Proprietary estoppel is a powerful equitable legal concept; used as both a ‘sword and a ‘shield which distinguishes it from other equitable concepts. To have a successful claim within proprietary estoppel three basic requirements must be fulfilled, as quoted by Ying Khai Liew: “B induces A to assume, through a promise, assurance or acquiescence in A’s mistaken belief, that B will cede an interest in property he or she owns to A, and A detrimentally relies on the assumption” This essay will look at the three requirements within a proprietary estoppel claim in great depth, noting how unconscionability plays a strong role and perhaps arguably exhibits the fourth element of the requirements for a successful claim.
The requirements for the doctrine of proprietary estoppel are shown by Lord Walker in Thorner v Major “A representation or assurance made to the claimant; reliance on it by the claimant; and detriment to the claimant in consequence of his (reasonable) reliance” Following this quote the first requirement of this doctrine is assurance; a way in which A makes B believe they will one day be entitled to A’s land. An assurance can come in many forms, the most obvious being by explicit means, such as a Will. Yet throughout the common law it has been established there are a variety of ways to provide assurance.
Thorner v Major highlights this issue. This case regards D who worked on his cousin P’s farm for thirty years without any pay, believing he would inherit the farm. P made a Will leaving D the farm, however this will was later destroyed; furthermore P had taken out a life insurance policy to D to pay the death duties. However due to the Will being destroyed the farm went to closer relatives to P, so D bought a claim using proprietary estoppel. The main issue the court had to resolve was ‘what form the assurance took as there was no explicit promise to rely on’.
The court held that there was assurance by conduct, found within P creating a Will and life insurance for the death duties, thus showing P acting in a way to make D believe he was entitled to the farm. In addition Lord Hoffman in the case of Walton v Walton describes that a successful assurance must “Be unambiguous and must appear to have been intended to be taken seriously” like that within Thorner, whereby the Will and insurance policy show the assurance was intended to be taken seriously. As seen in the above case, assurance may not always be explicit therefore the context of assurance must be fully taken into account.
This can be witnessed in the contrast between Cobbe v Yeoman’s and Crabbe v Arun. Cobbe v Yeoman’s it was orally agreed between Y who owned the property and C the property developer, that C would obtain the expensive planning permission and buy the property off Y for ? 12 million, and if the sale when redeveloped was over 24 million then Y would receive 50% of the profit. However the key problem here is the fact there was no written contract, therefore after C had obtained the planning permission Y went back on his word and asked for 20 million.
It was held proprietary estoppel could not be relied upon here, due to the relationship being commercial; where both parties knew the risk of not making a contract, it was C’s own risk that failed him therefore assurance of Y cannot be relied upon. However to contrast this, Crabbe v Arun displays an agreement that also has no official contract but has distinguishable context; Crabbe had been using a right of way on the councils land after negotiations, it was the non-verbal conduct that amounted to assurance, as the council had let Crabbe use this right of way even after they had built a fence with a gate, so it was held there was assurance.
Therefore within these two cases although they both do not have a written contract, context is displayed to be a vital distinction. The second requirement needed for a successful proprietary estoppel claim is reliance; whereby B must show reliance on A’s assurance that B has or will acquire a right in relation to A’s land. There are a number of cases that display the requirement of reliance. In Thorner v Major reliance could be shown in the fact that D continued to work on P’s farm for no pay as he relied on the assurance he would one day have the title to the farm.
Similarly within Wayling v Jones it was held that due to W managing the hotels for ‘pocket money’ there was reliance on J’s promise, as stated per Balcombe LJ: “Managing the Royal Hotel, Barmouth, for what was at best little more than pocket money… was conduct from which his reliance on the deceased’s clear promises could be inferred” However reliance as its own specific requirement is not always the route that is taken within proprietary estoppel, as reliance and detriment are often very closely linked.
This concept is drawn from Gillet v Holt by Robert Walker LJ “It is important to note at the outset that the doctrine of proprietary estoppel cannot be treated as subdivided into three or four watertight compartments… that reliance and detriment are often intertwined” Detriment occurs when looking at whether B has relied on A’s assurance to his detriment, or in other words would B suffer if he was unsuccessful in a proprietary estoppel claim?
Gillet v Holt displays the forms that detriment can take; G worked on H’s farm for 38 years and moved into the farmhouse, after multiple assurances from H he would gain the title of the farm. However when H tried to sack G and remove him as a beneficiary G claimed proprietary estoppel. There was clearly assurances made and the reliance is shown by G continuing to work on the farm and not seek other employment.
This case shows the various amounts of conduct that can constitute detriment as; “The detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial” Here it was held detriment to be found through reliance in conduct such as continuing to work on the farm and turning down other employment and hence not securing his future limiting his provisions for a pension.
Furthermore the renovations to the farmhouse constituted detriment, as prior to this the house was barely habitable. Nonetheless a large proportion of cases display the claimant suffering a detriment financially, for example Wayling v Jones whereby Wayling endured financial sacrifices on the reliance of acquiring the hotels in the future.
Not only do these cases highlight the concept of what constitutes a detriment, Lord Walker’s concept is displayed that reliance and detriment are often intertwined as it is witnessed to be difficult to have one concept completely separate from the other. Consequently to have a successful claim one must conclusively show all the three requirements and some argue a fourth; Unconscionability can be argued to be “at the heart of the doctrine” however whether it has a forceful individual notion to proprietary estoppel is disputed.
On the one hand Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd Lord Oliver depicts the notion of unconscionability as the ‘fourth requirement’ inferring that proprietary estoppel relies on the foundations of unconscionability; “It would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he has allowed or encouraged another to assume to his detriment” Yet within this case there is arguably a contrast to this view, as proprietary estoppel succeeded even when A had not deceived B to believe something A knows to be false, which displays the alternative view that unconscionability is an underlying factor within the doctrine but not powerful enough to be the fourth requirement.
Thus as long as the three components of the doctrine are present a successful claim can be made within proprietary estoppel; “Unconscionability of conduct may well lead to a remedy but, in my opinion, proprietary estoppel cannot be the route to it unless the ingredients for a proprietary estoppel are present” Therefore it can be viewed that unconscionability underlies as a principle of proprietary estoppel and is a relevant factor to take into consideration, as Lord Scott argued, it is not powerful enough as a concept to be the ‘fourth requirement.
Overall there are three explicit foundations that constitute proprietary estoppel; assurance, reliance and detriment as stated in Thorner v Major and many subsequent cases, with all three needing to be in attendance for a proprietary estoppel claim. Moreover many argue that unconscionability sets a fourth requirement for a claim as stated in Gillet v Holt unconscionability is always found in a repudiation of an assurance. However it can be shown that although this concept may underline the doctrine, it is not in all cases powerful enough to constitute its own requirement.