Equitable Remedies

Topic 9
Licenses & Estoppel

Topic outline:
 general principles of licenses and estoppel
 the situation at common law
 contractual licenses after the Judicature Acts
 constructive trusts
 licenses by estoppel
 types of estoppels
o promissory estoppel
o proprietary estoppel
 proprietary estoppel
o general principles
o judicial formulations
o representation
o reliance
o detriment
o the remedies
 the need for writing
 proprietary estoppel and constructive trusts

Learning outcomes:
by the end of this Topic, students should be able to:
1. define the different types of estoppel – estoppels by representation, promissory
and proprietary estoppels;
2. distinguish between contractual licenses, estoppels and the constructive trust;
3. illustrate the principles underpinning the principle of proprietary estoppel;
4. identify the elements of proprietary estoppel;
5. outline the importance of the principle of unconscionability to the principle of
proprietary estoppel;
6. discuss the elements of acquiescence, reliance and detriment as fundamental
components of the remedy of proprietary estoppel;

DRE pg. 1
7. recognize the similarities and differences between a proprietary estoppel and a
constructive trust;
8. explain and effectively deploy in both problem and essay questions, core
principles relation to proprietary estoppel and contractual licenses.

Required readings:
 Jaime Glister & James Lee. Hanbury and Martin on Modern Equity, 20th ed.
(Sweet & Maxwell, 2015), pp. 857 – 887

 Richard Clements and Ademola Abass, Equity and Trusts: Text, Cases and
Materials, 3 ed. (Oxford University Press, 2013), pp. 173 – 199

 Sampson Owusu, Commonwealth Caribbean Land Law, (Cavendish

Routledge, 2007), pp. 186 – 215

Key cases:
 Central London Property Trust Ltd v High Trees House [1947] KB 130
 Dilwyn v Llewelyn (1862) 45 E.R. 1285
 Ramsden v Dyson (1866) LR 1 HL 129
 Willmott v Barber (1880) 15 Ch D 96
 Taylor Fashions v Liverpool Victoria [1982] QB 133
 Crabb v Arun District Council [1976] Ch 179
 Gillett v Holt [2002] 2 All ER 298
 Yaxley v Gotts [2000] Ch 162
 Jennings v Rice [2002] EWCA Civ 159
 Yeoman’s Row Management v Cobbe [2008] 1 WLR 1752
 Thorner v Major [2009] UKHL 18
 Davies & Anor v Davies [2014] EWCA Civ 568
 Wayling v Jones [1995] 2 FLR 1029
 Re Basham (Deceased) [1986] 1 W.L.R. 1498
 Henry & Anor v Henry [2010] UKPC 3 (St. Lucia)

DRE pg. 2
General principles of licenses:

A licence is permission;
o licenses make lawful what would otherwise be a trespass
o the licence may be express, or it may be implied – as in the shopkeeper’s
invitation to enter the premises to do business
o express licenses arise from a myriad of factual situations – for example
where the owner invites guests for dinner
o some of these situations are expected to give minimal rights to a license
o (s)he has no interest in the land – the licence prevents him/ her from being a
trespasser and no more
o different situations create different types of licenses, and different levels of
protection to the licenses

 the key concern of this worksheet is the remedies equity provided in the cases
that the licensor purports to revoke the licence

• for example, equity would grant an injunction to restrain the licensor if the
licensor could not lawfully revoke the licence

• the protection of the licensee against the licensor raises questions as to

whether the licensee should be protected against third parties not being the
bona fide purchaser for value without notice

 where the licensee is protected from third parties, the question arises
whether the licensee has, in a roundabout route, become an interest in
land

 another question is whether the licensee can only be properly be satisfied by

a permanent right, and not merely an injunction

 the doctrine known as “proprietary estoppel” has developed, allowing

the courts to exercise a wide range of remedies in favour of the

DRE pg. 3
 licensee – including to reward him with a proprietary interest in the
land, with or without monetary compensation

 this was intended to provide a remedy which was just or proper in all
the circumstances

The situation at Common Law:

 the common law never reached a satisfactory solution to the problem of the
protection of the licensee

 essentially this was because the inquiry was to see what it was that the
licensor had granted to the licensee – and a licence grants nothing

 the true issue is the extent of the protection which should be given against the
licensor or against a third party, and without remedy of an injunction to
restrain interference, the common law had no adequate means of protection

 a number of propositions were however established prior to 1875

o a bare gratuitous licence

o licence coupled with a grant (or an interest)
o contractual licenses

 the conclusion must be that the common law provided no adequate doctrine,
nor any adequate remedies to deal with the problem of protection of
licensees.

