Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd

[HOUSE OF LORDS]

AND

Arbitration - Special case - Findings of fact - Contracts for sale of cocoa providing for payment in Nigerian pounds in Lagos - Buyers' claim that contracts varied to permit payment in sterling - Estoppel - Umpire's finding that sellers represented that they would accept "pound for pound" - Whether binding - Whether finding of fact

Estoppel - Representation - Ambiguity - Interpretation of recipient - Whether creating estoppel

Contracts between the appellant buyers and the respondent sellers for the sale and purchase of cocoa provided for payment in Nigerian pounds in Lagos. In August 1966 the sellers' London customers, including the buyers, were concerned about their inability to cover forward in respect of contracts expressed in terms of Nigerian currency. As a result, in July 1967 the sellers consented to the price being expressed in sterling in contracts made after September 1. That concession was, however, withdrawn by letter of August 29, 1967. On September 20 the buyers' agents asked if the sellers would "agree to accept payment against documents in sterling in Lagos as a temporary alternative." The sellers replied on September 30, saying:

"Payment terms. I write to confirm that payment can be made in sterling and in Lagos ... you are at liberty to make payment in sterling not only with contracts already entered into but also with future contracts."

On November 18, 1967, the pound sterling was devalued and, as a result, was worth about 15 per cent. less than the Nigerian

pound. The buyers claimed that the effect of the letter of September 30 was that in respect of contracts then open they were entitled to make payment in sterling in Lagos on the basis of one pound sterling for one nigerian pound. The sellers did not accept that, and the dispute was referred to arbitration. Before the umpire, arbitrators having disagreed, the buyers contended (i) that the letters of September 20 and 30 had varied the terms of the contracts, (ii) that in any event the sellers were estopped from disavowing an obligation to accept payment as if the price had been expressed in sterling of the same nominal amount. The umpire held in favour of the buyers, holding that by the letter of September 30 the sellers had represented that they would accept payment as if the price in the contracts had been expressed in sterling of the same nominal amount and that the buyers had relied on that representation to their detriment. At the request of the parties he stated a special case for the opinion of the court in which he recorded that they had expressed their wish to be in a position to argue "any point of law" and that the question should be stated "in the widest terms." The question which he stated was. "Whether on the facts found the buyers are entitled to the relief claimed. ... I hold that they are." He attached the pleadings, specimen contract documents and the correspondence to the award as forming part of it. Roskill J. felt that he was bound by the umpire's findings and upheld the award, but the Court of Appeal allowed an appeal by the sellers, holding that the true construction of the letter of September 30 was a matter of law for the court on which the finding of the umpire was not binding, that on its true construction that letter had not affected the money of account but only the money of payment and that the sellers were not estopped from relying on its true construction.

On appeal by the buyers, contending that the umpire's findings as to the representations made by the sellers were final and binding and that those representations had given rise to a promissory estoppel in their favour:-

Held, dismissing the appeal, (1) that the umpire had intended to place before the court the entire material on which he had founded his conclusions, whether those were inferences of fact or conclusions of law, and that the House was free to deal with his award on the footing that he had done so (post, pp. 753B, 758D-E, 761F, 766C-E, 770G-H).

(2) That the meaning of the sellers' letter of September 30, 1967, was a question of construction in the surrounding circumstances as stated in the award and not one of fact (post, pp. 753C, 758D-E, 761F, 766C-D, 770D-E); and that, on their true construction, the letters of September 20 and 30 referred to payment of the purchase price in sterling and not its measurement in sterling (post, pp. 755D, 761B, G, 767B, 770B-C).

(3) That to found a promissory estoppel a representation had to be clear and unequivocal, i.e., so expressed that, farfetched or strained interpretations apart, it would be understood in the sense required; and that the representation in the letter of September 30, 1967, which had not been sufficiently precise to amount to a variation of the contracts, could equally not found an estoppel as contended for by the buyers (post, pp. 755F-G, 756C-F, 757G - 758B, 761D-E, 762C-D, 767F - 768A, H - 769B, H - 770B, 771C-E).

Low v. Bouverie [1891] 3 Ch. 82, C.A. approved.

Dictum of McNair J. in Marquess of Bute v. Barclays Bank Ltd. [1955] 1 Q.B. 202, 213 considered.

Decision of the Court of Appeal [1971] 2 Q.B. 23; [1971] 2 W.L.R. 272; [1971] 1 All E.R. 665 affirmed.

The following cases are referred to in their Lordships' opinions:

Arkwright v. Newbold (1881) 17 Ch.D. 301, C.A.

Bute (Marquess of) v. Barclays Bank Ltd. [1955] 1 Q.B. 202; [1954] 3 W.L.R. 741; [1954] 3 All ER. 365.

Canadian and Dominion Sugar Co. Ltd. v. Canadian National (West Indies) Steamships Ltd. [1947] A.C. 46, P.C.

Capel & Co. v. Sim's Ships Composition Co. (1888) 58 L.T.N.S. 807.

Capital and Counties Bank Ltd. v. Henty (1882) 7 App.Cas. 741, H.L.(E.).

Central London Property Trust Ltd. v. High Trees House Ltd. [1947] K.B. 130; [1956] 1 All E.R. 256.

Clarke v. Dickson (1859) 6 C.B.N.S. 453.

Derry v. Peek (1889) 14 App.Cas. 337, H.L.(E.).

Gillespie Bros. & Co. v. Thompson Bros. & Co. (1922) 13 Ll.L.Rep. 519, C.A.

Hughes v. Metropolitan Railway Co. (1877) 2 App.Cas. 439, H.L.(E.).

Ireland v. Livingston (1872) L.R. 5 H.L. 395, H.L.(E.).

Low v. Bouverie [1891] 3 Ch. 82, C.A.

Nello Simoni v. A/S M/S Straum (1949) 83 Ll.L.Rep. 157.

Smith v. Chadwick (1882) 20 Ch.D. 27, C.A.; (1884) 9 App.Cas. 187, H.L.(E.).

Tersons Ltd. v. Stevenage Development Corporation [1965] 1 Q.B. 37; [1964] 2 W.L.R. 225; [1963] 3 All E.R. 863, C.A.

The following additional cases were cited in argument:

Birmingham and District Land Co. v. London & North Western Railway Co. (1888) 40 Ch.D. 268, C.A.

Freeman v. Cooke (1848) 2 Exch. 654.

Lyle-Meller v. A. Lewis & Co. (Westminster) Ltd. [1956] 1 W.L.R. 29; [1956] 1 All E.R. 247, C.A.

APPEAL from the Court of Appeal.

This was an appeal by Woodhouse A.C. Israel Cocoa Ltd. S.A. and A.C. Israel Cocoa Inc. ("the buyers") by leave of the Court of Appeal from their decision on November 24, 1970, by which they allowed an appeal by the respondents, Nigerian Produce Marketing Co. Ltd. ("the sellers") from the judgment of Roskill J. [1971] 2 Q.B. 23, 28-48 on February 11, 1970. By his judgment, Roskill J. upheld the award stated in the form of a special case of an arbitration tribunal appointed by the Cocoa Association of London Ltd. (umpire: R. E. R. Dowling, Esq.) in favour of the claimant buyers, which the sellers sought to set aside.

In his award, the umpire stated that he found the following facts:

1. The sellers had sold cocoa to members of the Cocoa Association of London Ltd. (hereinafter referred to as "the C.A.L.") for a considerable number of years. Before about october 1963 contracts entered into on CAL Form A.11 were for a price expressed in sterling. From about october 1963, at the request of the sellers, contracts entered into on the form were for a price expressed in Nigerian currency. The contracts

entered into between the buyers and the sellers which were the subject of the dispute were all for a price expressed in Nigerian currency. The practice of contracting in Nigerian currency contrasted with the practice which prevailed in dealings between Ghana and members of the C.A.L. where the contracts were for a price expressed in sterling.

2. At all material times Woodhouse Drake & Carey Ltd. (hereinafter referred to as "Woodhouse") acted as agents for the buyers both in entering into contracts on their behalf and [in] making payments under such contracts. The existence and scope of that agency was known to the sellers.

3. It was the general policy of Woodhouse as agents for the buyers to cover forward outstanding exchange transactions in respect of currencies other than sterling.

4. There was in practice no available forward market in Nigerian currency. On the other hand, there was at no time any difficulty in obtaining spot Nigerian currency to pay accounts on due date. In paying such accounts, the buyers had at all times paid the transfer charges necessary to procure payment in Nigerian currency in Lagos. Those charges were a charge of 1/8 per cent. for exchanging sterling into Nigerian currency, a charge for transferring funds of 1/16 per cent. with a maximum of �3 2s. 6d. and a small cable charge. The sellers were fully aware of those facts.

5. In the summer of 1966 the parties commenced the correspondence which had given rise to the dispute. The umpire was asked to record the objection of the sellers to the admissibility of evidence on behalf of the buyers (the sellers adduced no evidence) of the intention and understanding of the C.A.L. and Woodhouse during that correspondence. He had given no weight to such evidence in determining the meaning of the correspondence. He had, however, considered the evidence in deciding whether Woodhouse on behalf of the buyers relied upon the result of such correspondence.

6. In their letter of August 16, 1966, C.A.L. made clear to the sellers that they were concerned about their inability to cover forward in respect of contracts expressed in terms of Nigerian currency. Thereby the C.A.L. made clear to the sellers that they were concerned with securing the expression of the price in contracts in terms of sterling so as to obviate the need to cover forward and that they were not concerned with the money of payment. The sellers were therefore aware that the C.A.L. were seeking a return to the practice whereby the price of contracts was expressed in sterling. By their letter of August 3, 1967, to Woodhouse, of which advance notice had been given to the C.A.L. and by the C.A.L. to Woodhouse in letters of July 28, 1967, and August 2, 1967, respectively, the sellers offered to accept payment as if the price under the contracts had been expressed in sterling; that offer was made in relation both to concluded contracts and to future contracts. By their letter of August 29, 1967, the claimants withdrew their offer in relation to contracts to be entered into after September 1. By their letter of August 29, 1967, Woodhouse had, however, on behalf of the buyers Woodhouse A.C. Israel Cocoa Ltd. accepted the sellers' offer. That acceptance operated in relation to the contracts dated June 21, June 22, June 26, August 11 (two contracts), August 17 and August 22, 1967. Those contracts were thereby varied.

