Willmott v Barber

In Willmott v Barber ((1880) L.R. 15 Ch. D. 96) B was tenant of three acres of land. He granted W a lease of one acre and W spent money on that land and certain neighbouring land of his. B also granted W an option to purchase B’s lease of the three acres. W sought to exercise the option. B’s lease provided that the lease could not be assigned without the landlord’s prior written consent. The landlord refused to give consent and B refused to assign the lease to W. W sought specific performance as against Barber and an order compelling the landlord to give his consent to the assignment. As against the landlord he relied on estoppel on the basis that the landlord had allowed B to spend money on the land in the mistaken belief that he would be able to exercise the option.

The action failed as against B since there would be no order for specific performance to compel B to act in breach of his prior agreement with his landlord. The action failed as against the landlord since the landlord had no way of knowing about W’s mistake concerning his legal rights. Was it a ‘fraud’ for L to insist that there could be no assignment without his written consent (as provided for in the lease to Barber)? Fry J. said:

‘It requires very strong evidence to induce the Court to deprive a man of his legal right when he has expressly stipulated that he shall be bound only by a written document. It has been said that the acquiesence which will deprive a man of his legal rights must amount to fraud, and in my view that is an abbreviated statement of a very true proposition. A man is not to be deprived of his legal rights unless he has acted in such a way as would make it fraudulent for him to set up those rights.’ (at 105)

Fry J. then proceeds to list five factors which he thought would have to be present:

‘In the first place the plaintiff must have made a mistake as to his legal rights. Secondly, the plaintiff must have expended some money or must have done some act (not necessarily upon the defendant’s land) on the faith of his mistaken belief. Thirdly, the defendant, the possessor of the legal right, must know of the existence of his own right which is inconsistent with the right claimed by the plaintiff. If he does not know of it he is in the same position as the plaintiff, and the doctrine of acquiescence is founded upon conduct with a knowledge of your legal rights. Fourthly, the defendant, the possessor of the legal right, must know of the plaintiff’s mistaken belief of his rights. If he does not, there is nothing which calls upon him to assert his own rights. Lastly, the defendant, the possessor of the legal right, must have encouraged the plaintiff in his expenditure of money or in the other acts which he has done, either directly or by abstaining from asserting his legal right. Where all these elements exist, there is fraud of such a nature as will entitle the Court to restrain the possessor of the legal right from exercising it, but, in my judgment, nothing short of this will do.’ (105 – 106)

The landlord did not (at the relevant time) know of his own rights nor of W’s mistaken belief. Nor had W’s expenditure necessarily arisen from a belief that he could exercise the option. He could insist on the lease term providing that his written consent to an assignment was needed.

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