PROPERTY LAW

LECTURE: WEEK 16 & 17

READING MATERIAL:
SUBJECT GUIDE: CHAPTER 7
MARTIN DIXON: CHAPTER 9
 PROPRIETARY ESTOPPEL

Proprietary rights become bolted to the land itself and may endure through
successive changes in ownership of it, so it is imperative that their existence and
scope is certain and well defined both for the immediate parties and for any
intending purchasers or mortgagees. Necessarily, there is a price to pay for this
certainty, especially if it is secured through the use of mandatory formalities. In
land law, that price is flexibility and occasionally fairness.
The difficulties that can flow from an over-rigorous reliance on formality are
mitigated by the doctrine of proprietary estoppels. Proprietary estoppel is the
name given to a set of principles whereby an owner of land may be held to have
conferred some right or privilege connected with the land on another person,
despite the absence of a deed, registered disposition, written contract or valid
will.
Proprietary estoppel may be pleaded by any person claiming that they have an
interest in land or a right to use land of another even though no right has been
formally created. This claim arises from an assurance made to them upon which
they have relied to their detriment. On the basis of the estoppel doctrine, the
courts can disregard the strictures of the law and if all the triggers of estoppel
are present, can grant any remedy that they feel is appropriate to honor that
assurance. (GHAZAANI V ROWSHAN)
For the doctrine of estoppel to be triggered then, the claimant must establish
the presence of three ingredients:

1) An assurance from the owner,

2) Detrimental reliance by the claimant,
3) Unconscionability.
 1) ASSURANCE

Proprietary estoppel is a flexible doctrine that acts on the conscience of a land

owner. Accordingly, the landowner must have made some kind of express or
implied assurance to the claimant that the claimant might have some present or
future right or use over that land.
• SHIRT V SHIRT, CREASLEY V SOLE: the assurance may be oral, in
writing or may arise thru conduct. It must be in the nature of a loose
understanding or a unilateral promise and must be made directly to the
claimant.

• RE BASHAM: the claimants lived some distance from the promisor’s house
and took care of him and his house. Courts held that the claimant need not have
an existing interest in the property (like a license) to be able to claim an
estoppel. The fact that they lived in their own house and paid daily visits to the
promisor’s property was inconsequential. Moreover, the assurance may relate
to non-specific property but one that is reasonably identifiable. The property
must be in the ownership of the promisor at the time of making the assurance.
A statement to the effect that the claimants ‘will be taken care of’ was sufficient
assurance.
• WEST END COMMERCIAL V TROCADERO: the assurance must be of
a right relating to property and not merely that the claimant can have mere
permission or some other contractual or personal right over the land.

• DILLWYN V LLEWELLYN: the assurance can be express or implied.

Thus, where the son started building a house on his father’s land which was
clearly understood to be for the son’s occupation, the court held that no active
encouragement by the father was required. The “knowing acquiescence”
constituted the assurance.
• TAYLOR V DICKENS, PARKER V PARKER: a mere expectation, not
induced by the landowner but rather self-induced, will never amount to an
assurance. The claimant had a self-induced expectation of inheriting and
undertook work for many years in the hope that his expectation would be
fulfilled. The courts could not find an express or implied assurance.

• GILLETT V HOLT: ROBERT WALKER LJ held that the promisor was

bound by his promise to leave property in his will to the claimant because of the
repeated assurances over a period of forty years. Many of the assurances were
given publicly. Just before the promisor’s death the relationship of the claimant
and promisor broke down. Because of the considerable time (forty year period),
the change in the circumstances was irrelevant.
• UGLOW V UGLOW: in comparison to Gillet, the courts have recently
held that if the circumstances in which the assurance was made have
substantially changed, the court will not give effect to the assurance. In this case
the assurance to pass property under a will was made on the assumption of a
continued business relationship. That relationship had long ceased to exist and
the promisor was therefore free to make a new will. The courts also asserted that
‘family’ disputes and ‘commercial’ disputes will not be approached in the same
way as they have different factual backgrounds.

• JENNINGS V RICE: after a burglary at her house, D, an elderly woman,

had requested her young gardener to live in her house as her care taker. Her
assurance that she will “see to it” that the claimant will be taken care of in her
will was held to be articulate enough to form an assurance for purposes of
estoppel.
• JAMES V THOMAS: where there was insufficient evidence of a common
intention that J should have a beneficial interest in the property, and assurances
made by T to J were vague as to the extent of any beneficial interest, which J
might expect, neither a constructive trust interest nor one via proprietary
estoppel could arise. The parties had lived together for fifteen years in a
property held in T’s sole name. J had helped T with his business and together
they had conducted extensive renovations of the property. The assurances
which were found to be too vague were that the renovations would be for the
benefit of both parties and that J would be provided for on T’s death.

