Actionstrength agreed with Inglen to provide construction staff to build a factory for St-Gobain. Inglen failed to pay. Actionstrength claimed against for the amount due. Inglen went into liquidation. The claim was now against St-Gobain. The claim was based on an alleged oral guarantee. When the defendant pleaded the Statute of Frauds, the claimant alleged an estoppel, saying the defendant had urged it to continue to supply workers.
Held: Some recognisable structural framework must be established before recourse could be had to the underlying idea of unconscionable conduct. It needed to be shown that Actionstrength assumed that St-Gobain would honour the guarantee; that that assumption was induced or encouraged by St-Gobain; and that Actionstrength relied on that assumption. They had not established all these elements. These factors could not all be found in the pleadings. The only assurance given to Actionstrength was the promise itself. In order to be estopped from invoking the statute there must be something more, such as some additional encouragement, inducement or assurance. In addition to the promise there must be some influence exerted by St-Gobain on Actionstrength to lead it to assume that the promise would be honoured. However there was no suggestion made that St-Gobain said or did anything to lead Actionstrength to assume that St-Gobain would not stand on its rights.
The purpose of the Statute was, said Lord Hoffmann: ‘precisely to avoid the need to decide which side was telling the truth about whether or not an oral promise had been made and exactly what had been promised.’ and ‘It is quite true . . that the system of civil procedure in 1677 was not very well adapted to discovering the truth. For one thing, the parties to the action were not competent witnesses. But the question of whether the Act should be preserved in its application to guarantees was considered in 1953 by the Law Reform Committee (First Report, Statute of Frauds and Section 4 of the Sale of Goods Act 1893 (Cmd 8809)) and the recommendation of a very strong committee was to keep it.’
Lord Bingham said that section 4 was enacted ‘to address a mischief facilitated, it seems, by the procedural deficiencies of the day . . the calling of perjured evidence to prove spurious agreements said to have been made orally. The solution applied to the five classes of contract specified in section 4 was to require, as a condition of enforceability, some written memorandum or note of the agreement signed by the party to be charged under the agreement or his authorised agent’
Lord Bingham of Cornhill, Lord Woolf, Lord Hoffmann, Lord Clyde, Lord Walker of Gestingthorpe
[2003] UKHL 17, Times 04-Apr-2003, [2003] 2 AC 541, [2003] 2 WLR 1060, [2003] 1 CLC 1003, [2003] 2 All ER (Comm) 331, [2003] 2 All ER 615, [2003] BLR 207, 88 Con LR 208
House of Lords, Bailii
Statute of Frauds 1677 4
England and Wales
Citing:
Appeal from – Actionstrength Limited v International Glass Engineering, In Gl En SPA, Saint-Gobain Glass UK Limited CA 10-Oct-2001
The claimant sought payment for works undertaken. They had been given a promise that in return for not withdrawing their workforce from the site, the second defendants would redirect payments due to the first defendant to the claimant. When it came . .
Cited – Steadman v Steadman HL 1976
A mere payment of a sum of money might amount to an act of part performance, as might the act of a purchaser instructing solicitors to prepare and submit a draft conveyance or transfer, so as to leave asituation capable of enforcement in equity. . .
Cited – Maddison v Alderson HL 1883
The requirement of the doctrine of part performance is that the acts of part performance relied upon must be ‘referable’ to the contract sued on. The principle underlying the doctrine of part performance was expressed by Lord Selborne: ‘In a suit . .
Cited – Shah v Shah CA 10-Apr-2001
The court was asked as to the enforceability of a document under the terms of which the defendants were to make a payment of pounds 1.5 million to the claimant. The document was described as a deed and provided for each defendant to sign in the . .
Cited – Kok Hoong v Leong Cheong Kweng Mines Ltd PC 1964
A clear public policy underlying a statute (for instance, the need to protect vulnerable persons dealing with moneylenders or landlords) prevents an estoppel arising: ‘To ask whether the law that confronts the estoppel can be seen to represent a . .
Cited – Bank of Scotland v Wright ChD 1991
A director of two companies (one a subsidiary of the other) had given the bank a written guarantee of the liability of the holding company (only); but under an ‘interavailable’ facility backed by cross-guarantees (by the companies) the holding . .
Cited – Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd ChD 1981
The fundamental principle that equity is concerned to prevent unconscionable conduct permeates all the elements of the doctrine of estoppel. In the light of the more recent cases, the principle ‘requires a very much broader approach which is . .
Cited by:
Cited – Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd and Another ComC 21-Jan-2011
The defendants sought to set aside orders allowing the claimants to serve proceedings alleging repudiation of a charterparty in turn allowing a claim against the defendants under a guarantee. The defendant said the guarantee was unenforceable under . .
Cited – Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd and Another CA 9-Mar-2012
The court was asked ‘whether a contract of guarantee is enforceable where contained not in a single document signed by the guarantor but in a series of documents duly authenticated by the signature of the guarantor. It is common in commercial . .
Cited – Rock Advertising Ltd v MWB Business Exchange Centres Ltd SC 16-May-2018
The parties disputed whether a contract (licence to occupy an office) had been varied by an oral agreement, where the terms prohibited such.
Held: The ‘no oral variation’ clause applied. Such clauses were in common commercial use and served a . .
Lists of cited by and citing cases may be incomplete.
Updated: 24 July 2021; Ref: scu.180415