proprietary estoppel

Proprietary estoppel prevents….

per crabb v arun dc

a person from insisting on his strict legal rights when it would be inequitable for them to do so

what is the rationale of pe?

not to save people from the consequences of their own mistake, but to counteract any exploitation of another’s special vulnerability or misadventure in a way that is oppressive or unreasonable to an extent that affronts minimum standard of fair dealing

commonwealth of australia v verwayen

concept of pe as a sword?

• representations that generate expectations of proprietary entitlement

• person shouldn’t be allowed to go back on representations they have made which others relied upon

• equity arising from pe can bind 3rd parties

defining the nature of pe case (bungalow case)

inwards v baker

equity arose in son’s favour because:

• representation that son would have an indefinite right of occupation

  • son relied on this clear informal representation

• son incurred disadvantage via money and labour for 30 years

historical principles of pe categories

• imperfect gift

• common expectation

• unilateral mistake

historical imperfect gift case

dillwyn v llewelyn

• son and father signed memorandum to transfer land to son, didn’t fulfil deed formalities

• son incurred expenditure on the basis of promise and built house on land

• court went against equitable maxim to perfect the gift on the basis of the representation made to the son and the clear intentions of the father in the memorandum

common expectations case dissenting speech (originally unilateral mistake case)

ramsden v dyson

• if under an expectation a man takes possession of land with landlords consent and under his encouragement

• and on said land expends money on the land (without landlord’s objection)

• court will compel the landlord to give effect to the promise made by the landlord

common expectation definition case

er st ives investment v high

• mutual understanding between landowner and 3rd party that indicates MI as to the right afforded to 3rd party if they did something to improve the land

• here was an issue over an easement as it wasn’t registered under LRA 1925 and land was sold to 3rd party who said couldn’t use the easement even though claimant spent loads of money making a garage which he could only access via the easement

features of common expectation

• reliance

• estoppel by encouragement

• required shared expectations which arise during the course of dealings

• overlaps with implied agreement constructive trusts

unilateral mistake case ramsden v dyson

reliance on detriment alone doesn’t give rise to PE, must have some kind of representation made and not just rely on wishful thinking.

elements of unilateral mistake cases?

• one party errs in the precise nature/scope of their rights

• estoppel by acquiescence

• no constructive trust element

• very rare

what are the 5 probanda for proprietary estoppel to arise?

willmott v barber

• c made a mistake as to their legal rights over d’s land

• d knew of this mistaken belief

• c expended money or acted on the basis of this mistaken belief

• d directly or indirectly encouraged the expenditure fof this money

• d knew of their own rights over land and their inconsistency with c’s alleged rights (mistaken belief)

what happened in willmott v barber and why was it the case?

held that there wasn’t the fulfillment of the 5 probanda because the claimant didn’t rely on a representation made by the person who actually owned the land; the original landlord.

taylors fashions precedent

• pe operates when it would be unconscionable for the assertions of strict legal rights to be upheld when the party has either knowingly or unknowingly allowed to encourage another to assume something to their detriment

• essential elements are representation, reliance and detriment

gillet v holt precedent concerning the 3 pe requirements

pe cannot be treated as subdivided into compartments, HOLISTIC APPROACH; they all must operate together and be interrelated ie the reliance is related to the promise and is detrimental to the claimant

taylors fashions concerning unconscionability

there must be a broad inquiry as to whether it would be unconscionable for the party to deny the right in question.

the personalities of the parties and their relationships must be taken into account as well

cobbe v yeoman’s row unconscionability

objective value judgment on behaviour regardless of the state of mind of the owner of the land; circumstances rule

the result of the upholding without the intervention of pe should shock the conscience of the court. if not, likely not unconscionable even if the other elements are present.

thorner v major assurance

the relevant assurance must be clear enough and what it amounts to sufficient clarity depends on the context

ambiguity should not deprive a person who reasonably relied on the assurance of the belief

(here handing over life insurance policies paired with oblique assurance to leave the farm over 30 years implied that the landowner expected the claimant to obtain the interest in the land despite not ever saying ‘one day this land will be yours’).

