The modern approach to proprietary estoppel which began with Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] adopted a “broad test of whether in the circumstances the conduct complained of is unconscionable without the necessity of forcing those incumbrances into a Procrustean bed constructed from some unalterable criteria.”
Despite this statement the judgement in Taylor Fashions did not rely on unconscionability alone. The court required the three traditional elements to be present, albeit adopting a new claimant centred approach to establishing them. Therefore the statements in Cobbe regarding unconscionability are uncontroversial and do not significantly alter its position within the doctrine.
The judgement in Cobbe was regarded as a severe curtailment of the doctrine and was believed to have greatly narrowed the scope of its operation. It was even thought that it had led to the ‘the death of proprietary estoppel’ This was not due to the outcome of the case, but due to the controversial reasoning behind this decision.
Lord Scott attempted to rein in the doctrine by focusing on the traditional elements of proprietary estoppel and restricting the doctrine via their operation. He focused on the assurance or representation element, which requires that the claimant must have been led to believe that he has or he will acquire an interest in the defendant’s land. He stated that the required assurance was of a ‘certain interest’ and this meant that the claimant must specify the interest in the property he believed he had or would have.
Cobbe dealt with a case of proprietary estoppel in a commercial context. Therefore Mr Cobbe’s “was not an expectation that he would, if the planning application succeeded, become entitled to “a certain interest in land” but an expectation “of further negotiations leading, as he hoped and expected, to a formal contract”.
Lord Scott stated that this was not “the sort of expectation of ‘a certain interest in land’ that Oliver J in the Taylors Fashions case or Lord Kingsdown in Ramsden v Dyson had in mind” and so the claim failed.
This requirement for a specific assurance narrowed the scope of operation of the doctrine and was inconsistent with previous Court of Appeal decisions such as Gillett v Holt and Jennings v Rice where a claimant had an expectation of a future interest in land.
Lord Walker further restricted the doctrine by stating that the claimant must believe “that the assurance on which he or she relied was binding and irrevocable”. Therefore the claimant must not only believe that the landowner has made a promise, but also believe that the promise is legally binding.
He made it clear that context was important. “In the domestic or family context, the typical claimant is not a business person and is not receiving legal advice...The focus is not on intangible legal rights but on the tangible property which he or she expects to get.”
As the parties involved in Cobbe were “persons experienced in the property world, both parties knew that there was no legally binding contract, and that either was therefore free to discontinue the negotiations without legal liability…the fact is that he ran a commercial risk, with his eyes open”
This restriction is also inconsistent with Gillett v Holt which “explicitly addressed, and rejected, the notion that the revocability of wills prevents a promise to make a will forming the basis of a proprietary estoppel claim.” Surprisingly it was Lord Walker who gave the leading judgement in that case and acknowledged here that “It may possibly be that some of the domestic cases might have been decided differently if the nature of the claimant's belief had been an issue vigorously investigated in cross-examination.” Thus casting doubt on previous court of appeal authorities relating to testamentary promises.
The reasoning in Cobbe left the doctrine in an uncertain position and “If taken literally, this reformulation would have curtailed the reach of estoppel, and perhaps that was the point”.
Thorner v Major gave the House of Lords a chance to address these uncertainties and a further opportunity to clarify the doctrine definitively via the role of unconscionability.
From the beginning the Lords made it clear that the decision in Cobbe had not “severely curtailed, or even virtually extinguished, the doctrine of proprietary estoppel (a rather apocalyptic view that has been suggested by some commentators).”
Thorner dealt with proprietary estoppel in the domestic context. One cousin had worked unpaid on the other’s farm for nearly 30 years on the understanding that he would inherit the farm on his cousin’s death.
The cousin died intestate and the claim of proprietary estoppel had been rejected by the Court of Appeal. One reason given for this failure was that the extent of the farm had fluctuated in the preceding years and so the interest the claimant expected to receive was not a sufficiently ‘certain interest’ as required following Cobbe.
The Lords in Thorner made it clear that “the reasoning in Cobbe's case…was directed to the unusual facts of that case” and that in Cobbe “there was no doubt about the physical identity of the property. However, there was total uncertainty as to the...property interest…In this case…there is…no doubt as to what was the subject of the assurance, namely the farm as it existed from time to time. Accordingly, the nature of the interest to be received by David was clear: it was the farm as it existed on Peter's death.
