Umrish Ltd & Ors v Gill

A deed may be delivered unconditionally by sending the other party a scanned signature page on an identified document, unless the surrounding circumstances objectively indicate escrow or some other condition. The relevant question is how a reasonable recipient would understand the act, rather than the sender’s uncommunicated intention.

Promissory estoppel ordinarily requires a pre-existing legal relationship between promisor and promisee. In any event, a promise said to induce entry into the very legal relationship containing the relevant obligation presents an inherent difficulty. Representations must also be clear and unequivocal, and reliance must be shown in the sense alleged.

The claimants advanced £1.5 million, plus interest, to Swisspro Asset Management AG under funding agreements. Mr Bobby Gill, Swisspro’s chairman and sole shareholder, signed four personal guarantees in favour of the claimant companies and emailed scanned signature pages to them.

Mr Gill denied liability. He argued that the guarantees had not been delivered because the complete documents and originals had not been exchanged at an intended completion meeting. Alternatively, he relied on alleged assurances that the guarantees would provide comfort only, operate as a sleeping pill, and not be enforced generally or after 31 March 2017.

The issues were whether the guarantees had been delivered and whether the alleged assurances established promissory estoppel or estoppel by representation.

1. Delivery. The guarantees were delivered unconditionally. Mr Gill signed the signature pages, had them witnessed, scanned them and sent them to a person he knew would receive them for the claimants. Objectively, that conduct indicated an immediate intention to be bound. The reference to a possible later meeting to sign originals did not impose escrow conditions.
2. The court distinguished Bibby Financial Services v Magson and others [2011] EWHC 2495 (QB), because in that case the parties intended amendments before finalisation. No such intention existed here. Applying Bank of Scotland v Henry Butcher & Co [2003] EWCA Civ 67, the sender could not rely on a private or uncommunicated reservation inconsistent with the deed’s face and the act of sending it.
3. Alleged assurances. The judge accepted that Mr Venkatesh described the guarantees as providing comfort and probably used the expression sleeping pill, meaning that they would not be called upon for minor defaults while business discussions continued. He rejected any representation that the guarantees were unenforceable or expired after a specified date.
4. The promissory-estoppel defence therefore failed. The accepted statements were neither clear nor unequivocal, and the claimants’ conduct was not inequitable. The judge further held, in an obiter discussion, that English authority strongly supports a requirement for a pre-existing legal relationship between promisor and promisee, as stated in Harvey v Dunbar Assets Plc [2017] EWCA Civ 60.
5. Even if the alleged promise had been made, the asserted reliance was entry into the very legal relationship whose terms were said to be varied. That inherent contradiction, together with the availability of collateral warranty, misrepresentation and estoppel by convention, provided no principled basis for extending promissory estoppel.
6. Estoppel by representation of fact also failed. Mr Gill did not show reliance on any representation in the sense required. The claim under the guarantees succeeded.