Licences and Proprietary Estoppel


Bare Licence

Simplest form, and often called a Gratuitous license, as it can be granted without payment.

There are no formalities to comply with this type of licence, and can be granted expressly (e.g an invitation to a party) or impliedly (e.g a postman crossing your driveway to deliver mail).

It is a common principle that if granted a licence, you can only use it for that purpose. Scrutton LJ in The Calgarth [1927] noted how if granted licence to use the staircase, you then could not slide down the banister without technically being a trespasser.

A bare licence can be revoked on giving reasonable notice at any time and at the will of the licensor (Wood v Leadbitter [1845]). The licensee must be given a reasonable time to leave the property. 

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Licences Coupled with an Interest

An example would be the right to fish (which is a profit á prendre) however must be coupled with a license to use the land in order to do so as it would be otherwise worthless.

The licence in this case is irrevocable and grantable to a third party, as it is coupled with the right, which must be created with the proper formalities (e.g a deed). 

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Contractual Licence

A licence which has been given to another for consideration (e.g a ticket to a film).  They are generally controlled by contract law.

They are normally created expressly but can also be implied by the court (especially in areas of familial contexts as seen in the case of Tanner v Tanner [1975] where the couple had a child, brought a house in the man’s name and moved in together. The woman brought furnishings and intended to raise their children there but the man revoked her licence. She was awarded £2000 in damages as she had already moved out but the courts held that she had a contractual licence to live in the house until the children were of school age. It was held in Horrocks v Forray [1976] that it was the fact Tanner gave up her rent controlled flat and purchased the furniture which was seen as consideration).

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Estoppel Licences

Estoppel Licences are a form of PE, and are used to prevent a licensor from revoking the licence or to grant an interest in land.

In general terms, PE protects a person who has done acts in reliance on an expectation they will receive an interest in land or an estate in fee simple. The courts will use PE to “mitigate the rigours of strict law” and thus will stop unconscionable denial of rights (Cobbe Lord Scott). 

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Willmot v Barber [1880] 5 Probanda

Fry J set out five criteria (probanda) for fraud cases, however these criteria have also been used to establish estoppel claims in some situations:

1.       In the first place the plaintiff must have made a mistake as to his legal rights. 

2.      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. 

3.      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 a knowledge of your legal rights.

4.      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. 

5.      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,”

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The Modern Approach

Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] – Furthermore the more recent cases indicate, in my judgment, that the application of the Ramsden v. Dyson principle - whether you call it proprietary estoppel, estoppel by acquiescence or estoppel by encouragement is really immaterial - requires a very much broader approach which is directed rather at ascertaining whether, in particular individual circumstances, it would be unconscionable for a party to be permitted to deny that which, knowingly, or unknowingly, he has allowed or encouraged another to assume to his detriment than to inquiring whether the circumstances can be fitted within the confines of some preconceived formula serving as a universal yardstick for every form of unconscionable behavior.

-          He is saying it is essentially too narrow, and that PE isn’t about preventing fraud but unconscionability. This is a similar idea to equity (trusts).

Thus this case recreated the test for PE, and has set out the modern requirements:

1.       The C must show there was an Assurance by the Landowner that gave rise to an expectation that they were to have some interest in the land.

2.       The C must have relied on the assurance

3.       The C must have acted to his detriment on relying on that assurance

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Gillet v Holt [2000]

‘it is important to note at the outset that the doctrine of proprietary estoppel cannot be treated as subdivided into three or four watertight compartments. Both sides are agreed on that, and in the course of the oral argument in this court it repeatedly became apparent that the quality of the relevant assurances may influence the issue of reliance, that reliance and detriment are often intertwined, and that whether there is a distinct need for a 'mutual understanding' may depend on how the other elements are formulated and understood. Moreover the fundamental principle that equity is concerned to prevent unconscionable conduct permeates all the elements of the doctrine. In the end the court must look at the matter in the round.’

-          What the court is saying here is that each assurance, and the strength of the insurance will impact on the reliance, and the acceptability of the reliance will impact the detriment, etc etc and therefore each case is considered individually whilst each action is considered relative to the others.

-          This was described as a “Holistic Approach” by Baroness Hale in Throner v Major [2009]

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Pascoe v Turner [1979]

The D moved in with the plaintiff, first as his housekeeper, and then became his lover. They moved to a new house which he purchased. He subsequently had an affair and moved out. After he left, she remained. He said that the house and everything in it was hers. The CoA said he had therefore made an AA which was sufficient to establish PE. 

