License by Estopple

The rule in Milroy v Lord

Equity will not assist a volunteer to perfect and imperfect gift/trust.

What is meant by volunteer? A volunteer is a person who has not provided

consideration.

When would a gift be imperfect?

Eg: I have a car. The care is given to my friend and he is driving. Without a proper vesting of
the property it’s an imperfect gift.

Equity will not complete an imperfect gift. If a donor has failed to fulfill all the required legal
formalities to effect a transfer, meaning the gift is an imperfect gift, equity will not act to
provide assistance to the donee. This maxim is a subset of equity will not assist a volunteer.

For the doctrine to be applicable, claimant should have suffered a detriment in relying on
the promise. Once one invokes the doctrine, equity arises. Once equity is arisen the courts
need to mete the equity & do justice. During the court proceedings the aggrieved party will
get a temporary license to use the premise which is called a license by estopple. The court
decision can come as a license by estopple or something else.

License by Estopple
 It is the proprietary estopple that is considered under this particular area of law.
 This could be considered as an exception to the rule that, equity will not perfect an
imperfect gift.
 eg – owner invites somebody to come and live in the land.
- Does not prevent the other from spending on the land.
- Owner kept on encouraging the person to spend (invest) on the land.
- In such a situation the doctrine will be invoked.

The doctrine of Proprietary Estoppel is “a sword" – it can be used as the basis of an action
on its own. This is available to the plaintiff.

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Definition of proprietary estopple

 Ramsden V Dayson Lord Kings Down provides

- Owner knowingly encourages another
- To act or acquiesces on his detriment
- On understanding that he is to have an interest in the land.
- In such a situation owner will subsequently be stopped from asserting his strict
legal right and may indeed be compelled to give effect to the equity that had
arisen.

Requirements to raise the doctrine of proprietary estopple [What was earlier]

 Justice Fry in Willmott V Barber provides for this.

1) P must have made a mistake as to his legal right. ( today no need to establish
this requirement)
2) P must have expended some money or must have done some act on the faith of
his mistaken belief.
3) The defendant (possessor of the legal right) must know the existence of his own
right which is inconsistent with the right claimed by P. (today no need to
establish this requirement)
4) D must have known of P’s mistaken belief of his right.
5) D must have encouraged P in his expenditure of money or
- In other acts which he has done either directly or by abstaining from asserting his
legal rights by abstaining from asserting his legal rights.

 In * Taylor Fashions v Victoria Trustees Ltd

Rejected the 3rd requirement

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 In *Gillett v Holt court thought that the first requirement is not necessary. It was of
the view that, what is important is whether the P had made a mistake as to owner’s
intention not as to P’s legal rights.
 Accordingly P must be mistaken as to the owner’s intention. How? There should
have been a reason to the mistake.
- Naturally the reason is that the owner has given an assurance and it is the reason
for the mistake belief.

1. The new requirement of Assurance

 P has mistaken as to the owner’s intention on account of the assurance the owner
gave.
*Crab v Arun District Council
- Owner allowed the claimant (C) to have access through the owners land
- Built a gate to give effect to that.
- Believing that C now has access through D’s land, sold his part of the land which
had the only access to the main road.
- Held – C was mistaken as to the owner’s intentions because of the assurance
given by the owner. [causal connection is very important]
- Owner encouraged C to act on his assurance. (by building gates/ allowing C to
sell the only access he had)
- This amounted to reliance on the assurance that D gave, on which C has suffered
a detriment.

 Assurance must be firm, clear and final

*Gillett v Holt
- Assurance need not be repeated.
- Must have the firmness and finality.
- The words used must suggest that, it was an irrevocable assurance.
- Accordingly there is hardly any room for self-induced assurance.

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; *James v Thomas
- Thomas was the owner.
- James and Thomas renovated the house together.
- James thought that he will have an entitlement to that property.
- James could not show any evidence to show that Thomas had made any definite
assurance.
 In Arun, mere fact of making gates did not constitute an assurance.

 *Re Basham
- Step Daughter and Step Father were living in the same house.
- Plaintiff (daughter) continued to run the business on behalf of the Step Father.
- She was made to understand that she would inherit the deceased’s property.
- D later bought a cottage and P helped him to dissolve a boundary dispute.
- D made an assurance that, it was for P’s benefit that he bought the house and
that the house was P’s
- P’s husband provided food for D. and they guarded the house.
- P was told by D that she would lose nothing by doing so.
- Before the death D indicated that he wanted to make a will leaving money to P’s
son and P was to have the house.
- D later died intestate.
- Held – P was entitled to the property since the requirements are satisfied.

2. Requirement of encouragement

 After establishing assurance proceeds to establish that the owner encouraged P to

act on that assurance given.
 This can even be by way of acquiesce [Knowledge] – tacit consent, knowing that P is
doing and had an opportunity to stop P doing so but failed to do so.
 In *Crab v Arun
- D did not prevent P from selling the only access that P had to the main road.

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- Moreover encouraged P to do so by building gates to provide access through his

land.