• LISSIMORE V DOWNING: a wealthy home owners’ statement to his

girlfriend “wouldn’t you like to be a lady of this manor” did not constitute an
assurance or a promise that she was to acquire property rights in the estate.
• THORNER V MAJORS: an inarticulate farmer P, who was a man of few
words, died intestate after revoking a previous will that had left the residue of
his estate to D, the son of his cousin. The will had been revoked because P had
a falling out with one of the other legatees and wished to exclude him from the
will. The only way that D could now succeed in establishing title to the farm was
claiming the proprietary estoppel doctrine. D had assisted P on the farm for
almost 30 years without being paid an income. At no point did P state to D that
he would leave any property to him. Instead, D had to make this out from
inferences. The most important evidence was an occasion when P had handed
out notice of two life policies saying that it was meant to be for his death duties.
There were a number of other comments made by P which D alleged would only
have been made to a person who was expected to inherit. The reason for the
imprecise assurances was that P was known to be a ‘quiet and reserved person,
who kept mostly to himself, saying very little to others’.
The Court of appeal couldn’t find an assurance on the grounds that the
representation had to be clear and unequivocal and not drawn from inferences.
The House of Lords have overturned this decision. Lord Hoffman asserted that
the assurance has to be viewed in the context that it was made and would have
had sufficient impact on any reasonable claimant. The inarticulacy of P was an
important factor to be taken into account. The other important aspect of the
case was whether the property was sufficiently identified. After the assurances
had been made, the size and composition of the farm had increased. The court
held that both parties were aware of this fluctuation and it was clear that the
assurance was made in respect of the farm as it was going to be at the time of P’s
death and so there was sufficient clarity.
 2) DETRIMENTAL RELIANCE

• GREASELY V COOKE: LORD DENNING held that once it is shown that

a representation was calculated to influence the judgment of a reasonable man,
the presumption is that the claimant was so influenced, even if the landowner
did not intend to make any assurance.

• WAYLING V JONES, CHUN V HO: claimant helped promisor with café,

they were co-habitees and he performed duties such as taking care,
companionship and chauffeuring after assurances had been made to him.
Courts held that assurance need not be sole cause of reliance as long as it is one
of the reasons.
• HUNT V SOADY: where there had been a provisional agreement that one
beneficial tenant in common (H) would transfer her beneficial interest to the
other (S), proprietary estoppel could not operate since that agreement had not
been relied upon by the other party, either in good time or to his detriment; it
was not unconscionable for H to go back on her representation.
• POWELL & ANR V BENNEY: the appellants (P) had looked after B’s
cousin (H) and improved his properties for their own use after H became unable
to look after himself properly and gave them the keys to the premises. At a later
point, H promised to leave them the property in his will, which didn’t happen.
The appellants claimed that an estoppel had arisen in their favour. The courts
found that the renovations had been made before any concrete promise had
been made to the claimants. Thus, there was no causal link between the promise
and the detriment or in other words, there was no reliance on the promise.
Equity has always been wary of volunteers, i.e., claimants who seek to enforce a
promise even though they have given nothing in return. Similarly, proprietary
estoppel cannot be established unless the claimant can prove that he suffered
some detriment in reliance on the assurance. So long as the detriment is not
minimal or trivial, it may take any form because it is not a narrow or technical
concept. The detriment must be suffered by the person to whom the assurance
was made.
Detriment suffered may be of a monetary nature:

• INWARDS V BAKER, DILLWYN V LLEWELLYN: large sums of money

were spent in constructing houses on land provided by the promisors.

• JONES V JONES: abandonment of existing job to move in with her lover

was seen as monetary detriment.

• GRANT V EDWARDS: incurring house-hold expenditure and payment of

utility bills amounted to sufficient detriment.
Can non-monetary detriment be sufficient?

• GREASELY V COOKE: detriment does not require expenditure on the

property. As long as it is something substantial, it will be sufficient. It need
not be disadvantageous or prejudicial. Can simply be a change in position.
Moreover, a detriment can exist even though the claimant has derived some
benefit from his association with the land owner. In Cooke, the claimant
had lived in and taken care of the property/household for 30 years.

