Proprietary Estoppel

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  • It is a form of equitable estoppel which creates property rights
  • Operates so as to give rights to someone who would otherwise have no rights at all or only a bare licence
  • Strictly no property rights are created, no contract in writing is needed and there are no recognised property interests
  • Arises where a person 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
  • Doctrine operates so as to prevent the landowner from eforcing his strict legal rights and the claimant will usually also acquire a proprietary interest in the land
  • Allows the claimant to ask the court for property interrests - generally though to be limited to claims in land. 
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  • Prevents unconscionable conduct (Gillett v Holt)
  • Limited to interests in land and has been developing in the past 40 years.
  • It is flexible but has essential requirements
  • 5 requirements were set out for liability and the view was taken that you need all 4 elements and for many yeras it was considered to be correct (Fry J, Willmott v Barber)
  • Proprietary estoppel is not limited to acquiescence, can be used in other situations
  • A more flexible approach should be used by the courts, don't ignore the 5 criteria though (Oliver J, Fashions Ltd v Liverpool Victoria Trustees Co Ltd)
  • If the 5 criteria are satisfied then there can be proprietary estoppel. If no, possibility there can still be proprietary estoppel
  • No complete discretion to judges, there are basic requirements - no formulation is perfect
  • Proprietary estoppel can arise in many circumstannces and you can't cover them all - there are still difficulties in applying it
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Creation 2

  • There are basic requirements that must be satisfied, although there is flexibility in their satisfaction and an overall requirement of unconscionability
  • 'There is no definition of proprietary estoppel that is both comprehensive and uncontroversial' (Walker L, Thorner v Major)
  • How strong a requirement needs to be, depends on how strong the others are looking for unconscionability
  • Overall, have to be able to say that is unconscionable for the claimant to exercise their own rights
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Mistaken belief by the claimant or assurance

  • The belief may be created by an express representation or by conduct of the landowner; it may alternatively be confirmed by the landowner's inaction
  • Claimant has to be mistaken as to rights in land. If claimant knows the truth, there is no justification for a remedy and proprietary estoppel won't operate

Any representation or assurance need only be 'clear enough' in the circumstances (Thorner v Major)

Thorner v Major

  • The belief can be created by what the landowner has said or done
  • Mistaken belief arose in the claimant's mind but confirmed by the landowner's not clarifying the situation
  • Proprietary estoppel arises when the landowner is under a duty to correct, likely to require fulfilment of the 5 principles
  • The belief must relate to identified property that the landowner owns or possibly is about to own
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Mistaken belief by the claimant or assurance 2

  • The belief need not be of a specific recognised property interest

There was no clear link with the specific property, sufficient to give rise to proprietary estoppel (Southwell v Blackburn)

  • The claimant may have made a mistake as to his present righhts in the land (Pascoe v Turner)
  • Claimant had acquired rights of access by proprietary estoppel. The mistaken belief was as to the future grant of rights, not originally mistaken, became mistaken when the council changed their mind. (Crabb v Arun DC)
  • Claimant had looked after the house and paid money so proprietary estoppel was established. (Re Basham)
  • Proprietary estoppel can arise in inheriting only if there is a clear unambiguous promise that the claimant will get the property on death. Assurance may be linked to the making of the will. Has to be a commitment not just a statement of current intention. If still in negotiation there are important issues they haven't yet agreed on, so no proprietary estoppel. (Gillett v Holt)
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Mistaken belief by the claimant or assurance 3

  • A mere hope of acquiring rights is insufficient - consider an expectation of inheriting property and pre-contractual negotations

It is easier to establish proprietary estoppel in domestic situations. Claimants with no legal advice and doesn't realise the promise is not binding. Commercial cases - parties know nothing is binding until there is a written agreement (Walker J, Yeoman's Row Management v Cobbe)

  • Even an apparently clear promise may be regarded as implicitly qualified to take account of unforeseen events

It was important that the promise linked to the success of the partnership. Since the partnership failed, the promise couldn't be enforced. (Uglow v Uglow)

  • Generally an estoppel will not arise where the claimant has actual rights. 

