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Proprietary Estoppel UNIVERSITY OF THE WEST INDIES FACULTY OF LAW REAL PROPERTY I Worksheet 5 2018-2019 Proprietary Estoppel LEARNING OBJECTIVES By the end of this lesson, you should be able to:- Explain and apply the principles governing the doctrine of proprietary estoppel Required General Readings: Sampson Owusu, Commonwealth Caribbean Land Law, Ch. 6 and Ch. 7 Kevin and Susan Gray, Elements of Land Law (5th ed.), Chap. 9.2, pp. 1196 -1256 Neuberger, “The Stuffing of Minerva’s Owl? Taxonomy and Taxidermy in Equity” [2009] CLJ 537. Timothy Fancourt, QC, “Are All Estoppels Alike” available from https://www.chba.org.uk/for-members/library/overseas-seminars/3-non-financial THE DOCTRINE OF PROPRIETARY ESTOPPEL • The term estoppel is used to refer to circumstances in which a person is prevented or estopped from denying the truth of a particular matter of fact or law - Roger Smith, Introduction to Land Law (p.30). • A proprietary estoppel may arise in the following cases: (i) Incomplete gifts (ii) Reasonable (common) expectation of acquisition of right (iii) Unilateral Mistake The equitable doctrine of proprietary estoppel intervenes to “restrain (or estop) the assertion of legal entitlement on the grounds of conscience.”1 According to Walker LJ in Gillett v Holt [2001] Ch. 210 at 255, “[t]he fundamental principle that equity is concerned to prevent unconscionable conduct permeates all elements of the doctrine.” The doctrine of proprietary estoppel operates to prevent the revocation of a right held by one person (B) based on an assurance given by another (A) which the first person (B) relied on and was led to believe was permanent.2 1 Ridall, p. 1196 2 Ibid 1 • By this doctrine the courts of equity a) have created an inroad into the equitable maxim, “equity does not aid a volunteer”; b) circumvented the requirements of the Statute of Frauds, to perfect an imperfect gift by awarding specific performance where there is no consideration and/or written evidence to buttress a claim for an interest in land; c) Side-stepped the statutory requirements for testamentary disposition; and d) also departed from the general rule that estoppel can only operate as a shield (or a defence) but not as a sword. The Five Probanda • The five probanda (Wilmot v Barber) • The claimant must have been mistaken as to his legal rights; • Claimant must have expended some money or must have done some act on the faith of his mistaken belief • Defendant must have known of the existence of his own right, which is inconsistent with the right claimed by B, since acquiescence is founded on conduct with knowledge of one’s legal rights • Defendant must have known of the claimant’s mistaken belief as to his rights; with such knowledge, it is inequitable for him to remain silent and allow B to proceed on his mistake. • A must have encouraged B in his expenditure of money or other act, either directly or by abstaining from asserting his legal rights. • Fry J in Wilmot v Barber – “where all these elements [the probanda] exist, there is fraud of such a nature as will entitle the court to restrain the possessor of the legal right from exercising it, but, in my judgment, nothing short of this will do.” The Modern Approach The modern law does not recognise the rigid observance of the 5 probanda in Wilmott v Barber. Oliver J being of the view that proprietary estoppel is not limited to cases in which the defendant knew of his legal right said in Taylor Fashions Ltd v Liverpool Trustees: … it would be unconscionable for a party to be permitted to deny that which, knowlingly or unknowingly, he has allowed or encourage another to assume to his detriment than to inquiring whether the circumstances can be fitted within the 2 confines of some preconceived formula serving as a universal yardstick for every from of unconscionable behaviour” Oliver J also maintained that the probanda may be necessary where the defendant has done no positive act, and merely “stands by without protest.” Thus the courts now treat the probanda as guidelines to assist the court to determine the question of whether it is unconscionable for the plaintiffs to assert their legal rights by taking advantage of the defendant.” However, the five probanda are still strictly necessary in cases of unilateral mistake – Lord Walker in Cobb v Yeoman’s Row Management Ltd. For other cases, a broader approach is preferred based on the defendant’s unconscionable behaviour – Taylor Fashions Ltd v Liverpool Trustees. The modern approach to the doctrine recognises the following essential elements of the proprietary estoppel: (a) representation (or an