The Caisse populaire had obtained a judgment against Robichaud for $3,788.80. Robichaud entered into an agreement with Avco who negotiated a settlement with the Caisse who accepted $1,000 to release Robichaud from the judgment. The Board of the Caisse later resolved not to ratify the agreement made between Avco and the Caisse and did not cash the $1,000 cheque sent by Avco's solicitor. Robichaud brought an action to have the settlement agreement upheld and to have the Caisse's judgment against him struck out. The Caisse claimed that promise to forego payment of full amount was void for want of consideration.
- Can the court enforce an agreement in which the creditor accepted partial payment in full satisfaction of a debt?
- Can estoppel be used as a cause of action?
Angers held that it would be easy for the court to decide there is or is not consideration in such a case to give effect to such an agreement. In the case at bar, he finds that the Caisse knowingly entered into the agreement, knowing fully what the consequences of such an agreement would be. While generally partial payment is not sufficient consideration (Foakes v Beer), in this case the legally sufficient consideration was the saving of time, effort, and expense on the part of the Caisse (Williams v Roffey Bros. & Nicholls (Contractors) Ltd.). Angers held the role of the court in such a situation was simply to determine if the agreement was reached with full knowledge and consent (no duress).
Rice's concurring judgment dealt with Robichaud's argument for relief on the basis of promissory estoppel. After reviewing the case law and agreeing that estoppel can only be invoked as a defence, he writes that the distinction between estoppel as a ground for defence but not as a ground for action has been widely critiqued. Finding that in the case at bar the Caisse could invoke promissory estoppel against Robichaud, he found it contrary to the equitable principle of estoppel that Robichaud would not be able to utilize it in an action. Robichaud changed his position to his detriment in reliance on the promise of the Caisse, and thus is entitled to a judgment.
- Estoppel can be used as a cause of action.
- If the court can find legally sufficient consideration, even one of time/effort/expense, it can enforce a promise to accept less.