C was not acting on reliance of the rights she actually had a contract to purchase the property. Actually had a contract and so couldn't argue for proprietary estoppel (Lloyds Bank v Carrick)

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Acts in reliance by the claimant to his potential

  • Reliance will sometimes be assumed

Where a promise is made deliberately and made to influence the claimat, the court is prepared to assume the acts by C were done in reliance on that promise. Up to the land owner to prove C didn't act in reliance. Acts by C were substantial and the hope of rights is not sufficient. (Greasley v Cooke)

  • Reliance must be reasonable - Thorner v Major

Where a promise has been made the court may ask not whether the claimant would have acted the same had there been no promise, but what the claimant would have done had the landowner reneged on the promise

Promise doesn't have to be only act for reliance, generally thought that C would fail to establish proprietary estoppel if they would act in same way as if there was no promise. (Wayling v Jones)

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Acts in reliance by the claimant to his potential

  • The acts by the claimant need not themselves be detrimental
  • They must be such acts that the claimant would suffer detriment if the landowner were to be permitted to enforce his strict legal rights

Detriment will be judged at the same time the landowner seeks to enforce his strict legal rights (Gillett v  Holt)

  • If the land is taken away, loses the money he spent on the property (Dillwyn v Lewellyn)
  • If there is no right of way, the garage was a waste of money and potentially detrimental. An easement was created by proprietary estoppel (E.R Investments Ltd v High)
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Acts in reliance by the claimant to his potential

  • However the acts in reliance need not involve either building work or expenditure

Sale of land was sufficiently detrimental (Crabb v Arun DC)

C on reliance of a promise looked after an invalid (Greaslley v Cooke)

Relevant relationship wasn't natural, step-family. It went beyond the normal step family relationship. (Re Basham)

C has to show they could have done better (Davies v Davies)

C was lead to believe he could buy the premises. The failure was sufficient. (Lloyd v Dugdale)

  • In extreme cases the acts in reliance may be quite minimal
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  • Even if you can show a mistaken belief and detrimental reliance, it is not enough for proprietary estoppel
  • It is unconscionable for the landowner to enforce his strict legal rights
  • Courts are prepared to look at the detriment suffered compared with the benefits received by C during the relationshp between the parties


  • Consideration of detriment suffered and benefits received

Courts balanced sufficient detriment to give rise to proprietary estoppel (Southwell v Blackburn)

Even if proprietary estoppel is established, it is exhausted by the benefits already received. (Hobhouse LJ, Sledmore v Dalby)

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Unconscionability 2

Conduct of the landowner

  • Proprietary estoppel can arise in varying situations
  • Although there is an objective, the state of knowledge is highly relevant
  • The landowner must have conducted himself in such a way that it would be unconscionable for him to assert his strict legal rights

Whether a landowner's conduct is unconscionable is an objective value judgment regardless of his state of mind (Yeoman's Row Management v Cobbe)

It will be assessed objectively whether it was reasonable for the claimant to have taken any assurance seriously and acted in reliance on it (Thorner v Major)

A landowner with complete knowledge will lose his strict legal rights even if he was totally inactive throughout (Willmott v Barber)

  • Difference between a landowner who knows a neighbour is building on his land and does nothing to stop it
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Unconscionability 3

  • Proprietary estoppel can sometimes be established against a landowner who lacks knowledge of his own rights

Lack of knowledge of own rights can be fatal when claim against landowner when inactive. Landowner who does nothing not realising they have no rights x acting positively, should have checked true position before acting in such a way (Taylors Fashions v Liverpool Victoria)

Landowner encouraged act in reliance and not directly encouraged a mistaken belief but maybe indirectly (ER Ivest Investments v High)

Landowner created the mistaken belief, did nothing whilst claimant acted in reliance. Wife's conduct created a mistaken belief and proprietary estoppel was established. (Sweet v Sommer)