7. The C.A.L. made further representations to the sellers after receipt

of the letter of August 29, 1967. In the course of correspondence, the sellers represented by the letter of September 30, 1967, that in respect of contracts then open (which included the 14 contracts in dispute) they were prepared to accept payment as if the price in the contracts had been expressed in sterling of the same nominal amount.

8. The contents of the letter of September 30, 1967, were communicated to Woodhouse on behalf of the buyers and the sellers were informed of that fact on October 5, 1967. Thereafter Woodhouse reasonably regarded all open contracts as though the price was expressed in sterling of the same nominal amount. Mr. Coventry Woodhouse gave evidence that, although it was believed probable that in the event of a sterling devaluation there would be an equivalent percentage devaluation of Nigerian currency, he was concerned about the possibility that Nigerian currency might not follow sterling. Therefore he would, prior to the devaluation of sterling in 1967, have made some attempt to hedge the buyers' contractual commitments or to attempt to obtain insurance cover so as to protect the buyers against their exchange exposure under their contracts with the sellers. The umpire accepted his evidence that because of the representations made by the sellers he did not make any such attempts. Therefore the buyers relied on the representations of the sellers.

9. The pound sterling was devalued in terms of Nigerian currency on November 18, 1967.

10. After devaluation, in all contracts on Form CAL A.11 made between the buyers and the sellers the price was denominated in sterling.

11. The due dates for payment against documents for the relevant shipments under all the said contracts fell after November 18, 1967.

12. The sellers insisted upon payment of prices as if measured in Nigerian currency of the amounts expressed in the contracts, and threatened to suspend shipments unless they were paid accordingly. The buyers therefore, under protest and with full reservation of their legal rights, paid the full amounts claimed.

[The contracts provided that any dispute thereunder should be settled by arbitration as provided for by the rules, regulations and by-laws of the C.A.L. Pursuant to those rules and regulations arbitrators were appointed, and the umpire was appointed in the case of disagreement between the arbitrators. The arbitrators disagreed.] The umpire's award continued:

13. The umpire had been requested by both parties to state a case for the opinion of the court on a point of law. The parties had indicated that they wished to be able to argue any point of law and had therefore asked him to state a case in wide terms. He had acceded to their request.

14. "The question for the court and my findings thereon are: Whether on the facts found the buyers are entitled to the relief claimed or any part thereof. I hold that they are."

15."The pleadings in the arbitration, a specimen set of contract documents relating to each claimant and [the correspondence] are attached to and form part of this award."

The umpire awarded that the sellers paid to the buyers Woodhouse A.C. Israel Cocoa Ltd. S.A. �60,226 15s. 1d. with interest at 6 per cent. per annum from the date or dates upon which sums had been paid to the

sellers until the date of payment to the buyers and that the sellers paid to the buyers A.C. Israel Cocoa Inc. �105,243 12s. 5d. with interest thereon at the rate of 6 per cent. from the date or dates upon which that sum had been paid to the sellers until the date of payment to the buyers, with costs against the sellers.

The sellers sought to set that award aside. Roskill J. felt that he was bound by the umpire's findings and upheld the award. The Court of Appeal allowed an appeal by the sellers and made an award in an alternative form agreed to by the parties.

The buyers appealed, contending by their written case that the appeal should be allowed for the following, among other, reasons: 1. Because the umpire's findings as to the representations made by the sellers were final and binding. 2. Because the umpire's finding that the buyers reasonably understood the representations in a particular sense was final and binding. 3. Because the sellers were estopped by the said findings from denying that the contract prices fell to be read as if expressed in sterling of the same nominal amounts or alternatively because the sellers had waived their right to contend otherwise. 4. Because the representations had been understood by the buyers in their natural and ordinary meaning in the circumstances in which they were made. 5. Because, alternatively, the representations were capable of bearing that meaning and the buyers had reasonably understood and relied on them in that sense. 6. Because in the premises the contracts had been varied by the 1966-1967 correspondence as the umpire had found so that the contract prices were to be regarded as expressed in sterling, or had become payable in sterling, of the same nominal amount.

The effect of the material documents and correspondence is referred to in their Lordships' opinions, the letters of September 20 and 30 being set out in full by Lord Cross of Chelsea, post, p. 765C-F.

R. A. MacCrindle Q.C. and Anthony Evans for the buyers.

The form of the question stated by the umpire for the court is important. It asks it to assume that the facts found are correctly found; the only question left to it is whether on those facts the buyers were entitled to relief. The umpire is not leaving to the court the question whether there was any evidence on which he could find such facts, nor any similar question.

It is accepted that the letter from Mr. McLoughlin of overseas Buyers Ltd. to Mr. Oluyide of the sellers of July 12, 1966, was not making any variation in the contract. It was between other parties and was dealing with future contracts.

"Cost" in the sellers' letter to the Cocoa Association of London Ltd. of July 28, 1967, refers back to Mr. McLoughlin's letter to Mr. Oluyide of August 25, 1966. "Payment may be made" in the letter of July 28, 1967, and in that of the sellers to A.C. Israel Cocoa Inc. of August 3, 1967, relates to the currency of measurement of the price. If the sellers' letters were directed only to the money of payment then they gave nothing to the buyers, but all were proceeding on the footing that a concession had been made in order to meet the problem which the buyers had raised.

The umpire's finding that the buyers were entitled to the relief claimed is conclusive; the fact that he attaches the letter of August 3, 1967, does

not alter this. He does not leave to the court the question whether he was right in making his finding that thereby the sellers offered to accept payment as if the price under the contracts had been expressed in sterling.

The way in which the buyers put their case is not fundamentally different from that in which they put it in the Court of Appeal. They can succeed on any one of three alternatives: (1) The representation made in the letters of August 3 and September 30, 1967, did mean what the umpire held it to mean in the circumstances (the buyers are content to accept that this is a matter of law or construction). (2) At all events, the representation was capable of being reasonably understood as the umpire found that it was understood, and it was so understood and acted on. This would be sufficient to found promissory estoppel. (3) The relevant finding of the umpire (namely, that the sellers represented by their letters of September 30, 1967, that in respect of contracts then open they were prepared to accept payment as if the price in the contracts had been expressed in sterling of the same nominal amount) is a finding which cannot be attacked, either (a) because it is a finding of fact or (b) because, if it embraces a point of law, that is not a question which has been left to the court since the court has not been asked to consider whether there was evidence to support it. The appellants cannot phrase the question which the umpire has left to the court better than it is framed in paragraph 14 of his award: whether, in the light of his findings that the representation was made and understood and acted upon by the buyers, the buyers are entitled to rely on estoppel. Points (1) and (2) are argued on the basis that the court (contrary to (3)) is entitled to go behind the finding of the umpire.

Promissory and representational estoppel have been treated as much the same thing. [Reference was made to Birmingham and District Land Co. v. London & North Western Railway Co. (1888) 40 Ch.D. 268.] The concession granted by the respondents by their letter of September 30, 1967, was indefinite in duration, it could be withdrawn at any time so long as the person relying on it had not suffered any detriment. The parties would have to be put back in their original position. That is implicit in the passage in Birmingham and District Land Co. v. London & North Western Railway Co., 40 Ch.D. 268, per Bowen L.J., at p. 286. The parties must be put back in their original position, otherwise they would suffer a detriment. Since Denning L.J. explained the doctrine in his judgment in Lyle-Meller v. A. Lewis & Co. (Westminster) Ltd. [1956] 1 W.L.R. 29, 35 there have been an abundance of cases enunciating it; see also per Hodson L.J., at pp. 39-40, and per Morris L.J., at pp. 43-44. Intention is assessed objectively: see Freeman v. Cooke (1848) 2 Exch. 654, a case of representation by conduct, but the principle is the same.

As to submission (3) above, if this was a finding of law, it was such only to the extent that it embraced or involved in itself the answer to a question of law: that on the evidence and material before the umpire the words were capable of amounting to such a representation. In other words, the umpire must be deemed to have gone through the process of directing himself as if he were sitting with a jury. He should have asked himself: are the facts capable of amounting to a representation? If the Court of Appeal is correct, then the answer to that should have been

"no"; the umpire should not, figuratively speaking, have left the case to the jury. His finding, however, is equivalent to a jury's finding that such a representation was made in the present case. In cases of misrepresentation, one has to find out how far the question is one of law and how far it is one of fact. The matter is well put in Halsbury's Laws of England, 3rd. ed., vol. 26 (1959), p. 838, para. 1559. That is the orthodox approach. It should be the same with regard to representation. If it is the right approach, it follows that what the Court of Appeal in the present case has done is to say: "we do not think that the umpire was correct in finding that there was a representation, not because we are in a position to challenge his finding on fact but because we can challenge it on the law. There are no special facts." That is tantamount to saying that the arbitrator has not indicated in his award any circumstances which can be regarded as special. That would be legitimate in law only if the Court of Appeal had been able in law to assume that all the relevant material on which the arbitrator made his finding was set out in the award. If that was not so, then all that they are saying is: "maybe there was something, but it is not on the face of the award and, therefore, we must say that he is wrong in law." There is a logical gap unless the court can also say: "we do not think that there could ever be any circumstances in which the words used could be said to have this meaning."

If a party feels that the arbitrator is likely to make a finding of fact adverse to him and feels that there is no sufficient evidence on which that could properly be done, it is open to him to ask the arbitrator to state in his award the evidence on which the finding is based. Further, it is up to him to ask the arbitrator to state the question in the form of whether there was material on which the finding was capable of being made. If he does not do so, then he must take the facts as found.

The buyers do not concede that the court could take the view here that, looking realistically at the matter, there could not have been any material on which the umpire could find as he did. If the court were able to say: "he has in fact set out all the material relied on," and further were able to say that there was insufficient evidence on which any special meaning could be attached to the words used, then the result would no doubt be that the letter may be held to have been incapable in law of bearing the meaning which the umpire has found. But that is not the question which the court is asked here. Paragraph 7 of the award is not just a conclusion of law; it is also a finding of fact. The court is directed to try the matter on the basis of the facts found.