Contractual licenses after the Judicature Acts

 the treatment of contractual licenses at common law was clearly
unsatisfactory

 this situation, and that of the licenses generally, has been transformed by the
application of equitable remedies, not available to common law courts – by

DRE pg. 4
 the recognition of the part estoppels has to play; and finally, by the wiliness of
modern courts to seek the most appropriate remedy for the particular attention

 it is for the court in each case to decide in what way the equity can be
satisfied

 the reasoning at common law – established in Wood v Leadbitter (1845) was

that a licence was revocable unless it validly granted a proprietary interest

 in the absence of that grant, it was said even as late as 1944 that though the
licensor had no right to revoke, (s)he had a power to revoke, and could then
turn the licensee into a trespasser

 the opposite conclusion was reached in 1915 in Hurst v Picture Theatres Ltd.
but on grounds that show that the courts still thought that it was the grant of
the proprietary interest which made the licence irrevocable

 in Winter Garden Theatre (London) Ltd v Millennium Productions Ltd (1946)

finally established that the rights of the parties must be determined upon the
proper construction of the contract

 the licensee’s remedy for the breach is the normal remedy for breach of
contract – i.e. damages, but the normal way of protecting the contractual
licensee against improper revocation is by issuing an injunction to restrain the
breach by the licensor

o however, it was said by Lord Greene M.R. in Millennium Productions

Ltd v Winter Garden Theatre (London) Ltd (1946) that the injunction
was a useless remedy unless a Chancery judge was sitting at your
elbow, because the breach and ejection could take place before the
injunction could be issued

o additionally, the injunction, like all equitable remedies, is discretionary

DRE pg. 5
  in Verall v Great Yarmouth BC the Court of Appeal had no hesitation in
holding that a contractual licence was enforceable by specific performance

 the contract may be express or implied

 the extent to which a licence is binding on a third party will vary with the type
of licence

Licenses by estoppel:
 the doctrine of estoppels has played a significant part in the modern
development of licenses

o a situation in which a licensee has acted to his/her detriment in reliance

upon a representation or promise by a licensor presents a compelling case
for the intervention of equity in order to protect the licensee8 more
compelling, in a sense, than the case of a contractual licence, because the
licensee by estoppels has not alternative remedy of damages

 the doctrine of estoppels by encouragement or acquiescence has found a

fruitful area of operation in the field of licenses, under the name proprietary
estoppel – its success in this area is largely due to the fact that unlike
estoppel by representation or promissory estoppel, it can found a cause of
action, and in the licence context, enables the court to award a proprietary
interest to the licensee

Types of estoppel:
 there are many types of estoppel in law and equity, and for the purposes of
this course we are concerned with proprietary estoppel, as distinguished from
promissory estoppel

 U.K. courts have deemed it undesirable to distinguish between types of

estoppel, but the most recent pronouncements, however, are against the idea
of “an overarching principle”

1. Promissory estoppel

DRE pg. 6
  this is one of the best-known types of estoppel, and applies to contractual
situations
 the doctrine is expanded in equity, so as to include not only
representations of fact, but also representations of intention8 or promises

 the doctrine came to prominence with the decision of Denning J in 1947 in

the Central London Property Trust Ltd v High Trees House Ltd case, and
was firmly established in later cases (e.g. Combe v Combe (1951) 8 Ajayi
v RT Briscoe (Nigeria) Ltd (1964)8 WJ Alan & Co Ltd v El Nasr Export and
Import Co (1972).

 it may be noted that promissory estoppel can only be used as a defence to

an action – the contract cannot be enforced

 this is unlike proprietary estoppel, which forms the basis of a claim

2. Proprietary estoppel:

 equity developed a doctrine of proprietary estoppel which enabled the

plaintiff to claim an interest in land – hence the name proprietary –
because they had been promised, believed the promise and acted upon it

 proprietary estoppel is the basis of the claim, not just a defence to an

action, so in that respect it differs from promissory estoppel

 the claim could be established with the need for writing, deeds or other
formalities

 the doctrine is ancient and there have been many judicial attempts to
define its precise elements

 one of the earliest cases relying on the doctrine was Dillwyn v Llewelyn
(1862)