assurance incomplete agreement crabb v arun

agreement in principle reached despite on written agreement there and this was confirmed when council reinstalled gates where the claimant would be exercising the easement (partition between his land and council land). in meetings defendants did nothing to dissuade claimant from selling his land.

agreement in principle that council reinforced by installing the gates, valid easement would have been created if they recorded meetings and deal in writing and signed

assurance in commercial context cobbe v yeomans row

pe cannot be used to circumvent formality requirements in commercial contexts

here there was no agreement the parties were just negotiating and there was no certainty a right in land would arise

assurance must relate to ‘certain interests in land’ (thorner v major, taylors fashions, ramsden v dyson)

although there was an agreement in principle like in crabb v arun, but again there is contract in writing affirming entitlement to the land.

unconscionable behaviour alone cannot give rise to pe

reasons why no pe in cobbe v yeomans row

here the claimant was an experienced property developer who

• would be well aware of the formalities necessary to acquire proprietary rights (NO MISTAKEN BELIEF)

• didn’t spend time and money in order to obtain the planning permission

• was not encouraged by the defendant to believe that the agreement would be enforceable

yaxley v gotts proprietary in commercial context

yaxley agreed to sell ground floor flats to gotts if gotts refurbished them at his own expense but ended up selling property to his son during construction.

held that yaxley worked under the mistaken belied that the ownership didn’t pass to the son, son knew about the mistake and allowed the work to continue and this gave rise to pe equity; unconscionability

yaxley v gotts walker LJ statement concerning s2 LP(MP)A

even though contract for sale should be signed writing in order to be legal, per LP(MP)A s2, pe is flexible it would be unsustainable to say this formality is impossible to circumvent if the situation demanded it.

that being said, cannot use pe to evade statutory requirements; ‘inconsistencies’ in individual circumstances in cases explain them sufficiently.

active assurance pascoe v turner

rich man fell in love with his maid, house in his name and said to her ‘the house is yours and everything in it’ and encouraged her to make improvements to it, which she did on the basis that she thought the property belonged to her

awarded on the basis she did something to her detriment because of the promises

awarded her whole house as remedy to be equal to her expectations (NOT A GUARANTEE WILL HAPPEN IN EVERY CASE THOUGH)

passive assurance ramsden v dyson

courts won’t let a landowner benefit from the mistaken belief of another if the landowner deliberately let the mistake to continue. willful passivity in order to profit is dishonest.

excessively uncertain assurance lissimore v downing

‘don’t worry your pretty little head about money’ is excessively uncertain even though claimant gave up her job on the basis of this ‘assurance’; no proprietary interest related here just some vague financial security.

excessively uncertain assurance coombes v smith

woman moves in w man, asks him to put her name on title deeds, which he refuses

she redecorates house

after 10 years relationship ends and he offers her 10k to move out

general assurance she would ‘always have a roof over her head’ insufficient proprietary interest assurance

supposedly impossible that there was a mistaken belief she had a proprietary interest

pe and testamentary dispositions gillet v holt

testamentary dispositions can be revoked but only if there are repeated promises made over a long period that lead to the claimant to incur really big detriment like missed career or educational opportunities

(here worked for 38 years and didn’t go to school or anything else).

reliance in pe

there must be a causal link between assurance and detriment

not necessary that the change in position involves improvement of the land

reliance re basham

the claimant must prove they were influenced by the assurance and changed their position in reliance on the representation

(woman got married but stayed on to help the family business amongst other things, for which she was never paid. she thought she would inherit the property and her stepfather had indicated an intention to make a will but never did. she did all this because of this belief he’d leave things to her).

gillet v holt reliance

it must be proved the assurance has ‘induced’ or at least ‘influenced’ the representee’s conduct

more weight given if repeatedly promised over a long period of time

greasley v cooke reliance

reliance by the representee is presumed as soon as it is shown that representation was calculated to influence the judgment of a reasonable person

TO REBUT existence of reliance, must establish no reasonable person would have done anything to their detriment based on the promise made to them. EVIENTIAL PROOF WITH DEFENDANTS.

