In spite of the modern acceptance of a broadly based test of unconscionable dealing, the approach of the court when faced with estoppel claims tends to be restrictive. The courts treat such claims with a degree of caution......ritic
"In spite of the modern acceptance of a broadly based test of unconscionable dealing, the approach of the court when faced with estoppel claims tends to be restrictive. The courts treat such claims 'with a degree of caution', mindful of the fact that the doctrine of proprietary estoppel 'may have the drastic effect of conferring on one person a permanent, irrevocable interest in the land of another, even though he has given no consideration for such acquisition, by way of contractual arrangement, and no legally effective gift of it has been made in his favour '"
Critically analyse and assess this statement with particular regard to recent academic commentary and modern case law.
Word Count = 2554
To evaluate this statement we must examine the cases been bought to the judiciary on the concept of proprietary estoppel, how the judiciary made their decision on the basis of proprietary estoppel.
Land is defined by the Law of Property Act 1925 at S205 (1) (ix). When we buy property we do not own that land, the crown owns all the land. The best one can own is an estate/interest in land. Since the LPA1 1925, there are two legal estates in land and five interests. The two legal estates are set out in S.1 (1) (a) and (b) of the 1925 Act, namely; an estate in fee simple absolute in possession and a term of years estates. The five legal interest are contained at Section (2) (a) to (e) of the LPA Act2 such as easements, landlords rights of re-entry and charge by way of mortgage. Anything other than that contained in S (1) of the LPA Act3 is an equitable interest.
Land can be acquired both through a legal or an equitable right S.5224. There are basically two ways in which one can acquire an interest in Land, formally and informally.
The formal way, which is govern by the Law of the Property Act 1925 and the Law of Property (Miscellaneous Provisions) Act 1989, requires a contract, a conveyance and registration as dictated by statute. Once all legal requirements are carried out, ownership is conveyed from vendor to purchaser. S.1 (6) of the LPA 1925 does not permit a legal estate to be conveyed to a child under the age of 18 (Hector v Lyons5)
The informal modes of acquiring an interest in land are though adverse possession, licences and proprietary estoppel. The informal ways of acquiring property are by equity. Equity sees licenses couple with proprietary estoppel as fully legitimate modes of acquiring land.
When acquiring land informally, if there is no contact under statute, equity may enforce an agreement by find a constructive trust or by the doctrine of proprietary estoppel, if it would be unconscionable for the defendant to deny that he mad a promise to transfer the interest. Equity will only succeed if the claimant has acted to his detriment in relying on this promise and if the claimant has not acted unconscionable, the maxim "he who comes to equity must come with clean hands" prevails.
There can be two scenarios where propriety estoppel can exist. First scenario is where a person who owns land, does not actively encourage a person to build on his land but if the person believes he has a right to that land and the owner does not put that person straight it is difficult to establish equity6 It is important to know that the landowner knows that person's mistake and does not rectify that mistake. In Ramsden v Dyson7 A tenant built on his land, believing he would be entitled to a long lease. The House of Lords, by majority, decided he could not claim the lease but the Lord Wendselydale said this for future reference on cases like these
If a stranger build upon my land, supposing it be his own, and, I knowing it to be mine, do not interfere but leave him to go on, equity considers it dishonest in me to remain passive and afterwards to interfere and take the profit. But if a stranger built knowing on my land, there is no principle of equity which prevents me from insisting on having back my land, with all the additional value which the occupier has imprudently added to it. If a tenant of mine does not the same thing, he cannot insist on refusing ...
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If a stranger build upon my land, supposing it be his own, and, I knowing it to be mine, do not interfere but leave him to go on, equity considers it dishonest in me to remain passive and afterwards to interfere and take the profit. But if a stranger built knowing on my land, there is no principle of equity which prevents me from insisting on having back my land, with all the additional value which the occupier has imprudently added to it. If a tenant of mine does not the same thing, he cannot insist on refusing to give up the estate at the end of the term. It was his own folly to build.
It could be said that the court took the approach where they held no claim, because there was no prescent in favour for Dyson, but took an approach where if these circumstance arise again the judgement should not be the same.
The other scenario is where one person actively encourages another to believe he will have a right or interest to their land and that other person believes on that promise as in Plimmer v The Mayor of Wellington8 and in more up-to-date case is Inwards v Baker9 facts of this case is Father told son, he could build a bungalow on his land when purchasing a bungalow was too expensive. Son went on to build and lived in the bungalow. Father then died and left the land not to his son, the trustees sought possession. Court of Appeal held for his son. They held he had an expectation to live in bungalow indefinitely from his father.
In Willmott v Barber10 Fry J. set out the five probanda required for proprietary estoppel. The plaintiff must have made a mistake to his legal rights, he must have spent some money or relied on his mistaken belief, the defendant must be aware of the true position, the defendant must know of the plaintiff's mistake and he must have encourage the plaintiff in his expenditure or other act of reliance.