An arbitrator is a rather special form of tribunal. The parties take him for better or worse. If he makes a final award it cannot be set aside because he goes wrong in fact, nor because he goes wrong in law unless the error of law appears on the face of the award. This is subject to one qualification: in this country there is a further unique remedy in the form of an award in the form of a special case. This permits the court to investigate not the facts found nor the arbitrator's findings at large but only the question of law left to the court.

The buyers accept that it is a question of law to ask whether there was any or sufficient evidence or material before the tribunal of fact to permit it to find as it did. It follows that an arbitrator stating a special

case can of his own motion, or should if asked, state the question of law arising in either or both of two forms: (i) a pure or substantive point of law: (ii) only technically a question of law, namely whether there was sufficient evidence on which he could reach his findings of fact. But (ii) is not in the present case left to the court, and hence cannot be investigated.

With regard to the status of an arbitrator's award, see per Atkin L.J. in Gillespie Bros & Co. v. Thompson Bros & Co. (1922) 13 Ll.L.Rep. 519, 524. That is the right approach (it is not novel). It was taken a stage further - flowing from what Devlin J. had said in Nello Simoni v. A/SM/S Straum (1949) 83 Ll.L.Rep. 157 - in Tersons Ltd. v. Stevenage Development Corporation [1965] 1 Q.B. 37: see the question for judgment in that case at pp. 39, 45, 51. There the tribunal did adopt the procedure suggested by Atkin L.J.

So, here, the court is confined to the question specifically stated. The only question is a question which assumes that the umpire was correct in his finding of fact.

The fact that the representation was only made because one party asked the other to make it should not make any difference to Birmingham and District Land Co. v. London & North Western Railway Co., 40 Ch.D. 268.

[The House adjourned for a short time.]

[LORD HAILSHAM OF ST. MARYLEBONE L.C. The buyers should address the House on the assumption that at best the letters of August and September 30, 1967, were ambiguous, though it should not be assumed that that is the view which the House takes.]

On the assumption that the words were reasonably susceptible of more than one meaning - not so much to a lawyer but to a reasonable man - then the buyers' proposition (2) is sound: if the words would reasonably have been regarded by the buyers as bearing the meaning which is one of the meanings which a reasonable person could place on them and if the buyers relied on them then the sellers are estopped from denying that meaning.

There is little law in the authorities on the concept of an ambiguous representation: see Halsbury's Laws of England, 3rd ed., vol. 15 (1956), p. 230 (para. 431). The representation here was latently rather than patently unequivocal: see Spencer Bower and Turner on Estoppel by Representation, 2nd. ed. (1966), pp. 78-79 and Clarke v. Dickson (1859) 6 C.B.N.S. 453.

[LORD HAILSHAM OF ST. MARYLEBONE L.C. We are not helped by fraud or prospectus cases.]

There is a distinction, but the present is an a fortiori case. [Reference was made to Smith v. Chadwick (1882) 20 Ch.D. 27 and Low v. Bouverie [1891] 3 Ch. 82, 103.] The distinction which Bowen L.J. may have had in mind in Low v. Bouverie - see Freeman v. Cooke, 2 Exch. 654 - was between a representation which was patently equivocal and the situation where a reasonable man could quite reasonably interpret the representation in one sense only. [Reference was made to Marquess of Bute v. Barclays Bank Ltd. [1955] 1 Q.B. 202.] The present is a pure case of promissory estoppel. The doctrines of pure estoppel and representational estoppel stem from the same equitable principle. There is no reason in principle why,

in applying the doctrine of promissory estoppel, one should not apply the same test to words as to conduct. [Reference was made to Arkwright v. Newbold (1881) 17 Ch.D. 301, 322-323, per Cotton L.J., and Capel & Co. v. Sim's Ships Composition Co. (1888) 58 L.T.N.S. 807, 808-809 (not cited).] Ireland v. Livingston (1872) L.R. 5 H.L. 395 was not a case of construction of the contract and is not explicable except in the way the appellant here suggests on the basis of some doctrine of estoppel or equity preventing a man from going back on his words reasonably interpreted.

Michael Kerr Q.C. and T. H. Bingham for the sellers were not called on.

Their Lordships took time for consideration.

April 19. LORD HAILSHAM OF ST. MARYLEBONE L.C. My Lords, these proceedings arise out of an award by an umpire stated in the form of a special case and dated April 3, 1969. The parties to the proceedings are the vendors (respondents to this appeal) and the purchasers (the appellants) under 14 contracts for the sale c.i.f. Liverpool of Nigerian cocoa. All these contracts were still open at the time of the devaluation of the pound sterling on November 18, 1967. The sum involved in the dispute, in excess of �165,000, is considerable. But we were informed that a large number of other contracts, at least 75, raised similar points and that the total amount at stake ran into millions of pounds sterling. The sole question for determination is which of the parties had to bear the loss consequent on devaluation. This depends on the currency in which, at the date when payment became due, the purchase price was to be measured (the "currency of account"), it being conceded that at the material time the mode of discharge permitted payment in pounds sterling (the "currency of payment"). The difference is crucial. Before devaluation the Nigerian pound and the pound sterling were exactly equal in value. After devaluation the pound sterling was worth between 14 per cent. and 15 per cent. less than the Nigerian pound.

In the events which happened, the appellants paid in sterling the sum which was demanded of them by the vendors, since otherwise they would not have obtained delivery of the cocoa. But they paid under protest, reserving their rights, and then proceeded to arbitration. The two arbitrators having disagreed, the matter fell to be determined by the umpire. At the hearing before the umpire he recorded that both parties asked for the award to be stated in the form of a case, and indicated "that they wished to be able to argue any point of law and therefore asked me to state a case in wide terms." He added that he had acceded to this request. The award in the form of a special case which emerged was defective in form in as much as it only provided for what was to happen if the umpire's opinion was right. But this was not a point on which anything turned. The question formulated in the case for the opinion of the court was "whether on the facts found the claimants are entitled to the relief claimed or any part thereof." The relief claimed was the return of a sum of money equivalent to the amount paid under protest on the 14 contracts, being equal to the difference in sterling between the purchase price measured in Nigerian pounds and the same price measured in the same number of pounds sterling.

There is no dispute, and the award specifically stated, that the purchase

price in all the contracts was expressed to be in Nigerian pounds payable in cash in Lagos for 100 per cent. of the invoice amount against presentation and in exchange for shipping documents. The contracts were expressed to be c.i.f. Liverpool. Thus, if no change had been made in the contractual relationship between the parties after the conclusion of the contracts, the vendors' claim to be paid in a sum to be measured in Nigerian currency would have been unassailable.

The case for the purchasers was, and has remained throughout, that such a change had taken place as the result of letters and cables exchanged in the period of 15 months or so prior to devaluation, and in particular by an exchange of two documents dated September 20 and 30, 1967. These two documents took the form of a request emanating from the agents of the appellants, and a conditional acceptance by the respondents as to the "payment terms" of contracts then open. The appellants contended, and the umpire accepted, that the effect of these documents was such as to lead them reasonably to suppose that the purchase price of these contracts was to be measured as if it had been expressed in sterling of the same nominal amount, and not, as was in fact the case, in Nigerian pounds. They claimed that, relying on this construction, they acted to their detriment, since, believing as they did that they had nothing any longer to fear from devaluation, they did not, as they would otherwise have done, make an attempt, in the words of the award, "to hedge" their contractual commitments or to "attempt to obtain insurance cover so as to protect [them] against their exchange exposure under their contracts with the respondents." All the relevant documents, including the earlier correspondence and the two vital letters, were attached to the award and form part of it.

Before the umpire, the appellants argued (i) that the exchange of correspondence amounted to a variation in the contractual terms, and (ii) that in any event the respondents were precluded by way of estoppel from disavowing an obligation to accept payment as if the price had been expressed in sterling of the same nominal amount.

The umpire in fact decided that

"the respondents represented by the letter of September 30, 1967, that in respect of contracts then open (which included the 14 contracts in dispute) they were prepared to accept payment as if the price in the contracts had been expressed in sterling of the same nominal amount,"

that the appellants' agents "thereafter ... reasonably regarded all open contracts as though the price was expressed in sterling of the same nominal amount," and that they had acted accordingly to the appellants' detriment in the sense I have described, and came to the conclusion that in consequence the appellants were entitled to the relief claimed.

In addition to what he claimed to be what I might call the substantial merits of his case, these points of decision led counsel for the appellants to argue that the respondents were effectively stated out of court since, according to this contention, the umpire had made findings of fact which were not open to dispute in any court proceedings founded on the award, and findings of fact by the umpire were sacrosanct unless, which it was argued was not the case here, the umpire had distinctly raised the question

whether there was evidence or material on which he could found them. Accordingly, even if the umpire were wholly wrong, the contention for the appellants was that it was beyond the power of the court to put him right. In making this submission, counsel for the appellants drew our attention to Gillespie Bros. & Co. v. Thompson Bros. & Co. (1922) 13 Ll.L.Rep. 519 and especially to the remarks of Atkin L.J. at p. 524 and to Tersons Ltd. v. Stevenage Development Corporation [1965] 1 Q.B. 37 and especially to the passage there quoted, at p. 45, from the judgment of Devlin J. in Nello Simoni v. A/S M/S Straum (1949) 83 Ll.L.Rep. 157, 161.

Roskill J. came to the conclusion that the umpire's award must stand if only on this last, and somewhat technical, ground. The Court of Appeal (Lord Denning M.R., Phillimore L.J. and Cairns L.J.) unanimously came to the conclusion that it could not be upheld. The umpire, they considered, had been guilty of an error of law which appeared clearly on the face of the award, and nothing which he wrote in language more appropriate to a finding of fact could cure this error, or convert an erroneous decision of law into one of fact by which the court was bound.

Although the three questions raised on behalf of the appellants are logically distinct, they are very closely related. To answer any of them it is necessary first to consider the effect of the award itself, including the documents which the umpire attached to the award and made part of it.

At one stage of his argument counsel appeared to be suggesting that, though the umpire had been at great pains to state the facts in his award, and to incorporate as part of his award all the relevant documents, so that they could be referred to, nonetheless when it came to the point when he decided that

"the respondents represented by the letter of September 30, 1967, that ... they were prepared to accept payment as if the price in the contracts had been expressed in sterling of the same nominal amount"

he might in truth have been relying either on some oral evidence which is not in fact referred to or on some esoteric knowledge locked up in his breast and relating to the practice of the trade which he did not think it necessary to mention.