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Yeomans Row v Cobbe [2006] (OVERRULED)

Mr Cobbe was a property developer and entered negotiations with the D’s, who wanted to redevelop the land. The parties reached an oral agreement in principle, its terms where that Mr Cobbe at his own expense would make a planning application. What he proposed was to demolish the flats and build 6 new houses, if the planning application was successful, it was agreed he was too buy the land for £12 million. Mr Cobbe would then carry out the development, and sell them (50% of all gross profits in excess of £24 million was to go to the D’s). Mr Cobbe incurred significant expenses in obtaining the planning permission which was granted in March 2004. The D’s then said that they wanted £20 million and not £12 million. Cobbe commenced proceedings due to his reliance on the oral agreement.

-          The HoL stated that in order for PE to occur you will need a contract, as otherwise you wont have a proprietary claim.

They also said that as the statute is supreme, equity cannot bypass or undue the clear rules in the 1989 Act. Especially as in the act there is an exception on a different ground, therefore if Parliament intended PE to be one, they would have said so.

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Thorner v Major [2009]

The appellant (C) claimed to be the owner of a farm. He was the cousin of the D and had helped out the farm a lot, unpaid, for over 30 years. David (C) came to believe he would inherit the farm, but there was never any express representation of that. There was a matter of implication from conduct and quips of speech. Peter (owner of the farm) in 1990 gave David the insurance policy with the words “that’s for my death duties” (these go to the executors or the beneficiaries of wills). The judge at the original trial found that the buildup of implications amounted to an assurance on which he could rely. Peter made a will leaving most of his estate to David, and then the will was destroyed in order to stop the rest of it (not David’s share) from taking effect, and the evidence suggested Peter still intended David’s inheritance. When peter died the estate passed to the closest relatives, and so David sued. The farm was worth £3 Million. 

-          The HoL stated that families do not create binding legal documents, and so they should look to the past and ask if it would be unconscionable for the promise not to be kept.

-          They also said they do not think cases like this would be very common and so there is no floodgates issue

-          They essentially reactivated the concept of PE in the absence of a legally binding contract.

-          The HoL dramatically disagreed with Cobbe. This case demonstrates the power of PE, as there was no gift, David could never prove any contractual duty, however because of the idea of the unconscionability David won the case.

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Revocable Assurance?

lots of estoppel cases revolve on the fact that people have said they will leave land to someone in their will.  Whilst the person may have acted in their detriment when they have acted on that promise, however, a testator at any point can change the title in his will, and therefore the claimant must be aware that can occur and so cannot rely on the promise.

-          Taylor v Dickens [1998] – a elderly woman said she would leave her entire estate to her gardener, she then changed her mind after he had stopped making her pay for his work. The court held that he could not rely on her promise, as she had never encouraged him to believe that she would not change her will after the promise.

§  The court therefore held that she would have to have made a promise to leave X and then made a promise not to break the promise.

-          Gillett v Holt [2000] – The court in this case held that the revocable element of the will was irrelevant and so a promise could create an estoppel equity at that point (when the person relies on it whether or not it was revoked).

§  ‘If there was a relevant unforeseen change of circumstances, the probable reaction of the just bystander (and it is by reference to his conscience that these matters should be judged) would be that the assurance of the Testator could be rescinded by him and replaced by a different arrangement, as long as it satisfied the equity that had arisen in favour of the claimant before the change of circumstances.’

Thorner v Major [2009] – the HoL supported the maxim that irrevocability does not matter!

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Coombes v Smith [1986] – Mrs C and Mr S became lovers whilst married to different people. Mr S purchased a house in which he and Mrs C intended to cohabit. He said things about living the rest of their lives together, and so she moved into the new house and decorated it. She then became pregnant and Mr S said he would move in very shortly after she did, but first wanted to spend Christmas with his children. He never moved into the house. After three years, Mrs C and daughter moved to another house purchased by Mr S which she then redecorated. Mr S then began living with another woman. He said he told Mrs C and the child that they could live in the house until the child was 17 then they had to leave. Mrs C then claimed title to the house through PE

-          The judge held that none of the elements of PE were established. He said this as she had not been acting under mistaken beliefs, and that her conduct did not constitute a detriment as well as the acts of alleged detriments (including leaving her husband and having a child) were not connected with any representation

