Topic: Estoppel

Submitted to: Mrs.Ambreen Abbasi

Submitted by: Lubna Iftikhar
Reg No: 4506/FSL/LLB/F-15
Subject: Law of Evidence-|
Dated: 20.Nov.2019

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Estoppel
Estoppel meaning in law:
The legal principal of estoppel keeps a party from alleging a fact or acting in a certain way, then
attempting to claim something in opposition to that fact or action later in the proceeding to suit
their purposes. In other words, a party cannot deny a fact that has already been settled as truth.
The truth may have been determined by a judicial decision, legislative act, or by the party’s own
acts, deeds, or representations. To explore this concept, consider the following estoppel
definition.

Definition of Estoppel:
A legal principle that prevents, or “stops,” someone from asserting a fact that is contradictory to
an already established truth.

What is an Estoppel:
When a court determines a party has done, or is attempting to do something, that should be
prevented or “stopped,” it issues an order of estoppel. The party is then said to be “estopped”
from taking that action, such as presenting the related evidence, or from making a
particular argument.

Example of Estoppel:
Maryann obtains a judgment of paternity in family court, showing that Steve is the father of her
baby. Later, Maryann seeks an order for Steve to pay child support. Because the issue of
paternity has already been established by the court, Steven is collaterally estopped (or “estopped
by record”) from claiming he is not the father in an attempt to avoid his child support
obligations.
Alternatively, if following the judgment of paternity, Steve requests custody of the baby,
Maryann would be equitably estopped from claiming Steven could not have custody because he
is not the father. In this case, equitable estoppel prevents Maryanne from changing her position
from her earlier claim, because Steve would suffer harm, in being denied custody, by the change.

Types of Estoppel:
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Estoppel by Matter of Record or Estoppel by Res Judicata
Estoppel by record means nothing more generally than that the matter is res Judicata. It belongs
more properly to the province of the pure procedure and is so dealt with in the Indian legislation.
Res judicata is an estoppels by judgment. It embraces all those rules, the common characteristic
of which is that final judicial decision of a tribunal of competent jurisdiction, once pronounced
between parties litigant, cannot be contradicted by anyone, as against any other of such parties,
in any subsequent litigation between the same parties respecting the same subject-matter. There
is a difference in the principles upon which the doctrines of res judicata and estoppel by
representation are based. Res judicata in this country is founded on the principle that there should
be an end to litigation as to any issue between the parties when once that issue has been directly
determined between them by a Court of competent jurisdiction, and it affects not only the
original parties but all others afterwards claiming under them and litigating under the same title.
It bars fresh litigation at the outset. Estoppel by representation is a rule of evidence based on the
principle that a man, who by his acts or statements has induced another to believe a thing to be
true, should not afterwards be heard to deny the truth of that thing to the prejudice of the other
who acted upon the belief so induced. Res judicata ousts the jurisdiction of the Court, while
estoppel merely shuts the mouth of a party. Estoppel does not forces and effect of judgment
depend on (1) nature of proceedings (2) forum on which it was pronounced mean anything more
than that a person shall not be allowed to say one thing at one time and the opposite of it at
another time while res judicata means nothing more than that a person shall not be heard to say
the same thing twice over. Estoppel by res judicata extends also to matters of admission
fundamental to the decision. A judgment by consent or default is as effective an estoppel
between the parties as a judgment whereby the Court exercises its mind on a contested case.

