Estoppel by Convention (Collatory Case)

In Musst Holdings Ltd v Astra Asset Management UK Ltd [2023] EWCA Civ 128 ('Musst 128'), Falk LJ (with whom Whipple LJ and Peter Jackson LJ agreed), under the heading 'Legal principles' and subheading 'Conventional estoppel', said, at paragraphs 61 and 62:

'No issue is taken with the judge's summary of the principles of estoppel by convention. In the context of non-contractual dealings these have recently been considered in detail by the Supreme Court in Tinkler v HMRC [2021] UKSC 39 at [45][53], where Lord Burrows approved the approach of Briggs J in Revenue and Customs Commrs v Benchdollar Ltd [2010] 1 All ER 174 ("Benchdollar"), as slightly modified subsequently, including by this court in Blindley Heath Investments Ltd v Bass [2017] Ch 389. In summary, and reflecting Lord Burrows' further explanation:

a) There must be a common assumption that is not only understood between the parties but is expressly shared between them. Thus the party seeking to rely on an estoppel (C) must know that the person against whom the estoppel is raised (D) shares the common assumption. In short, the common assumption must have "crossed the line".

b) C must in fact have relied on the common assumption to a sufficient extent, rather than merely relying on his own independent view. This requires C to at least have been strengthened or influenced in its reliance on the assumption by the knowledge that D shared the assumption.

c) The expression of the common assumption by D must be such that he may properly be said to have assumed some responsibility for C's reliance on it. This requires D to have objectively intended or expected reliance, in the sense of conveying an understanding that he expected C to rely on the common assumption.

d) That reliance must have occurred in connection with some mutual dealing between the parties.

e) Some detriment must thereby have been suffered by the person alleging the estoppel, or benefit conferred on the person alleged to be estopped, sufficient to make it unjust or unconscionable for the latter to assert the true legal or factual position.

As already indicated, Tinkler concerned non-contractual dealings. On the hypothesis that there was no novation, this case can be described as non-contractual as far as the dealings between Astra and Musst are concerned. In any event I note that Lord Burrows (with whose judgment the other members of the court agreed) observed at [78] that whilst it was not necessary to decide the point, the principles just described were in his view a correct statement of the law on estoppel by convention for contractual as well as non-contractual dealings.'[1].

In My Protection Guru Ltd v Lifesearch Partners Ltd [2026] EWHC 60 (Comm), HHJ Pearce (sitting as a Judge of the High Court) said, at paragraphs 157 to 158:

'The third argument that I consider, estoppel by convention, arises where both parties to a transaction "… act on assumed state of facts or law, the assumption being either shared by both or made by 1 and acquiesced in by the other" (see Republic of India v India Steamship (The Indian Endurance) (No. 2) [1998] AC 878 at 913). In Revenue and Customs Commissioners v Benchdollar Ltd , Briggs J, in a passage which Lord Burrows cited with approval in Tinkler v Revenue and Customs Commissioners [2021] UKSC 39 at [45], stated,

(i) it is not enough that the common assumption upon which the estoppel is based is merely understood by the parties in the same way. It must be expressly shared between them.

(ii) the expression of the common assumption by the party alleged to be estopped must be such that he may properly be said to have assumed some element of responsibility for it, in the sense of conveying to the other party an understanding that he expected the other party to rely upon it.

(iii) the person alleging the estoppel must in fact have relied upon the common assumption, to a significant extent, rather than merely upon his own independent view of the matter.

(iv) That reliance must have occurred in connection with some subsequent mutual dealing between the parties.

(v) Some detriment must thereby have been suffered by the person alleging the estoppel, or benefit thereby have been conferred upon the person alleged to be estopped, sufficient to make it unjust or unconscionable for the latter to assert the true legal (or factual) position."

In respect of the first of these points, as the Court of Appeal stated in Dixon v Blindley Health Investments Ltd [2015] EWCA Civ 1023 at [92] (again approved in Tinkler at [49] – [50]), "something must be shown to have 'crossed the line' sufficient to manifest an assent to the assumption."'

Collatory Case Series

The Collatory Case Series, is an series of bulletins, designed to report that one case which collates the essential principles/propositions of law, for a particular doctrine/area of law (and perhaps, as here, provide a few extra citations/quotations etc.). It is not designed as a deep and comprehensive review of an area of law, but to provide that quick 'go to' case.

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