Proprietary Estoppel Flashcards
(37 cards)
What is unique about proprietary estoppel? Justify this unique trait.
Proprietary estoppel is both a shield and a sword as it is capable of by itself conferring a right on the promisor (Crabbe). Thorner justifies this on the basis of the doctrine’s limited scope - it applies only in relation to identified land belonging to the promisor.
Why do MHN suggest that the label “estoppel” is misleading when applied to proprietary estoppel?
Technically an estoppel merely prevents A from doing something but proprietary estoppel, by imposing a duty on A, can compel A to do something
Is PE an exception to the formality requirements imposed by the LP(MP)A on disposition of interests in land?
Yes, notwithstanding Lord Scott’s dicta in Cobbe that PE could not render enforceable an agreement that S.2 LP(MP)A has declared to be void, for equity could not contradict statute. In Whittaker Bean J, noting the position of the Law Comm that formalities rules were not intended to affect the operation of PE or CT, held that “proprietary estoppel has survived the enactment of S.2 of the LP(MP)A”.
Is PE an exception to the formality requirements imposed by the LP(MP)A on disposition of interests in land?
Yes, notwithstanding Lord Scott’s dicta in Cobbe that since equity could not contradict statute, PE could not render enforceable an agreement that S.2 LP(MP)A has declared to be void. In Whittaker Bean J, noting the position of the Law Comm that formalities rules were not intended to affect the operation of PE or CT, held that “proprietary estoppel has survived the enactment of S.2 of the LP(MP)A”.
What are the three stages in the life of a PE claim?
i. 3 (possibly 4) PE core elements satisfied on the facts
ii. Inchoate equity (a right to go to court) arises by estoppel
iii. C seeks relief from the court, which decides how to satisfy the equity
What are the core elements of proprietary estoppel, and what is the r/s between them?
- A ASSURED B of an existing or future right in A’s land.
- B reasonably RELIED on B’s assurance.
- B would now suffer a DETRIMENT as a consequence of his reasonable reliance if A were not under a duty to B.
Thorner (3 requirements for an assurance to found a PE claim)
I. The representation may be express or implied by indirect statements and conduct or even by passive acquiescence, so long as they reasonably conveyed to B the meaning that B would have a right in A’s land.
II. The assurance must be clear.
III. The assurance given to B must relate to identified property owned or about to be owned by A.
What was the test advanced in Thorner for the clarity of the representation?
Lord Neuberger endorsed the test in Walton – “The promise must be unambiguous and must appear to have been intended to be taken seriously…it must be a promise which one might reasonably expect to be relied upon by the promisee”.
He also supported the “clear and unequivocal” test, but his emphasis on its flexible and practical application effectively emasculate the test.
Is it always necessary to found a claim of PE that the assurance thoroughly defines the land in which A claims an interest?
Uncertainty over the nature and terms of the property interest will generally be fatal to a claim of PE (Cobbe) but uncertainty over the character and extent of the property may not be, for it is not necessary that the precise extent of the property should always be strictly defined (Thorner).
Ramsden (+ gloss added in Thorner)
A’s knowing acquiescence in B’s mistake may be sufficient assurance.
Lord Walker implied in Thorner that B must actually be aware that A is standing by and failing to intervene, for otherwise it is difficult to speak of “reliance” or “assurance”.
Cobbe (1 guideline, 2 ratios)
The court should be very reluctant to introduce uncertainty into commercial transactions by over-ready use of equitable concepts such as fiduciary obligations and equitable estoppel
Ratio -
- Where the parties are commercially experienced and in an arm’s-length r/s and could have been expected to enter into a contract, but consciously chose not to, PE is NA.
- Neither A’s unconscionable conduct nor B’s conscious reliance on A’s honour is sufficient to found a PE claim.
What is the r/s between Cobbe and
(i) Crabbe
(ii) Thorner
While in Crabbe PE was found in a commercial negotiation context, Cobbe explained this on the ground that A’s act of erecting the gates allowing access by B was so unequivocal that it put the matter beyond the negotiation stage
What is the r/s between Cobbe and
(i) Crabbe
(ii) Thorner
(i) While in Crabbe PE was found in a commercial negotiation context, Cobbe explained this on the ground that A’s act of erecting the gates allowing access by B was so unequivocal that it put the matter beyond the negotiation stage.
