#19941 - Pq Map Prop Estoppel - Land Law

Proprietary Estoppel

General principles:

1. Proprietary estoppel can operate as both a shield and a sword

• Shield: Proprietary estoppel can be a defence to an action by a landowner who seeks to enforce his rights against another’s informally promised right or liberty over the land.

  • Lester v Hardy (2010) : PE operated as a defence to an allegation of nuisance

  • Wormall v Wormall (2004): PE operated as a defence to an action of trespass

• Sword: Proprietary estoppel can be a sword in the hands of a claimant who has relied on an assurance by Landowner of some right or privilege over the land. Crabb v Arun DC (1976)

2. The features of estoppel are both fluid and intertwined hollistic assessment

• Jennings v Rice (2002):

  • The three features of estoppel – assurance, reliance, detriment (+ unconscionability) are not to be isolated features, each case must be looked at ‘in the round’ to determine whether the landowner is able to go back on his assurance to C about the use of land.

  • Must adopt a holistic approach to establish proprietary estoppel in Thorner v. Major (2009)

3. Estoppel is a drastic remedy and a major step for the court

• Prudential Assurance v. Waterloo Real Estate (1998)

  • Court can award C a proprietary right over A’s land in the absence of due formality, especially if the effect of the estoppel is to compel a transfer of ownership of the land itself.

• This can be illustrated by a line of cases where estoppel has been rejected:

• Cobbe v. Yeoman’s Row Management [2008[: HL didn’t allow estoppel to enforce an oral agreement that both parties knew was only ‘binding in honour’ until reduced to writing;

• Shirt v Shirt [2012]: A son could not use estoppel to claim possession of the family farm because his father’s oral assurances were vague and unspecific.

Step 1: Establishing equity by estoppel

Element 1: Assurance/promise

1. Can be silent encouragement (acquiescence), past & future rights.

Thorner v Major (2009)

• Principle: The representation/promise can relate either to existing rights (‘The land is yours’) or to a future grant (‘The land will be yours when I die’).

• Can be used to defend a present right or assert a future right (eg dead dad promised, but no will)

Wilmott v Barber (1880)

• Principle: Estoppel doesn’t need to come from an explicit representation or promise (can be tacit/implied/involve mere acquiescence). However, it must be a formed implied intention.

• Facts: D says C can move onto land with his daughter. C builds house without asking permission, but D knew about it. D tells C to leave the land. Estoppel claim arises.

• Held: There was tacit acquiescence to what C had done so C could rely on D’s representation.

2. Clarity of promise depends on context of parties and character of the promisor:

Cobbe v Yeoman’s Row [2008]: Context + formality

• Principle: When parties have equal bargaining power (commercial), dealing at arm’s length, can’t bypass s2 LP(MP)A 1989 (formalities) by granting estoppel. Both parties knew ‘promise’ wasn’t binding.

  • s2: ‘A contract for the sale or other disposition of an interest in land can only be made in writing’.

• Facts: Y offered C a development for 12mn + share of profits, that C wanted to convert into flats. This was an unwritten ‘gentleman’s agreement’. After C got planning permission, Y raised to 20mn.

• Held: Estoppel claim failed, ‘equity cannot contradict the statute’, commercially aware actors. “The oral agreement in principle that had been reached, i.e. the core terms, did not cover everything that would have been expected in due course to be dealt with in a formal written contract.” (Lord Scott)

Thorner v Major [2009] Leading Case: Character of promisor

• Principle 1: For estoppel, assurance must be clear enough. What counts as sufficiently clear depends on the context of the parties’ relationship and the character of the promisor. (Lord Neuberger below)

• Principle 2: Family context: general assurance; commercial context: more explicit assurance.

• Facts: C worked unpaid on D’s farm for 20y. Throughout, D suggested that he’d leave C his farm. D died, no farm, C sought entitlement through PE. D was ‘a man of few words’ – oblique.

  • Gillett v Holt [2001]: C got farm because D said: ‘all land will be yours on my death’ cf: Thorner.

