; (2) Representation of an existing fact; (3)
Reliance on the representation.

Robertson v. Minister of Pensions [1949] 1 KB 227:

 An officer claimed a pension relying upon a statement (Our disability has been accepted
as attributable to military service) made by the War Office in the Ministry of Pensions
that his disability has been accepted as due to military service and he did not obtain other
independent medical opinion. Later, the Minister of Pensions decided that the officer’s
disability was not due to war service.
  Held: “Minister of Pensions could not go back on the statement previously made. The
officer was no longer in a position to supply the necessary evidence. The assurance given
to the officer was explicit.”

Veeriah v Keretapi Tanah Melayu [1974] 1 MLJ 201:

 Plaintiff was employed by Defendant as a chargeman at the Malayan Railway at Kuala
Lipis. From the record, he reached age of 55 on 26 June 1971 and accordingly he was
retired from service under mandatory provision of Section 10 (a) of Pension Ordinance
1951. P contended that on the said date he had not in fact reached 55 and therefore
brought an action to claim for reinstatement in his employment. His Identity Card, EPF
Membership Card and Citizenship Certificate all showed his DOB as 1921. D invoked
Section 115 of the Evidence Act and averred that P was estopped from proving his real
age because since joining the KTM 30 years ago, P had all along represented his DOB as
1916 and P took action to change his DOB only 6 months before had been notified of his
retirement.
 Held: The representation as to the DOB in the record is made innocently and mistakenly.
D failed to prove that P made the representation was with the intention to induce D to
alter his position to his detriment. Hence, the defence of estoppel failed.

Promissory Estoppel

 Definition: Where by his words or conduct one party to a transaction voluntarily 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.
 Elements:
 Unambiguous promise or assurance;
 Promisor intended to affect the legal relations between the parties;
 The promisee acts upon the promise;
 Acting upon the promise alters the position of the promisee to his detriment.

Central London Property Trust Ltd v. High Trees House Ltd [1947] 1 KB 130
 (Lord Denning established the doctrine of promissory estoppel in this case): In 1937, D
leased a block of flats for a rate £2,500/year from P. Due to the war and the resultant
heavy bombing of London, occupancy rates were drastically lower than normal. In
January 1940, to ameliorate the situation the parties made an agreement in writing to
reduce rent by half. However, neither party stipulated the period for which this reduced
rental was to apply. Over the next five years, D paid the reduced rate while the flats
 began to fill and by 1945, the flats were back at full occupancy. P sued for payment of the
full rental costs from June 1945 onwards.
 Held: P would have been estopped from claiming the full rent for the period from 1940 -
1945 on the ground that P had intended D to rely on the promise and D had acted on the
faith of it. The rent waiver was only meant to cover the wartime period. Therefore, it was
not unjust to raise the rent back to the original amount after the war, when D was able to
pay it again.

William Teo’s House and Estate Agencies v. Chang Eng Swee [1965] 2 MLJ 89:
 Defendant owed $3592 to the Plaintiff.
 D paid $2000 allegedly in full payment of the debt as a result of mutual settlement
between him and P.
 P acknowledged receipt of $2000 but denied any settlement.
 Held: D could rely on the settlement agreement as a defence to the claim.

Proprietary Estoppel

 Definition: One party knowingly encourages another party to act or where one party
acquiesces in another party’s actions and the other party thereby suffers some loss then
the party which initially encouraged or acquiesced would be estopped from complaining
about the infringement of its rights.
 Unlike other estoppels, this doctrine may in some circumstances create a claim and an
entitlement to proprietary rights. [sword]
 Elements:
1) Encouragement made by the landlord;
2) Claimant acted in the belief that he either owned or would obtain a sufficient interest
in the property;
3) Claimant must have incurred expenditure or otherwise acted to his detriment;
4) No bar to equity such as the contravention of any statute.

