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FactsEdit

Palm and Vegetable Oils sold 250 tonnes of Malayan palm oil to Société Italo-Belge who in turn sold it to Conti. Under the contract the sellers were to give notice to the buyers of the ship's sailing "in writing as soon as possible after vessel's sailing". In breach of this condition Palm and Vegetable Oils were a month late in giving notice to the buyers. This breach by the sellers entitled Société Italo-Belge to reject the oil but they made no protest to the sellers about the lateness of the notice. On the same day (10 January, 1975) that Société Italo-Belge received the notice from Palm and Vegetable Oils they passed on the notice to Conti. On the 20 of January the buyers telexed the sellers requesting them to present the documents direct to Conti which they did. Conti informed the buyers that they were rejecting the documents as being out of time and on 22 January Société Italo-Belge informed Palm and Vegetable Oils that they were rejecting the documents as being out of time. Palm and Vegetable Oils had to sell the oil on the open market and obtained only $460 per long ton; they claimed the difference between this price and the contract price of $792.50 per long ton.

IssueEdit

  1. Did the buyers waive their right to reject the sellers' tender of documents?
  2. Did the sellers rely on this representation for the purpose of the waiver?

DecisionEdit

Judgment for the buyers.

ReasonsEdit

Goff refers to the words of Cairns in Hughes v Metropolitan Railway Company, stating that a representator would not be allowed to enforce his rights where it would be inequitable as regards the dealings between the parties. In the case at bar, Société Italo-Belge did represent that they were waiving their right to reject the tender, but in order for Palm and Vegetable Oils to use estoppel, they would have had to rely on that representation in a way which would render it inequitable for Société Italo-Belge to enforce their rights. Referring to W.J. Alan & Co. v El Nasr Export & Import Co. and the principle that detrimental reliance is not necessary, he finds nothing on the evidence that there was any change in actions by the sellers which would make enforcement of the buyer's rights inequitable. Noting the very short time (two days) before notice was given, he found it impossible to infer any prejudice by the enforcement. As there was no reliance interest, the complete elements of promissory estoppel were absent and thus he found for Société Italo-Belge.

RatioEdit

  • Estoppel only takes effect where equity demands.
  • There must be action taken on the representation by the representer but no detriment to the representee is needed.
  • Estoppel is only a defence for the defendant.

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