Proprietary Estoppel

Front 1

Nature

Back 1

Proprietary estoppel is a form of equitable estoppel which creates property rights. It can operate so as to give property rights to someone who would otherwise have no property rights at all or only a bare licence.
In general terms the doctrine of proprietary estoppel arises where a person (the claimant) has done acts in reliance on a belief that he has or will have an interest in the landowner’s land and he has acted in such circumstances that it would be unconscionable for the landowner thereafter to enforce his strict legal rights and deny the claimant any rights at all. The doctrine operates so as to prevent the landowner from enforcing his strict legal rights and the claimant will usually also acquire a proprietary interest in the land. The doctrine is generally thought to be limited to claims to land rather than all property.

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Creation of proprietary estoppel

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There are a number of strands of cases which together are now regarded as examples of proprietary estoppel: some involve informal gifts; some involve the encouragement of a mistaken belief; and others the failure to correct a mistaken belief (otherwise known as acquiescence).

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Willmott v Barber (1880)

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Landowner had stood by doing nothing whilst the claimant built on his land.
Fry J: set out five requirements for liability:
“A man is not to be deprived of his legal rights unless he has acted in such a way as would make it fraudulent for him to set up those rights. What, then, are the elements or requisites necessary to constitute fraud of that description? In the first place the plaintiff must have made a mistake as to his legal rights. Secondly the plaintiff must have expended some money or must have done some act (not necessarily upon the defendant’s land) on the faith of his mistaken belief. Thirdly, the defendant, the possessor of the legal right, must know of the existence of his own right which is inconsistent with the right claimed by the plaintiff. If he does not know of it he is in the same position as the plaintiff, and the doctrine of acquiescence is founded upon conduct with knowledge of your legal rights. Fourthly, the defendant, the possessor of the legal right, must know of the plaintiff’s mistaken belief of his rights. If he does not, there is nothing which calls upon him to assert his own rights. Lastly, the defendant, the possessor of the legal right, must have encouraged the plaintiff in his expenditure of money or in the other acts which he has done, either directly or by abstaining from asserting his legal right. Where all these elements exist, there is fraud of such a nature as will entitle the court to restrain the possessor of the legal right from exercising it, but, in my judgment, nothing short of this will do.”

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5 factors to proprietary estoppel as listed in Willmott v Barber (1880)

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• A mistake
• Acted on to the detriment of the party
• Landowner must know his own rights and that he is doing something wrong
• D must know of the plaintiff’s mistaken beliefs
• D must have encouraged the plaintiff to continue either directly or indirectly (by not asserting his own rights)

(used to think all were necessary, changed under Taylors Fashions Ltd v Liverpool Victoria Trustees Co

Front 5

Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982]

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More flexible approach to proprietary estoppel
than Willmott v Barber (1880)

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What if you don't get all five factors in Wilmot?

Back 6

It becomes a question as to whether it was unconscionable to prove proprietary estoppel.

Front 7

Uglow v Uglow [2004]

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The overriding concern of equity to prevent unconscionable conduct permeates all the different elements of the doctrine.
CoA: assurance, reliance, detriment and satisfaction are all intertwined.

Front 8

Yeoman’s Row Management Ltd v Cobbe [2008]

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HoL: Walker: unconscionbability unifies and confirms the other elements of the doctrine. If the claimant appears to have established all the requirements of the doctrine but the result does not shock the conscience of the court then maybe the facts must be looked at again.

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Thorner v Major [2009]

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The landowner and the claimant, were classed as farmers, was a taciturn man who was not given to direct talking. Various oblique remarks made by him over the years to his cousin’s son were reasonably believed by the latter to indicate that he would inherit the farm.
Held: the only thing that mattered was whether a reasonable person could have relied on the conduct that looked like an assurance.
Speaking in oblique and allusive terms does not matter if one could reasonably believe one was being given an assurance. What mattered was whether Peter’s conduct ‘would reasonably have been understood as intended to be taken seriously as an assurance which could be relied upon’. There was no requirement that D intended C to rely on him.