• LLOYDS BANK V ROSSETT: although a case pertaining to the common

intention constructive trust, with reference to detriment it has established
that a wife’s or partners act of merely redecorating a house will not
constitute detriment.
• CAMPBELL V GRIFFIN: devoted performance as a live-in care taker
amounted to detriment.

• GILLETT V HOLT: foregoing opportunities of alternative employment

which may have fetched greater remuneration, undertaking renovation work on
one of the farms owned by the promisor, taking care of the business without any
salary, were all sufficient detriment.

• JENNINGS V RICE: claimant was her gardener who also ran errands for
her, took care of her, slept on her couch every night, as she felt insecure alone.
The courts viewed this as detriment.
• HENRY V HENRY: the claimant had deprived himself of a better life
elsewhere by remaining on land promised to him. He lived on it and cultivated
it for thirty years. The courts held that there was sufficient detriment that could
trigger the doctrine of estoppel. Although he had the advantage of living on the
property rent free, that was balanced by the hard life on the farm, full of
struggles, to make ends meet.

• WATTS V STORY: the claimant moved in with her grandmother after

assurances of financial security. The detriment of giving up a rent-protected
tenancy was seen as being outweighed by the benefit of rent-free occupation.
 3) UNCONSCIONABILITY

It is the element of unconscionability that frees the court from the requirement
of formality to create any interest in land. The element of unconscionability is
not merely unfairness, but rather it arises where the promisors conduct shocks
the court. Whether there is unconscionability depends in turn upon whether
there was an assurance which caused a detrimental reliance. Thus, in OTTEY
V GRUNDY it was held that the features of estoppel cannot be viewed in
isolation. Each case must be looked at in the round, assessing each element in
concomitance.
 SATISFYING THE EQUITY

Unlike a constructive trust which only gives rise to a beneficial entitlement in

the land, an equity by estoppel can give rise to various proprietary interests in
land. The remedy given to satisfy a claim by estoppel is at the complete
discretion of the courts as is evidenced by the vast plethora of case law and
whereas at one time the remedy granted was expectation based, the courts have
shown a move towards a compensation-based remedy i.e., doing the necessary
to ensure that the unconscionability against the claimant is corrected. This
approach has shifted the focus to the proportionality between the assurance and
the detriment. It should be borne in mind that in DAVIES V DAVIES, the court
held that where the assurance is clear and an adequate detriment is suffered over
a long period of time, it is very likely that the expectation that the assurance
induced will be fulfilled.
 Following are some of the remedies the courts have granted over the years:

1) Conveyance of the freehold estate: DILLWYN V LEWELLYN, PASCOE V

TURNER; In both cases, the fee simple was transferred in light of the
expectation.

2) Creation of a leasehold estate: GRANT V WILLIAMS; remedy of a long lease

in return for nominal sum of 30 pounds per annum was given as promised to
the claimant. In YAXLEY V GOTTS, a 99 yr lease was given when on reliance
upon a promise to grant the same, the claimant expended money on renovations
of the flat.
3) Transfer of share of equitable ownership: LIM TENG HUAN V ANG SWEE
CHUAN; the equity was satisfied by transfer of the joint tenants share to the
claimant as that was what had been promised.

4) Award of a right of occupancy (tenancy for life): GREASLEY V COOKE,

INWARDS V BAKER. However, in WORMALL V WORMALL, a time-
limited right to occupy was the minimum necessary to do justice in light of the
detriment suffered.
5) Award of an easement by estoppel: ROCHDALE CANAL V KING,
SWEET V SOMMERS.

6) Validation of a Mortgage agreement: KINANE V ALIMAMY MACKIE-

CONTEH; estoppel was used to validate a mortgage agreement that was void
for all formalities in land law. The estoppel gave the mortgagee his remedies
when loan was not paid.
7) An award of financial compensation: GRIFFITH V WILLIAMS; JENNINGS
V RICE; The courts may give effect to the expectation of the parties but the
relief granted will be that which remedies the detriment suffered by the claimant.
The recent approach of the courts has witnessed a shift towards awards of
money rather than the grant of a proprietary interest in land. In Jennings itself,
the gardener was given an award of 200, 000 pounds rather than a transfer of
the estate amounting to 400, 000 pounds. This figure was reached on the
grounds that the gardener had no expectation of receiving such a great amount,
as he did not know the value of the property. For “giving up alternative
employment and devoting time to the old lady where as he could have spent that
time doing other jobs”, the compensation was quantified at the sum given. In
CAMPBELL V GRIFFIN the courts gave value in land amounting to 35000
pounds but no right to possession.
8) A hybrid award: In GILLETT V HOLT, the compensation (rather than the
expectation) was quantified at a 100, 000 pounds and the transfer of one of
the farmhouses.

