Waiver by estoppel

In European Asia (Hong Kong) Investment Ltd v Wong Shun On Anthony ([2010] HKEC 747) W’s father had agreed to sell a flat to E. The father died intestate between contract and completion (in respect of which time was of the essence). Completion had been due to take place on 28 January 2008. On 8 January, E’s solicitors wrote a letter to the effect that their client was prepared to defer completion for six months to allow time for letters of administration to be obtained. The letter went on to say that E would entertain a request for a further extension if extra time was still needed. The father’s solicitors replied the next day to say that they had not yet received any instructions. Not having heard any more by 8 October, E alleged that the agreement had been repudiated and sought the return of the deposit. W having obtained letters of administration, his solicitors responded that the agreement was still in existence and that the letter of 8 January had waived the stipulation that time was of the essence. W gave E 60 days’ notice to complete the agreement.

The court had to decide whether the letter of 8 January had simply deferred the completion date by six months (with time remaining of the essence) or whether it had waived the time of the essence stipulation. The court decided the case on the basis that the letter and W’s subsequent reliance on it gave rise to a waiver by estoppel, similar to, perhaps even the same as, a promissory estoppel.  Time was no longer of the essence. E had repudiated the agreement by not completing within the sixty day period set by W. W was entitled to forfeit the deposit and to sell the property free from any claim by E.

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