Proprietary Estoppel

Question 1

What is proprietary estoppel

Answer 1

Land law is the study of proprietary rights, being estates or interests in land and usually these can only be created by deed, registered disposition or a specifically enforceable written contract. This need for formalities renders land law inflexible, and can impact it’s fairness. However, the doctrine of proprietary estopppel mitigates some of the difficulties that flow from reliance on agreements that do not meet strict formal requirements. Therefore, proprietary estoppel is the name given to a set of principles whereby an owner of land may be held to have conferred some right connected with the land to another, despite the absence of a deed, registered disposition, written contract or valid will. Typically, the right conferred will arise out of the conduct of the parties, usually due to some assurance made by the landowner, which is relied upon by the claimant.

Question 2

The type of right pre LRA

Answer 2

there were two views as to the nature of proprietary estoppel. First – it is itself an interest in the land. Second – it is a method by which people could achieve that right.

Question 3

Post- LRA

Answer 3

s116 - view 1 applied, it is itself an interest in land

Question 4

Proprietary estoppel as a sheild (cases)

Answer 4

Lester, Hardy, Wormall

Question 5

PE as a shield

Answer 5

Proprietary estoppel can provide a defence to an action by a landowner who seeks to enforce their strict rights against someone who has been informally promised some right over the land. In Lester and Hardy v Woodgate, estoppel operated as a defence to an allegation of nuisance by the landowner, and in Wormall, the defendant successfully pleaded estoppel as a defence to an action of trespass. Thus, the landowner is not permitted to plead that the defendant has no right to use the land if this would be inequitable, where such inequity is generated by the landowner’s own conduct This is proprietary estoppel being used as a shield.

Question 6

PE as a sword

Answer 6

If successfully established, it can generate a new property interest in favour of a claimant. Thus it can be a sword in the hands of a claimant who has relied on an assurance by a landowner that they will be given some right or privilege over the land.

Question 7

Old conditions of PE

Answer 7

At one time, the conditions for the operation of proprietary estoppel were strictly drawn, these were codified by Fry J in Willmott v Barber (1880). Here he identified ‘five probanda’ of proprietary estoppel and it can be seen that they required the claimant to jump a high hurdle to be successful. The following had to be established:

1. Claimant must have made a mistake as to their legal rights over some land belonging to another
2. The true landowner must know of the claimants mistaken belief
3. The Claimant must have expended money or carried out some action on the faith of that mistaken belief
4. The landowner must have encouraged the expenditure by the claimant either directly or by abstaining from enforcing their legal rights
5. The owner of the land over which the right is claimed must know of the existence of their own rights and that these are inconsistent with the alleged rights of the claimant.

Perhaps justified that the conditions were onerous because a successful claim could result in the creation of an interest in land that affects the immediate estate owner and also future purchasers or transferees of the land. However, since these early days there have been many social and economic changes, thus inevitable that PE would grow in importance and defining features would change.

Question 8

Modern conditions of PE case

Answer 8

Taylor Fashions

Question 9

Taylor Fashions facts

Answer 9

In this case, the claimants were two companies Taylor Fashions and Old & Campbell. They held leases on two business premises and asked to have their leases renewed by their landlord, Liverpool Victoria Trustees. All parties had assumed the leases were accompanied by a statutory right of renew when they came to an end. Based on this assumption both the claimant companies had spent money improving their premises. However, it transpired that Liverpool Victoria was under no obligation to renew. The claimants aregued that LV should be estopped from not renewing, based on their reliance. Oliver J held that a claimant will be able to establish an estoppel if they can prove:

1. Assurance that there is a right
2. Reliance on that insurance
3. An actionable detriment
4. Unconscionability

Question 10

Assurance

Answer 10

landowner must have made some kind of assurance to the claimant that either the landowner would refrain from exercising their strict legal right over the land or, more commonly, that the claimant might have some present or future right or use over the land. The form of assurance is irrelevant. It may be given orally, arise from conduct or even be in the form of a written instrument that is not itself enforceable as a contract.

Question 11

Assurance cases

Answer 11

Thorner v Major
Lissimore v Downing
Cobbe v Yeoman’s Row
Gillet v Holt

Question 12

Thorner v Major

Answer 12

Shows assurance can be implied.

