'Gillett v. Holt is a watershed in the law of estoppel. The need to

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Gillett v. Holt is a watershed in the law of estoppel. The need to “look at the case in the round” means that many more cases will be successful.’

The doctrine of proprietary estoppel is an equitable intervention in cases where the enforcement of legal rights is considered by the courts to be unconscionably unfair. The essence of the doctrine arises, as defined by Snell:

‘[when] one (A) is encouraged to act to his detriment by the representations or encouragement of another (O) so that it would be unconscionable for O to insist on his strict legal rights.’ (McGhee, 2000, p.637)

In the absence of a written agreement, estoppel acts as an evidentiary tool with which the courts can help ensure fair interaction in property dealings. Proprietary estoppel is a method by which informal arrangements are recognized as being capable of creating proprietary interests. Given that it lies within the domain of equity, the case law indicates a great flexibility in its application, both in the substantive requirements of proof demanded by the courts and in the manner in which the courts will satisfy the equity. It is the first of these aspects of the doctrine that I will examine in this essay. I will look at the shift in the evidentiary requirements and what a representation (or an assurance of rights), a reliance (a change of position on the basis of that assurance) and a detriment (or unconscionable disadvantage) - the three pre-requisites for a successful claim - have come to mean with regard to case law and in particular the judgement of Judge Robert Walker in the Court of Appeal in Gillett v. Holt, in which the plaintiff had been given repeated assurances over many decades that he would inherit the defendant’s estate, and remained in service to him at least partially on that basis until the promises were finally rescinded. In that case, Walker J referred to the need to “look at the case in the round” when deciding whether the application of proprietary estoppel is an appropriate remedy. Whether this amounts to a departure from the criteria laid down by Oliver J in Taylor Fashions v Liverpool Victoria Trustees (1982) that a claimant must prove an assurance, a reliance and a detriment in circumstances where it would be unconscionable for the defendant to strictly assert his legal right is crucial in determining the status of proprietary estoppel after Gillett v Holt.

Proprietary estoppel has been available as an equitable remedy for decades, performing Equity’s duty and intervening in instances where the absence of an informal agreement results in a manifest abuse of legal property rights. An early case that gave it credibility as a legal option was Inwards v. Baker in which a son who had constructed a bungalow on his father’s land upon his request and lived in it with his family for over 30 years was granted a licence by estoppel to remain on the land for as long as he desired despite the absence of a written agreement. But it was 85 years before this that the basis upon which a claim for proprietary estoppel could be successful was laid down. In Willmott v Barber (1880), Fry LJ formalised the criteria in the ‘five probanda’: a) that the claimant must have made a mistake as to their legal rights over some land belonging to another; and b) that the true landowner must know of this claimant’s mistaken belief; and c) that the claimant must have expended money or carried out some action on the faith of that mistaken belief; and d) that the landowner must have encouraged the expenditure by the claimant, either directly, or by abstaining from enforcing their legal right; and e) that the owner of the land over which the right is claimed must know of the existence of their own rights, and that these are inconsistent with the alleged rights of the claimant. The strictness of these rules reflected the need to curtail a powerful action in its embryonic stage – the action is restricted to instances of knowing deception on the part of the possessor of the relevant legal rights. Its ability to create new interests in land perhaps against the wishes of the plaintiff meant that without sufficient judicial precedent to limit it, it might be used to perpetrate the unfairness it was designed to remedy.

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As the requirements of formality have become tighter and more frequently unsatisfied, proprietary estoppel has taken on greater significance. Claims have become substantially more common since Fry laid down his tests although successes in pursuit of the claim are still rare. It is still considered a last resort for the courts to disregard formality as the steady basis for property dealings. As the Law Commission put it: ‘In putting forward the present recommendation (the replacement of part performance with proprietary estoppel) we rely greatly on the principle, recognised even by equity, that ‘certainty is the father of right and ...

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