The reason the courts intervenee is if the landowner knew of act in reliance. If complete inaction, it is essential to show act in reliance, there is a duty to speak out. (Gillett v Holt)

  • Cases in promises/assurance, there is a suggestion that the precise knowledge of what the claimant has done may not be essential
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Unconscionability 4

  • Knowledge of the claimant's acts in reliance may not be necessary: in a case of encouragement it may be sufficient that the landowner knew what the claimant intended to do

It is enough to show that the council know what the claimant intended to do . C didn't have to know what he actually did (Joyce v Epson & Ewell)

  • Where there is an assurance it may only ne necessary to show the actual fact of reliance

If you have an express assurance, that can be reasonably understood as taken seriously, mere fact of reliance is enough (L Hoffman, Thorner v Major)

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Effect of the Doctrine

  • Gives the claimant a right to claim relief from the court. It can be used as a defence or as a cause of action Crabb v Arun DC
  • It is usually sufficient to say that claimant has a right to take D to court, if the landowner interferes he can bring action by a court oder, which will clarify and settle the claimant's rights in land
  • Rights of a claimant in the property before a court order are not precisely clear
  • Dicta says he has an 'equity' from the moment of reliance (Crabb) 
  • In the context of an expectation of inheriting property this seems to impose restrictions on the landowner's freedom to use his property in his lifetime

A floating trust arises from the moment of reliance. It hovers above a property and attaches at the moment of death. It allows the landowner the ability to deal with the property as he wishes, but it also imposes some restrictions. It's nature and limit are unclear. (Re Basham)

Proprietary estoppel would not prevent the landowner from selling the property for necessary medical treatment/care (Thorner v Major)

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Effect of the Doctrine 2

  • The court has the power to grant to the claimant such remedy as it deems to be appropriate in the circumsances

'The court will consider the extent of the equity and decide how best to satisfy it' (Scarman LJ, Crabb v Arun DC)

Precise right the claimant gets depends on the discretion of the court - 4 possibilities

  • Grant a proprietary interest of some kind to C
  • Compensation to C
  • In rare cases, the courts award an injunction to prevent the landowner interfering with the claimant's enjoyment
  • No remedy
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Effect of the Doctrine 3

  • Earlier cases seemed to favour the grant of a proprietary interest; compensatio has been awarded more readily in recent cases

The court has to consider the expectation of C, it didn't matter if the interest was vague, they considered all factors to determine the most appropriate interest. There is some flexibility. Sometimes it is more obvious or would be inappropriate (Pascoe v Turner)

Courts still don't like lifetime interests, by creating a trust, lots of admin and possibility of further disputes between parties. (Griffiths v Williams)

  • Calculation of compensation - compensation varies

Compensation = return of money expended on act in reliance of the mistaken belief + the right to stay until repaid. It is easier when a precise sum has been spent (Dodsworth v Dodsworth)

Compensation cannot be greater than the property in the hands of the landowner. If it is subject to mortgages, there is no value. (Jules v Robertson)

Compensation = expenditure she incurred to increase value of the property (Southwell v Blackburn)

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Effect of the Doctrine 4

  • The possibility of negative relief such as an injunction

It is not always easy to quantify detrimental reliance, expectation may be a starting point, but not sole factor to be considered. (Inwards v Baker)

  • The possibility of no remedy
  • The expectation is the maximum - Dodsworth v Dodsworth
  • Lack of clear principle until recently
  • Recet reliance on the principle of proportionality (between expectation and detriment)

To award the house value would be out of all proportion to the detriment suffered (Jennings v Rice)

Court looked at the expectation and detriment and gave compensation in the middle (Ottey v Grundy)

Court refused to reward the return of expenditure as the landowner would disproportionately benefit from it. If not entitled to remedy, courts can be flexible with the requirements. Can allow proprietary estoppel to be establiehd when there is minimal detrimental reliance, can also be reflected in the remedy. (Cobbe v Yeoan's Row Management)