My Lords, I do not so read the umpire's award. He seems to have been at the greatest possible pains to place the court in possession of all the facts which he had considered relevant. He had not merely attached to the award all the documents which could be considered to have a bearing on the matter. He had been at pains to find in terms whether or not there was at the material time an available forward market in Nigerian currency. When it came to the oral evidence, he was careful to record the fact that the respondents had called none, and that he had given no weight to that of the claimants in determining the meaning of the correspondence, but had given consideration to it only for the purpose of considering whether the claimants' agent had "relied upon the result of such correspondence." At the conclusion of his award, he observed carefully that both parties had expressed their wish to be in a position to argue in court "any" (italics mine) "point of law," and that the case should be stated "in wide terms." Though it is true that he did not expressly state for the opinion of the court the question whether there was evidence on which he could found his

opinion, the question he did state for the opinion of the court was in these terms:

"The question for the court and my findings thereon are: Whether on the facts found the claimants are entitled to the relief claimed or any part thereof. I hold "(sic)" that they are."

I am sure that the correct view is that the umpire intended to state, and did state, the entire material on which he had founded his conclusions whether these were inferences of fact or conclusions of law, and I feel certain that this House is completely free to deal with his award on this footing.

On these assumptions, it is next material to discuss what was the meaning of the letter of September 30, 1967, on which all else depends. I find myself in complete agreement with the view of the Court of Appeal that, whether the matter be viewed as a question of estoppel or of variation, this is a question of law, and not an issue of fact. It might conceivably have been different if all the documents had not been made part of the award, or if all the relevant circumstances had not been fully exposed. But, on the course which the umpire rightly decided to pursue, the meaning of the letter of September 30, 1967, is a matter of construction in the light of the surrounding circumstances and not a matter of fact.

Apart from the fact of devaluation, the main circumstances surrounding the exchange of letters of September 20 and 30, 1967, were letters and cables passing between London and Nigeria between the summer of 1966 and the date at which payment became due under the contract. Apart from the circumstance, recorded by the umpire, that there was in practice no available forward market in Nigerian currency, it is not necessary to set these out at length. In August 1966 the London customers of the respondents, including the appellants, had made it clear, either directly or through the Cocoa Association of London Ltd. ("C.A.L.") that they were concerned about their inability to cover forward in respect of contracts expressed in terms of Nigerian currency. As a result of a correspondence, somewhat protracted in time, C.A.L. ultimately won for their members two concessions. The first applied to the terms on which future contracts, i.e. contracts concluded from September 1, 1967, would be negotiated. This concession was that payment might "be made in pound [s] sterling in London or �Nigerian in Lagos." The second concession applied to transactions already concluded and was to the effect that "payment may be made in pound[s] sterling provided the transfer charges are borne by the buyer concerned." So far as regards the latter point, it may well be that there was, for a time, a valid variation of existing contracts, though as regards the former, it can have amounted to no more than an agreement as to the terms which the parties would embody in future contracts.

However this may be, these arrangements were cancelled from the end of August 1967, and, when C.A.L. attempted to preserve the facility as regards existing contracts, they were conclusively and peremptorily rebuffed. On September 1, 1967, they had written: "It is assumed that sterling payment arrangements against contracts already concluded and accepted ... will still stand." To this the immediate reply dated September 6, 1967, was: "We are sorry we cannot agree with your assumption." This led to the exchange of letters which became the main subject of this dispute.

In reply to the letter of September 6, 1967, C.A.L. wrote on September 30, 1967:

"PAYMENT TERMS ... I am asked to reiterate the view of members that those who exercised the option offered in your letter of July 28 in regard to open contracts are still most disturbed by the cancellation of the facility. It is noted that you state circumstances outside your control caused you to withdraw. I am requested to ask if you can arrange to accept payment against documents in sterling in Lagos as a temporary alternative?"

To this came back the reply dated September 30, 1967:

"I write to confirm that payment can be made in sterling and in Lagos with the following provisos: (1) That the buyer will be responsible for the transfer charge; (2) that documents be made available in Lagos. If you are agreeable to these conditions, you are at liberty to make payment in sterling not only with contracts already entered into but also with future contracts."

This is the letter which the appellants contended amounted to the variation or representation, and which the umpire decided to be a representation that the vendors "were prepared to accept payment as if the price in the contracts had been expressed in sterling of the same nominal amount," so as to give rise to a promissory estoppel.

The letter was replied to on october 5, 1967, by C.A.L. in the following terms: "I ... thank you ... for your cooperation in this matter. The text of your letter has been circulated to all our interested members." This circulation took place, and the umpire found that the appellants thereafter acted on the representation (if such it was) in the sense explained.

It is on the basis of this exchange that the appellants now contend that, when devaluation came on November 18, 1967, they were entitled to pay a sum to the respondents which amounted, in Nigerian pounds, to a reduction of the purchase price of between 14 per cent. and 15 per cent.

It is fair to both sides to say that, when devaluation came, each placed his position on the record with commendable promptitude. On November 22, 1967, C.A.L. cabled to the respondents:

"Please pass following to managing director or secretary from Cocoa Association of London Ltd. The board of the C.A.L. presumes that you may now wish to revise for new business the arrangements made with our members in your letter 30th Sept. 1967 ref: 212/VOL 11/47 and confirm[ed] separately by you to some of our members whereby payment can be made in sterling in Lagos on the basis of one pound sterling for one Nigeria [n] pound provided the buyer pays the transfer charge which arrangements our members will be carrying out for all contracts concluded with N.P.M.C. up to November 1967 Please advise W. Galloway Secretary."

To which the answer came promptly enough dated November 23, 1967:

"Attention Mr. W. Galloway We acknowledge receipt of your message dated November 22, 1967, we sympathise with members of your association and others who have been adversely affected by the British

Government decision to devalue the pound sterling. We have to advise you however that the assumption of your board with regards to the insinuation that the basis of payment is one pound sterling for one Nigerian pound is incorrect. We wish to point out that our contracts with buyers are denominated in Nigerian pounds and we agreed and still agree that payments can be made in pound sterling. You will appreciate however that we are not in a position to renegotiate the contract price and all buyers must be aware that enough pound sterling must be provided to pay for the contract value. When contracts are made in Nigerian pounds payment can be made as we have agreed in our letter to you in sterling in Lagos. Enough sterling must be provided however to pay the full contract value. The procedure indicated in our letter of September 1967 Will still continue for the future."

As I have already said, I regard the meaning of the exchange of communications of September 20 and 30, 1967, as a question of construction for the court and not a question of fact. No doubt the letters must be construed in the light of the surrounding circumstances. But, in my opinion, these are stated in the award, and the decisive context is the previous correspondence which is attached to and forms part of the award. In my view, the letters do not bear the construction sought to be put upon them by the appellants. They refer to payment of the purchase price in sterling and not measurement of the purchase price in sterling. I must and do accept that both parties honestly believed in their respective constructions from the first. But I must point out that, in so far as there may be any ambiguity, and I do not myself think there is any, it originated in the letter of September 20 which came from the buyers and not in the reply originating from the sellers. I regard this as an important consideration, since at a given moment of the hearing their Lordships intimated to the appellants' counsel that in their Lordships' view he should address their Lordships on the assumption that on the most favourable construction for himself the effect of the crucial exchange of letters was ambiguous. I do not myself think there was ambiguity. But, on the assumption that there was, I agree with the Court of Appeal that such cases as Low v. Bouverie [1891] 3 Ch. 82 and Canadian and Dominion Sugar Co. Ltd. v. Canadian National (West Indies) Steamships Ltd. [1947] A.C. 46 are authority for the proposition that, to give rise to an estoppel, representations should be clear and unequivocal, and that, if a representation is not made in such a form as to comply with this requirement, it normally matters not that the representee should have misconstrued it and relied upon it.

In commenting on these authorities counsel for the appellants drew our attention to a number of dicta and cases which, he claimed, told in a contrary sense. The argument was that it was or could be the representor who was responsible for ambiguities if the representee reasonably misunderstood what was said to him and acted upon it. The short, and to my mind conclusive, answer to this line of reasoning in the present case is that the ambiguity, if any, in the whole correspondence originated from the alleged representee and not from the alleged representor, In such a case, I would have thought that justice, law and common sense demanded

that the alleged representor should not be made to bear any financial loss arising from the ambiguity. To my mind, this also disposes of the entire sequence of authority which the appellant sought to pray in aid. But, since the matter is of some general importance, I desire to add some general comments upon the authorities and quotations relied on by the appellants. The first of these was a dictum of McNair J. obiter in Marquess of Bute v. Barclays Bank Ltd. [1955] 1 Q.B. 202. In the course of a judgment in which he held that a particular representation relied on as giving rise to an estoppel was not clear and unequivocal in the required sense McNair J. is reported as saying, at p. 213: "the representation must be clear and unequivocal or at least reasonably understood to be clear and unequivocal" (italics mine). These words clearly give rise to considerable logical difficulties in exegesis, since, one would have thought, words are either clear and unequivocal, in which case they would be reasonably so understood, or not clear or not unequivocal, in which case a representee would not be reasonable in so understanding them. However that may be, it is reasonably clear that the words italicised above are unnecessary to the decision, and it is therefore for consideration how far, apart from them, there is or was any authority for the proposition. The researches of counsel led him to the citation of the well-known passage of Bowen L.J. in Low v. Bouverie [1891] 3 Ch. 82. But I do not think that this citation bears the weight sought to be placed upon it. Bowen L.J. said, at p. 106:

"... an estoppel, that is to say, the language upon which the estoppel is founded, must be precise and unambiguous. That does not necessarily mean that the language must be such that it cannot possibly be open to different constructions, but that it must be such as will be reasonably understood in a particular sense by the person to whom it is addressed."

I am satisfied that, in the second sentence of the above quotation, the meaning is to exclude far-fetched or strained, but still possible, interpretations, whilst still insisting on a sufficient precision and freedom from ambiguity to ensure that the representation will (not may) be reasonably understood in the particular sense required. I do not regard this second sentence as any authority for general qualification of the first. On the contrary, the first sentence governs the second and contains the very proposition for which Low v. Bouverie is rightly cited as an authority.