(maid who lived like wife of man who made her believe that she would be allowed to live in the property as long as she wished and that he ‘intended to do the right thing by her’. she stayed there and looked after the house, unpaid with no other job (was like family to her so asking for money felt inappropriate). when he died, he left the estate to his brother).

ramsden v dyson reliance representation

no representation made here, claimant simply hoped the expenditure of money would no longer make him a tenant at will, but a long term tenant.

no passive representation here as no awareness of claimant’s mistaken belief

coombes v smith establishing reliance

cannot claim one allowed themselves to get pregnant on some mistaken belief of her legal rights; she did so because she wanted to live with her partner and have his child.

also couldn’t say she left her husband in reliance of the promise of the proprietary interest ‘you will always have a roof over your head’

property improvements done in context of a continuing relationship with the defendant and as an occupier of the house

mixed motives wayling v jones

promise/assurance need not be the sole reason behind the claimant’s detrimental conduct, can be an inducement.

(worked in hotel for mere pocket money in relationship with owner. owner wrote will leaving hotel to wayling but sold it before death and promised to get new one for him. Never did).

Highlights importance of  cross examination in questions asked to claimant and defendants. Wayling was asked directly whether he would have stayed with Jones if the hotel promise not made, he said he would have had to leave or do something about his life and find a proper job. Given the promises, he thought his future was secure, Judges here more lenient to him and said his actions probably induced to love and devotion towards partner but also moderated by this interest of the hotel.

Cooke (1995) said that unusuallly generous case and may be limited to family property cases

presumption of reliance and mixed motives campbell v griffin

promise need not be the sole inducement, feelings of obligation (lodger who came to treat landowners like parents).

Can have feelings of devotion and a valid expectation that they’ll have an interest in the land and their actions motivated by both of these factors.

‘whatever happens, you have a home for life’.

what counts as detriment in pe?

• expenditure of money/ incurring financial detriment

• expenditure on the enhancement of land resulting in permanent or substantial alterations (inwards v baker and dillwyn v llewelyn)

• not getting knocked up

establishing detriment per gillet v holt

• detriment judged at the time the representation is withdrawn

• sufficiently substantial and specifically pleaded and proven (though not precisely quantifiable, reiterated in henry v henry)

• detriment proved by claimant and on the defendant to disprove it

• must be regarded in accordance with the benefits and advantages the plaintiff enjoyed from the relationship

detriment in re basham

the cumulative effect of the detriments can be sufficient even if they individually wouldn’t

here was her husband turning down job opportunity elsewhere, them caring for (and carpeting) the house and garden, getting their own solicitors to advise on boundary dispute for parents’ land, food supplying

establishing detriment in henry v henry

detriment need not be the expenditure of money, here (privy council case) the claimant had a hard life looking after his granny, feeding her and caring for her. he could have moved away and got an easier job/life but he didn’t.

his reliance on her promise made him choose this life and even though court of 1st instance say he benefitted more than he was deprived, CoA said the outcome did shock the conscience of the court

when does inchoate equity arise in pe?

whenever all the necessary elements are present (called inchoate because we don’t know what form the equity is to take yet until remedy awarded)

what legislation governs inchoate equity?

• LRA 2002 s116

  • can survive a sale or anything similar; binds 3rd parties

inchoate equity per henry v henry PC?

equity acquired through proprietary estoppel would take effect as an inchoate equity, and could be an overriding interest which binds a third-party

controversy surrounding s116 lra per smith 2020?

• uncertainty as to what the claimant is entitled to due to the remedy being the court’s discretion

• retrospective argument to this that it undermines the principle of the purchaser knowing their rights in regard to property and their obligations (falls outside of curtain (does affect the purchaser but a hidden equitable interest) and mirror principles in registered titles)

• when monetary remedy awarded, contrary to the idea of the proprietary interest in land of the claimant

inchoate equity pe rmcfarlane 2005

• the remedies arising from pe should give rise to a property right only if that is necessary to protect the claimant's reasonable reliance.