Front 10

MacDonald v Frost [2009]

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Unless you can interpret the promise so that it relates to a specific, identifiable property.

Front 11

Inwards v Baker [1965]

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D wanted to buy a plot of land and build a bungalow but it was too expensive. At his father’s suggestion, he built on his father’s land. After his Father’s death, the trustees under his father’s will sought possession.
CoA: there had not been an agreement of a specific interest – but the son was of the opinion that the house was his for as long as he liked. The court refused to grant permission to the trustees.

Front 12

Crabb v Arun DC [1976]

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The claimant was the owner of a piece of land which he divided into two plots. Only the northern plot had access to the highway. He wanted to sell the northern plot and entered into negotiations with the defendant during which it was agreed that he would be granted a new means of access to the southern plot. This was not a binding agreement but the council erected gates where the access was intended to be. In reliance on this the claimant sold the northern plot without reserving a right of access over it. The defendants then refused to grant a right of access except on payment of £3,000. The claimant refused.
Held: had a means of access via proprietary estoppel.
It wasn’t always a mistaken belief – only when the council changed it mind.

Front 13

Re Basham [1986]

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A stepfather had by various statements over the years deliberately encouraged his stepdaughter’s belief that she would inherit his property on his death to induce her and her husband to look after him and his property and not to move away from the area. He did not leave his property to her.

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Gillett v Holt [2001]

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The parties had become friends when G was 12 and H was 38. G had been persuaded to leave school at 16 to work for H. He worked for him, at an average wage, for nearly 40 years. G, his wife and family basically devoted their lives to H: they became his surrogate family. They sold their house (thus stepping off the property ladder) to move into property owned by H on which they spent substantial sums of money. At seven times over the years H said that he intended to leave his various properties to G. However, the relationship cooled; G was summarily dismissed; and another will was written leaving the properties to a third party.
Held: Gillett did get an immediate interest in one of the properties and was awarded the sum of £100,000.

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Yeoman’s Row Management Ltd v Cobbe

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Explained Crabb. Erection of gates was so unequivocal that it took matters beyond negotiation. However, it is important that nothing must remain to be negotiated.
Walker: easier to establish proprietary estoppel in a domestic situation as there would be no legal advice, and a the claimant will be less informed then in a commercial setting.

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Uglow v Uglow

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A farmer promised to leave his farm to his nephew to persuade the latter to leave the farming business run by his father and brothers and join his uncle in partnership. The partnership did not work out. The nephew had been granted an agricultural tenancy of part of the property instead.
CoA: claim to ownership of the farm failed as the partnership failed.

Front 17

Lloyds Bank plc v Carrick [1996]

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Mrs Carrick had contracted to buy a maisonette belonging to her brother-in-law to whom she had paid the agreed purchase price. She failed to register the contract under the Land Charges Act 1972 and thus it did not bind a later mortgagee. She claimed the benefit of proprietary estoppel on the ground that she had paid the purchase price and carried out improvements in the belief that she did or would own the property.
Held: She had relied on a contract, so there was no room for proprietory estoppel to operate.
Would have been different if there had been a later assurance (eg someone told her her rights were recognised) then PE could arise.
Buit on the facts her actions were justified by the rights she had.

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Greasley v Cooke

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The claimant was in a long-term relationship with one of two joint landowners (the other was his brother). They assured her that their house would be her home for life and in consequence she stayed there and looked after her partner and his invalid sister.
CoA: where a promise has been made that is calculated to influence the claimant, then it can be assumed that any acts that were done can be said to be in reliance of this promise.

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Wayling v Jones (1993)

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Helped out his partners various businesses for what was little more than pocket money and living expenses.
CoA: Where a promise has been made the court may not ask whether the claimant would have acted the same had there been no promise, but what the claimant would have done had the promise been withdrawn.
This is worse than never having been made a promise in the first place.
Proprietary estoppel.

