Facts
- Baird Textile Holdings Ltd supplied goods to Marks & Spencer plc under a longstanding supply arrangement.
- Baird claimed Marks & Spencer’s conduct implied an ongoing, stable partnership, on which Baird relied to its detriment.
- No formal written contract existed detailing the duration or conditions of the relationship.
- Baird sought to found a proprietary estoppel claim, arguing that M&S’s conduct amounted to a promise of continued business.
Issues
- Whether proprietary estoppel can be established based on implied or vague promises without specific and definite terms.
- Whether Baird’s reliance on Marks & Spencer’s conduct, leading to alleged loss, satisfied the requirements for proprietary estoppel.
- Whether loss from reliance must be directly attributable to a precise promise or assurance.
- Whether the doctrine of proprietary estoppel can prevent unfairness in the absence of clear assurances.
Decision
- The Court of Appeal held that proprietary estoppel requires a clear and definite promise or assurance.
- Implied or vague understandings of a relationship’s continuation were not sufficient to found an estoppel claim.
- The court found that Baird had not received a sufficiently precise promise from Marks & Spencer regarding future business.
- Baird’s claim failed as the reliance and loss alleged could not be directly linked to a definite assurance by Marks & Spencer.
Legal Principles
- Proprietary estoppel requires a definite and precise promise or assurance, not merely open-ended or implied understandings.
- Loss from reliance is only relevant where it stems directly from acting on a specific promise.
- The doctrine operates to prevent unfairness but does not extend to cases where promises cannot be clearly established or linked to loss.
- Written contracts are not always necessary, but the promise or assurance must be sufficiently certain to support a legal remedy.
- The court distinguished successful estoppel claims, such as in Gillett v Holt, Crabb v Arun District Council, and Thorner v Major, on the basis that clear and actionable promises were made in those cases.
Conclusion
The Court of Appeal in Baird Textile Holdings Ltd v Marks & Spencer plc determined that proprietary estoppel cannot be founded on vague or implied promises; only specific, definite assurances linked directly to reliance and loss will satisfy the doctrine’s requirements.