• Held: Succeeded. Promise was sufficiently clear, in this context. Revocability belief irrelevant.

3. Assurance must relate to identifiable property

Thorner v Major [2009]

• Principle: Promise must relate to identifiable land, but not a specific proprietary interest.

  • Although precise scope of farm was unidentifiable, the nature of farm business (land fluctuates) made the land to which D was referring reasonably clear. Cf SSC & LG v.Praxis

4. Assurance must generate unconscionability if withdrawn. This is when equity intervenes (Crab)

Cobbe v. Yeomans Row

• Principle: Estoppel is available when it is necessary to prevent unconscionability.

5. Estoppel can still arise when there is no property right, or even contractual right.

Tanner v Tanner [1975]

• Principle: Estoppel license: if D only promises a bare license, C can make a successful claim if she has relied on the promise to her detrimental. This is unusual to allow, cf Re Sharpe [1980]

6. Estoppel can succeed even if landowner did not intend assurance

Thorner v Major [2009]

• Principle: C must reasonably believe that an assurance has been made, regardless of whether D intended to make the assurance (& cause reliance) by words or deeds.

• Objective test: would a reasonable C believe an assurance had been made?

• No estoppel if D can’t reasonably know of C’s belief & didn’t encourage, silently or explicitly.

Element 2: Reliance (C must be in a position (through act or omission) he wouldn’t be in, but for D’s promise/assurance.)

1. But what if you would have put yourself in that position anyway? Estoppel allowed, causality.

Wayling v Jones (1993): Current ‘but for’ test

• Principle: Test: would C have acted that way anyway, knowing what they now know about D (eg that D’s a promise breaker).

• Facts: C did unpaid work for D, who promised to leave C a property. C would do work anyway.

• Held : Distinction between C’s state of mind now and then. C would’ve worked for D anyway because they were friends, vs C would not work for D today, because D breaks promises.

2. Presumed Reliance (Burden of proof on D not C), causal link.

Greasley v Cooke 1980

• Principle: court will presume C’s (detrimental) reliance on D’s assurance. Burden of proof on D.

• D must prove that C’s reliance on his assurance was unreasonable or disproportionate.

Wayling v Jones

• CA only looked for a “sufficient link” between the assurance made & detriment incurred.

3. Dual Motive = estoppel allowed

Campbell v Griffin (2001)

• Facts: C admitted that he would’ve cared for D out of human compassion, had D made no promise

• CA: dual motive for action (human compassion + assurance) doesn’t diminish estoppel claim

Chun v Ho (2001)

• Principle: existence of reliance is fact-dependent. Mustn’t presume intentions (eg family ties).

• D made assurances about the business, C gave up her career (to the disgrace of her family).

• CA: Her actions could not be explained solely on the basis of her love for him.

4. No Reliance, if wholly discounting D’s conduct/assurance

Orgee (1997)

• Principle: no reliance, if C would have incurred same detriment, irrespective of D’s conduct.

Element 3: Detriment includes anything which can be said to leave the claimant worse off if the promise is broken e.g., spending money on the land, forsaking other valuable opportunities.

• A causal link to Reliance is needed (burden on D to show there wasn’t)

• Courts also ask whether C’s reliance on D’s assurance had countervailing benefits

1. Detriment will suffice as long as it is not minimal or trivial – must be something substantial

Lothian v Dixon (2014)

• Principle: So long as the detriment is not minimal or trivial, it may take any form.

Gillet v Holt [2001]

• Although C had done well from his relationship with D, court found detriment.

• Detriment: underpaid, not accepting offers elsewhere, stopping education early, going beyond scope of employee’s duty, not securing future wealth, cost on improving house

Jennings v Rice: Detriment need not be related to land: C spent no money, on assurance that he’d have a house.

Creasey v Sole [2013]

• Principle: no detriment if turned down opportunities weren’t more advantageous.

• C couldn’t show that he’d be in a better...