#15581 - Proprietary Estoppel - GDL Land Law

Land Law: Proprietary Estoppel

Proprietary Estoppel

• Promissory Estoppel merely suspends rights; CF proprietary E can create rights.

• Can be shield and sword can be used to create a proprietary right

• Requires detriment (CF Promissory E)

• Definition, Moorgate Mercantile v Twitchings, Lord Denning MR: PE is ‘a principle of justice and of equity ... when a man, by his words or conduct, has led another to believe in a particular state of affairs, he will not be allowed to go back on it when it would be unjust or inequitable for him to do so’.

Development of PE

• Class exposition, Ramsden v Dyson, Lord Kingsdown

• Current test, Taylor’s Fashions v Liverpool Victoria Trustees, Lord Oliver, 4 elements

  • (1) Assurance by owner (a representation, expectation or assurance)

  • (2) Reliance by promisee

  • (3) Detriment

  • (4) Unconscionable

(1) Assurance/expectation/representation

• Assurance must relate to a right in property (eg a promise of money is insufficient) (but in family context this can be informal, eg ‘home for life’ in Griffiths v Williams)

• Need ‘clear and unambiguous’ representation (Neuberger, Thorner v Major)

• But what is sufficient is ‘hugely dependent on context’ (Thorner v Major)

• in family context, is whether the person invoking the estoppel ‘reasonably understood’ the statement/action to be an assurance he could rely on (Thorner)

• Assurance can be hardly spoken of, Can be informal language and inferred from conduct in family context (Thorner v Major).

• Commercial cases, difficult to show sufficient assurance/expectation

  • Crabb v Arun DC

  • Council had promised right of way; C then sold part of land leaving the land effectively landlocked; commercial setting, sufficient promise to give rise to PE.

  • D had ‘notice’ of C’s intention to act detrimentally in reliance on the assurance; and did nothing to stop it.

  • CF, no estoppel, ‘subject to contract’ case, Cobbe v Yeoman’s Row Management, strict approach-commercial context, need much clearer assurance

  • Difficult in commercial case to claim PE, businessmen should know the matter is still subject to contract.

  • C agreed to buy Y’s land; C spent money obtaining planning permission.

  • Y then refusal to sell.

  • Rejected estoppel claim: C was an experienced businessman, property-developer; he knew the oral agreement to sell the land was not legally binding; he knew it was subject to contract; he was taking a commercial risk.

  • CF informal ‘family’ setting of Gillet v Holt

  • Lord Scott: said you need an assurance as to a specific proprietary right

  • Lord Walker: distinction between family & commercial cases—in family settings, parties have little knowledge of proprietary rights.

• Family/informal settings, easier to claim, can be informal/implicit

  • Griffiths v Williams: promise of ‘home for life’, is sufficient in family context re a specific right in property.

  • Promises to leave property by will (even though inherently irrevocable), can give PE if combined with further statements/actions—Gillett v Holt, the assurance need not be irrevocable, repeated over time

  • Wills are inherently revocable; so would seem cannot form basis for a PE claim; but it can.

  • Endorsed Re Basham: a promise to leave property in a will can form basis of PE.

  • Holt promised Gillet farm; Gillet came to work and live on farm; 7 incidents of assurances.

  • CA: (1) no requirement that the assurance itself has to be irrevocable (what makes it irrevocable is that C has detrimentally relied on it, unconscionable to go back).

  • A statement of intention to leave property by will itself is insufficient; but if backed up, eg repeated over time-> can create an assurance.

  • Suggitt v Suggitt, also a will case

  • Father, over lifetime, gave, by implication, farm would be left to son; son worked on farm; father’s will didn’t leave to son; son successfully claimed.

  • Thorner v Major (widening PE again after Cobbe), C worked for 30 years on farm without payment, understanding he would inherit

  • Sufficient clarity of assurance is hugely dependent on context: distinction between ‘commercial context’ (Cobbe) CF domestic/family context of Thorner.

  • Rather than over statements, representation deduced from conduct & indirect comments (even ‘oblique and allusive’ terms).

  • C helped landowner on farm, mostly unpaid, for 30 years.

  • Oblique remarks and actions by landowner: gave C notice of an insurance policy bonus, telling him the money was to pay the landowner’s death duties;

  • Made a will in C’s favour but subsequently destroyed it. Died intestate.

  • Lord Scott, strict: need ‘clear and unequivocal’ assurance; reasonable reliance; substantial detriment.

  • Lord Walker: The relevant assurance must be ‘clear enough’—‘hugely dependent on context’.