9) A practical award: In BAKER V BAKER, the courts will not give an

impractical or unworkable judgment. Where the parties could not possibly
live together under one roof, a monetary compensation was granted instead
of a proprietary interest.

10) SLEDMORE V DALBY: rent free occupation for 18 years was seen as
sufficient compensation. The equity was already satisfied and the claimant
was given nothing.
 CAN AN ESTOPPEL INTEREST BE ENFORCED AGAINST
PURCHASERS OF LAND?

Suppose that B is claiming an estoppel interest on A’s land, and the matter has
not been heard by the court yet (and thus the remedy has not been given by the
court, the equity is still uncrystallised). A wants to rid himself of the land and
quickly sells it to P. Is it possible for the new owner P to be bound by an estoppel
promise that was made by A? The answer to this depends on whether the equity
arising by estoppel is a proprietary right in itself or only the specific interest
eventually granted by the court (as a remedy) is proprietary. This question is an
extremely important one as only proprietary rights are capable of surviving a
transfer of title.
 ILLUSTRATION OF THE DISPUTE

A
LEGAL PURCHASER
OWNER

B DISPUTE B/W
ESTOPPEL B & THE
EQUITY PURCHASER
• S 116 LRA 2002: the LRA 2002 specifically states that from the time when
the equity is triggered, it constitutes a proprietary interest capable of binding a
purchaser of land. Thus, the uncrystallized equity will bind purchasers subject,
however, to the rules of registered land i.e., the claimant must get his equity
protected by entering a notice on the register. If he fails to do so he may
alternatively rely on Schedule 3 para 2 of the LRA 2002. If neither of the two
are satisfied, the purchaser takes free of the interest (s 29 LRA 2002) unless he
is a donee (s 28 LRA 2002).
It is submitted that even though s 116 does not apply to unregistered land, a
proprietary estoppel equity will be given similar proprietary status in a dispute
with a purchaser ( BIRMINGHAM MIDSHIRE MORTGAGE V
SABHERWAL).

• MORTGAGE EXPRESS V LAMBERT: as a private equitable interest, an

uncrystallised equity is capable of being overreached subject to the rules of S
2(1) LPA 1925.
 ESTOPPEL after COBBE V YEOMAN’S ROW

In COBBE V YEOMAN’S ROW MANAGEMENT, the parties reached an oral

agreement ‘in principle’ under which YRML would sell land to Cobbe for
development. The agreement was void by virtue of section 2 of the Law of
Property (Miscellaneous Provisions) Act 1989. However, as Cobbe had spent
a considerable amount of time and money in applying for planning permission
in the belief, encouraged by YRML, that the company would honour the
agreement, a proprietary estoppel equity arose in Cobbe’s favour. This was a
separate and distinct cause of action based on the unconscionable conduct of
YRML, and Cobbe was entitled to a remedy.
The House of Lords in a surprising and groundbreaking decision overturned
this finding and highlighted that the exceptions to s 2 LP(MP) Act 1989 are
narrower than previously thought. Lord Walker emphasized that proprietary
estoppel is unlikely to be an easy way of enforcing commercial agreements for
the sale of land where there has been a failure to follow the formalities of s2. He
stated that if the Court of Appeal decision were allowed, it would create too
much uncertainty in commercial negotiations. The fact was that the
arrangement between both parties was very fluid and uncertain with no clarity
as to what the exact terms of sale would be. The matters that were left undecided
by them were far from trivial. The claimant’s case failed on the fundamental
point that both parties had known that there was no legally binding contract.
The claimant had in fact run a commercial risk with his eyes open. The decision
was approved and followed in HERBERT V DOYLE.
It is worth noting that Cobbe cannot be taken to mean that estoppels will not
operate in commercial transactions. Such a narrowing of the doctrine would not
be acceptable. Estoppel will work even between commercial parties as long as
it is being used to avoid an unconscionability to the claimant rather than to avert
or circumvent the formalities of the law. It is difficult to see how this would
happen. Where a claimant ought to have known (and this expectation will surely
be there in negotiations between commercial parties) that an agreement cannot
be legally binding without compliance with formalities, his claim will
necessarily fail on the basis of Cobbe as it will be seen as an attempt to
circumvent formality. How else is Cobbe to be interpreted than to say that it
does impose a possible limitation on the doctrine of estoppel?