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Dillwyn v Llewellyn

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A father had purported to convey the fee simple of some land he owned to his son for the son to build a house on. However, due to the father’s failure to use a deed the gift of the land was ineffective. The son proceeded to build a house.
Held: sufficient to give rise to proprietary estoppel.

Front 21

E.R. Ives Investments Ltd v High [1967]

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A landowner had built a block of flats, the foundations of which trespassed on to adjoining land. An informal agreement between the neighbouring landowners permitted the foundations to remain in return for allowing the owner of the adjoining land a right of access. The agreement was in writing and at most created an equitable easement; it was not registered as a land charge and therefore was defeated on a sale of the property on which the flats stood. However, the purchasers had been told of the agreement and encouraged the adjoining owner when he built a garage on his land which could only be reached over their land by means of the right of access.

Front 22

Coombes v Smith [1986]

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A woman who moved in with her lover, got pregnant and looked after the home and child.
Held: failed to establish proprietary estoppel.

Front 23

Jennings v Rice [2002]

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Gave up spare time at evenings and weekends to care for landowner and do gardening. No relation to her – even slept at her property to look after her.
Held: proprietary esttoppel.

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Lloyd v Dugdale

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C had been led to believe he’d be able to purchase certain commercial premises. He failed to seek alternative commercial premises to buy because of this.
Held: proprietary esttoppel.

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Pascoe v Turner [1979]

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The claimant lived in a house owned by man with whom she had had a relationship in the past. He had told her that the house was hers. In reliance she spent about £230 on redecoration and more money on furnishings. Not a great deal as she was claiming for fee simple – however it was a large proportion of her minimal savings – and there were other factors that would let her get fee simple (looked at later in course).
Held: proprietary esttoppel.

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Unconscionability: the conduct of the landowner

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The landowner must have conducted himself in such a way that it would be unconscionable for him to assert his strict legal rights. Consider:

• The role that the landowner played in the creation of the claimant’s mistaken belief and in connection with the detrimental reliance.

• The landowner’s knowledge of his own rights, the claimant’s mistaken belief and the claimant’s acts in reliance.

Front 27

Yeoman’s Row Management Ltd v Cobbe

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HoL: whether a landowner’s conduct is unconscionable is an objective value judgment regardless of his state of mind.

Front 28

Thorner v Major

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In addition to Yeoman’s Row, it will be assessed objectively whether it was reasonable for the claimant to have taken any assurance seriously and acted in reliance on it.

Front 29

Willmott v Barber

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A landowner with complete knowledge will lose his strict legal rights even if he was totally inactive throughout. So whilst state of mind is not relevant – knowledge is.

Front 30

Taylors Fashions Ltd v Liverpool Victoria Trustees Ltd.

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Held: Lack of knowledge of landowner fatal to claim when there is total lack of action throughout.

Front 31

E.R. Ives Investments Ltd v High

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Held: claim succeeded where he encouraged the act in reliance as indirectly encouraging the mistaken belief. Even though they had no knowledge.

Front 32

Sweet v Sommer [2004]

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H owned a plot of land which he sold for building. He purported to grant to P a right of way over adjoining land owned jointly by himself and his W. Grant ineffective because W did not sign the right of way. W believed the right of way had been granted, drew it on the conveyancing plan and then stood by while the building went ahead.
Held: claim succeeded where he CREATED the mistaken belief, then stood by whilst there were acts in reliance.

Front 33

Joyce v Epsom & Ewell BC [2012]

Back 33

D had encouraged C’s belief that he had a right of access over council land to the rear of his property. C built a garage and driveway that could only be accessed via the land. D didn’t know he had actually built it.
Held: enough that they knew he had intention, rater than knowing he’d actually done it.