They confirmed that the assurances “should relate to identified property owned (or, perhaps, about to be owned) by the defendant.”and that “It would represent a regrettable and substantial emasculation of the beneficial principle of proprietary estoppel if it were artificially fettered so as to require the precise extent of the property the subject of the alleged estoppel to be strictly defined in every case.”
Context is vital, whereas a specific certainty may be required in a commercial situation, this will not necessarily be required in a domestic context.
The Court of Appeal had also required that the nature of the assurance be “clear and unequivocal” . This test for clarity of assurance was that required in promissory estoppel, and may have been adopted here due to the conflation of the two forms of estoppel by Lord Scott in Cobbe.
The parties in Thorner were “taciturn and undemonstrative men” and the assurances mainly consisted of “oblique remarks” and therefore it was held that these assurances lacked the requisite certainty.
The House of Lords loosened this restriction stating that “I would prefer to say …that to establish a proprietary estoppel the relevant assurance must be clear enough. What amounts to sufficient clarity, in a case of this sort, is hugely dependent on context”.
As “the relationship between Peter and David was familial and personal, and neither of them…had much commercial experience...Peter made what were, in the circumstances, clear and unambiguous assurances that he would leave his farm to David, and David reasonably relied on, and reasonably acted to his detriment on the basis of, those assurances, over a long period.”
The House of Lords had made it abundantly clear once again that everything is dependent on context. In a domestic context such as Thorner an oblique assurance may be ‘clear enough’ even though a commercial case such as in Cobbe may require a much more specific assurance. Lord Walker also rejected Lord Scott’s characterisation of estoppel “I have some difficulty with Lord Scott's observation…that proprietary estoppel is a sub-species of promissory estoppel.”
The House of Lord’s in Thorner also clarified that the correct approach for landowner’s intention was an objective test and that it was “enough that the meaning he conveyed would reasonably have been understood as intended to be taken seriously as an assurance which could be relied upon…It is not necessary that Peter should have known or foreseen the particular act of reliance”.
The House of Lords allowed the proprietary estoppel claim to succeed even though there was no evidence that the claimant believed that the assurance was legally binding, therefore also rejecting Lord Walker’s restriction in Cobbe.
Thorner had maintained a flexible approach to proprietary estoppel making it clear that everything was “hugely dependent on context", re-affirming the holistic approach found in Gillett that “in the end the court must look at the matter in the round.” Lord Neuberger stated that “it appears to me unlikely in the extreme that Lord Scott was intending impliedly to disapprove any aspect of the reasoning or decision of the Court of Appeal in Gillett's case” Thorner effectively placed the doctrine back in the position it stood before Cobbe.
It was said that the decision in Thorner had “brought proprietary estoppel back from the brink. The apocalypse…has been averted and proprietary estoppel can continue to function as an independent source of rights. It can thus perform its vital role as a broad and flexible doctrine.”
Thorner has clarified some of the uncertainties surrounding the traditional elements of proprietary estoppel that had been raised in Cobbe and followed in the Court of Appeal. It returned the formulation to a flexible and broad definition requiring ‘identifiable property’ that the assurance must be “in the circumstances, clear and unambiguous” and that the assurance must “reasonably have been understood as intended to be taken seriously as an assurance which could be relied upon.
Thorner did not however say anything regarding role of unconscionability, only affirming the uncontroversial position taken by Cobbe, whilst confirming the flexibility of the doctrine.
“Concentrating on the perceived morality of the parties' behaviour can lead to an unacceptable degree of uncertainty of outcome, and hence I welcome the decision in Cobbe's case…However, it is equally true that focussing on technicalities can lead to a degree of strictness inconsistent with the fundamental aims of equity”.