• Where a personal right gives sufficient protection that will have to do, whatever the claimant may have been promised or expected

re basham identifiable property

need not be a specific plot, cna apply to the residuary estate

proportionality per jennings v rice

making good the expectation is not the only way to satisfy equity

there must be proportionality between expectation and detriment, especially of the claimant’s expectations are vague or extravagant. Disproportionate remedy cannot be the right way of avoiding an unconscionable outcome.

what is the ‘essence’ of unconscionability per halliwell 1977

‘[A] party in either a social or commercial relationship with another person will not be allowed to take unconscientious advantage of that other person.’

expectation-based approach of pe?

• usually grants more extensive remedy and claimant may end up with more far-reaching relied than merited by their detrimental reliance

• ‘often the only way to ensure the promisee experiencing detriment via promise enforcement’ per commonwealth of australia v verwayen

• can be traced back to ramsden v dyson and preferred in pascoe v turner and re basham

academic criticisms fo expectation-based approach in pe

• cooke - emasculates and confuses the law on estoppel

ottey v grundy remedy?

should be no more than that which is necessary to protect against unconscionable conduct and must be proportionate to the detriment suffered

pawlowski’s view on the aim of Pe per jennings v rice and campbell v griffin

• not to fulfill the claimant’s expectations

• not to compensate the claimant’s detrimental reliance

• meant to satisfy equity in a way that does justice to both parties having regard to all the circumstances and the need for proportionality between expectation and detriment

satisfying equity, sliding scale?

• davies v davies

• essence of pe is the combination of detriment and expectation, with the latter being the starting point

• sliding scale where greater expectation = greater detriment which increases depending on the period of time the expectation was reasonably held = greater detriment

dodsworth v dodsworth precedent

remedy cannot be greater than the claimant’s expectations

(here being granted a tenancy for life would have entitled them to eventually sell the property under different legislation which constituted excess)

suggitt v suggit REVIEW

henry v henry disadvantages v advanatges

should be weighed against each other which the claimant enjoyed on the basis of his reliance (hard life looking after his granny v the accomodations)

entitled to half share in plot

campbell v griffin

Man who lived in house with old people who more or less considered him their son. Literally said this was an almost-familial-like relationship.

rent-free occupation of the property hadn’t extinguished his equity but granting him a life interest in the house would have been disproportionate to his legal and moral claims

A fixed monetary sum charged on the property was considered appropriate relief.

sledmore v dalby

Although equity had arisen in the present case in Dalby’s favour, court had to take into account the fact that he had lived in the house 18 years rent-free and his parents in law had retiled the roof at their own expense. He had another place to live and only spent a few nights a week in the house compared to the defendant (mother in law) who had nowhere else to go and was in arrears on her mortgage payments.

guest v guest

man worked on parents’ dairy farm for 30 years for very low wages and did what was considered beyond the scope of work for his actual job title (compared to a normal employee)

said that the core principle underpinning PE is equity won’t allow a person to go back on a promise without ensuring the person who reasonably relied on the promise doesn’t suffer detriment as a result.

court had the option to compel the parents to uphold their promise/award equivalent sum of money or compensate the promisee for is reliance loss; the court should choose based on what places the least burden on the promisor while preventing the promisee suffering detriment.

the claimant's award should be an immediate payment assessed by calculating his loss of earnings arising from working on the defendants’ farm for very low wages rather than working on another farm for market wages, plus interest

remedy in guest v guest

specific performance may not always be possible in clean break cases and same goes for quantifying detriment instead of vlauing expectation.This isnt a vlaid reasonf ro pikcing one ove rhte other though.

sometimes not possible to montise detriment when tking into account lost opportunities like education and stuff.

gillet v holt

acts undertaken by the claimant must be distinct and substantial but dont have to include the expenditure of money; not a narrow or technical concept

plimmer

court must look at circumstances of the case to decide in what way the equity can be satisfied.

they should not be bound by strict legal rights, but do what is just and reasonable.

crabb v arun motto in regarding remedies

minimum equity to do justice