Front 34

Thorner v Major

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Dicta Lord Hoffmann where there is a promise or assurance then it may be enough that there is reliance, doesn’t matter if the landowner actually knows of it. As long as it is reasonably understood to be taken seriously that may be sufficient.

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Effect of Proprietary Estoppel

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The doctrine of proprietary estoppel gives the claimant a right to claim relief from the court. It can be used as a defence: Crabb v Arun DC (referred to as a sword and a shield).

Front 36

Issues come from promise to leave property to people after death.

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Before death there is no intention for the person to have rights in the property whilst you are alive. Presumably you intend that during your life time you can deal with your property in whatever way suits you. However, an equity exists from the moment of reliance. Therefore the person cannot deal with their property as they like (eg by giving it away/selling it). What about if you promise to leave everything to someone? What if it is necessary to cash it all in for holiday, medical treatment etc? (You can for medical treatment, some case law).

Front 37

Re Basham

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Equity that occurs for the moment of reliance is that of a floating trust. Not attached to the property but floats above it. When death occurs it then attaches it to itself. This means that the person can deal with their property as they like throughout their lifetime. However, the floating trust has not been properly worked out in English law – not understood how it works or what limitations it gives to the property owner. Therefore it is unsatisfactory.

Front 38

The 4 possibilities of a proprietary estoppel case:

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Courts might grant a proprietary interest, might give compensation, might grant an injunction, or there may be no remedy at all.

Front 39

Dillwyn v Llewellyn

Back 39

Conveyance of the fee simple ordered by way of completion of a gift. What C expected.

Front 40

Pascoe v Turner.

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Award of the fee simple. What C expected.

Front 41

Griffiths v Williams (1977)

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The claimant had spent money on repairs and improvements to her mother’s house in the belief that she could remain there for life.
Court persuaded to allow her to live there for life – but were scared this would bring in the Settled Land Act, which would give the daughter the right to sell the property. This was clearly more than expected or intended. Courts decided to try to get a different solution
The parties were persuaded to agree to the grant of a long lease at a low rent with a restriction on the right to assign. This essentially gave her the same right, but in a different way.

Front 42

Campbell v Griffin [2001]

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Held: refused to grant life interest. Would give rise to trust under TOLATA, would be inconvenient, cause too much legal expense and may lead to further disputes between the parties.

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Dodsworth v Dodsworth (1973)

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The landowner had led her brother and his wife to believe they had a home for life in the house in which she lived. They spent £700 on the house. The parties fell out. The claimants got the return of their expenditure of £700 with a right to remain until it was repaid.

Front 44

Wayling v Jones.

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The compensation was the value of the hotel he had expected to inherit.

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Jules v Robertson [2011]

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The property was subject to mortgages and valueless in the hands of the landowner.

Compensation cannot be more than what the property is worth.

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Jennings v Rice [2002]

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The claimant had cared for an old lady. He had run errands, help her dress, wash etc, ensured she had food and drink, done the gardening and stayed overnight. This was done in the expectation of inheriting her house and furniture worth £435,000. There was no exact figure that could be given. Normally court would give proprietary interest. Did not here. Instead he was awarded £200,000. The reason for this was that to award the house or the value of the house would be out of proportion to the detriment.
First instance: calculated the value of everything he had done (eg cost of full time nursiong care)
CoA: agreed with £200,000 – but said it would rarely be necessary to work out hourly rates and how much work was done. Does not need to be exact – can be a vague, approximate figure.

Front 47

Cobbe v Yeoman’s Row Management Ltd [2006]

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Agreement in principle that if claimant got planning permission for the defendant’s property, defendant would sell that property to the claimant. Claimant spent £69,000 on successful application which increased value of property by millions of pounds. The claimant was awarded half the increase in value as this was what the parties had intended. Case reversed by HL on the ground no estoppel had arisen.

Could be argued that the claimant’s acts didn’t increase the value of the land but instead “unlocked” the value of the land.