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Effect of the Doctrine 5

  • In recent cases, the judges have been too generous and are not applying the principle of proportionality properly (J. Mee)
  • The remedies the court may award take into account relevant factors. 1) The financial position of the parties and 2) The relationship between the parties

The 2 parties didn't get on due to the attitude of the landowner, who was a nasty piece of work. If he retained ownership, he'd interfere with C's enjoyment or sell it. (Pascoe v Turner)

Equity was exahsited, no proprietary estoppel could be established due to the benefit already recevied. If there is an act in reliance of a mistaken belief, why should the remedy be affected by the landowner's financial difficulties. (LJ Hobhouse, Sledmore v Dalby)

A clean break is not always possible. The court cannot grant a remedy leading to no dealings with each other. (Gillett v Holt)

The courts may pursuade the court to award compensation instead of a proprietary interest. Compensation wouldn't force the landowner to live with people she didn't get on with. (Dodsworth v Dodsworth)

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Effect of the Doctrine 6

Once a remedy is given, rights cannot be lost through bad behaviour. L Denning disagreed and held there might be exceptional circumstances. If there were bad behaviour prior to getting the remedy, it will be relevant because of the equitable maxim 'come with clean hands' (Williams v Staite)

Supervening circumstances may be relevant, an assurance was qualifying (Uglow v Uglow)

Effect of taxation relevant and existence of other people's claims on the property are relevant (Jennings v Rice)

If the land is sold, the circumstances around the sale are relevant. Remedy against the purchaser instead of the landowner might affect the remedy (Henry v Henry)

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Successors of the landowner

Before any court order

Registered land

  • The equity is reagrded as capable of binding successors in title from the moment it arises s 116 LRA 2002
  • The moment there is a detrimental reliance on a mistaken belief, there is equity which would need to be protected by the purchaser
  • Where proprietary estoppel gives rise to beneficial ownership, that proprietary estoppel equity can be overreached Birmingham Midshires

Unregistered land

There is no doubt that the equity binds certain successors in title of the landowner:

  • Those who step into his shoes - Dodsworth v Dodsworth
  • Volunteers (donees or beneficiaries under a will) Sledmore v Dalby, Greasley v Cooke
  • A purchaser with express notice ER Ives Investments v High
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Successors of the landowner 2

In Favour

A purchaser with constructive notice would be bound by the equity created by proprietary estoppel. It is a personal interest and capable of binding a bona fide purchaser (ER Ives Investments)

Certain equity can be overreached, must be an interest in land, otherwise it doesn't need to be overreached (Birmingham Midshires Mortgages)


Express notice throught necessary (Re Sharpe)

Should purchasers with notice be bound?

If proprietary estoppel cannot bind - then only a chance of remedy for C would be to rely on Wayling  to sue original landowner and get compensation

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Successors of the landowner 3

After the court order

  • Claimant is likely to have been granted a recognised interest in land and the effect on purchasers will depend on what that interest is
  • If a recognised property interest is not granted, it is unclear whether the equity continues in existence

Successors of the claimant

  • Whether the benefit of the equity can be passed on by the claimant remains unclear
  • Some 19th century cases in which the equity has passed either to the heir of the claimant, with the land or been successfully assigned
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Is a Licence or Proprietary Estoppel an interest i

  • An interest should be 'definable, identifable by 3rd parties, capable in its nature of assumption by 3rd parties, and have some degree of permanence or stability' (L Wilberforce, National Provincial Bank v Ainsworth)
  • A contractual licence, probably of the correct view that it cannot bind - so not a proprietary interest
  • Gives the licensee a stake in the property
  • Proprietary estoppel is capable of binding, but there are problems with other parts of the definition
  • Although the extent of the equity will be unclear, it will be clear that it exists

A contractual licencee is entitled to an order in possession against a trespasser, so some rights but not a proprietary interest (Dutton v Manchester Airport)

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