Estoppel by Representation as a Defence to Restitution: The Exception Proves the Rule?

Extract

The recognition of the defence of change of position in Lipkin Gorman v. Karpnale Ltd. [1991] 2 A.C. 548 was a landmark for the law of restitution. In the ten years which have followed Lipkin Gorman, courts and academics have been involved in two, closely related, tasks: first, a description of the content and nature of the defence of change of position; and, secondly, an analysis of the relationship between change of position and other defences to restitution. An important aspect of the latter task has been the fundamental re-examination of the role of estoppel by representation as a defence to restitution. Two recent cases in the Court of Appeal, Scottish Equitable plc v. Derby [2001] 3 All E.R. 818 and National Westminster Bank plc v. Somer International (UK) Ltd. [2001] Lloyd’s Rep. Bank. 263, indicate that, although estoppel by representation remains a defence, the practical effect of the defence will often be much more limited than had been previously understood.