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Before I read Derby v Scottish Equitable in full an hour ago I was of the strong view that estoppel ought to survive. Estoppel is (as far as I know) a 'defence' which can be invoked against the assertion of any type of right. It seems anomalous that the only type of right against which it could not succeed would be where what is claimed is restitution of an unjust enrichment. Estoppel, unlike change of position, requires that the claimant has made a representation. Unlike the defence of change of position it does not show that the defendant is no longer enriched. Where it is invoked against a claim based upon unjust enrichment, estoppel prevents the claimant from asserting that the enrichment is unjust(-ified).

However, having read the following passage it seems to me that it can now be argued that the existence of the defence of change of position prevents the defendant, in the usual case, from establishing that he has detrimentally relied upon the claimant's statement:

'A pays £1000 to B, representing to him "I have carefully checked all the figures and this is all yours". B spends £250 on a party and puts £750 in the bank. A discovers that he has made a mistake and owed B nothing. He learns that B has spent £250 and he asks B to repay £750.

B: "You are estopped by your representation on which I have acted to my detriment."

A: "You have not acted to your detriment. You have had a good party, and at my expense, because I cannot recover the £250 back from you."

This is clearly a powerful argument. If, however, absent the representation, B would not have thrown the party but queried the receipt of the money it is arguable that B's expenditure on the party was caused by the representation and not by the enrichment. If this is correct it might be argued that change of position ought to fail and, consequently, estoppel succeed. Derby v Scottish Equitable seems to reject this.

It might of course be thought problematic that the correct characterisation of a claim as being one based upon unjust enrichment or otherwise determines the applicability of the defence of estoppel The characterisation exercise is not a very easy one. The recognition of the defence of change of position already necessitates this enquiry however.

Any remaining scope for the defence of estoppel may turn upon the scope of the defence of change of position. For example

D represents to E "I have carefully checked all the figures and I owe you £1000". In reliance upon this statement E spends £250 on a party. D pays E £1000.

If change of position in anticipation of an receipt is not a defence then estoppel ought to succeed.

The only other argument I can think of is that there may be cases where the non-recognition of the defence of estoppel in claims for restitution might lead to incoherent results where a claimant was estopped from asserting some rights but not others. For example:

The Inland Revenue represent to F that he has overpaid £1000 during the tax year. In reliance upon this representation F spends £250 on a party. The inland revenue pay F £1000. In fact F has underpaid the Revenue £2000. Is the Revenue estopped from claiming the unpaid tax from F but not estopped from seeking restitution of the money reimbursed?

Sorry for writing so much.

Robert Stevens

----- Original Message -----
From: "Nicholas Briggs"
Sent: Thursday, March 22, 2001 11:09 AM
Subject: [RDG:] FW: [RDG:] Answers on a postcard

You can find a full transcript on Casetrack.com. The case number is A2/00/0418 or for those of you who are familiar with the neutral citation [2001] EWCA CIV 369. The CA have ducked the issue of whether estoppel survives the defence of change of position. The Court said that it would leave that question for another case (curious as there was a direct finding of fact at first instance in relation to estoppel). A member of my chambers shall be running the argument that estoppel does survive. The Court of Appeal adjourned the hearing pending the outcome of Derby and have acknowledged that the argument is live. The matter is called National Westminster Bank Plc v Somer International and is due to be heard in the Court of Appeal on 9 April 200. All arguments to support estoppel gratefully received.