Land registration has long proved a source of concern to the Law Commission. Its Third Report in 1987 recommended significant changes to the substantive law; its Fourth Report subsequently incorporated these changes into a comprehensive draft Land Registration Bill which was intended to replace the Land Registration Act 1925 with a modern, simpler statute.

In a recent article in the Cambridge Law Journal, Dr. D. M. Gordon, q.c., sets out systematically to demolish the theory of quasi-estoppel propounded by Denning J. in Central London Property Trust Ltd. v. High Trees House Ltd. In his closely reasoned argument he seeks to prove that no authority is to be found in case-law, either before or after 1947, to support any principle of this type, which he believes has been totally discredited by dicta in the later case of Tool Metal Manufacturing Co. Ltd. v. Tungsten Electric Co. Ltd. He further goes on to assert that the results of the implementation of such a principle would be arbitrary and undesirable in contrast with what he believes to be the clear rule of law laid down in the two nineteenth-century cases of Jorden v. Money and Foakes v. Beer. In short, it appears to be his view that a creditor who promises to forgo contractual rights without consideration and then subsequently retracts his promise and seeks to enforce his strict legal rights is both legally and ethically justified in doing so.

These are sweeping allegations which call for an answer. The object of this paper is to examine the validity of these arguments and to reassert that not only does authority exist to support a principle of quasi-estoppel of the type outlined by the writer on a previous occasion, but also to suggest that the implementation of this principle is most desirable if the rule of law is to be brought into line with commercial expectation and commercial practice.

THE facts of Barclays Bank Ltd. v. Quistclose Investments Ltd. are well-known. In July 1964 Rolls Razor Ltd. declared a dividend payment that they were unable to meet. In order to meet their obligation, the company arranged to borrow the amount of the dividend, £210,000, from Quistclose Investments. The money was duly transferred into a separate account of Rolls Razor, opened specially for the purpose, held at Barclays Bank. The dividend was payable on 24 July but had not been paid when, on 27 August, Rolls Razor entered voluntary liquidation. Barclays and Quistclose both claimed the money. Barclays asserted a right of set-off against the Rolls Razor overdraft, while Quistclose claimed that the money was held in trust for them and, since Barclays were aware of this, the bank were accordingly constructive trustees of the funds.

One can conceive of more exciting presents than a part of a debt; but a creditor is sometimes moved to make such an assignment. Suppose, for example, that he is owed £100 by X and desires to transfer the right to half of it to a friend. How can he do this?