DRE pg. 7
 1. General principles of Proprietary estoppel
 the doctrine is applicable where one party knowingly encourages another to
act or acquiesces in the other’s actions, to his/her detriment in the that (s)he
has or will have some property right against the first party (Ramsden v Dyson
(1866))

 the latter may be required to make good the expectation which (s)he
encourages in the other party

 unlike other estoppels therefore, this doctrine may in some circumstances

create a claim, and an entitlement to positive proprietary rights; in others, it
can operate negatively, or can produce a compromise situation appropriate to
the particular circumstances

 the doctrine was most recently reviewed in Davies & Anor v Davies (2014),
where Floyd LJ at para. 29 stated

[i]n Thorner v Major [2009] UKHL 18, Lord Walker of Gestingthorpe

pointed out that whilst there was no universal definition of proprietary
estoppel which is both comprehensive and uncontroversial, most scholars
agreed that:

“... the doctrine is based on three main elements, although they express
them in slightly different terms: a representation or assurance made to the
claimant; reliance on it by the claimant; and detriment to the claimant in
consequence of his (reasonable) reliance ...”

 the doctrine is applicable where one party knowingly encourages another to

act or acquiesces in the other key decisions in recent time include Cook v
Thomas (2010) Thorner v Major (2009), Yeoman’s Row Management v
Cobbe (2008), Jennings v Rice (2003), Grundy v Ottey (2003), Lissmore v
Downing (2002), Gillett v Holt (2001), Wayling v Jones (1995), Windeler v
Whitehall (1990), Greasley v Cooke (1980) and Pascoe v Turner (1979)

DRE pg. 8
 2. Judicial formulations:
 two early judicial formulations of the doctrine came from the statement of Lord
Kingsdown in Ramsden v Dyson (1866) and Fry J in Willmott v Barber (1880)

 Fry J’s formulation laid down the principle in specific detail in what have been
called the “five probanda”:

o first, the claimant must have made a mistake as to his legal rights;

o secondly, the claimant must have expended some money or must have done
some act of reliance (not necessarily on the defendant’s land) on the faith of his
mistaken belief;

o thirdly, the defendant – the possessor of a legal right, must know of the
existence of his own right which is inconsistent with the right claimed by the
claimant;

o fourthly, the defendant – the possessor of a legal right must know of the
claimant's mistaken belief of his rights and

o fifthly, the defendant – the possessor of a legal right must have encouraged the
claimant in his act of reliance, in expenditure of money or in other acts he has
done, either directly or by abstaining from asserting his legal right.

 later cases have not had such a rigid insistence that all five elements must be
present

o for example in Taylors Fashions v Liverpool Victoria Trustees Co Ltd (1981),

one of the elements was missing but an estoppel was still made out

DRE pg. 9
  in a number of subsequent cases, ‘unconscionability’ became the key concept
(Re Basham (Deceased) (1986) B Gillett v Holt (2000)

 unconscionability alone however is not enough (Yeoman’s Row Management

v Cobbe (2008))

Key point: representation, reliance and detriment are more important elements
of estoppel than unconscionability.

 Some thought the judgment in Yeoman’s Row Management v Cobbe (2008)

was so strict that it spelt the end of proprietary estoppel, but the following
year, the House of Lords was able to look at a new case on estoppel, with
very different facts.

See Thorner v Major [2009] UKHL 18

Key case: Thorner v Major [2009] UKHL 18

 Peter Thorner owned Steart Farm, near Cheddar in Somerset

 his younger cousin, David Major, helped him to run the farm, and worked
without pay for 29 years. Peter indicated by various remarks to David that
David would inherit the farm when he died – an example of such was giving
David the details of life assurance policies and saying, “that is for my death
duties.”
 Peter however, never made a definite statement to David that he would inherit
the far
 unknown to David, Peter had made a will to this effect, but he revoked it, and
died intestate in 2005
 other relatives claimed the farm under the intestacy rules, as Peter had no
wife or children
 the House of Lords was able to distinguish Yeoman’s Row Management v
Cobbe (2008) and held that the only thing that mattered was whether a
reasonable person could have relied on the conduct that looked like an
assurance.
 Lord Hoffmann said that speaking in oblique and allusive terms does not
matter if one could reasonably believe one was being given an assurance