  • Lord Neuberger: should not be ‘unrealistically rigorous’ when applying ‘clear and unambiguous’ test—look at circumstances.

  • Didn’t matter that property was uncertain, extent of farm had changed over the years: the physical geography changed over time, but clear enough

  • Davies v Davies

  • Daughter got PE; because over years had been promised farm by parents if she worked on it; she did so if the other party would ‘reasonably’ understand an assurance.

(2) Detriment

• Context Is significant

• Gillett v Holt (Robert Walker LJ) ‘detriment is not a narrow or technical concept’; need not be financial, as long as ‘substantial’

  • detriment is part of broader enquiry re whether repudiation of assurance is ‘unconscionable’. The ‘essential test’ = ‘unconscionability’.

  • Detriment measure at time the person seeks to go back on the assurance.

• Working for less pay than an agricultural worker would have expected (Suggitt v Suggitt)

• Working for owner; instead of advancing career elsewhere (giving up other prospects) (Gillet v Holt)

• Selling off land which C would otherwise not have done (Crabb v Arun, sold off land in reliance on council’s assurance of a right of way to the land he retained)

• Looking after owner and family (Greasley v Cooke)—cared for family unpaid.

• Spending money on building/improvements to owner’s property (Dilwyn v Llewlyn; Pascoe v Turner; Griffiths v Williams).

• Providing unpaid services in landowner’s business (Wayling v Jones)

• Providing unpaid services in owner’s home (Greasley v Cooke; Jennings v Rice)

• Giving up job/accommodation to be nearer the landowner (Maharaj v Shand)

• But NOT normal family/domestic activity/something would have done anyway (Coombes v Smith)

• Owner does not have to know exactly what C doing in reliance: general awareness is enough.

(3) Reliance , a change of position in reliance; (Coombes v Smith, detriment must be in reliance on the assurance, need causal link)

• Need sufficient causal link between the assurance and the detriment asserted (Gillett v Holt)

• Once assurance & detriment established reliance presumed (Greasley v Cooke);

• And burden of proving no reliance shifts to D (Wayling v Jones)

• The detrimental must result from reliance on the mistake/assumption/expectation—need causal link—no reliance if C would have suffered the detriment anyway (Coombes v Smith): woman left husband to live with another man; got pregnant by him; went to live in house he promised her would be hers; 10 years later, relationship ended. C suffered detriment, but not in reliance on any assurance—she had given up her home because she loved him; not in reliance/expectation of an assurance as to property rights.

• CF Maharaj v Chand: similar facts to Coombes, but detrimental reliance found

• Campbell v Griffin: reliance found; burden on D to disprove reliance.

(4) Unconscionability (Cobbe—‘shocks’ the conscience of the court’)

• Introduced in Taylors Fashions v Liverpool Victoria

• Is insufficient by itself (Re Basham)

• Normally follows from the other 3 elements

• Cobbe v Yeoman’s Row:

  • Lord Walker: ‘unconscionable’ is an ‘objective value judgment on behaviour’, regardless of state of mind of the individual.

  • It plays a role in ‘unifying and confirming the other elements’ of PE.

  • It must ‘shock the conscience of the court’—if other elements present, but doesn’t shock conscience—no PE.

• Uglow v Uglow: not unconscionable to go back on assurance that he would have the farm; in the meantime, he had already been given satisfaction (given a special type of protected tenancy enabling C to stay in occupation of the farm)

• Gillet v Holt (Robert Walker LJ): the 4 compartments of PE are not separate ‘watertight’ compartments the ‘unconscionable’ element permeates all the elements must look at the matter ‘in the round’.

• Court will consider interests of both parties (eg may be unconscionable to kick a single mother with 5 children out of home).

Effect of a PE—‘equity by estoppel, an inchoate (embryonic) equity’

• If fulfilled, the PE gives rise to an ‘equity’ by estoppel—inchoate equity.

• Can be a basis for a claim to (inter alia) an easement, lease or fee simple.

• So can be used as a sword, to enforce a promise.

• The estoppel does not give rise to an equitable interest in the land; it creates an ‘equity’, not a proprietary right

• It creates a right to make a claim: allowing C the right to ask the court for a remedy, which is discretionary, they may grant an interest in the land. So is ‘inchoate’.

• Although only an equity, it has some characteristics of a proprietary interest: i.e. it can bind a successor in title.

Equity by estoppel binding on purchaser:

• An equity by estoppel is capable of binding a purchaser

• Registered land:

  • S116 LRA 2002: an equity by estoppel can bind successors in title (even though at the time the equity arises it is inchoate; it is the right to make a claim which is binding)—will bind a donee and may bind a purchaser.

  • Can...