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both the passage above from Grundt and the sentence above from Hamel-
Smith without suggesting that they contradict each other.30
Greer
Another potentially contrary authority is Greer v. Kettle, where Lord
Maugham said that “it is at least equally clear that in equity a party to a
deed could not set up an estoppel … in reliance on an untrue statement”.31
In Chen v. Ng, Lords Neuberger and Mance for the Privy Council pointed
out that Prime Sight has been criticized extra-judicially for not dealing with
this statement from Greer (the Privy Council in Chen refused to decide if
that criticism was correct).32 See also Destine Estates Ltd. v. Muir, where Justice
Newey said: “There may be room for argument as to how far the
Lavarello Prime Sight case detracts from equity’s traditional reluctance to
allow a party to a deed to rely on a receipt clause when payment has not in
fact been made”.33
However, this criticism is unwarranted. In Prime Sight, the Privy Council
referred specifically to the above passage from Greer but distinguished it as
follows: “The House of Lords in Greer was not concerned in that case with
a situation in which a deed contained a recital of fact known by both parties
to be untrue. The Court of Appeal in the present case was right for that reason
to regard the decision in Greer as not directly in point”.34
The Point of the Estoppel
The concept that the truth of the assumption is irrelevant comes from considering
the fundamental nature of estoppel by convention. The key point
is that the parties agree to proceed on the basis that certain facts or legal
principles will be taken to be true for purposes of the transaction. This is
not an “assumption” that the facts or principles are true; it is an agreement
to “deem” them to be taken as being true for the purposes of the transaction.
I think a lot of the confusion in this area stems from the use of the word
“assumption”, as in, the estoppel applies when the parties make an assumption
as to a particular fact or principle of law. That is an imprecise way of
defining the estoppel. It does not rest on a shared assumption; if it did, then
the falseness of the assumption might oust the estoppel. It rests on the convention
that the fact or principle is taken or deemed to be correct, even
though the parties may know that it is false. If the basis were worded by saying
the parties “have agreed to assume the facts as the conventional basis of
their transaction”, then that would be correct.35
CONCLUSION
Despite some apparently contradictory authorities, at least one of which
was cited with approval by the Supreme Court of Canada, my view of the