DRE pg. 10
  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 Peter intended David to rely on him
 the House of Lords was able to distinguish Yeoman’s Row Management v
Cobbe (2008) and held that the only thing that mattered was whether a
reasonable person could have relied on the conduct that looked like an
assurance.
 Lord Hoffmann said that 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 Peter intended David to rely on him
o [t]here was a close and ongoing daily relationship between the parties.
Past events provide context and background for the interpretation of
subsequent events and subsequent events throw retrospective light upon
the meaning of past events. The owl of Minerva spreads its wings only
with the falling of the dusk. The finding was that David reasonably relied
upon the assurance from 1990, even if it required later events to confirm
that it was reasonable for him to have done so

Judicial formulations continued:

 the question arises whether there is a distinction between business and
domestic cases

o from Thorner v Major, it may be that a different approach to estoppel can

be taken if the case involves ordinary people, as opposed to business
women and men

o the latter would be expected to know the law, and not have to rely on
equitable remedies such as those provided by proprietary estoppels

DRE pg. 11
 o the strict decision in Yeoman’s Row Management v Cobbe was followed
in another ‘business’ case – Crossco No 4 Unlimited v Jolan Ltd (2012)

Key case: Yeoman’s Row Management v Cobbe

 Mrs. Lisle-Mainwaring owned a block of flats through her company Yeoman’s
Row, and negotiated with Cobbe, an experienced property developer

 Cobbe would obtain planning permission for the flats, at his own expense, and
then buy the flats from her for £12 million

 he would redevelop the site and build houses. If the houses were sold for
more than £24 million, he would give Mrs. Lisle-Mainwaring 50 percent of the
proceeds above that figure

 Cobbe obtained planning permission, but Mrs. Lisle-Mainwaring wanted to

renegotiate the terms of the agreement, and obtain a much bigger share of
the profits

 Cobbe wanted her to keep the terms of the original agreement

 as the agreement was oral, there was no contract under s. 2(1) of the Law of
Property (Miscellaneous Provisions) Act 1989, so he claimed a proprietary
estoppel

 for there to be an estoppel, Cobbe would have to be under an expectation,

created or encouraged by Mrs. Lisle-Mainwaring, that he was to have a
certain interest in land and that Cobbe would rely on that representation to his
detriment

 the Court found that Cobbe had no expectation, because it was always clear
that they were still negotiating the terms of the contract and the terms that
they agreed were not intended to be binding

DRE pg. 12
  Cobbe’s ‘expectation’ was that he would be allocated a particular share of the
profits, not that he would receive an interest in the land

 therefore, Cobbe had no claim based on estoppel

 the House considered that business people, who could take legal advice,
should be expected to make proper contracts, if they wanted an ‘agreement’
to be binding

 The same level of formality should not be expected of domestic or family

situations

Judicial formulations continued:

 in 2014, the Court of Appeal in Davies & Anor v Davies considered
precedents in Thorner v Major (2009) and in Gillett v Holt (2001), including, in
the latter case the principle that; “[t]he detriment need not consist of the
expenditure of money or other quantifiable financial detriment, so long as it is
something substantial” ... [i]n addition, whether the detriment is sufficiently
substantial must be judged by whether it would be unjust or inequitable to
allow the assurance which the claimant has relied upon to be disregarded

o the Court of Appeal found that detriment is not to be defined by the

difference between what the claimant was worth to the business and what
they actually received from it, but by how well the claimant could have
done elsewhere

o this would take into account quality of life, enjoyment of work, social
interactions and other factors, not just how much money they could have
earned
see • Davies & Anor v Davies [2014] EWCA Civ 568

Key case: Davies & Anor v Davies [2014] EWCA Civ 568
 on an appeal by Tegwyn and Mary Davies in Davies & Ano’r v Davies that the
High Court had erred in allowing a claim for proprietary estoppel brought by
their daughter Eirian Davies, the Court of Appeal rejected the claim

DRE pg. 13
  the claim had been brought in respect of the dairy farm on which Ms Davies
had worked for her parents since she was a child and which she had been led
to believe she would inherit
 she later discovered they had executed wills dividing the farm between all
three of their daughters, even though the other two had never worked on it