(ii) In Thorner the the r/s between A and B was familial and personal, the parties lacked commercial experience and neither had even begun to contemplate entering into a contract over ownership of A’s farm; it was unreal to suppose that B should have asked A for a legal commitment.
Greasley
Once it is shown that a representation was calculated to influence the judgment of a reasonable man, the presumption is that he was so influenced; it is no answer for A to merely speculate that B would have acted the same way anyway.
Greasley
Once it is shown that a representation was calculated to influence the judgment of a reasonable man, the presumption is that he was so influenced.
Wayling (+ comments by MHN)
Once the Greasley presumption is raised it is not sufficient for A to show that B would have acted the same way if the promise had not been made; A must show that B would have done so if the promise, once made, had been withdrawn.
MHN – this unusually relaxed interpretation of “reliance” was probably adopted to give full effect to the true nature of A and B’s r/s (similar to the approach to constructive trusts in the family home context) and is probably NA in a commercial case.
Thorner (2 comments on reliance)
- It is NOT necessary that A must have known or foreseen the particular act of reliance.
- Events subsequent to the reliance may be taken into account in determining the reasonableness of the reliance.
Gillett v Holt (2 broad comments on the requirement of detriment)
It is not the reliance itself that must be detrimental; the question is whether given B’s reliance he would suffer detriment w/o a PE claim against A.
The requirement of substantial detriment must be approached as part of a broad inquiry as to whether repudiation of an assurance is unconscionable in all the circumstances.
Gillett v Holt (2 broad comments on the requirement of detriment)
(a) It is not the reliance itself that must be detrimental; the question is whether given B’s reliance he would suffer detriment w/o a PE claim against A.
(b) The requirement of substantial detriment must be approached as part of a broad inquiry as to whether repudiation of an assurance is unconscionable in all the circumstances.
Gillett v Holt - how are we to determine whether the requirement of substantial detriment is met? (3 points)
a. There must be a sufficient causal link between the assurance relied on and the detriment asserted.
b. Whether the detriment exists is to be judged at the moment when the person who has given the assurance seeks to go back on it.
c. Whether the detriment is sufficiently substantial is to be tested by whether it would be unjust or inequitable to allow the assurance to be disregarded (a test of unconscionability).
Where B has benefited from his reliance on A’s assurance, will he always fail the requirement for detrimental reliance?
Henry (UKPC) - in such cases the question is whether the benefits of reliance outweigh the prejudice to B if A were wholly free to renege on his promise.
What is the role of unconscionability in PE? (Cobbe/Dixon/Southwell)
Lord Walker in Cobbe – the role of unconscionability is as part of the context. It unifies and confirms the first three requirements; if the first three requirements appear to be present but the result does not shock the conscience of the court, the result needs to be assessed again.
Dixon disagrees - he argues that the elements of assurance, reliance and detriment alone do not explain why these elements must impose a duty on A to B. Thus, as Taylor Fashions and Walker LJ’s judgment in Gillett suggest, unconscionability must be an independent requirement.
Southwell - acknowledged that the 3 core elements might not be sufficient to give rise to the equity, but later seemed to elide unconscionability and DR.
What are the four possible configurations of A’s duty to B?
- A must honour his commitment.
- A must ensure B suffers no detriment from A’s failure to honour his promise.
- A must pay B the value of any benefit he has received at B’s expense.
- A must do whatever the court thinks necessary to avoid unconscionable conduct.
Jennings v Rice (3 points on satisfying equity)
(i) The extent of B’s expectation is the starting point, for it indicates the maximum extent of the equity, but the court is not bound to fulfill it.
(ii) The court has discretion to make an award that is proportionate both to B’s expectation and the detriment B suffered and is not bound to fulfil B’s expectation
(iii) The overall aim is to do what is necessary to avoid an unconscionable result.
