Another solution or another problem?

October 9, 2015

The Court of Appeal gave judgment in the long running and multi party case of Blindley Heath Investments Limited v Bass (and others) [2015] EWCA Civ 1023 on Friday 9 October 2015. The case, included two juniors in chambers who acted for the successful parties: Hashim Reza and Timothy Carlisle

The factual background was a struggle for control of a company and the acquisition of 200 Sale Shares by a written Share Purchase Agreement, being a minority interest in that company’s shares. 

In fact, the Sale Shares were found to be subject to written rights of pre-emption. Those pre-emption rights would  (but for the favourable and recently upheld decision of the Court) have prevented the transfer or registration of the Sale Shares to the purchaser, and been a breach of the warranties given the vendors under the Share Purchase Agreement.  

Amongst other issues that arise in this unusual and significant case, is the extent to which the vendors and the purchaser were entitled to rely on the doctrine of estoppel by convention against a background of written agreements. It is unusual because it a modern example of the doctrine being successfully relied on at trial. Ordinarily, the doctrine does not require any actionable representation or promise to first have been made for an estoppel to arise. It is significant because the Court of Appeal in the Blindley Heath case, clarified that a mistaken recollection of a contractual document is not legally different from a state of “forgetfulness” of it. They held that whether the true state of affairs has been misappreciated, misremembered or forgotten should make no difference to whether the parties eventually adopted a common assumption for the purposes of the doctrine. It is also significant because the purchaser of the Sale Shares was found to have been entitled to benefit from the estoppel, even though it was not a party to the pre-emption agreements, amongst other things.