Proprietary Estoppel: Formalities & Controversies

• Lecture 6 focuses on proprietary estoppel, including its development, measurement, death, and revival.

Proprietary Estoppel Controversies

• This relates to requirement for formalities
• It arises in two main contexts: work done in anticipation of contract and inheritance.
• Contracts for land need formalities in accordance with the Law of Property Act 1925, s52, which requires a deed, and the Law of Property (Miscellaneous Provisions) Act 1989, s2, which requires contracts relating to land to be in writing.
• Inheritance requires formalities per the Wills Act 1837, s9, where wills must be in writing, signed, and witnessed.
• It is considered a subspecies of estoppel by representation.
• Involves a belief that the claimant already has an interest in land.
• Includes situations of standing by (acquiescence).

Ramsden v Dyson (1866)

• A stranger building on another's land believing it to be their own, with the owner aware and not correcting the mistake, will prevent the court of equity from allowing the owner to assert their title to the land where the stranger spent money believing it was theirs.
• Lord Kingsdown stated in Ramsden v Dyson (1866) that if someone makes a verbal agreement with a landlord for land interest or has an expectation created/encouraged by the landlord for land interest, takes possession with consent, and spends money on the land with the knowledge and without objection, equity will compel the landlord to fulfill the promise or expectation.

Crabb v Arun DC (1975)

• Equity intervenes to mitigate the rigors of strict law in proprietary estoppel cases.
• Raising an equity must first be established.
• Establishing the extent of the equity is required if it is established at all.
• After establishing the extent of the equity, the appropriate relief to satisfy it is determined.

Crabb v Arun: Three Questions

• Framework for establishing proprietary estoppel requires determining if equity has arisen by asking:
  • Has an equity arisen?
    • This requires a clear promise/representation which creates a belief/expectation of obtaining certain interests in the land
    • The wronged party relied on the promise/representation
    • There was unconscionability
• Additionally, there must is a determination of:
  • The extent of the equity
  • The appropriate relief to satisfy the equity
• Proprietary estoppel extends to promises and is not restricted to existing rights, therefore it is the cause of action.
• There must also be a clear representation that creating a belief or expectation to obtain certain interest in land.
• The wronged party must rely on the promise/representation.
• Unconscionability is an underpinning principle of all estoppels.
• Extends proprietary estoppel to promises, becoming a cause of action and creating new rights.

Preventing Unconscionability: Gillett v Holt

• The doctrine of proprietary estoppel cannot be treated as subdivided into strict separate elements.
• The principle that equity prevents unconscionable conduct permeates all aspects of the doctrine.

Crabb v Arun Q2: Measure of the Equity

• The "minimum equity to do justice to the claimant" must be reached.
• Reliance loss is the act of compensating to the extent of value lost by the claimant.
• Expectation is giving claimant the exact thing expected.
• Jennings v Rice (2002) applies a proportionality test.
• Suggitt v Suggitt (2012) applies proportionality to ensure against wild expectations given.
• Davies v Davies (2016) uses a sliding scale between the given expectation and detrimental reliance.

Guest v Guest

• At first instance, an estoppel was found, and claimant was awarded 50% of the market value of business plus 40% of market value of farm (expectation).
  • This would entail breaking up and selling off business to award
• On appeal to CA (2020) it was upheld.
• In SC (2022) the appeal was allowed 3-2 with multiple factors being taken into account including, ‘clear break’ and future promise.
  • The defendants were allowed to choose how to satisfy the equity. Either:
    • Through putting the farm on trust for the son with life interest
    • Paying in monetary terms for an accelerated payment now
    • The majority considered the purpose to prevent unconscionability where expectation is the starting point. Detriment cannot outweigh expectations where they would cause overcompensation.
    • The minority said the purpose of the estopple is to avoid promisee suffering detriment where court will adopt the least onerous resolution for the promisor.
• Guest v Guest (ctd), Lord Briggs (2022): Courts of equity prevent the unconscionable repudiation of promises the promisor relied to his detriment
• Remedy to uphold the promisor the promise is discretionary and tempered by the circumstances.
• The focus is aimed at preventing/remedying the unconscionability of the actual or threatened conduct of the promisor.
• This presents a missed opportunity to clear principles.
• It reaffirms the discretionary nature of equitable remedies and unconscionability rather than loss/expectation.

Measuring the Equity: Discretion and Unconscionability

• Davies v Davies stated that in deciding how to satisfy the equity, the court must exercise a broad judgmental decision.
• The court is not unfettered, but must proceed on a principled basis.
• Guest v Guest (2022) says flexibility and pragmatism enables court to address problems to put right unconscionability.

Crabb v Arun Q3: How to Satisfy the Equity?

• Satisfaction of the equity is not the same as its measurement, but they are related.
• Wide discretion is required of the court.
• Dodsworth v Dodsworth (1973) says the already received benefits have satisfied the equity.
• Equity can be satisfied by using the following methods:
  • Grant interest in property
  • Issue an injunction
  • Order the property be held on Constructive Trust
• Questions to consider:
  • The correct measure of relief. Whether it be expectation, reliance, or somewhere in between.
  • The relationship between estoppel and Constructive Trust.
  • Still no exception for estoppel in the 1989 Act.
  • 2008 failed to answer these questions in Cobbe.

The 'Death' and "Revival" of Proprietary Estoppel

• Cobbe v Yeomann's Row (2008) marked the death of proprietary estoppel?
• Commercial Context
• D promised to sell if C procured a planning permission
• Reliance and detriments to C
• CA: found an estoppel where the remedy should be to the House of Lords.
• The HOL refused to establish the estopple.
• Lord Walker: is usually flexible but should not be treated as a joker or a wild card - The court cannot have a broad discretion. - The nature of the claimant's belief would enter the contract.
• Thorner v Major: proprietary estoppel was revived.
• Domestic context: similar to Gillet
• Could C still reply after the Cobbe case
• Revocation of C's uncle will
• Assurance of the farm inheritance was indicated.
  • Thorner uncle of few words but with a pattern of conduct
  • the question was whether assurances was adequate.

Proprietary Estoppel: Overview

• It is used as a cause of action.
• Commercial vs. Non-commercial context
• Three questions in Crabb:
  • Has an equity arisen? Measure of relief?
  • What steps to satisfy the equity?
• Approaching the measure of relief with expectation, reliance, proportionality.
• Must also avoid an unconscionable result.
• For satisfying the equity, avoid an unconscionable result (Guest).
• Both 'measure of relief' and 'satisfaction of equity' is treated togethe