 Ms Davies’ claim was, in summary, that as she had worked on the farm for
her parents, to her detriment, and on the understanding that the farm would
be left to her on their deaths, they were estopped from leaving the farm to all
three of their children

3. Representation:
 the defendant must make a representation to the claimant, indicating that the
claimant has some sort of right to the land, or at least acquiescence in the
claimant’s mistaken belief that they may have some right to the land

 this includes a representation as to future rights

 estoppel may restrict testamentary freedom

o there have been a number of proprietary estoppel cases on the basis that
the deceased made promised to leave property, but they did not keep them

o in Gillett v Holt (2000), the Court of Appeal further extended the doctrine

 it is not necessary for the defendant to make a representation to the claimant :

acquiescence in the claimant’s mistaken belief that they have a legal right
over land may be enough

 this can be seen in the definitions of proprietary estoppel in Ramsden v Dyson

(1866) and Wilmott v Barber (1880)

DRE pg. 14
  a good example is seen in the more modern case of Crabb v Arun District
Council (1976)

 however, as Lissimore v Downing (2003) shows, proprietary estoppel cases

are usually fact sensitive

Key point: whether a representation has been made depends upon what it is
reasonable for the claimant to understand it.
 in the domestic context, representations do not have to be precise in order to
form the basis of proprietary estoppel

see o Thorner v Major [2009] UKHL 18

• a distinction could be drawn between commercial and domestic cases

 whether a representation has been made all depends upon the facts and the
context of the case

Thinking Point: there is quite a contrast between the House of Lords’ decisions in
Yeoman’s Row Management v Cobbe (2008) and Thorner v Major (2009), yet they
are only a year apart and involve the same judges. Is it all down to the difference
between domestic and commercial relations, or did the facts in Cobbe never indicate
an estoppel. Thorner seems a return to the usual approach to estoppel

o see Martin Dixon ‘Proprietary Estoppel: A Return to Principle. A

Commentary on Thorner v Major’ [2009] Conv 260

4. Reliance:
 there has to be a link between the representation, the promise of the interest
in the land and the claimant acting to their detriment

o did the claimant do what they did because they thought they had a
claim to the land?

DRE pg. 15
  in older cases such as Ramsden v Dyson (1866) the situation would be
something straightforward like the claimant thinking that they owned the land
and spending money to build or improve a house there, but in more modern
type cases, it may be harder to discover the motivation of the claimant

o for example, in Gillett v Holt

 once it is established that there is a clear representation and that the claimant
acted to their detriment, it is likely that the claimant relied on the
representation
o the defence would have to disprove this and show that the claimant
acted with a different motive

see • Greasley v Cooke (1980)

 as we saw in Taylors Fashions v Liverpool Victoria Trustees Co Ltd (1982),

the courts have since abandoned a rigid insistence on the claimant proving
the 5 requirements in Willmott v Barber (1880)

 the courts now accept that a claimant’s motives may be mixed, but one of the
motives for acting as they did must be because they thought that they had an
interest in the land

see o Wayling v Jones (1995)

5. Detriment:
 the claimant must act to their detriment, relying on the representation made to
them that they had some sort of legal right to the land concerned

 in the older cases, detriment would be expenditure on the land, building on

the land, improvement s to the land etc.

see o Dillwyn v Llewelyn (1862)

DRE pg. 16
  detriment is an essential element of estoppel

 it is generally considered that detriment is an essential part of proprietary

estoppel

o Lord Denning suggested to the contrary in Greasley v Cook (1980), but

an analysis of the facts and the statement yield that he simply meat that
detriment could be something other than expenditure

 subsequent cases have insisted that detriment is required defined as

spending money on land

o for example, it can involve caring for someone as in Re Basham

(Deceased) (1986), working for low pay as in Gillett v Holt (2000), Thorner
v Major (2009) and Wayling v Jones (1993)

 in this type of case, the court must look at all the things that the claimant did
for the defendant to decide whether there was sufficient detriment

 it may be that the claimant acted to their detriment, but also gained something
from the land

o the court has to weigh up whether there was an overall detriment which
deserves a remedy

see • Henry & Anor v Henry [2010] UKPC 3

Key case: Henry & Anor v Henry [2010] UKPC 3 (St. Lucia)
 Geraldine Pierre owned some land, jointly with a relative Marie Mitchel, on a
part of which she allowed a relative – Gladys Henry to build a house, live and
farm