Cheng Hang Guan & Ors v. Perumahan Farlim (Penang) Sdn Bhd & Ors [1993] 3
MLJ 352:
 P’s family had been staying on 2 plots of land (with two dwelling houses and vegetable
farm) for more than 100 years. The registered proprietors of the land were the trustees of
the Khoo Kongsi. P’s family had converted what was once swampy jungle land into a
productive farm. On Cheong’s death, the family took over management of the farm on
the conditions written in English which included a period of one month’s notice would be
sufficient to terminate the tenancy. Ps were illiterate farmers and could not understand
these conditions. In 1972, P was informed by the visiting trustee of the Khoo Kongsi that
 it was not necessary to change the tenancy into her name and that she could continue
planting vegetables as long as she wished provided she paid rent. Due to this assurance, P
invested RM12,000 in installing a sprinkler system. Later, Khoo Kongsi had entered into
a joint-venture agreement with D and gave one month’s notice of termination to P. P
pleaded the proprietary estoppel.
 Held: P could invoke proprietary estoppel.
 On the evidence, promises and assurances had been made by the Khoo Kongsi first to
Cheong that so long as he or his family continued to pay ground rent he could stay and
cultivate the farm as long as he wanted and relying on the same he and his family had
converted what was once a swampy land into a productive farm. He had also built the
two dwelling houses with the consent of the Khoo Kongsi. P had invested money and
incurred substantial expenditure based on the assurances. On the evidence, the tenancies
held by Cheong were not just for his benefit but also for the benefit of his family and
these tenancies were not merely monthly tenancies.
 There was no evidence that the conditions appearing in the rent receipts in respect of the
farm or the two dwelling houses had been introduced from the inception of the tenancies
nor was there anything to show that P, or their ancestors, who had no knowledge of the
English language, could be said to have accepted the ‘conditions’.

Can proprietary estoppel be invoked against the state authority?

 Govt of Negeri Sembilan v. Yap Chong Lan [1984] 2 MLJ 123: Respondents who were
living in houses built by them on land in Seremban for which they paid ground rent to the
registered proprietor who informed that the land had been acquired by the State
Government for a road widening project. Rs appealed to the Collector for time to vacate
and either for low cost houses or State land. Whether Rs have acquired an equitable right
or interest to remain on the respective lots allocated to them?
 Held: “The equity sought by Rs against the State Authority would establish rights in
respect of State land which it is prevented by statute from creating other than in the
prescribed manner”.

Can proprietaty estoppel be pleaded against the holder of temporary occupation license?

 Temporary Occupation License Holder TOL (Pendudukan Sementara): Temporary used

of state land is permitted by NLC.
 Paruvathy d/o Murugiah v. Krishnan s/o Doraisamy [1983] 2 MLJ 121: Appellant was
the holder of a TOL of a piece of land in Seremban. Respondent built a house on the land
and claimed that he was entitled to do so by virtue of a document made between A and
himself and one Thangavelu whereby A gave “equal shares” in the land to R and
 Thangavelu. A claimed possession of the land and house. R claimed that he had a right to
stay on the basic of the document executed by A and he had built the house at the request
and with the consent of A.
 Held: The principle of proprietary estoppel can, in a proper case, be invoked against the
holder of a temporary occupation license.
 However, in this case, the document purported to be executed by A was void for illegality
as it was in contravention of Section 68 of the NLC, as it purported to transfer the rights
and interests of A in the TOL and the document was also a fraudulent document and
therefore the principle of equitable estoppel could not arise in the R’s favour. Lastly,
although the house was built by R it was built with the money form A and therefore its
ownership was with A.

Is proprietary estoppel available under torren system?

 The one who invoked proprietary estoppel is the one without title.
 Holee Holdings (M) Sdn Bhd v. Chai Him [1997] 4 MLJ 601: LLT was the registered
proprietor of certain lands. He created two charges over the lands to a bank in 1978. In
1989, the bank obtained an order for sale and the land was auctioned off where P was the
successful bidder. P was then registered as the proprietor of the land. D were occupiers of
the land and refused to vacate. The 1st D was the licensee of LLT since 1957 whilst the
2nd D was a temple on the land. The 3rd to 5th Ds were trustees of the temple. Whether Ds
could invoke proprietary estoppel against P?
 Held: All that Ds had was a right in personam against LLT, the previous land owner. The
correct manner for D to protect their equity, if any, against P was to lodge a caveat, which
was not done. If they had lodged a caveat, P would be bound as having statutory notice of
their ‘equities’. In absence of the caveat, P being the newly registered proprietor was not
bound by the equities of Ds.