Claimant worked on the defendants estate farm for over 10 years without pay. Believed he would inherit the land when the defendant died. Defendant issues a will where the estate is to be left to the claimant. He then retracts this will and dies intestate. The defendant had given the claimant a bonus for his ‘death duties’ but never explicitly told the claimant he would inherit the farm. HoL held the claimant had a proprietary estoppel. Assurance can be implied in the course of the conduct. Unconscionable for the person to work on the farm for that long without pay and not get anything as a result.

Question 13

Lissimore

Answer 13

Shows assurance must be sufficiently clear

Defendant meets the claimant who was 16 at the time, he was very wealthy and older. Moved in together and have a relationship. This breaks down and the claimant makes the argument that because he said “you will never want for anything, you will be lady of the manor, all this will be yours” that this is assurance. However, the actual right, while it might have been implied, was not sufficiently developed to be enforceable. There was not clear assurance, therefore PE was not established.

Question 14

Cobbe

Answer 14

Shows difference between personal and commercial claim

Mr Cobbe was a property developer. He entered into negotiations to develop flats in London. Mr Cobbe was looking to demolish flats belonging to Yeomans Row and replace them with terraced housing. They reached a verbal agreement that Mr Cobbe, at his own expense would apply for planning permission to demolish the flats and YR would sell the freehold at a price of 12m. Mr C spends the money and time to obtain planning permission etc. But YR find they are unhappy with the agreement and request more money. Found that because this was a commercial dispute between two property developers who are presumably well-acquainted with the formalities of land law. Therefore, unlike in Gillet where the young farm manager did not take any legal advice and believed the assurances to be binding, this was a commercial context whereby a business person would have access to advice and taken to know the assurances were not binding.

Question 15

Gillet v Holt

Answer 15

Shows that representations can be formulated over time and be made irrevocable. Gillet worked on Holt’s farm. Holt persuaded Gillett to abandon plans of future education and work for him instead, at age of 15. He stated several times that on his death the farm would be left to the claimant. The relationship broke down and Holt executed a will which did not leave Gillett the farm. The court found in favour or Gillett. Mr Holt’s assurances were repeated over a long period and some were completely unambiguous. The assurances were intended to be relied on and were in fact relied upon. This reliance made them irrevocable.

Question 16

Reliance

Answer 16

Whatever form the assurance takes, it is essential that it produces an effect on the claimant. The claimant must rely on the assurance in that it must be shown they were induced to behave differently because that assurance had been given. In practice, reliance may be difficult to prove and the courts may well be prepared to infer reliance if that is a plausible explanation of the claimants conduct.

Question 17

Cases for reliance

Answer 17

Wayling v Jones
Thorner
Ogree
Campbell v Griffin

Question 18

Thorner

Answer 18

Shows that it is sufficient if the claimant reasonable relies on assurance, if the landowner did not intend that they would so rely

Question 19

Wayling

Answer 19

the claimant is in a relationship. For several years he worked for his partners business but was never paid a proper salary. The partner made a will which left a hotel to the claimant, but this was later sold and a new one purchase. The will was not updated but the partner promised the claimant he would get the new hotel. When Jones died, the will left nothing to the claimant. It was found because the claimant worked for almost nothing, and he could have sought work elsewhere earning more money, his behaviour had changed, thus reliance was established.

Question 20

Ogree

Answer 20

The crucial point seems to be that there will be no reliance only when it can be shown that the claimant would have incurred detriment completely irrespective of the defendants conduct.

It was clear that much of the plaintiffs alleged detriment was ordinary expenses that would have been incurred normally and in any event.

Question 21

Campbell

Answer 21

claimant had been a lodger in the landowners house and over time had taken on the responsibility of caring for his landlords – an elderly couple. There was clear evidence of several assurances about the property. At trial the claimant admitted that he would have aided his landlords out of ordinary human compassion rather than in clear reliance on their promises. Nevertheless CoA upheld the estopppel claim noting that a dual motive for action (assurance plus compassion) does not diminish the fact that reliance has occurred.

Question 22

Detriment

Answer 22

the claimant can prove that they have suffered some detriment in reliance on the assurance. So long as the detriment is not minimal or trivial, it may take any form. This does not mean solely monetary expenditure. It can be time, practical improvements to a property, forsaken opportunity. Campbell and Jennings show that it is not necessary that the detriment be related to the land in dispute or land at all.