DRE pg. 17
  a grandson of Gladys, Calixtus Henry – about 50 years, lived with her from
birth, and took over the house when she died 30 years ago. He lived there
with his family

 Geraldine promised Calixtus that if he farmed the land and looked after her,
he would be given a share of the land on her death

 instead, shortly before her death, she sold her land to another relative,
Theresa Henry

 Theresa argued that the land was sold to her in a fair manner, and anyway,
Calixtus has been able to live rent free and enjoy the profits of the produce he
sold

 this she argued satisfied the equity

 the Privy Council found that Calixtus had acted to his detriment, contrary to
the views of the original trial judge

 the Privy Council looked at whether there had been detrimental reliance (more
than simple reliance), and that while Calixtus had benefited substantially from
the arrangement during Geraldine’s lifetime (rent@free accommodation and
living off the produce of the land), the court had, however, to look at whether
there had also been detriment and to conduct a balancing exercise

 this led the court to acknowledge that Calixtus had given up opportunities to
better his life elsewhere and this outweighed the benefits he had acquired in
the land

 proportionality is a relevant factor when granting the relief: ‘Proportionality lies

at the heart of the doctrine of proprietary estoppel and permeates its every
application.’ (per Sir Jonathan Parker) and so Calixtus should not get all of
Geraldine’s original half share in the plot but only half of that

DRE pg. 18
 see
 Clements and Abass, Equity and Trusts: Text, Cases and Materials, 3
ed., pp. 176 – 194
 Owusu, Commonwealth Caribbean Land Law, pp. 186 – 203

Proprietary estoppel remedies:

 the basic principle is that the remedy should be the minimum equity to do
justice, which was clearly explained in Crabb v Arun District Council (1976)

 early illustrations of the doctrine dealt with the protection of a lessee, as in

Huning v Ferrers (1711) were a life tenant granted a 30-year lease to the
knowledge of the remainderman who “stood by and encouraged” to take the
lease and incur expenditure

o Lord Hardwick confirmed that the in the balance of his lease after the
life tenant’s death

 other cases have a wide and varied application, but it was held that the
doctrine does not apply where the claimant does acts on his own land which
was not done in the expectation of acquiring rights over the land of another

see
o Martin. Hanbury and Martin on Modern Equity, 18 ed.,
pp. 933 – 935

• Western Fish Products Ltd. v Penwith District Council [1981] 2 All ER

204

 the most extreme cases are those where a non-owner, in reliance upon a
gratuitous promise of a gift of the land, has built on, or improved the land –
clearly some remedy was required

 in some cases, the licensee has been protected from eviction without
obtaining a proprietary interest in land

DRE pg. 19
 see
o Inwards v Baker [965] 2 Q.B. 29
o Jones v Jones [1977] 1 W.L.R. 438
o Matharu v Matharu (1994) 68 P. & C.R. 93

o in other cases, a conveyance of the freehold has been ordered

see o Dillwyn v Llewelyn (1862) 4 De G.F. & J 517
 perhaps the most extreme of the cases on proprietary estoppel, resulting in an
extraordinary windfall for the licensee is Pascoe v Turner (1979)

Key case: Pascoe v Turner (1979)

 the claimant and defendant lived together in a house owned by the claimant

 they were not married but lived as if they were

 in 1973 he met another woman, and left the defendant

 he told her the claimant that she could have the house but never formally
transferred the title

 the claimant remained in the house and spent money on redecoration and
improvements in the belief that she owned the house, but there was never
any written agreement or conveyance

 the defendant was aware of her expenditure and belief but did nothing to
prevent either

 in 1976 the defendant brought an action seeking to evict her

 the claimant entered a defence and counterclaim

DRE pg. 20
  the defendant could remain in the house and was entitled to have the title
transferred to her through proprietary estoppel

 the principle claim failed, but an equity had nevertheless been established in
the form of a proprietary estoppel

 the court went on to consider the extent of the relief that should be granted

 the essential choice was between a licence for life or a conveyance of the
freehold
 the court came to the conclusion that the plaintiff intended to pursue his
purpose of evicting the defendant ‘by any legal means at his disposal with a
ruthless disregard of the obligations binding on conscience.’

