West End Commercial Ltd v London Trocadero (2015) LLP

An interim injunction requires a serious issue to be tried, inadequacy of damages or injustice in confining the claimant to damages, and a favourable balance of convenience. Promissory estoppel requires an existing legal relationship. On the authority of Thorner v Major, proprietary estoppel remains confined to assurances concerning an identified proprietary interest in property owned by the defendant. A contractual licence alone does not satisfy that requirement. The claimant must also show detriment caused by reliance. Where any loss can be assessed in damages and the defendant appears able to pay, an injunction will ordinarily be refused.

West End Commercial Ltd sought continuation of an interim injunction restraining London Trocadero (2015) LLP from terminating a licence of retail Unit 6. The licence permitted termination on 30 days’ notice. The claimant relied on alleged pre-contractual assurances that termination would not occur while the licence terms were complied with, and argued that the defendant was estopped from exercising the contractual right.

A without-notice injunction had been granted by Henry Carr J on 11 August 2017. Before Snowden J, the service argument was abandoned. The central issue was whether the alleged assurances could found an estoppel sufficient to establish a serious issue to be tried.

1. The injunction was not continued. The claimant failed to establish a serious issue to be tried and would in any event have been adequately compensated by damages.

2. The applicable American Cyanamid conditions were whether there was a serious issue to be tried, whether damages would be inadequate or it would be unjust to confine the claimant to damages, and where the balance of convenience lay.

3. The alleged assurance could not found a promissory estoppel. Such an estoppel requires an existing legal relationship. The claimant had no legal or other relationship with the defendant before the new licence was executed.

4. The claimant’s case was therefore proprietary estoppel. That doctrine requires an assurance relating to identified property owned, or perhaps about to be owned, by the defendant. The claimant claimed no proprietary interest in Unit 6. It held only contractual rights under a licence. The court considered itself bound by Thorner v Major and held that the alleged assurance could not satisfy the proprietary requirement.

5. The claimant also failed to identify detriment. Entering the licence gave it valuable rights which it previously lacked, and the evidence did not show that it had provided the relevant deposit. The essential elements of assurance, reliance and detriment were therefore not established even on the assumed facts favourable to the claimant.

6. Damages would have been an adequate remedy. Lost profits could be assessed using trading and expert evidence, and the ordinary uncertainty of quantification did not make damages inadequate. The defendant’s ownership of a substantial property also provided no basis to conclude that it could not satisfy an award.

7. Had there been a serious issue and inadequate damages, the balance of convenience would have favoured a short continuation of the injunction to preserve the status quo. The court also considered there was a prima facie case that the arrangements with H&K were sham documents designed to characterise licence payments as dilapidations and avoid VAT. That issue did not affect the injunction decision and the papers were to be referred to HMRC.