The Post Chaser [1982] 1 All ER 19; [1981] 2 Lloyd’s Rep 695
Société Italo-Belge pour le Commerce et l’Industrie v Palm and Vegetable Oils (Malaysia) Sdn Bhd
Declaration of shipment, waiver and equitable estoppel.
Facts
The sellers agreed to sell a quantity of palm oil to buyers who had contracted to resell it to sub-buyers. The contract required a written declaration of shipment as soon as possible after the ship sailed. The sellers gave the declaration about a month after sailing, and the buyers did not protest at the delay.
At the buyers’ request, the sellers presented the documents directly to the sub-buyers. The sub-buyers rejected them, and the buyers followed suit. The sellers then sold the oil elsewhere for a lower price and claimed the difference as damages.
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Issue
Had the buyers lost their right to reject the documents because of the late declaration, through waiver or an equitable estoppel?
Decision and reasoning
The sellers’ claim failed. The request to present the documents to the sub-buyers amounted to a representation that the buyers would not insist on their strict rights. That did not, by itself, establish an equitable estoppel.
Robert Goff J explained that the sellers’ reliance had to make enforcement of those rights inequitable. Detriment was not invariably required: a party might have benefited from a representation yet organised its affairs so that withdrawal would be unfair. Equally, acting on a representation did not automatically establish that unfairness.
Here, the sellers presented the documents on the day of the representation, and rejection followed within two days. They had relied on it, but there was no evidence of resulting prejudice, and the short interval did not justify inferring any. The buyers could therefore exercise their right to reject. The decision turned on the absence of inequity, not an absence of reliance.