I am equally unimpressed with the applicability of the prospectus cases and fraud cases (some of them manifestly bearing marks of having been decided before Derry v. Peek (1889) 14 App.Cas. 337) which were pressed in the appellants' service in this context. Amongst these were Clarke v. Dickson (1859) 6 C.B.N.S. 453 and Smith v. Chadwick (1882) 20 Ch.D. 27; (1884) 9 App.Cas. 187. It must be reasonably obvious that if both representor and representee understand a representation in the same sense, and the representor is dishonest, he cannot thereafter be heard to say to his victim: "True you understood my words in this sense, and acted on them to your detriment, and I intended you to do so. But now that you have discovered that in this sense they were false, I now rely on another sense which they can possibly bear, but which I did not intend, and which I will now proceed to demonstrate is not false or was not the cause of

your acting to your detriment." There may be also cases where the originator of a document intended it to be acted on and may in appropriate instances have to bear the consequences of an ambiguity for which he is himself responsible. This may be particularly true in the cases of company prospectuses (cf. Arkwright v. Newbold (1881) 17 Ch.D. 301, especially at pp. 322, 323, and Capel & Co. v. Sim's Ships Composition Co. (1888) 58 L.T.N.S. 807, 809). It also appears to have been the underlying reasoning in Ireland v. Livingston (1872) L.R. 5 H.L. 395. That, however, was not a true case of estoppel but of a principal's obligations under a contract to his agent who took reasonable action on the principal's mandate of which the agent reasonably misunderstood the intended meaning. I think, however, that at least Lord Westbury would have been surprised to learn that his speech in your Lordships' House was being cited as an authority after the lapse of a century, when he had begun it with the words, at p. 417: "... this is a case which depends entirely on its own peculiar circumstances. There is hardly any principle involved in it." Ireland v. Livingston is referred to by Lord Denning M.R. in the present appeal as an exception [1971] 2 Q.B. 23, 59. I am not sure that this is right, but in any event I do not regard it as analogous to the present case. Nor do I think much useful analogy can be drawn from the respective functions of judge and jury in libel cases, as discussed, for instance, in Capital and Counties Bank Ltd. v. Henty (1882) 7 App.Cas. 741, 777.

Counsel for the appellants was asked whether he knew of any case in which an ambiguous statement had ever formed the basis of a purely promissory estoppel, as contended for here, as distinct from estoppel of a more familiar type based on factual misrepresentation. He candidly replied that he did not. I do not find this surprising, since it would really be an astonishing thing if, in the case of a genuine misunderstanding as to the meaning of an offer, the offeree could obtain by means of the doctrine of promissory estoppel something that he must fail to obtain under the conventional law of contract. I share the feeling of incredulity expressed by Lord Denning M.R. in the course of his judgment in the instant case when he said [1971] 2 Q.B. 23, 59-60:

"If the judge be right, it leads to this extraordinary consequence: letter which is not sufficient to vary a contract is, nevertheless, sufficient to work an estoppel - which will have the same effect as a variation."

There seem to me to be so many and such conclusive reasons for dismissing this appeal that it may be thought a work of supererogation to add yet another. But basically I feel convinced that there was never here any real room for the doctrine or estoppel at all. If the exchange of letters was not variation, I believe it was nothing. The buyers asked for a variation in the mode of discharge of a contract of sale. If the proposal meant what they claimed, and was accepted and acted upon, I venture to think that the vendors would have been bound by their acceptance at least until they gave reasonable notice to terminate, and I imagine that a modern court would have found no difficulty in discovering consideration for such a promise. Business men know their own business best even when they appear to grant an indulgence, and in the present case I do not think that

there would have been insuperable difficulty in spelling out consideration from the earlier correspondence. If, however, the two letters were insufficiently unambiguous and precise to form the basis, if accepted, for a variation in the contract I do not think their combined effect is sufficiently unambiguous or precise to form the basis of an estoppel which would produce the result of reducing the purchase price by no less than 14 per cent. against a vendor who had never consciously agreed to the proposition.

I desire to add that the time may soon come when the whole sequence of cases based on promissory estoppel since the war, beginning with Central London Property Trust Ltd. v. High Trees House Ltd. [1947] K.B. 130, may need to be reviewed and reduced to a coherent body of doctrine by the courts. I do not mean to say that any are to be regarded with suspicion. But as is common with an expanding doctrine they do raise problems of coherent exposition which have never been systematically explored. However this may be, we are not in a position to carry out this exploration here and in the present proceedings. It is sufficient to say here that, for the reasons I have given above, I would dismiss this appeal with costs.

VISCOUNT DILHORNE. My Lords, I have had the advantage of reading the speeches of my noble and learned friends, Lord Hailsham of St. Marylebone L.C. and Lord Cross of Chelsea, and I agree with their conclusions.

I too agree with the Court of Appeal that the construction to be placed on the important letter written by the respondents of September 30, 1967, is a question of law and not one of fact, and I also reject the contention advanced on behalf of the appellants that the umpire's conclusions as to the meaning of that letter cannot be questioned in this House. The umpire stated in his award in the form of a special case that he had been asked to state a case in wide terms as the parties had indicated that they wished to argue any point of law. If the appellants' contention was sound, far from the case being stated in terms wide enough for any point of law to be argued, the vital question of law, namely, the construction to be placed on that letter, could not be argued and the question for the court would have to be treated as drawn in very narrow terms: the House would have to accept that by that letter the respondents had represented that they were prepared to accept payment as if the price in the contracts had been expressed in sterling and not Nigerian currency and of the same nominal amount.

The real issue in dispute is whether that letter contained any such representation.

The umpire began his award with the words "I find the following facts." They were stated in the paragraphs that followed. In paragraph 6 the umpire refers to a number of earlier letters and states his opinion as to their meaning. In paragraph 7 he states the meaning he gave to the letter of September 30, 1967, and in paragraph 8 he concludes that the appellants relied on the representation which, in his view, that letter contained and had consequently made no attempt to hedge against the consequences of devaluation or to insure against them. Whether, there being no forward market in Nigerian currency, it would have been possible to do so is not known.

In my view, none of the umpire's conclusions as to the meaning to be placed on letters constitute findings of fact.

The contracts iu question clearly distinguish between the price at which the cocoa beans were bought (clause 3) and the mode of payment of that price (clause 12). Unfortunately the correspondence which began in 1966 did not do so.

The appellants were concerned about the possible effect of devaluation of the pound sterling if there was a time lag between the devaluation of sterling and that of the Nigerian pound. The Cocoa Association of London Ltd. (C.A.L.) on August 16, 1966, wrote to the respondents asking them to "consider reverting to your erstwhile practice of selling your produce (cocoa) for payment in sterling." While this letter might have been understood as referring only to the mode of payment, the position was made clear by the letter they wrote to the respondents on October 31, 1966. In that letter they asked the respondents whether they were able to deal "with the matter of contracting in sterling instead of Nigerian pounds." In their letter of July 28, 1967, in response to this request, the respondents said (1) that for transactions concluded from September 1, 1967, payment might be made in pounds sterling in London or in �N in Lagos; and (2) that for payments in respect of transactions already concluded in �N, payment might be made in pounds sterling provided the transfer charges were borne by the buyer concerned. The context shows that "transactions" in this letter meant "contracts."

Although the letter was headed "Payment Terms" and appeared to refer only to the mode of payment, it clearly was not intended by the respondents to have only that limited significance, for on August 3, 1967, or thereabouts they sent letters to their customers, including the appellants, which contained the following paragraph: "Will those buyers who wish to make future contracts in pound sterling, please let us know by return of post."

I therefore conclude that the respondents had, by their letter of July 28, 1967, intended to consent and had consented to the price being expressed in sterling in contracts made after September 1, 1967.

On August 29, 1967, the respondents withdrew "the option of payment in sterling ... which was to take effect from September 1."

The 14 contracts which are now the subject of dispute were made between May 5 and September 5, 1967. The respondents did not by their letter of August 29, withdraw the concession that they had made in relation to transactions already concluded.

It is against the background of this correspondence that the vital letters of September 20 and 30, 1967, have to be considered. In the letter of September 20 the secretary of C.A.L. wrote saying:

"I am asked to reiterate the view of members that those who exercised the option offered in your letter of July 28 in regard to open contracts are still most disturbed by the cancellation of the facility. It is noted that you state circumstances outside your control caused you to withdraw. I am requested to ask if you can arrange to accept payment against documents in sterling in Lagos as a temporary alternative?"

"Open contracts" in this letter must mean contracts under which

delivery of cocoa beans had not been made and in respect of which payment would become due, in other words, "transactions concluded" in the sense in which those words were used in the letter of July 28, 1967. C.A.L. were thus treating the concession made in that letter with regard to transactions already concluded as also having been withdrawn.

Their request that as a temporary alternative payments under open contracts might be made in sterling at Lagos against documents does not suggest that they were asking that the open contracts should be varied so that the price expressed in the contracts in Nigerian currency should be treated as if it had been expressed in sterling.

To that the respondents had not agreed in their letter of July 28, 1967. They had only said that future contracts made from September 1, 1967, might be so made, that being in my opinion the effect of that letter as shown by their letters of August 3 and 29, 1967. I do not think that it is likely that the appellants and C.A.L. can have thought that the respondents would agree to the price expressed in the open contracts being treated as if expressed in sterling, and so, when that letter was written, I do not think that it can have been intended to convey any such request. If that had been the intention, it could easily have been clearly expressed. That letter in the circumstances is to be regarded as containing only a request as to the mode of payment.

The respondents' reply on September 30 was in the following terms:

"I write to confirm that payment can be made in sterling and in Lagos with the following provisos: (1) That the buyer will be responsible for the transfer charge; (2) that documents be made available in Lagos. If you are agreeable to these conditions, you are at liberty to make payment in sterling not only with contracts already entered into but also with future contracts."

I cannot construe this letter, whether read by itself or read with the other correspondence, as saying that, in relation to contracts already entered into, the price could be treated as expressed in sterling of the same nominal amount and that future contracts might be made for the sale of cocoa beans for sterling. It dealt solely with the mode of payment.