assurance of rights) – Re Basham [1986] 1 WLR 1498 and Yeoman’s Row Management Ltd v Cobbe [2008] UKHL 55 (b) reliance (or a change in position) and (c) detriment (or unconscionable advantage) Cases on proprietary estoppel: McCollin v. Carter (1974) 26 WIR 1 Clarke v Kellarie (1970) 16 WIR 40 Derrick v. Mohammed (1960) 2 W.I.R. 352 Taylor Fashions Ltd. v. Liverpool Victoria Trustees Co. Ltd. [1982] 2 W.L.R. 576 Lewis v McLean (1982) 19 JLR 56 Hackett v. Inverugie Investment Ltd. (1982) 32 W.I.R. 3 Trenchfield v. Leslie (1994) 31 JLR 497 Gillett v. Holt (2001) Ch. 210 Blue Haven Enterprises Ltd. v. Tully (2006) Privy Council Appeal No. 57 of 2004 (unreported) Flanders v. Teesdale (2009) High Court T&T No. 127 of 2006 (unreported) Cobb v. Yeoman’s Row Management Ltd. [2008] 1 W.L.R. 1752 Knowles v. Knowles [2008] UKPC 30 Jennings v Rice [2003] 1 P& CR 8 Thorner v. Major [2009] 1 W.L.R. 776 Henry v. Henry [2010] UKPC 3 Greasley v Cooke [1980] 3 All ER 710 3 Yaxley v Gotts [2000] 1 All ER 711 The proprietary estoppel has been said to apply the following three cases: (i) Cases of incomplete gifts Raffington v. McIntosh (2009) Court of Appeal, Jamaica, Civil Appeal No. 5 0f 2007 Dilwyn v. Llewellyn (1862) 45 E.R. 1285, at p. 1286. Sealy v Sealy (1990) Barb. High Court (unrep.) Khan v Khan (1994) T&T High Court (ii) Cases of reasonable (common) expectation of acquisition of right Ramsden v. Dyson (1866) L.R. 1 H.L. 129, at 140-141 Inwards v. Baker [1965] 1 All ER 446 Clarke. v. Kellarie (1970) 16 W.I.R. 40 Denson v. Bush [1980-83] CILR 41 White v. Ramroop (2010) High Court, T&T, No. 7245 of 1986 (unreported), Carilaw TT 2010 HC 111 (ii) Unilateral mistake cases Ramsden v Dyson Willmott v. Barber (1880) 15 Ch. D. 96 - the five probanda – the probanda applies in these case. A word of Caution The equitable doctrines are still evolving and there is considerable overlap. In Thorner v Major, the court considered whether there was a proprietary estoppel or the enforcement of a contract (specific performance). Lord Scott said he wouldn’t disagree that it was proprietary estoppel, but would feel more comfortable finding that there was a remedial constructive trust. Greasley v Cooke was decided on the basis of proprietary estoppel, but looks very similar to the part performance cases of Maddison v Alderson and Wakeham v Mackenzie. In Yaxley v Gotts, the court considered part performance and proprietary estoppel but eventually settled on constructive trust. Note that the doctrine of part performance no longer applies in England following the Law of Property (Miscellaneous Provisions) Act 1989. However, it still applies in the Caribbean. 4 Remedies (Satisfying the ‘equity’) Once the court establishes that a case for proprietary estoppel can be made, it must decide how to satisfy the equity: Specific performance Inwards v. Baker [1965] 2 Q.B. 29. Plimmer v. Wellington Corp. (1844) 9 App. Cas 699 Crabb v. Arun D.C. (1976) Ch. 179, 189, per per Lord Denning. Thomas v. Thomas [1956] N.Z.L.R. 785 Injunction Charge for expenditure Raffaele v. Raffaele [1962] W.A.R. 29 Seymour v Ebanks [1980-83] CILR 252 Virginia Moncur v. Margaret Palacious Supreme Court of the Bahamas, Equity side, No. 1163/1985 (unreported). Title to land The “effect of the estoppel on the true owner may be that his own title to the property, be it land or goods, has been held to be limited or extinguished or new rights and interests have been created therein...” Crabb v. Arun D.C. [1974] 3 All E.R. 865, 876 (B), per Lord Denning, M.R. Inwards v. Baker [1965] 1 All E.R. 446 E.R. Ives Investment Ltd. v. High [1967] All E.R. 504 Hopgood v. Brown [1955] 1 All E.R. 550 Licences A licence is permission granted by one party to another to occupy land or to enter upon land for a particular purpose. It does not create an interest in land. The doctrine of proprietary estoppel can be used to prevent the revocation of a licence. It is thus said to be inextricably linked to the law of licences.3 There are four types of licences: (i) bare licences; (ii) licence coupled with an interest; (iii) contractual licences and (iv) the licence protected by estoppel. 3 Kodilinye, Commonwealth Caribbean Property Law, p. 90 5 1 QUESTIONS FOR TUTORIAL DISCUSSION: Dec 2014, q5 In 2010, Bob granted a yearly tenancy of a parcel of land called Sunset Ridge to Allan. Bob represented to Allan that he (Bob) was the owner of Sunset Ridge and that Sunset Ridge would be sold to him (Allan) whenever he (Bob) decided to sell it. Allan took possession of Sunset Ridge and started to construct a block of apartments and a concrete two-storey house.
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