Question 23

Detriment case

Answer 23

Lloyd v Dugdale, makes it clear that the detriment must be incurred by the person to whom the assurance is made. Here, Mr Dugdale had to prove that the detriment was incurred by him personally and not on behalf of is company which is a separate legal entity.

Question 24

Unconscionability cases

Answer 24

Taylor Fashions
Gillet
Jennings

Question 25

Taylor Fashions Unconscionabiltiy

Answer 25

Oliver J in Taylor Dashions regarded unconscionability as the very essence of a claim of proprietary estoppel. PE requires a much broader approach which is directed at ascertaining whether, in particular individual circumstances, it would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he has allowed or encouraged another to assume to his detriment.

An unconscionable result is one that would be recognised by an objective bystander (Guest v Guest). The fact that a promise has been made previously and the promisor has changed their mind is not enough.

Question 26

Gillet unconscionability

Answer 26

In this case, Mr Holt has promised Mr Gillet over a 40 year period that he would be the beneficiary of Holt’s will. When Holt changed his will to exclude Gillet, a claim based on estoppel was successful, the CoA noting that the mere withdrawal of assurance after such detriment was sufficient to establish unconscionability. The analysis in Gillett is driven by the understanding that estoppel claims should not be dissected too closely by an analysis of the ingredients of a claim but should be looked at in total to see if the denial of the claimants alleged right to the land is unconscionable.

Question 27

Jennings

Answer 27

Mr Jennings worked as a gardener and handyman in the home of an elderly lady. He began as a paid employee but the lady then stopped paying him. She became increasingly ill and Mr Jennings and his wife continued to care for her, often staying at her home. Mrs Royle mad regular statements along the lines of ‘all this will be yours one day.’ Helped and cared for her for 15 years. The need to search for principles cannot be avoided but unlikely to be a short or simple search because PE can apply in a wide variety of factual situations and any summary formula is likely an over-simplification. The doctrine applied only if these elements, in combination, make it unconscionable for the person giving the assurances to go back on them.

Question 28

Remedies intro

Answer 28

As there is a myriad of circumstances in which PE can be established, this necessarily means that the remedy will vary from case to case. If the estoppel is established by a claimant seeking to enforce a claim against a landowner in consequence of an assurance, the court can award the claimant such remedy as it deems appropriate. Thus, the question of remedy perhaps the most open-ended and fluid issue in the law of estoppel. This flexibility does produce a measure of uncertainty for both the claimant and potential purchaser of the land over which the estoppel is asserted.

Question 29

Early case law

Answer 29

Crab
Pascoe

Question 30

Crab

Answer 30

Scarman LJ found, when discussing remedies, that what was required was the ‘minimum equity to do justice to the plaintiff.’

Question 31

Pascoe

Answer 31

Cumming-Bruce LJ found the courts must decide what the minimum equity to do justice to her detrimental reliance would be

Question 32

Jennings remedies

Answer 32

Robert Walker LJ posed the question whether the fundamental aim of this form of estoppel is to fulfill the claimants expectations or to compensate him for his detrimental reliance. He observed that the range of English authorities provides some support for both theories.

Two factors underlying the concept of unconscionability were examined as potential guiding principles for remedial discretion:
1. The claimants expectation, as induced by assurances relating to their future rights regarding specific property
2. The claimants detrimental reliance upon said assurances

Therefore, when the court is called upon to avoid an unconscionable result, it could fulfill the expectation or compensate the claimant for the detriment incurred. Court set out that expectation should be the natural response. But if these are uncertain, extravagant or out of proportion to detriment, court should recognise that the claimant’s equity should be satisfied in another way. The courts in this case did not firmly or unanimously adopt either one. Instead Aldous LJ did not state the remedial objective any higher than ‘to do justice’ in light of a given case’s circumstances.