On November 18, 1967, the pound sterling was devalued and, as the Nigerian pound did not follow suit, the pound sterling became worth about 15 per cent. less than the Nigerian pound.

Immediately thereafter, on November 22, 1967, C.A.L. sent a telex to the respondents in which they asserted that arrangement made in the letter of September 30 was one "whereby payment can be made in sterling in Lagos on the basis of one pound sterling for one Nigerian pound." The respondents replied by cable the next day, saying:

"We have to advise you however that the assumption of your board with regards to the insinuation that the basis of payment is one pound sterling for one Nigerian pound is incorrect. We wish to point out that our contracts with buyers are denominated in Nigerian pounds and we agreed and still agree that payments can be made in pound sterling. You will appreciate however that we are not in a position to renegotiate the contract price and all buyers must be aware that enough pound sterling must be provided to pay for the contract value ..."

The umpire not only construed the letter of September 30 as representing that the respondents would accept payment on the basis of one pound sterling for one Nigerian pound but also found that the appellants had relied on that representation to their detriment. In view of that finding, I must accept that the appellants believed that the respondents had so represented though I cannot find any justification for their belief.

The appellants contended that the contracts in question were varied by the letters of September 20 and 30. If there was any variation, it was, in my opinion, only a variation in relation to the mode of payment. Even if, contrary to my view, the letter of September 20 could be said to contain a request that payment might be made on the basis of one pound sterling for one Nigerian pound, it cannot be said that the parties were ad idem as to that.

In the alternative it was said, and this was the appellants' main contention, that if the contracts were not varied so that payment might be made on the basis of one pound sterling for one Nigerian pound, at least the respondents had represented that it could and, as the appellants had relied on that representation to their detriment, the respondents were estopped from denying that payment could be so made.

While I recognise that a party to a contract, while not agreeing to a variation of it, may nevertheless say that he will waive the performance by the other party of certain of its terms, and that if the other party relies on the waiver performance of the terms waived cannot be insisted on, in this case there was not a representation of the character alleged contained in or to be implied from the letter of September 30. To found an estoppel, the representation must be clear and unequivocal. In my opinion, the letter of September 30 could not reasonably be understood to contain or to imply a clear and unequivocal representation of the nature alleged.

For these reasons in my opinion this appeal should be dismissed.

LORD PEARSON. My Lords, I have had the advantage of reading in advance the opinion of my noble and learned friend Lord Hailsham of St. Marylebone L.C., and I agree with it, and wish to add only a few observations.

Although commercial men may not be familiar with the terminology of the distinction between "money of account" and "money of payment," they must be familiar with the difference between "price" and "terms of payment," which are usual headings in a sale of goods contract.

In this case, as I understand the history, the price payable for the cocoa to be delivered under any of the contracts concerned remained unaltered, being a specified number of Nigerian pounds. That price was never varied. The only alteration was in respect of the terms of payment. Even in that respect I think there was no variation of the contract but only an indulgence or concession, whereby the buyers were at liberty to pay the price in sterling currency. But that did not naturally imply any alteration of the price. Liberty to pay the price in sterling currency would naturally mean liberty to pay a sum of sterling currency equivalent to the number of Nigerian pounds which constituted the price.

Secondly, there is the question as to the duration of the indulgence or concession. What was there to prevent the sellers from withdrawing it at

any time? They might be bound in equity to give reasonable notice to enable the buyers to make use of sterling funds which they had provided in Nigeria for payment of the prices under particular contracts. But, subject, perhaps, to some such equitable requirement as to notice, the sellers would prima facie be entitled to withdraw their indulgence or concession and insist on performance of the contracts according to their terms, which had not been varied. The sellers naturally would do this when the pound sterling was devalued in relation to the Nigerian pound. The question of duration was not much explored in the argument of the appeal, but if the appeal had not failed on other grounds it would have been necessary to consider whether the alleged indulgence or concession was sufficiently definite in respect of duration to preclude withdrawal of it when the pound sterling was devalued.

This is not an appropriate case for a general examination of the principle which is sometimes known as "promissory estoppel," though it is far removed from the familiar kind of estoppel by representation of fact and seems, at any rate in a case of this kind, to be more like a waiver of contractual rights. In a case of this kind the alleged "representation" or promise or assurance ought to be reasonably clear and definite both as to the terms of the contract which is being waived and as to the duration of the waiver. It may be that the "representation" or promise or assurance has to have at least as much precision as would be needed for a variation of the contract.

I would dismiss this appeal.

LORD CROSS OF CHELSEA. My Lords, for many years past the respondents, Nigerian Produce Marketing Co. Ltd., have been selling Nigerian cocoa to members of the Cocoa Association of London Ltd. The appellants who are members of the association have been purchasing cocoa from the respondents through the agency of Messrs. Woodhouse Drake & Carey Ltd., of 51 Eastcheap, London, who enter into contracts with the respondents on behalf of members of the association, using the association's official form of contract. That is a document addressed by the respondents to Woodhouse Drake which is largely in print but leaves blanks to be filled in. It begins:

"We have this day sold to you upon the terms of this contract and in accordance with the rules, regulations and by-laws of the Cocoa Association of London Ltd."

There then follow 13 separate clauses. The first states the quantity sold in tons and the second the quality of the cocoa. The third - the side note to which is "Price" - runs: "At per shipping weights." The only other clauses to which it is necessary to refer are 6, 12 and 13. Clause 6 says, so far as relevant: "To be shipped per steamer or steamers during" leaving a blank for the period of shipment which was normally some three to six months after the date of the contract. Clause 12 - the side note to which is "Payment" - says, so far as relevant: "Payment to be made by cash in for 100 per cent. of the invoice amount against presentation and in exchange for shipping documents." Clause 13 is a clause providing for the settlement of disputes by arbitration in London as

provided by the rules of the association. Until about October 1963 the cocoa was sold for a price expressed in pounds sterling to be paid in London; but then at the request of the respondents the Nigerian pound was substituted for the pound sterling and payment in Lagos for payment in London. Thenceforward - and in the contracts with which we are concerned - the blank in clause 3 was filled in with so-and-so many pounds, shillings and pence "Nigerian" per hundredweight and the blank in clause 12 with the word "Lagos." So long as there was parity between the pound sterling and the Nigerian pound the only difference which the change made to the parties was that the buyers had to bear the comparatively trifling charges incident to procuring payment in Nigerian currency in Lagos; but once there was no longer parity between the two pounds, one or other of the parties would suffer depending on which way the rate of exchange went. By the middle of 1966 members of the association began to be worried lest the pound sterling might be devalued and the Nigerian pound not immediately follow suit. The result of that would be that where they had made a contract before devaluation with a payment date falling after devaluation they would have to spend more sterling to buy the Nigerian pounds needed to discharge the price than would have been needed but for the devaluation. In the ordinary way, of course, traders can - at some expense to themselves - guard against this sort of risk by buying the necessary foreign currency "forward," but though there does not appear to have been any legal obstacle to buying Nigerian pounds "forward" it was not in fact possible to do this.

On August 16, 1966, Mr. Galloway, the secretary of the association, addressed a letter to the secretary of the respondents some of which I will quote. It begins:

"Members of this association have expressed concern regarding a difficulty which exists when purchasing Nigerian cocoa directly from your company compared with other origins, notably from Ghana. This is apparently caused by your company rendering contracts which stipulate 'payment to be made in Nigerian pounds.'"

After pointing out that it was virtually impossible to obtain forward cover in Nigerian pounds the letter went on as follows:

"My board has, therefore, instructed me to ask you that your company consider reverting to your erstwhile practice of selling your produce (cocoa) for payment in sterling as is the custom of most other Commonwealth and/or sterling area origins."

It was not, of course, strictly true to say that the new form of contract stipulated for "payment to be made in Nigerian pounds" or that the old form had provided for "payment in sterling"; but the writer of the letter clearly had not the distinction between "money of account" and "money of payment" in mind, and I have no doubt that by "payment in Nigerian pounds" or "sterling" he meant "a price fixed in Nigerian pounds" or "sterling." The respondents acknowledged this letter on August 25 but as he had received no reply Mr. Galloway wrote again on october 31 as follows:

"I am asked by my board to refer to your letter of August 25, 1966,

and to inquire if you are yet able to deal with the matter of contracting in sterling instead of Nigerian pounds. It is my board's opinion that this will facilitate and increase business."

On November 9, 1966, the respondents replied as follows:

"Thank you for your letter dated october 31, 1966. The subject of payment terms is still a matter for consideration by our board of directors and we will get in touch with you as soon as a decision is taken."

After another reminder dated February 21, 1967, the respondents' managing director wrote a letter on July 28, 1967, in the following terms:

"PAYMENT TERMS We refer to your letters dated August 16, 1966, October 31, 1966, and February 21, 1967, on the above subject. We have given very serious consideration to your request to pay for marketing board produce in pounds sterling. This matter has been thoroughly considered and it has been decided that for transactions concluded from September 1, 1967, payment may be made in pounds sterling in London or in �N in Lagos. It has been further decided that for payments in respect of transactions already concluded in �N, payment may be made in pound sterling provided the transfer charges are borne by the buyer concerned. We trust that you will find the above to be very satisfactory and that the possibility of payment in pound sterling will reduce the cost of buying Nigerian produce by our customers."

It is to be observed that this letter is headed "Payment Terms" which was the phrase used in the respondents' letter of November 9, 1966, in response to the letter of october 31, which spoke of "contracting in sterling instead of Nigerian pounds," and notwithstanding that the letter speaks of payment in pounds sterling and not of contracting in pounds sterling, I have no doubt that it was the intention of the writer - who may well never have heard or thought of the distinction between money of account and money of payment - to include the former under the words "payment in sterling." That this is so is indeed shown conclusively by the final paragraph of a letter which the managing director wrote to Woodhouse Drake on August 3, 1967, in which, after repeating in almost the same words what he had written to the secretary of the association, he went on to say: "Will those buyers who wish to make future contracts in pound sterling, please let us know by return of post." On August 18 the respondents wrote a letter to their bankers, copies of which they sent to a number of buyers, saying that buyers of cocoa now had the option of payment either in Nigerian pounds in Lagos or in sterling in London and explaining the new payment arrangements which would obtain in the case of those who chose the latter alternative. A number of buyers, including the appellants, informed the respondents that they wished to avail themselves of the option to pay in sterling.