The five probanda criteria listed above can be ambiguous as both parties are unsure of their legal right. In E R. Ives Investment Ltd v High11 is an example of this. The court held in Mr High favour.
The five probanda followed until Taylor v Liverpool Victoria trustee Co12 when Oliver J took a flexible approach that each case should be looked at on individual merits and in particular circumstance and it would be unconscionable for a party to be permitted to deny that which knowing or unknowingly he has encouraged another to assume a detriment.
The flexible approach has been controversial with academic writers. It has been called unhelpful13 it could be said that if we use this approach, there will be no point using judicial review. Thompson MP says it is easy to see why a test based on a broad principle of unconscionability should be viewed should be viewed with some suspicion; it may be seen as providing scope for judges to apply idiosyncratic notions of fairness to different factual scenarios, the result being uncertainty.
As the statement in the essay question says the courts treat proprietary estoppel claims with caution. The following cases will illustrate this in the order of how the courts decided on the promise, the reliance on that promise and to the detriment.
When a claim is bought to the court on the doctrine of proprietary estoppel it will depend on the circumstances of the case. The most important requirement being that there was a promise, the reliance on that promise and detriment. There must be a causal link between the three; if there is no link then there can be no claim for proprietary estoppel.
In Taylor v Dickens14 An elderly lady (Mrs Parker) told her gardener (Taylor) she was going to leave her estate to him and his wife in her will. Taylor then offered to work for the elderly lady, for which he did for nothing. The lady then died and did not leave her estate to Taylor in her will. The court did not upheld Taylor's claim. The court saying that Mrs Parker was entitled to revoke her will at anytime.
It could be said this was unfair to Taylor. Mrs Parker, did in fact received free workmanship for her garden from Taylor, as he was on the understanding he was receiving a generous gift from Mrs Parker. Taylor should have at least received some sort of remedy from the court for his free work from Parker's estate Thompson MP15 wrote this case is highly artificial and wrong as in the case in Gillett v Holt16 where there court held that the assurance where to be relied as the promise was repeated over a period of time. The three following factors from Gillett v Holt17 suggest that a representation may be acted on repetition of representation made, representation made before witnesses and the nature of the representation was unambiguous. Thompson MP18 wrote that claims maybe sufficient to form on unambiguous statement that property will in fact be inherited but will seek an overall justice of the case.
The second requirement for proprietary estoppel is that the claimant must have shown he relied on that promise and then changed his in reliance to that promise. The claimant will need to prove that he acted in a way he did because he relied on the assurance made. In the case of Campbell v Griffin19 Campbell gone to live with and elderly couple (the Ascoughs), paying rent. After five years his relationship became like parent and son. The Ascoughs made promises to Campbell that he had a home for life. When the Ascoughs died, there was no will in place for Campbell to inherit the property. Campbell produced evidence to the court in ways he helped and cared for the Ascoughs. The court did not place to much reliance on his claim on the basis that the small expenditure was small and could not be taken as reliance on the assurance which Campbell had been given with regard to the house. The Court did in fact uphold his claim as Campbell said he would have cared for the Ascoughs without the promise inheriting the property.
It could be said the court took a view in Campbell v Griffin20 on compassion of the relationship between Campbell and the Ascoughs, the evidence given in court was dismissed. Gray and Gray21 took the view it is the element of prejudice to the representee which confers a legal significance upon the parties' dealing and renders it unconscionable that the relevant assurance, once given, should be subsequently withdrawn or denied. As In Re v Basham22 The deceased owned a cottage and had on numerous occasions indicated to the plaintiff that she would get the cottage when he died in return for what she had done for the deceased. He reiterated that intention on his deathbed. His family also understood that the cottage would go to the plaintiff on his death. The deceased died and did not leave his estate to the claimants. His next of kin who were entitled to the estate on the intestacy were two nieces who were the administrators of the estate. The claimant brought an action against the nieces seeking a declaration that she was entitled to the deceased's estate because the deceased had induced and encouraged in her the expectation or belief that she would receive the estate on his death and she had acted to her detriment in reliance on that expectation thereby raising a proprietary estoppel in her favour.
Taylor and Basham demonstrate that the decision is reliant on the actual facts of the individual case. There should be proportionality between the expectation and the detriment.
In Taylor v Dickins23 the court criticised Basham fro bringing the scope for Proprietary estoppel too wide. The Court held that a promise that another would inherit from a person and thereby that person making a reliance upon that promise was insufficient to base a claim upon proprietary estoppel, as a will can be revoked at anytime. It must be proved that there was a collateral promise that there would be no revocation.
