DAVID RAYMOND BRIERLEY v FRANK OTUO & Ors

An estoppel by convention requires a shared assumption, an expression of that assumption sufficient to establish responsibility for it, reliance, subsequent mutual dealings, and detriment or benefit making it unjust or unconscionable to resile.

Unilateral reliance on a shared assumption is insufficient where it is not connected with mutual dealings. Relief must also reflect the actual influence of the assumption and must not confer a disproportionate windfall. Unassessed costs are not included in the sum required to redeem charging orders where the orders do not charge the relevant property with those costs.

The judgment concerned two related property and costs claims between former business partners. The court considered an application by the defendants for a declaration that the claimant was estopped by convention from departing from a redemption figure stated in October 2021.

The court also determined whether unassessed costs could be included in the sum required to discharge charging orders over property. The claimant had obtained charging orders securing certain costs, but some costs remained unassessed after a default costs certificate was set aside.

1. Estoppel by convention. The court applied the principles approved in Tinkler v HMRC and derived from HM Revenue and Customs v Benchdollar Ltd, as amended by Dixon v Blindley Heath Investments Ltd. The requirements were a shared assumption; an expression of that assumption giving rise to responsibility; reliance; reliance in connection with subsequent mutual dealings; and detriment or benefit sufficient to make resiling unjust or unconscionable.
2. The claimant’s letter of 12 November 2021 and silence in response to the points of dispute established a shared assumption that £246,366.64 was the total redemption sum, and satisfied the first two requirements.
3. The defendants failed to establish sufficient reliance. Their decision to seek only £60,000 in funding depended not only on the stated redemption figure but also on their own assessment of the merits of challenges to the claimant’s calculations. The alleged reliance was also unilateral and did not arise from subsequent mutual dealings between the parties.
4. The alleged detriment was inadequately proved. There was no sufficient evidence that more borrowing had been available or that it would have covered the additional interest. The defendants remained able to challenge the interest calculations. Any benefit to the claimant from recovering interest was not a benefit conferred by the defendants’ reliance.
5. Even if an estoppel had arisen, relieving the defendants from paying interest would have produced a windfall disproportionate to any disadvantage. The estoppel application was therefore dismissed.
6. Unassessed costs. The order of 2 August 2019 required payment from sale proceeds of amounts due under costs orders, but was not itself a charging order. The charging orders in issue did not charge the property with unassessed costs. The total sum required to discharge those charging orders therefore excluded the unassessed costs. Further submissions were invited on consequential directions.