On August 29 the respondents wrote to the buyers to whom they had written on August 18 saying that circumstances beyond their control obliged them to withdraw the option to pay in sterling as from September 1, 1967, and on August 30 they cabled to the same effect to Mr. Galloway, the

secretary of the association. On September 1 he wrote to the respondents' managing director acknowledging the cable, saying that he had informed his members of its contents and adding

"It is assumed that sterling payment arrangements against contracts already concluded and accepted (as per paragraph 3 of your letter of July 28) will still stand,"

but on September 6 the respondents replied that he was wrong in that assumption. Whether or not the buyers who had accepted the option to pay in sterling could have held the respondents to the arrangement so far as concerned contracts already entered into, they made no attempt to do so. They acquiesced in the withdrawal of the options contained in the letter of July 28 and through Mr. Galloway made a fresh approach to the respondents by a letter dated September 20 to which the respondents replied on September 30. These are the crucial letters in the case and must be set out in full:

"PAYMENT TERMS I thank you for your letter of September 6 which, together with previous correspondence, was discussed at a board meeting held yesterday. I am asked to reiterate the view of members that those who exercised the option offered in your letter of July 28 in regard to open contracts are still most disturbed by the cancellation of the facility. It is noted that you state circumstances outside your control caused you to withdraw. I am requested to ask if you can arrange to accept payment against documents in sterling in Lagos as a temporary alternative? Yours faithfully, (sgd.) W. Galloway, Secretary."

"PAYMENT TERMS Your letter dated September 20, 1967, and addressed to the managing director has been passed to me. I write to confirm that payment can be made in sterling and in Lagos with the following provisos: (1) That the buyer will be responsible for the transfer charge; (2) that documents be made available in Lagos. If you are agreeable to these conditions, you are at liberty to make payment in sterling not only with contracts already entered into but also with future contracts. Yours faithfully, Nigerian Produce Marketing Co. Ltd. (sgd.) J. G. Ayodele, Ag. Chief Accountant."

On October 5 the association wrote thanking the respondents for their cooperation and saying that the text of the letter of September 30 had been circulated to its members.

On November 18, 1967, the pound sterling was devalued by about 15 per cent.; but the Nigerian pound was not devalued correspondingly. By a cable to the respondents sent on November 22 the association claimed that in view of the respondents' letter of September 30 buyers could discharge their obligations under all contracts made before November 18 by paying on delivery one pound sterling for one Nigerian pound. The respondents at once rejected this view and contended that the buyers, though they could pay in sterling, must pay so much sterling as was needed to buy the quantity of Nigerian pounds expressed as the purchase price in the contract. The buyers paid the sums demanded by the respondents

under protest in order to obtain delivery of the cocoa but the dispute between the two appellants and the respondents was submitted to arbitration as a test case the outcome of which would govern all the contracts with the various buyers made before but not completed by delivery and payment until after the devaluation date.

The arbitrators appointed by the parties having disagreed an umpire was appointed on April 3, 1969, who made an award in favour of the appellants in the form of a special case. The relevant parts of the special case are set out in the judgment of Roskill J. and I need not set them out again here. Roskill J. by a judgment dated February 11, 1970, upheld the umpire's award, but on November 24, 1970, the Court of Appeal allowed an appeal from his decision.

The first question to be answered is whether the umpire's finding that the letter of September 30 contained a representation by the respondents to the effect that in respect of contracts then open they were prepared to accept payment as if the price in the contracts had been expressed in sterling of the same nominal amounts is binding on the court as a finding of fact. I agree with the Court of Appeal that it was a question of law. Counsel for the appellants submitted that the court could only say that the construction favoured by the umpire was wrong if it had before it all the evidence on which he purported to form his view and could say that there was no evidence to support it. As the umpire had not left the question of construction to the court in this form it might be that he had formed his view partly on material which he had not set out in the case and was treating it as one of his findings of fact. To my mind, this is a very far fetched supposition. The only reasonable inference is that the umpire reached his conclusion by reading the letters in the light of the earlier correspondence and the background facts which he set out in the case and that he intended to submit the question of construction to the court as a question of law. Indeed if that were not so it is difficult to see what he was submitting to the court.

Turning now to the crucial letters themselves, the appellants' case may be put as follows: "It is true that if you read the two letters by themselves you would say that they refer simply to the currency in which the obligation is to be discharged; but it must have been clear to the respondents from the earlier correspondence that what was worrying the buyers was the prospect of devaluation and in that correspondence both sides used the phrases 'payment in sterling' and 'payment terms' as covering the currency in which the price was to be fixed and not as relating simply to the currency in which the obligation was to be discharged. When the buyers put forward the suggestion that in respect of contracts already concluded the sellers should accept payment in sterling in Lagos (instead of the payment in sterling in London the offer to accept which had been withdrawn) they naturally intended the words 'payment in sterling' to bear the same wide meaning as they had always borne in the correspondence and they naturally read the answer of September 30 in that way." The umpire thought that it was reasonable for the buyers to read the respondents' letter of September 30 in the way they did, and for my part I would go so far with him as to say if you look at the matter exclusively from their point of view it is quite understandable that they should have read the letters in that way. But if one looks at the matter from the standpoint

of the sellers it wears a different aspect. They had agreed to give the buyers the option to make future contracts in pounds sterling instead of Nigerian pounds and to treat existing contracts as though they had been made in pounds sterling. But some higher authority had objected to the proposed arrangement and they had had to tell the buyers that it was "off." Why should they think that the buyers would have the optimism at once to ask again for what had just been refused them? Surely it was not unnatural that they should read the letter of September 20 as meaning no more than it said, notwithstanding the wide sense in which "payment in sterling" had been used in the earlier correspondence. One may say, of course, that unless the buyers were asking for what they thought they were asking for the option to pay in sterling in Lagos instead of in Nigerian pounds in Lagos was giving them nothing of any value. But it was not for the sellers to inquire into the buyers' reasons for making the request - and one might with as much justice ask why it did not occur to the buyers, when the sellers at once said that the suggested mode of payment could apply not only to existing contracts but also to new contracts as well, that there might be some misunderstanding. The truth, as I see it, is that the parties were not "ad idem" - the buyers meaning one thing by their request and the sellers another by their acceptance of it. If the letter of September 20 was an offer to make or vary a contract and the letter of September 30 a purported acceptance of the offer the result would be that neither side could say that any contract had come into being. Counsel for the appellant recognised this and this was perhaps the reason - or one of the reasons - why he rested his case not on a variation of the contract but on estoppel: not an estoppel by reason of an assertion of fact such as was said to have arisen in Low v. Bouverie [1891] 3 Ch. 82 but a promissory estoppel founded on the principle of equity illustrated by Hughes v. Metropolitan Railway Co. (1877) 2 App.Cas. 439. As it was reasonable - so the argument ran - for the buyers to read the letter of September 30 in the way in which they did read it the sellers were obliged, until they withdrew the indulgence on reasonable notice, to allow the buyers to treat both existing and new contracts as though they had been made in sterling. "Reasonable notice" meant such notice as would allow the buyers time before sterling was devalued to take steps (e.g. by insurance) to protect themselves against the risk of devaluation. But it is, to my mind, a fatal objection to this contention that it makes the letter of September 30 bind the respondents as a representation though it would not have bound them had it been an acceptance of a misunderstood offer. Even if one assumes that a man who makes a representation of fact which he reasonably interprets in one way but which the representee reasonably interprets in another may in some circumstances be bound by the interpretation placed on it by the representee, it surely cannot be that a man who in response to a request for an indulgence which he reasonably interprets in one way makes an unenforceable promise as to his future conduct which the other party reasonably interprets in a sense different from that intended can be in a worse position than if the request for an indulgence had been an offer to contract and the granting of the indulgence an acceptance of the offer. Even if one assumes in favour of the buyers that it was reasonable for them to read the letter of September 30 as they did it was at least equally reasonable for the sellers to have read the

letter of September 20 as they did and, that being so, they can say "We were not ad idem as to the character of the indulgence which you were seeking and we were granting."

If this be so it is not necessary to try to define exhaustively in what circumstances a man who makes a representation of fact as opposed to a promise with regard to his future conduct will be precluded from denying that he meant it in the sense in which it was understood by the representee even though he in fact meant it in a different sense. It is generally said - on the authority of Low v. Bouverie [1891] 3 Ch. 82 - that he will only be so bound if the representation was "precise and unambiguous," but in his judgment in that case Bowen L.J. after saying that the language upon which the alleged estoppel is sought to be founded must be "precise and unambiguous" went on to say, at p. 106:

"That does not necessarily mean that the language must be such that it cannot possibly be open to different constructions, but that it must be such as will be reasonably understood in a particular sense by the person to whom it is addressed"

and in Marquess of Bute v. Barclays Bank Ltd. [1955] 1 Q.B. 202 McNair J. - possibly with Bowen L.J.'s words in mind - said, at p. 213, that to found an estoppel a representation must be clear and unequivocal "or at least reasonably understood to be clear and unequivocal." In the course of the argument in this case there was considerable discussion as to what Bowen L.J. and McNair J. may have meant. How, it was said, could a statement which was "precise and unambiguous" be open to more than one construction and how could someone reasonably understand a statement to be clear and unequivocal which was in fact not clear and unequivocal? But though the language used may be open to criticism the thought behind it is not, to my mind, very obscure. Although words used have only one "true" construction - namely, that which would be placed on them by the court if called upon to decide their meaning - there are different types and shades of ambiguity. Sometimes the ambiguity of the statement may be obvious to any one but sometimes it may arise from facts not known to the representee. What, I conceive, Bowen L.J. and McNair J. were saying - rightly or wrongly - was that the question to ask was whether the representee was justified in having no doubt that the words meant what he took them to mean. But one cannot decide questions of this sort without regard to the relationship of the parties for that may be such that the representor ought to be saddled with the risk of the representee putting the best interpretation which he can on language which is undoubtedly equivocal. In Low v. Bouverie [1891] 3 Ch. 82 the representor was under no duty to answer the inquiry and the court held that the representees were not justified in being satisfied that the words used meant what they took them to mean. On the other hand, in Ireland v. Livingston, L.R. 5 H.L. 395 where a principal gave his agent ambiguous instructions the House of Lords held that the principal was bound by the meaning which the agent put on the words even though that might not be the meaning which the principal intended or even that which the court would hold to be the "true" meaning. In this case it is not, as I see it, necessary to explore this difficult territory exhaustively. Even if one were to treat

this case as what one may call a Low v. Bouverie type of case and not, as I think it is, a case of parties intending to enter into an agreement and not being ad idem, the buyers - though their mistake was understandable - were not justified in leaping to the conclusion that the sellers' letter of September 30 meant what they took it to mean and there was nothing in the relationship between the parties which would make it just to saddle the sellers with the consequences of the buyers' mistake.

