10 The Wider Legal Context

This chapter considers the wider legal context in which proprietary estoppel operates. It therefore considers some of the practical issues (for example, in relation to taxation or the conflict of laws) that may arise when making or defending a proprietary estoppel claim. It is split into three parts. Firstly, the chapter looks at issues that may arise where B brings a proprietary estoppel claim. It then examines alternative claims that may be relevant when a proprietary estoppel claim is brought or contemplated. Finally, the chapter considers possible future developments in the law of proprietary estoppel and presents a case for the expansion of the promise-based strand to promises that are unrelated to land or other property.

6 Formal Requirements and Other Possible Bars

This chapter considers more specific statutory and common law rules that may also seem to have the potential to deny, or at least affect, a claim based on proprietary estoppel. It therefore considers the effect of informality, incapacity, ultra vires, and illegality. The chapter focuses in particular on informality, as this is the area of most practical importance. In its interaction with rules as to formality, capacity, vires, or legality, proprietary estoppel is no different from any other legal doctrine: it will not be allowed to operate in such a way as to stultify or undermine the statutory or common law rule. The effect of a particular statutory provision on a proprietary estoppel claim will therefore depend on ‘the nature of the enactment, the purpose of the provision and the social policy behind it’; the same can be said for the impact of a non-statutory rule. The court will also have to consider the conduct of each of A and B and whether it would, overall, be ‘disproportionate’ to deny B’s claim. The precise nature of the claimed estoppel is therefore important.

5 Unconscionability

This chapter considers whether B separately needs to show unconscionable conduct by A in order to establish a proprietary estoppel. It focuses in particular on A’s conscience. Here, the chapter notes that there is no such independent requirement, but that the concept of unconscionability, in each of two different senses, nonetheless has some role to play in the current law of proprietary estoppel. That role varies between each of the three strands and so they will again be considered separately. In addition, a clear analysis depends on making two important distinctions: first, between two different senses of unconscionability; and secondly, between each of the three different strands of proprietary estoppel set out in the first chapter.

8 Third Parties

This chapter examines how B’s ability to establish a proprietary estoppel as a result of A’s conduct may affect third parties such as C. First, there may be a question as to the burden of B’s pre-existing proprietary estoppel on a third party. This question will arise where, after the occurrence of facts that would allow B to establish a claimed proprietary estoppel against A, a third party deals with the property to which B’s claim relates. Secondly, there may be a question as to the benefit of B’s pre-existing proprietary estoppel. This question will arise where, after the occurrence of facts that would allow B to establish a claimed proprietary estoppel against A, B2 then acquires, or purports to acquire, a right from B that relates to B’s claim. Thirdly, there may be other circumstances in which third parties may be affected, concerned with neither the benefit nor the burden of B’s proprietary estoppel.

2 Acquiescence, Representation, or Promise

This chapter is concerned with the conduct of a person, A. Each of the acquiescence-, representation-, and promise-based strands is considered separately. The chapter therefore sets out the particular conduct of A that may give rise to a proprietary estoppel. The need to distinguish between these three forms is particularly evident when considering the notion that a proprietary estoppel claim requires a representation or assurance by A. Whilst the formulation in Thorner describes the first element of proprietary estoppel as consisting of a ‘representation or assurance’, it is submitted here that it is more accurate to describe that element as capable of being satisfied by A’s acquiescence, representation, or promise.

7 The Extent of the Equity

This chapter considers the impact of B’s claim on A: in relation to each of the acquiescence- and promise-based strands, the nature and extent of A’s liability to B is assessed; the effect of the representation-based strand is simply that A is precluded from denying the existence of a particular state of affairs. Therefore, in analysing the law in this area, it is helpful to keep in mind the distinction between the extent of B’s equity on the one hand and the means of giving effect to that equity on the other. Nonetheless, even when that remedial question is separated out, the law as to the extent of B’s equity is far from clear. Indeed, there are cases in which a court has justified its chosen response to a promise-based proprietary estoppel on the basis that it was the least unsatisfactory of the possible outcomes. The lack of clarity is most noticeable, and most problematic, in the most important of the three forms of proprietary estoppel: the promise-based strand.

3 Reliance

This chapter examines person B’s reliance. Where B makes a proprietary estoppel claim, reliance must be pleaded. It is an essential element of B’s claim as it is necessary to establish a connection between A’s action or inaction and the detriment that B would suffer in the absence of a claim against A. As the second of the three main elements of proprietary estoppel, reliance can thus be seen as forming the link between the first and third of those elements. In the absence of reliance, A’s acquiescence, representation, or assurance cannot, by itself, mean that A should have to bear the responsibility of ensuring that B does not suffer a detriment. The reliance requirement can therefore be seen as raising an issue of causation: as in other areas of law, causation must be proved in order to attribute to A responsibility for B’s position. In the context of proprietary estoppel, such attribution depends on establishing a relevant link between A and the prospective detriment of which B complains. This is achieved by showing that the particular action or inaction of B that has exposed B to the prospect of such detriment was caused by A’s acquiescence, representation, or assurance.

1 Introduction

This introductory chapter sets out the law of proprietary estoppel through the principle applied in Thorner v Major (2009). Peter Thorner, a farmer from Somerset, had indicated to David, whose father was a cousin of Peter, that David would inherit Peter’s farm. As a result, David had continued to work on that farm, for very low pay, for a further fifteen years. When Peter died without having made a valid will, the statutory intestacy rules imposed a duty on Peter’s administrators to hold the farm for the benefit not of David but of other relatives of Peter, closer to him in blood if not in life. The House of Lords confirmed, however, that proprietary estoppel operated to impose a duty on Peter (and now on his administrators) to transfer to David the farm and associated assets. The decision meant not only that David was around £2.1 million better off than he would have been had no estoppel claim been possible, but also that, in the words of the Supreme Court’s exhibition’s display: ‘if a verbal promise is made to someone who subsequently relies on that promise to their own detriment, that promise can be enforced under the principles of fairness and equity’.

9 Remedies

This chapter deals with remedies and so looks at how a court will enforce B’s rights, whether against A or any other party bound by those rights. The practical remedial question of how best to enforce B’s rights arises irrespective of the means by which those rights have been acquired, and so this chapter makes no distinction between the three strands of proprietary estoppel. Here, a court has a wide discretion when deciding how best to protect and enforce B’s right. Whenever a court has to answer the remedial question, and thus must decide how best to protect and enforce a right of B, it will need to have the flexibility to mould its order to the facts before it. This is true whether or not B’s right has arisen through proprietary estoppel.

4 Detriment

This chapter deals with B’s detriment; as this requirement is common to, and treated the same way in, each of the strands, a unified approach is taken. It shows that a proprietary estoppel claim, whether based on A’s acquiescence, representation, or promise, will fail if B cannot show that, were A free to act as A wishes, B would suffer a detriment. Some confusion has, however, been caused by the interaction between proprietary estoppel and other principles that, whilst related to proprietary estoppel, do not contain such a detriment requirement. It is therefore important to distinguish such principles from proprietary estoppel. In addition to this, the chapter also discusses the legal test for detriment.