 in the light of that conclusion, the court concluded that the only way of
assuring the defendant security in her home was by ordering the transfer of
the freehold

The remedies:
 sometimes therefore, what the defendant promised can be granted and that
would do justice

see
o Thorner v Major [2009] UKHL 18
o Re Basham (Deceased) [1986] 1 W.L.R. 1498
o Wayling v Jones (1993) 69 P & CR 170
o Dillwyn v Llewelyn (1862) 4 De G.F. & J 517

 however, this approach is not always the case as seen in Greasley v Cooke
(1980), which can be contrasted sharply with Pascoe v Turner (1979)

 the courts often seek to ensure that the remedy should be in proportion to the
detriment suffered

DRE pg. 21
 see
o Gillett v Holt [2002] 2 All ER 298
o Henry v Henry [2010] 1 All E.R. 988 P.C.
o Sledmore v Dalby [1996] 72 P & CR 196

The need for writing:

 proprietary estoppel usually involves land yet there is no writing, as most of
the case involve oral promises or assurances

 s. 53(2) of the Law of Property Act, 1925 (U.K.) and s. 2(5) of the Law of
Property (Miscellaneous Provisions) Act 1989 (U.K.) both exclude resulting
trusts and constructive trusts from the need for writing, but neither mention
proprietary estoppels

 old authority holds that proprietary estoppel is excluded from the writing
requirement – as the equitable maxim has it: “equity will not permit a statute to
be used as an instrument of fraud”

 the issue arose in Yaxley v Gotts (2002) and a few years later in Yeoman’s
Row Management v Cobbe (2008), where the House of Lords seemed less
sure that proprietary estoppels was exempt from the writing requirement

 the issue did not arise in Thorner v Major (2009), so the point has not been
finally decided

Key point: most authorities indicate that writing is not required for proprietary
estoppel of land, but the point has not been finally decided.

Proprietary estoppel and constructive trusts:

 a few cases in this field have been decided on the basis of a constructive
trusts

 Lord Denning has described a constructive trust as one

DRE pg. 22
 o [i]mposed by law whenever justice and good conscience require it. It is a
liberal process, founded upon large principles of equity, to be applied in cases
where the legal owner cannot conscientiously keep the property to
himself/herself alone, but ought to allow another to have the property or the
benefit of it or a share of it

see • Hussey v Palmer [1972] 1 W.L.R. 1286, at 1290

 in those terms the constructive trust was too vague and far reaching where a
contractual licence is concerned

 however, it was not appropriate where the title to land was at stake
 as explained by Robert Walker LJ in Yaxley v Gotts (2002) at 176 and 177,
the same facts can give rise to both

o but in the area of joint enterprise for the acquisition of land (which may
be, but is not necessarily the matrimonial home), the 2 concepts
coincide ...

o the oral bargain which the judge found had been made between Mr.
Yaxley and Mr. Brownie Gotts, and had been adopted by Mr. Alan Gotts,
was definite enough to meet the test stated by Lord Bridge in Lloyds Bank
plc v Rosset (1991)

see • Worksheet 10 for further discussion on Lloyds Bank plc v Rosset

(1991)

Key case: Yaxley v Gotts (2002)

 Yaxley was a self-employed builder who attempted to persuade Gotts to lend
him money for the purchase of a building

 Gotts instead bought the building but agreed Yaxley could have the bottom
floor in return for renovating the other flats and managing the building

DRE pg. 23
  after performing the work at his own cost and time, Yaxley argued that an oral
agreement between himself, and Mr. Gotts was to reward him with ownership
of the ground floor of the building

 Gotts failed to convey the title deeds in the name of Yaxley

 when the two men fell out, Yaxley brought legal proceedings as a plaintiff in
court

 the judge in the case took most of the evidence of Yaxley, but would not factor
in the evidence given by the defendant, Gotts

 in the end, the judge found an oral contract between the plaintiff and
defendant existed

 this entitled the plaintiff to ownership in the form of a 99-year lease on the
portion of the structure per the agreement

 later, when Gotts filed an appeal, the Court of Appeal dismissed Gotts' claim
that the claimant was entitled only to a portion of interest in the lease