I would dismiss the appeal.

LORD SALMON. My Lords, I agree that this appeal should be dismissed. I wish, however, to add a few observations of my own although I do not propose to recite any of the correspondence or other documents which have already been read.

All the relevant contracts stipulated a price in Nigerian pounds payable in that currency in Lagos. Thus the money of account and the money of payment were both Nigerian pounds. The correspondence between the sellers and the buyers from July 1966 until early August 1967 shows that the possible devaluation of sterling was foreseen but no one could foretell whether the Nigerian pound would also be devalued nor, if it were, whether it would fall to the same level or to a higher or lower level than sterling. Clearly, since Nigerian pounds could not be bought forward, the buyers were anxious to protect themselves by obtaining the sellers' agreement to outstanding contracts being treated as if the money of account were sterling. They also wanted the future contracts to stipulate sterling as the money of account. The buyers were asking for these concessions on the ground that it would increase the business which the sellers would be able to do with the English cocoa market. There is no doubt that by August 3, 1967, these concessions had been agreed by the sellers. There is equally little doubt that the concessions were withdrawn on August 29, 1967. The question whether the sellers were entitled to withdraw the concessions in respect of outstanding contracts which had already been entered into does not arise. The buyers appear to have accepted that the sellers were entitled to do so but, by their letter of September 1, they attempted to persuade the sellers to keep that concession alive. The sellers by their letter of September 16 categorically refused to do so. Then came the two crucial letters, the letter from the buyers of September 20 and the sellers' reply of September 30.

The learned judge decided that these two letters did not amount to an agreed variation of the contract, converting the money of account from Nigerian pounds into sterling. Nevertheless, he decided that he was bound by the umpire's finding that the sellers had represented, by their letter of September 30, "that ... they were prepared to accept payment as if the price in the contracts had been expressed in sterling of the same nominal amount", that the buyers acted to their detriment in reliance on that representation and that, therefore, the sellers were precluded after devaluation occurred from recovering the difference between that amount and the sterling equivalent of the price expressed in Nigerian pounds. In other words, that although the letters of September 20 and 30 did not amount to a variation of the money of account, the sellers were estopped by their letter of September 30 from saying that they did. As Lord Denning M.R. pointed out, this would produce an odd result. The Court of Appeal

unanimously decided that it was a result which could not be justified in law. I agree. No letter, not even the letter of September 30, can assume the qualities of a chameleon. It cannot take on one meaning if you consider it as a possible contractual document and a contrary meaning if you consider it as a possible representation. The sellers did not, either in the Court of Appeal or in this House, press the argument that the letters amounted to a variation of the money of account. They relied in substance upon the alleged promissory estoppel.

There can, in my view, be no doubt that the construction put upon the letters of September 20 and 30 by the learned judges in the Court of Appeal was right. The letters can amount to no more than an agreement that the price in Nigerian pounds may be paid in Lagos in sterling of an equivalent value. The letter of September 30 contains no more than a representation that the sellers would accept payment in Lagos of the sterling equivalent of the price calculated in Nigerian pounds. The true interpretation of the letter of September 30, like that of any other document, is a question of law for the court unless there is some evidence that its words have some special meaning different from their ordinary meaning.

No doubt any finding of fact in an award is unassailable providing there is evidence to support it. In my view, however, the umpire's finding as to the meaning of the letter of September 30 was wrong in law and cannot be binding upon the court. It clearly was not a finding of fact. Mr. MacCrindle submitted that the finding may have been based on some evidence that the language of the letter did in truth have a special meaning very different from its ordinary meaning. I cannot accept that argument. I cannot conceive that if there had been any such evidence there would not have been any allusion to it in the case which was very fully and fairly stated by the umpire admittedly for the purpose of allowing the parties to take any point of law available to them. He referred to evidence adduced by the buyers as to the meaning of the correspondence to which he gave no weight. Surely if there had been any evidence as to the meaning of the correspondence to which he did give any weight, he would have mentioned it. It is incredible that he should have referred to the irrelevant evidence on this topic but should have failed to mention the relevant evidence had there been any.

Mr. MacCrindle further contended that, even if the umpire did not rely on any evidence as to a special meaning to be attached to the letter of September 30, it might be that, even without such evidence, he knew because of his expertise or experience in the cocoa trade that the letter would have the special meaning in the trade which he attributed to it. I am afraid that I cannot accept that argument. If the umpire had reached his conclusion about the meaning of the letter on the basis which Mr. MacCrindle suggests, he would surely have said so. To my mind, it is plain from the award that the umpire quite rightly considered the letter of September 30 in its setting. Its setting was the earlier correspondence passing between the parties and their representatives, and this correspondence he rightly attached to and made part of his award.

Mr. MacCrindle relied strongly on the umpire's finding that the buyers reasonably understood the letter of September 30 as bearing the meaning which he attached to it and that they acted on it accordingly. He argues

that this is enough to establish an estoppel. There can be no doubt that there is implicit in the award an unassailable finding of fact that the buyers genuinely understood the letter of September 30 as making the representation which the umpire found. Once the umpire misconstrued the letter, it was a natural step for him to conclude that the buyers were reasonable in understanding it in the same sense as he did. To my mind, the letter in its setting clearly did not mean what the umpire thought it meant, I find difficulty in accepting that the buyers were reasonable in so reading it. Although there can be no doubt that they genuinely but mistakenly did so, it does not follow that they were reasonable. The letter of September 20 clearly asked for a change in the money of payment from Nigerian pounds into sterling for outstanding contracts. The letter of September 30 clearly stated that the sellers would accept payment in sterling not only for outstanding contracts but also for future contracts. Neither letter suggested any change in the money of account. No doubt a change in the money of payment was of very little, if any, value to the buyers. I recognise that the umpire accepted that the letter of September 30 had the meaning which the buyers attributed to it. Perhaps this was due to the magic of Mr. MacCrindle's advocacy. For my part, I consider that for the buyers to read the letter of September 30 as containing the representation upon which they seek to rely required a degree of blind optimism and a failure to understand plain English which I am afraid I cannot regard as reasonable.

Evidently the meaning which the buyers put upon the letter was a possible though unlikely meaning, otherwise they could not so have understood it. This, however, will not do for an estoppel. To work an estoppel the representation relied upon must be clear and unequivocal: Low v. Bouverie [1891] 3 Ch. 82. Mr. MacCrindle has sought to find some support for his argument from the second part of the celebrated passage from Bowen L.J.'s judgment in that case, at p. 106. I entirely agree with Cairns L.J.'s analysis of that passage [1971] 2 Q.B. 23, 66. It is reasonably easy to draft a letter containing a representation, the true meaning of which is clear and unequivocal. I would classify such a letter as "alpha." It is, however, quite another matter to be able to draft a letter, or anything else, which is not only clear and unequivocal but is also incapable of having extracted from it some possible meaning other than its true meaning. I would classify such a letter, if it exists, as "alpha plus." As I understand Bowen L.J.'s judgment, all he was saying was that the language upon which an estoppel is founded must comply with what I call the "alpha" standard but that it need not come up to "alpha plus."

If, which I doubt, McNair J. intended by his judgment in Marquess of Bute v. Barclays Bank Ltd. [1955] 1 Q.B. 202 to alter the principle enunciated in Low v. Bouverie, he went further than was necessary for the purpose of his decision and he was wrong. Low v. Bouverie laid down with clarity a principle which accords with common sense and is still good law. This principle is fatal to the buyers' case.

Ireland v. Livingston, L.R. 5 H.L. 395 has been prayed in aid on behalf of the appellants. There a principal in England gave certain written instructions to his agent in Mauritius upon which the agent was obliged to act promptly. He did so. believing that he was acting in accordance with his instructions. The principal contended that the agent had exceeded

his authority. The instructions were so badly framed that their meaning was obscure. Their true meaning and effect was litigated up to this House. Many of the judges understood the instructions in the same sense as the agent had understood them. At least four, however, concluded that they bore a different meaning. This House decided that, whatever the true meaning might be, the principal was responsible for the misunderstanding and, since many judges would have understood those instructions and acted upon them in the same way as the agent had done, it did not lie in the mouth of the principal to say that his agent had exceeded his authority. It is to be observed that in 1872 there were no means by which an agent, at the other end of the world, receiving ambiguous instructions, could communicate with his principal in London to clear up any doubt about their meaning before carrying out his duty to act upon them promptly. In the present case the sellers' letter of September 30 was not ambiguous. It bore the meaning which the sellers attribute to it - as all the judges have agreed. Moreover, it imposed no duty upon the buyers to take or forbear from taking any action upon it. I do not consider that Ireland v. Livingston has any real bearing upon the present case.

Nor do I derive any help from the judgments in any of the fraud cases to which we were referred by Mr. MacCrindle. They amount to no more than this: If A makes a fraudulent representation to B, intending B to act upon it, and B does so to his detriment and then brings an action against A for damages, it can be no answer for A to say: "Of course I intended you to understand what I wrote in the sense in which you understood it and I intended you to act upon it as you did. I knew that what I wrote was untrue if it meant what I intended you to understand it to mean. Nevertheless you cannot succeed in an action in deceit against me because if you had taken my letter to counsel you might well have been advised that on its true construction it bore some different meaning." This seems to me to be a far cry from any point that arises for consideration in the present case. In my view, the umpire misconstrued the letter of September 30: I agree with the Court of Appeal that in law that letter was incapable of amounting to a representation that the sellers were prepared to accept payment as if the price in the contracts had been expressed in sterling.

I would accordingly dismiss this appeal with costs.

Solicitors: Coward, Chance; Freshfields.

M. G.