Example of Res Judicata in Real Estate Fraud Case

In 1999, Anita Davis loaned over $500,000 to several individuals who functioned as a real
property investment company, for the purpose of purchasing several properties, and fixing them
up for resale. Davis learned that the company had falsely inflated the values of the properties
they were to purchase with Davis’ money, and that they had no intention to ever rehabilitate the
properties. Davis filed a civil lawsuit claiming the company had defrauded her, and seeking
damages to the tune of nearly $1 million. At trial, the judge dismissed Davis’ claim with
prejudice, as she had not sufficiently proven her case.
Two years later, Davis filed a new lawsuit against the same investment company,
claiming breach of contract, as it had failed to make any payments on the four deed of trust notes
they had signed in the original loan transaction. Davis also claimed that, although plaintiffs had
surrendered the properties to her, she spent a great deal of money to make improvements to the
properties, but ultimately incurred a loss after the properties were sold.
In the new lawsuit, Davis requested over $164,000 in damages, plus interest, attorney’s fees, and
other costs of suing the defendants. The defendants requested that the Court dismiss her lawsuit
with a plea of res judicata, arguing that she was barred from bringing this claim by res judicata,
because her prior claim for fraud had been dismissed with prejudice. Defendants backed up this
argument by claiming the facts, accusations, and damages in the breach of contract case were the

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same as those in the fraud case. The circuit Court agreed with the defendants, and dismissed
Davis’ case with prejudice.
Davis appealed her case to the state of Virginia Supreme Court, which affirmed the requirements
of res judicata. The Court also reiterated that the party claiming the defense of res judicata must
prove, by a preponderance of the evidence, that the claim is barred by a prior judgment.
Davis first lawsuit claimed that the defendants committed actual fraud, and that she had relied on
their representations of the value of the collateral (the real properties) securing the deeds of trust,
which were false. To prove actual fraud, a plaintiff must prove to the Court that the defendants
intentionally and knowingly made a false representation about a material fact, with the intent to
mislead, and that the plaintiff’s damages were due to her reliance on the defendants’ statements.
The Court ruled that Davis’ lawsuit for breach of contract is identified as a separate claim. While
the claim for fraud required the plaintiff to prove that the defendants had intent to defraud her,
her claim for breach of contract required her to prove:
 That the deed of trust notes existed
 The defendants failed to pay the notes as agreed
 The amount and nature of Plaintiff’s damages based on defendants’ breach of contract
Evidence necessary to proving fraud is not only different from, but irrelevant to, proving a claim
of breach of contract. Because irrelevant evidence is not allowed to be presented, the two cases
were definitively of separate issues. The Court rejected the defendants’ claim of res judicata, and
concluded that the district court had erred in dismissing Davis’ claim for breach of contract.

Laches or Equitable Estoppel

The modern law of estoppel owes immensely to the doctrine of equity being founded on the
incidents of contracts or relations analogous to contracts coupled with the representations of
parties by a declaration, act, or omission. Estoppels that are not provided by statute law may, in
this country, be termed equitable estoppels. A man may be estopped not only from giving
particular evidence, but from doing acts, or relying upon any particular arguments or contention
which the rules of equity conscience prevent his using as against his opponent. This doctrine also
applies to a case where a person is given an unequivocal assurance and On the faith thereof, he
acts detrimental to his interest and he then suffers an irretrievable injury in that pursuit. In such a
case having made a promise, the maker thereof is precluded to resile therefrom.
However it has been held that section 115 is not exhaustive and there may be rules of estoppel
which may be applicable in India other than what is contained in that section.

Example:
Jessica takes her car to the mechanic to have some work done. During the process, the mechanic
accidentally slips with one of his tools and puts a small dent in Jessica’s car. He brings Jessica’s
attention to the dent and offers to fix it, but she says that it’s only cosmetic and not to worry
about it.

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Jessica cannot, then, file a lawsuit against the mechanic for damaging her car. If she were to do
so, she would be estopped by the courts, since her claim would run counter to her earlier
forgiveness of the damages that she had incurred because of the mechanic’s mistake.

Proprietary Estoppel
A legal precedent that will prevent a party from denying the right that another party has in the
first party’s property. The second party will have had costs in relation to the first party’s
property. Until 1986 the doctrine of proprietary estoppel was used as a way to bar litigants from
asserting their strict proprietary rights. The doctrine had not been used to give effect to promises
to leave property to someone in the future. It has developed into one of equity’s sharpest
instruments in its intervention in the common law and statutory regulation of land and the
distribution of assets on death. In such a manner, there is a balance to be struck between the need
to hold people for their bargains and promises.
In the case of Cobbe v Yeoman’s Row Management, the essentials of proprietary estoppels were
taken into consideration. The House of Lords in this case stated that Cobbe cannot make a claim
of proprietary estoppel, and also negated on the aspect of acquiring an interest as regards to a
constructive trust.