Gillett v Holt24 criticised Taylor and held that Proprietary estoppel could be upheld in relation to a will. Robert Walker LJ states that the fundamental principle that equity is concerned with, is to prevent unconscionable behaviour and the court must look at each case in the round. The court found that here was in fact a detrimental reliance on the promise of inheriting under the will which made the promise binding regardless of the fact the will could have been revoked. Thompson25 heralded the decision in Gillett for providing support to the analysis taken in Taylor Fashions that the underlying basis of proprietary estoppel is unconscionability.
Not an unusual on claims bought to the courts on propriety estoppel when the parties are in a relationship and on the breakdown of their relationship, one party makes a claim on the other person's property. In Maharaj v Chand26 a woman who moved in with her partner, had already had her own secure accommodation of her own. Before she moved in with her partner she received assurance she would have a secure home. Years later, the relationship broke down and her partner seeks to evict her. The Privy Council held in her favour for proprietary estoppel. Her act of giving up a secure accommodation moving in with her partner was classed as sufficient act of reliance. However, in the case of Coombes v Smith27 A married woman left her husband to live in a house bought by her new partner who was also married. The woman has one child. On the breakdown of this relationship it was held she had no claim and even though she was assured of a secured accommodation. The court held she did not rely to her detriment on the assurance which she had been given.
It could be said this is unfair. The facts of both of theses cases are two women left their secure accommodation to live with the new partner whom both partners assured them of secure accommodation one action was granted and the other was not. Thompson MP28 said this view is understandable, it is not convincing.
The claimant must show that they have suffered detriment. The court will only award the claimant rights if they can show that the representation has left them disadvantage by his reliance.
There are three situations where detriment will be proved
Expenditure of money is one. Inwards v Baker29 is an example of this as the claimant spent his own money to build the bungalow.
Incurring financial loss is another. In Crabb v Arun District Council30 The council led to believe the claimant that if he sold his pot of land he would have a right of way to the council's land. Claimant sold his land and the council refused to give him the right of way the court held in the claimants favour. It could be said that court saw this view as the council did not fulfil their part of the contract in this sale of land.
Finally, suffering personal detriment by not taking advantage of opportunities or giving up time and effort to care for the representor. In Gillett v Holt31 promises where made on a number of occasions to Mr Gillett by Mr Holt that he would leave his farm to Gillett when he dies. Gillett worked for his employers rather than to pursue opportunities of going into work on his own account, Gillett and his family had spent time with his employer beyond the normal scope of an employee's duty in fact the Court of Appeal accepted Gillett provided Holt with a 'surrogate family' and Gillett showed loyalty and devotion. The court held in Gillett's favour and these facts proved to be the claimant's detriment.
To conclude, it could be said that the courts are restrictive when it comes to claiming for proprietary estoppel. However this approach has left the courts criticising each other cases as seen in Basham, Taylor and Gillett and leaving it uncertain as seen in Maharaj and Coombes.
Bibliography
Elements of Land Law, Gray & Gray, fourth edition, 2004
Modern Land Law, Mark P Thompson, third edition, 2006
Unlocking Land Law, Bary, Turner & Martin, 2004
Estoppel: A Return to principle, M P Thompson, 2001
Law of Property Act 1925
2 Law of Property Act 1925
3 Law of Property Act 1925
4 Law of Property Act 1925
5 Hector v Lyons (1989) 52 P&CR 156
6 Modern Land Law, third edition, Mark P Thompson, 2006
7 (1886) L.R H.L 129 at 168
8 (1884) 9 App. Cas.699
9 Inwards v Baker [1965] 2 QB 929
0 Willmott v Barber (1880) 15 Ch D 96
1 [1967] 2 Q.B 379
2 Taylor Fashions v Liverpool Victoria Trustee ([1982] QB133
3 Treitel, opcit, 148
4 Taylor v Dickens [1998] 3 FCR 455
5 Modern Land Law, Mark P Thompson, 2006 third edition page 536
6 Gillett v Holt [1998] 3 All ER 917
7 Gillett v Holt [1998] 3 All ER 917
8 Modern Land Law, Mark P Thompson, 2006 third edition, page 536
9 Campbell v Griffin [2001] EWCA civ 990
20 Campbell v Griffin [2001] EWCA civ 990
21 Gray & Gray, Elements of Land Law, 3rd edition, 2001 page 793
22 Re v Basham [1986] 1 WLR 1498
23 Taylor v Dickins [1998] 1 FLR 806
24 Gillett v Holt [1998] 3 All ER 917
25 "Estoppel: A Return to Principle" M P Thompson Convpl 2001 Feb/Jan 78-86
26 Maharaj v Chand [1986] AC 898
27 Coombes v Smith [1986] 1 W.L.R 808
28 Modern Land Law, Mark P Thompson, 2006 third edition page 538
29 Inwards v Baker [1965] 2 QB 929
30 Crabb v Arun District Council [1976] Ch.179.
31 Gillett v Holt [2001] Ch. 210