Some commentators believe that this was an opportunity missed as “Lord Scott may have chosen the wrong train to ride in Yeoman's Row, but it is not clear that he chose the wrong destination” Defining ‘unconscionability’ is a difficult task and commentators have their own competing theories. Dixon believes that “an estoppel is made out when a landowner makes a ‘double assurance’ – an assurance that the claimant will have some right over the representor’s land…combined with an assurance that the right will ensue even if the formalities necessary to convey that right are not complied with…Unconscionability exists when a ‘formality assurance’ is withdrawn after detrimental reliance ”
Balen and Knowles believe that “this “extra ingredient”, for so long described as “unconscionability”, requires the court to ask whether the basis, or condition, on which the claimant incurred her detriment has failed.”
There is no consensus as to how unconscionability should be defined only that it should. It may be that the judiciary have missed an opportunity to clarify the doctrine or it could be that they have no desire to “define unconscionability and thereby limit the application of the doctrine…Uncertainty can be a benefit as well as a burden, and while unconscionability of itself cannot generate an estoppel, the claim can be denied despite t he presence of an assurance, reliance and detriment by judicious deployment of the ‘unconscionability’ card”.
Thorner v Major [2009] 1 W.L.R. 776 Lord Walker 29
Thorner v Major [2009] 1 W.L.R. 776
Cobbe v Yeoman's Row Management Ltd [2008] 1 W.L.R. 1752
Ramsden v Dyson [1866] LR 1 HL 129
Cobbe v Yeoman's Row Management Ltd [2008] 1 W.L.R. 1752 Lord Walker 46
Cobbe v Yeoman's Row Management Ltd [2008] 1 W.L.R. 1752 Lord Scott 16
Ibid [2008] 1 W.L.R. 1752 Lord Walker 92
Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133
Ibid [1982] QB 133 Oliver J 151-152
Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133 Oliver J
McFarlane & Robertson [2008] ‘The Death of Proprietary Estoppel’. LMCLQ 449
Cobbe v Yeoman's Row Management Ltd [2008] 1 W.L.R. 1752 Lord Scott 20
Ibid [2008] 1 W.L.R. 1752 Lord Scott 21
Ibid [2008] 1 W.L.R. 1752 Lord Scott 20
Gillett v Holt [2001] Ch. 210
Jennings v Rice [2003] 1 P&CR 8
Cobbe v Yeoman's Row Management Ltd [2008] 1 W.L.R. 1752 Lord Walker 66
Ibid [2008] 1 W.L.R. 1752 Lord Walker 68
Ibid [2008] 1 W.L.R. 1752 Lord Walker 91
Gillett v Holt [2001] Ch. 210
McFarlane & Robertson (2009)538
Cobbe v Yeoman's Row Management Ltd [2008] 1 W.L.R. 1752 Lord Walker 67
Gillett v Holt [2001] Ch. 210, Jennings v Rice [2003] 1 P&CR 8
Thorner v Major [2009] 1 W.L.R. 776
Ibid [2009] 1 W.L.R. 776 Lord Walker 31
Ibid [2009] 1 W.L.R. 776 Lord Neuberger 99
Ibid [2009] 1 W.L.R. 776 Lord Neuberger 94-95
Ibid [2009] 1 W.L.R. 776 Lord Walker 61
Ibid [2009] 1 W.L.R. 776 Lord Neuberger 98
Thorner v Major [2009] 1 W.L.R. 776 Lord Scott 18
Cobbe v Yeoman's Row Management Ltd [2008] 1 W.L.R. 1752 Lord Scott 14
Thorner v Major [2009] 1 W.L.R. 776 Lord Walker 59
Ibid [2009] 1 W.L.R. 776 Lord Hoffman 2
Ibid [2009] 1 W.L.R. 776 Lord Walker 56
Ibid [2009] 1 W.L.R. 776 Lord Neuberger 97
Ibid [2009]1 W.L.R. 776 Lord Walker 67
Ibid [2009] 1 W.L.R. 776 Lord Hoffman 5
Gillett v Holt [2001] Ch. 210 Walker LJ 225
Thorner v Major [2009] 1 W.L.R. 776 Lord Neuberger 100
McFarlane & Robertson (2009) 535
Thorner v Major [2009] 1 W.L.R. 776 Lord Walker 61
Ibid [2009] 1 W.L.R. 776 Lord Neuberger 97
Ibid [2009] 1 W.L.R. 776 Lord Hoffman 5
Ibid [2009] 1 W.L.R. 776 Lord Neuberger 98
Balen & Knowles (2011) 187-90