The judge is saying that reliance should be rejected as Mrs Coombes acted from personal feelings. Some people disagree, as the decision appears to draw an arbitrary decision between motives of love and affection as well as acquiring proprietary interests in land. People however tend to cohabit on the basis they like each other, and so do not have one motive in mind when they move in with someone else

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Detriment - G v H [2000]

Gillett v Holt [2000] - ‘The overwhelming weight of authority shows that detriment is required. But the authorities also show that it is not a narrow or technical concept. The detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether repudiation of an assurance is or is not unconscionable in all the circumstances...There must be sufficient causal link between the assurances relied on and the detriment asserted. The issue of detriment must be judged at the moment when the person who has given the assurance seeks to go back on it. Whether the detriment is sufficiently substantial is to be tested by whether it would be unjust or inequitable to allow the assurance to be disregarded—that is, again, the essential test of unconscionability. The detriment alleged must be pleaded and proved.’

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Types of Detriment - Financial & Labour

1.       Improving Land – Pascoe v Turner [1979] a woman decorating the house of her former lover was a detriment  ‘...the claimant, having been told that the house was hers, set about improving it within and without..We would describe the work done in and about the house as substantial 

2.       Suffering Financial Disadvantage – Gillett v Holt [2000] – Mr Gillett claimed he suffered detriment in the form of opportunity lost by continuing Mr Holt’s employment having rejected other employment offers elsewhere. He had also stepped off the property ladder by living in the farm house of Mr Holt. He appeared to be paid about 80% of the standard amount paid, and did more work than most people in his position. Mr Holt enjoyed dominance over Mr and Mrs Gillett as patron and therefore decided to pay for their son to go to private school, but did not make the same offer for the other son for whom the Gilletts took out many loans. The court held this was a detriment.


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Types of Detriment - Non Financial

      Non-Financial Disadvantage – Re Basham (Deceased) [1986] – the step daughter cared for her step father, and the court agreed her actions went far further than what was called for by family, and so clearly amounted to a detriment.

a.      Grant v Edwards [1986] - ‘In many cases of the present sort, it is impossible to say whether or not the claimant would have done the acts relied on as a detriment even if she thought she had no interest in the house. Setting up house together, having a baby, making payments to general housekeeping expenses (not strictly necessary to enable the mortgage to be paid) may all be referable to the mutual love and affection of the parties and not specifically referable to the claimant's belief that she has an interest in the house. As at present advised, once it has been shown that there was a common intention that the claimant should have an interest in the house, any act done by her to her detriment relating to the joint lives of the parties is, in my judgment, sufficient detriment to qualify.’

                                                               i.      This is a very expansive view of detriment

b.      Jennings v Rice [2002] – The gardener in this case ran errands for the elderly lady and after a burglary spent many nights on her sofa (even though he had his own family), the court held that this was clearly a detriment.

There also tends to be the requirement of unconscionability as per Lord Walker in Cobbe who argued it was a very important part as an objective value judgment of behaviour, however Professor Birks called it “a fifth wheel on the coach” in 2002 as a use in describing a state of mind.

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Equitable Remedies

1.       Gillett v Holt [2000] – Conveyance of Freehold

2.       Grant v Williams [1977] – Grant of a Lease

3.       Share of a Beneficial (equitable) Ownership

4.       Dodsworth v Dodsworth [1973] – Compensation

In some cases, no remedy: Appleby v Cowley [1982] - ‘When the work was being done the rental value of the premises for which some £1500 a year had been paid for some 10 years was about £4300...In those circumstances I think [the representor] may echo the phrase of Lord Hardwicke in Attorney General v Balliol College Oxford...and say that the plaintiffs have had ‘sufficient satisfaction’ for their expenditure.’

Which Satisfaction (remedy) is Appropriate? – Griffiths v Williams [1977] - ‘The...question is one upon which the court has to exercise a discretion. If it finds that there is an equity, then it must determine the nature of it, and then guided by that nature and exercising discretion in all the circumstances, it has to determine what is the fair order to make between the parties for the protection of the claimant.’

§  Moriarty (1984) said ‘Normally...a remedy will be chosen which gives the party precisely what he has been led to expect, but occasionally, where joint rights to land have been represented, he may get money instead.’

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