Question 33

Davies v Davies remedies

Answer 33

No progress had been made in resolving this fundamental question – stating that the court has to exercise broad judgemental discretion. Lewison LJ referred to the lively controversy about the aim of this discretion. He stated:
“One line of authority takes the view that the essential aim of the discretion is to give effect to the claimant’s expectation unless it would be disproportionate to do so. The other takes the view that the essential aim of the discretion is to ensure that the claimant’s reliance interest is protected so that she is compensated for such detriment as she has suffered. The two approaches, in their starkest form are fundamentally different.”
Case demonstrated another lack of commitment ab initio to either expectation or detriment obscured the purposes served by affording the claimant with a remedy.

Lewison LJ’s judgement in Davies contemplates the detriment-focused remedial approach favourably. Given that detrimental reliance on an expectations is an essential requirement for a successful claim, the removal of that detriment by means of compensation ought simultaneously to remove the basis for the claim. Remedying that detriment to remove unconscionable result.

Question 34

Expectation approach

Answer 34

Cooke notes that, historically across multiple legal disciplines, the usual measure of relied in estoppel is expectation rather than the compensation of the reliance. Thus, in a practical sense adopting expectation as an initial presumptions aligns with more general legal principles

Question 35

Guest v Guest facts

Answer 35

The claimant, Andrew, is the defendants eldest son. He left school at 16 to work, full time and for little reward, on his parents dairy farm expecting he would inherit part of it upon their deaths. However, due to a relationship breakdown the parents altered their wills, excluding any entitlement on his part to the farm or its dairy business. Andrew left the farm having worked 33 years before bringing a claim in proprietary estopppel for a declaration of his beneficial interest

Question 36

Remedies point Guest

Answer 36

Guest clarifies that the true purpose of remedy for PE is dealing with the unconscionability constituted by the promisor repudiating on his promise. Here court clarified the previous case law, citing, inter alia Crabb, Pascoe, and Holt, showing a tendency of the English courts to prioritise an expectation-based approach to remedy. LJ provided the logic of the detriment-based approach is faulty in origin and wrong in its result. It fails to recognise that while detriment is necessary it is the repudiation of the promised expectation which constitutes the unconscionable wrong. It mistakenly treats the detriment rather than the loss of expectation as the relevant harm.

Thus, the case found that, equity is not in this context merely providing an ancillary remedy in support of a common law cause of action, for which damages is the primary remedy. Under the doctrine of PE the specific enforcement of the promise or assurance is the primary remedy for unconscionability threatened or occasioned by its breach

Acknowledge, Nonetheless there have been many cases where the court has recognised that full specific enforcement is not the appropriate remedy. The promise may be incapable of specific enforcement, for example, where the underlying property is no longer in the hands of the promisor or his estate for one example.

Question 37

Who commented and what

Answer 37

Fahrenkamp - Guest v Guest is but one example of how the lack of clear remedial objective in the law of PE can complicate litigation and render the underlying equitable doctrine less transparent that it could otherwise be, Despite having several chances to adopt clear remedial approaches based on a claimants expectations or their detrimental reliance, courts have refrained from committing themselves to a particular guiding principle.

Mee - the absence of a clear remedial objective in the courts’ treatment of PE encourages lengthy litigation, exacerbating intra-familial disputes.

Question 38

Similarities to CICT

Answer 38

Doctrine of PE has much in common with the branch of trusts known as the common intention constructive trusts which concern the acquisition of an equitable interest in another person’s land. Estoppel is triggered by an assurance, relied on to detriment where it would be unconscionable for the assurance to be withdrawn. A CICT is triggered by an express promise or assurance as to ownership that is relied on to detriment. This overlap was given prominence by the Court of Appeal in Yaxley v Gotts.

Question 39

Yaxly facts

Answer 39

Mr Yaxley and Mr Gotts were long-standing friends. Mr Y was a self-employed builder who had worked for Mr G on previous occasions. They agreed, orally, that Mr G would buy a property and Mr Y would carry out the refurbishment work at his own expense and thereafter act as managing agent of the property, in return the ground floor (2 flats) would be his for ever. Mr A Gotts then excluded Mr Y from the property, and Mr Y commenced proceedings. The case proceeded on the basis of proprietary estoppel and constructive trust, and Mr Y succeeded.