Proprietary estoppel and constructive trusts continued:

 a proprietary estoppel can be based on a representation

o so if no oral agreement to share the land is found, then it unlikely to

be
a constructive trust

o an estoppel is possible if something less such as a representation or

acquiescence can be proved

see • Matharu v Matharu [1994] FLR 597

DRE pg. 24
  proprietary estoppel has a flexible remedy

o it used to be said that a major difference between estoppel and

constructive trusts was that the remedy of estoppel was at the
discretion of the court, where the remedy of a constructive trust must
reflect the common intention of the parties

o this distinction is no longer clear cut, now that the Supreme Court in
Jones v Kernott (2012) has said that it is possible to impute the
common intention and award the parties fair shares

see • Worksheet 10 for further discussion on Jones v Kernott (2012)

Key point: There are similarities between constructive trusts and estoppels, but also
differences. Often both occur or are at least argued in the same case, causing some
confusion between the two. Yet, they have separate origins, and one is a trust, with
the characteristics of a trust, and the other is not. Both estoppel and the constructive
trust have been examined in the House of Lords in Stack v Dowden [2007] 2 All E.R.
929, which concerned a family home; and in Yeoman’s Row Management v Cobbe
[2008] 1 W.L.R. which concerned a business deal. Do the two concepts operate
differently in different situations, or are they the same?

o See T Etherton ‘Constructive Trusts and Proprietary Estoppel: The

Search for Clarity and Principle’ [2009] Conv 104

 proprietary estoppel, constructive trusts, resulting trusts and the family home

o in cases which relate to the family home, such as Grant v Edwards

(1986), and Lloyds Bank plc v Rosset (1991), it is stated that the
principles of resulting trust, constructive trust and proprietary estoppel
combine together to form the common intention constructive trust

DRE pg. 25
 o there does not seem much to be gained by arguing estoppel rather
the common intention constructive trust in disputes over the family
home

o although cases such as Pascoe v Turner (1970) might seem

attractive to claimants, Lissimore v Downing (2003) is more typical –
the claimant’s arguments in common intention constructive trust and
proprietary estoppel both failed

• see Worksheet 10: Trusts of the Family Home

Key case: Lissimore v Downing (2003)

 a rich man, who owned a large country estate, told his girlfriend many things
which she construed as indicating that the property would one day be hers, as
well as making unspecific representations to the effect that she would never
want for anything and he had always looked after his girlfriends
 her claim based on estoppel failed because unspecific statements made by
the defendant that ‘she would never want for anything’, or that ‘he would take
care of her’, or that ‘he had looked after his other girlfriends and she would not
be different’ did not found a proprietary estoppel

 ‘such statements do not on their face relate to any specific property, they
plainly do not amount to a representation which binds the whole of Mr.
Downing’s property, and they are not expressed in terms which enable any
objective assessment to be made of what is being promised

Tutorial question:
‘Estoppel must not be so governed by its own principles that it is unable to undertake
its main function, nor so wide and general that it is impossible to see what that
function is’
(a) Citing decided cases, outline the principal distinction between the two key types
of estoppel?
(5) marks)

DRE pg. 26
(b) With reference to decided cases, critically evaluate the abovementioned
statement.
taken from the LAW 2810 exams of April/May
2015

Past examination question:

Trish is the owner of a large agricultural barn which she uses for her sculpture and
pottery business. Two years ago, Trish is approached by Sia – an old friend from
school days – who has inherited a large amount of money from her father. The
inheritance money was acquired mainly from buying abandoned agricultural holdings
and developing them into high quality housing Sia thinks it would be a great idea to
use her inheritance to help her old friend, so proposes that together, they could
convert Trish’s studio into 2 large houses.

As Trish has no money to invest in this venture, they agree that Sia would bear all
the costs involved in acquiring the planning permission, and she will then buy the
studio from Trish for BDS 500,000 and will undertake the development. When the
work is completed, Sia will recoup her costs out of the sale of the housing, and the
two friends will share the profits equally.

At some considerable expense, the planning permission was successfully obtained

last December. However, Trish has now received an offer from Demolition Inc. to sell
the studio to them, with the benefit of the planning permission for BDS 750,000. She
is now refusing to go ahead with the original arrangement with Sia.

With reference to STATED authorities, advise Sia.

taken from the LAW 2810 exams of April/May
2015

DRE pg. 27