Example:
Pascoe v Turner [1979] WLR 431 Court of Appeal
The claimant and defendant lived together in a house owned by the claimant. They were not
married but lived as if they were. In 1973 he met another woman and left the defendant. He told
her she could have the house but never formally transferred the title. She remained in the house
and spent money on redecoration and improvements in the belief that she owned the house. He
was aware of her expenditure and belief but did nothing to prevent either. In 1976 he brought an
action seeking to evict her. She entered a defence and counter claim.
Held:
The defendant could remain in the house and was entitled to have the title transferred to her
through proprietary estoppel.

Collateral Estoppel
Collateral estoppel is included in the constitutional prohibition against double jeopardy, though it
is essentially a different concept. Double jeopardy prevents any individual from being re-tried for
the same crime. Collateral estoppel prevents any party, including the prosecutor in a criminal
matter, from seeking a different decision on a factual issue, or rule of law within a particular
case.

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There are a number of types of estoppel, each of which bars an action in court. Collateral
estoppel, also known as “issue preclusion,” or “estoppel by record,” prevents any party to a
lawsuit from asking the court to made a new decision on something that has already been
decided in a previous lawsuit involving any of the same parties. The purpose of this is to promote
consistent rulings in cases of identical facts. This principle often comes into play when related
cases are tried separately.

Example:
A civil lawsuit is filed against Norman, in which the Amanda claims Norman side-swiped
her car when he was driving recklessly, under the influence of alcohol. The plaintiff’s
passenger, Cindy, was very seriously injured in the accident. There were no witnesses to
the accident, neither party called the police, and
Amanda could offer no proof other than her own testimony that Norman smelled heavily
of alcohol. The judge rules that there is no proof of the DUI claim, and therefore that
assumption cannot be made in his judgment. He then rules in favor of Norman, denying
compensation to the plaintiff.
A few weeks later, the District Attorney files criminal charges against Norman for
causing near-fatal injuries to Cindy while driving recklessly, under the influence. When
the prosecutor attempts to have both Cindy and Amanda testify about Norman’s
obvious intoxication, Norman’s attorney may claim collateral estoppel. He may argue
that a decision had already been made by the civil court, regarding whether or not
Norman was driving under the influence.
In this example of collateral estoppel in a criminal case, it may be considered
inappropriate for the court to re-hear evidence on the same issue, and possibly make a
different decision from the civil court’s ruling.

Promissory Estoppel
The legal enforcement of a promise. Made by words or conduct to the promisee without the
consideration of the detriment it may cause. The doctrine of promissory estoppel does not fall
within the scope of section 115 as the section talks about representations made as to existing
facts whereas promissory estoppel deals with future promises.

Example:
Charles is ten years from retirement age, and has worked for the company for 19 years. One day
Charles is enticed to take on a very large project for the company, by the owner’s promise to pay
him a specified amount of money each year, over the duration of his retirement. This amount is
nearly 50 percent higher than his retirement amount would be otherwise.

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As the two discuss the project over dinner, the employer tells Charles that he would be able to
take his retirement early – as early as two years after getting the project off the ground. This plan
is made verbally, and as Charles undertakes the project, the employer supports it wholeheartedly,
providing funding, personnel, and everything else that is needed.

Two and a half years later, Charles retires as discussed, but his employer lets him know that,
because he retired early, his pension will be less than normal. Charles reminds him of their
agreement, but the employer tries to put it off as wine-infused musings between two “work
buddies,” saying he didn’t mean the retirement offer to be taken seriously.

In this example, promissory estoppel may be enforced by the court, as Charles relied upon his
employer’s offer (verbal contract), in making a major decision. Here, promissory estoppel
doctrine dictates that the employer could be legally estopped from not making good on his
promise.