Front 48

Pascoe v Turner

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LO told partner land was hers – she spent dollar on making the house better. One factor in the remedy was her financial position.
Held: she would have to borrow money to carry out further stuff. Would be easier if she owned house to use as security.

Front 49

Sledmore v Dalby [1996]

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The son-in-law of the landowner had spent money on improvements to the property in the expectation of rent-free accommodation for life. He had already lived there rent free for 18 years.
Regarded the benefit C had already received as important.
CoA: looked at present situation of claimant and landowner. He was (at the time) in employment and would have no issue renting somewhere else – and only stayed at the property 2 nights a week.
In contrast the landowners financial condition had deteriorated and she needed te property to live in.
There was no remedy given. C had already received sufficient benefit and in the circumstances it was not unconscionable for the landowner to enforce her rights.

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Dodsworth v Dodsworth

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Woman let bro and sister-in-law to live with her for rest of lives. They fell out.
First instance, decision not to give proprietary rights to people that LO didn’t want to live in.
CoA: D dead. Still compensation in case Settled Land Act applied.

Front 51

Williams v Staite [1979]

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Poor behaviour on part of the claimant may also be relevant.
In earlier proceedings the claimants had been granted an equitable licence for life. Since then their conduct in relation to the landowner had been appalling. Did this behaviour lead to them losing their right?
CoA: No. Once you have come to court and got a court order you cannot lose it. It was suggested, however, that when C initially comes to court for a remedy the fact they “do not come with clean hands” may mean that the court may not grant a remedy in the first place.

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Wayling v Jones

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C expected to inherit hotel after partners death. Instead executors sold the hotel. Brought a claim against them and won – but could only get compensation.
This was very unusual as the doctrine of proprietary estoppel to bring action for interest in property. Here the action was brought against D who no longer had the relevant property. The only case in which this has occurred.

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Successors of the landowner

Before any court order

Registered land

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Registered land is simple: section 116 LRA 2002 - the equity is regarded as capable of binding successors in title from the moment it arises. (Must be coupled with a notice or with actual occupation).

In Birmingham Midshires Mortgage Services Ltd v Sabherwal (2000) 80 P&CR 256, CA (dicta)
It was said that an equity which effectively gives rise to a family interest is capable of being overreached.

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Successors of the landowner

Before any court order

Unregistered land

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Cases in favour:
E.R. Ives Investments Ltd v High.
Lloyds Bank plc v Carrick.
Birmingham Midshires Mortgage Services Ltd v Sabherwal (2000) 80 P&CR 256, CA.
Against:
Re Sharpe [1980] 1 WLR 219.
United Bank of Kuwait v Sahib [1997] Ch 107, CA.

Definitely NOT registerable under LCA.

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Successors of the landowner

After the court order

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The claimant is likely to have been granted a recognised interest in land and therefore the effect on purchasers will depend on what that interest is. If a recognised property interest is not granted, for example where the court simply grants negative protection or a licence, it is unclear whether the equity continues in existence.

Possibly in this case the equity continues in the same way as it would before the court order – but this is not clear.

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Successors of the claimant

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Whether the benefit of the equity can be passed on by the claimant remains unclear. In recent cases there have been dicta either way. However, there are some 19th century cases in which the equity has passed either to the heir of the claimant, with the land or been successfully assigned.

Front 57

Is proprietary estoppel an interest in land?

Back 57

In registered land can bind successors in title, not clear in unregistered but probably. Other problems when trying to fit it into Lord Wilberforce’s definition. Talking about in equity before a court order. Vague and flexible – not definable as we don’t know what rights it gives parties or how it affects others. Not got a sufficient degree of permanence and stability? Having said that – even though you can’t be certain of the extent of the right it is clear that there is a right. And there are other circumstances in land law that the claimants potential interests can be affected by his behaviour.
So we cannot say with absolute certainty whether proprietary estoppel is an interest or not – but it is pretty close.