Question 40

Yaxly judgement

Answer 40

Lord Robert Walker found at a high level of generality, there is much common ground between the doctrines of PE and CICT. Concerned with equity’s intervention to provide relief against unconscionable conduct. On the facts it was not disputed that a proprietary estoppel arose and that the appropriate remedy was the grant to Mr Y a long leasehold interest, rent free, of the ground floor of the property. Those findings equally provide the basis for the conclusion that Mr Yaxley was entitled to such an interest under a constructive trust. However, it remains unclear whether the claimant, in this position, succeeds on the basis of PE or CICT. Their Lordships considered this question irrelevant in Yaxley as, in their view, the result is identical.

Question 41

Who commented what Yaxly

Answer 41

On a different set of facts however, this could be significant. On one view PE might give rise to a number of different remedies, that being the one which resolved the unconscionability, but a constructive trust finding a beneficial interest in the property. Moore argues, following this case, the distinctions between PE and CICT and the full extent to which equitable remedies continue to apply in the context of an informal agreement concerning land remain unclear.

Question 42

Differences CICT and PE

Answer 42

Common intention
Remedies
Types of dispute

Question 43

Types of dispute

Answer 43

The CICT tends to be relied on in matrimonial or quasi-matrimonial disputes concerning the family home. Proprietary estoppel on the other hand tends to be used in a variety of cases both between strangers, acquaintances and familial or friend relationships.

Question 44

Remedies cases

Answer 44

Pascoe
Hoyle v Cromer
Wayling
Davies

Question 45

Case remedy outcomes

Answer 45

Pascoe - fee simple
Hoyle - easement
Wayling - compensation in leui of prop interest because property had been sold
Davies - cash sum

Question 46

Remedies differences

Answer 46

A successful plea of a CICT results in an equitable share of ownership for the claimant with the legal owner holding the land under trust.

However, the remedies for proprietary estoppel are much more varied and subject to wide judicial discretion. The way of awarding remedies for PE was subject to much consideration by the courts, however the recent case of Guest v Guest provides that the courts should follow an expectation-based approach where it is applicable. As PE arises out of varies different factual scenarios this could be a multitude of things. PE offers a much wider range and provides the courts with considerable judicial discretion.

Question 47

Common intention case

Answer 47

Arif v Anwar

Question 48

Arif facts

Answer 48

the son held the belief that he would acquire some beneficial interest in the family home, as he had allowed money in his name to be used for its purchase. The court determined that the dealings were too vague and uncertain to establish a CICT but were enough to establish proprietary estoppel.

Question 49

Arif facts

Answer 49

the son held the belief that he would acquire some beneficial interest in the family home, as he had allowed money in his name to be used for its purchase. The court determined that the dealings were too vague and uncertain to establish a CICT but were enough to establish proprietary estoppel.

Question 50

Common intention

Answer 50

Both CICT and PE are triggered by an assurance, reliance and detriment. In consequence there are many cases in which a claimant could plead either doctrine and in many cases they do. It is generally though however that estoppel is available in a wider range of circumstances because the assurance in CICT appears to have a higher evidential threshold, due to it being thought of a common intention. Thus it seems the difference between these two doctrines relies on the need for common intention in finding a constructive trust. An estoppel is, perhaps, easier to establish because it can arise from unilateral assurance.

Question 51

Who said what about combining doctrines

Answer 51

George and Layard provide that they are distinct doctrines that should not be fused. The constructive trust is predicated upon the basis that there is an agreement to share the beneficial ownership in the property. While an estoppel case, the expectation may be to acquire beneficial ownership or could be to have some lesser right such as right of occupation.

Further argue that the theoretical basis of the doctrines are different. The rationale of the constructive trust is to prevent unjust enrichment. The rationale of estoppel is to prevent unconscionability – a much wider concept.

Question 52

Pascoe facts

Answer 52

The claimant and the defendant lived together in a house owned by the claimant. They were not married but lived as it they were. In 1973 he met another woman and left the defendant. He assured her that she could have the house but never formally transferred the title. She remained in the house and spent money on redecoration and improvements in the belief that she owned the house. He then brought an actions seeking to evict her. It was held that the defendant could remain in the house and was entitled to have the title transferred through PE

Question 53

Pascoe who held what, remedies point

Answer 53

Cumming-Bruce - the equity to which the facts in this case give rise can only be satisfied by compelling the appellant to give effect to his promise and her expectations. Thus, she was provided with what she expected from the assurances, and that was ownership of the house.