 In *Re Basham
- D allowed P and her husband to do things in and around the house.
- Even they went on to settle the boundary dispute.
- Went so far to say “you will not lose nothing by doing those things for me”

3. Requirement of reliance

P must have expended some consideration (detrimental reliance)

 Must establish that P suffered a detriment on account of relying on the assurance. In

proprietary estopple we are considering only the factual causation.

 In *Crab v Arun
- Detriment suffered was selling the only access that P had to the main road.

 In *E. R. Ives Investment v High

- P builds a large garage relying on the promise that the neighbor would allow him
access through the neighbor’s garage.
- Building of the garage was considered as the detriment.

 *Wayling V Jones
- Parties were homosexuals.
- Deceased requested P to return to London house which was the name of the
café owned by D.
- Asked P to help him to run the café.
- D promised that he would leave the house and the business by will to P.
- P helped to run the café and was paid pocket money.
- P acted as a chauffeur and a companion.

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- D bought a hotel and promised to update the will to leave the hotel to the P.
- When D died, P was the only entitled to car and to some furniture.
- Held – there was detrimental reliance.
- P was not paid remuneration and drove the car as a chauffeur.
- Accordingly P is entitled to claim a proprietary estopple.

 *Matharu v Matharu
- Invited son and daughter in law and children to live with the father instead of
purchasing their own house.
- They carried out considerable improvements to the house.
- Spent for day to day expenses.
- Father required the daughter in law to leave.
- Held – A propriety estopple can be raised.

Assurance Encouragement Detrimental Reliance

There must be a link [a causal connection must be there] between the detriment suffered
and the owner’s assurance.

 *Powell v Benny
- P looked after the patient and in addition improved the property for their own
use.
- They had been given keys to the premises.
- At one point the owner had even promised to make a will leaving the property to
them.
- Patient died intestate.
- Court inquired as to what he did on account of the assurance.
- Asked “did you do all these, expecting the deceased to give you the property?”
- Here the court did not find a causal link. There must be a connection between
- Any expense they incurred was for their own benefit.

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Once the plaintiff invokes the doctrine of proprietary estopple, equity arises. Once equity is
arisen the courts need to mete the equity & do justice. But, that justice will be done at the
discretion of the court. The discretion is in built in equity.

Ways in which the equity could be met

1) By meting the promise. This is the best way to mete the equity.
 By giving the innocent party what was promised. i.e. meeting the assurance or
meeting the expectation of the Claimant.
 Expectation cannot go beyond the assurance.
 In both Wayling V Jone & Re Bashan plaintiffs got what they were promised.
 However sometimes meeting the promise may not be practical.
- *Burrows v Sharpe
- The P and D were in a relationship which had been broken. There was a promise
between them to stay in the house.
- It was not practical to order the owner to let P to continue to live in the premises
as the relationship between P and the owner is over.

2) Where it is not practical to give what P was promised, judges preferred to order
compensation. *Burrows v Sharpe
- *Dodsworth V Dodsworth
- This is known as the Dodsworth approach
- Brother invited his brother and sister in law to live with him rather than
purchasing their own.
- Brother spent 700$ on improvements.
- Judge did not give effect to promise since it was not practical for two families to
live together.
- Court preferred a monitory award – they could continue to live in the house until
they recover the cost of expenditure.

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 *The Broad brush approach [the willingness of the court to act liberally] is not
adopted.
 However in license by estopple, court’s approach to meeting the equity is limited.
Accordingly the broad brush approach will not be adopted.

 In *Crab v Arun
- Scarman LJ – it will be minimum equity to do justice. i.e. – minimum necessary
to do juctice.
 Most sensible thing to do is, giving effect to the promise unless it is not practical.
 Writer Moriaty held the same view.
 However judges think differently. Court is not always willing to give effect to the
promise, as observed in Scarman LJ’s statement.
 Why? Because by the time of action claimant would have accrued so many benefits
from the owner.
 The fact that C lived in the premises for long time will be taken in to account.
 Equity may have already been spent by the time of action.
 *Sledmore v Dalby
- This the dictum of Scarman LJ
- In deciding as to what relief should be granted, court must see the amount of
equity that is already been spent.
- Benefits incurred were taken in to account.
- Court found that the equity had already been spent. ( C had enjoyed 18 years
free occupation with full board)

3) Court will look at the detriment suffered and make an award to make good that
detriment.
- It will be considered what the loss that C had suffered is and to compensate for
the detriment suffered not what C was promised.
- *Jennings v Rice
- Detriment will be looked at rather than the promise.

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- Why? Because of the principle of proportionality. The compensation one

receives should be proportionate to the loss that one incurs.
- Proportionality between the promise and the detriment.

- (Facts)
- The Gardner was promised that the house would be given to him in return for
the nursing care and support given for the owner for long period of time.
- House was 400,000 of value.
- Instead the house, court awarded 200,000 which was the estimated value of his
services.

4) Since the relief is in equity, claimant’s conduct will be taken in to account.

* Willis v Willis

- Court refused to assist the claimant.

- Because of C’s lies and fabrications during the course of litigation.
- One who seeks equity must do equity. To receive equitable relief, the petitioning
party must be willing to complete all of its own obligations as well.

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