Proprietary Estoppel Notes

Proprietary Estoppel

• Re Basham (Ch)

  • Where one person, A, has acted to his detriment on the faith of a belief, which was known to and encouraged by another person, B, that he either has or is to be given a right in or over B's property, B cannot insist on his strict legal rights if to do so would be inconsistent with A's belief.

• CF v JDF (SC)

  • In a dispute relating to the respondent's assets it was claimed that he gained an interest in his father's stud farm through proprietary estoppel.

  • Held that, in order to establish estoppel there must actually be a promise or at least a reasonably clear direct representation or inducement of some kind – it is not sufficient to establish that something was permitted to happen (i.e. in this case the respondent's father had permitted him to make improvements to the farm.)

• Gillett v Holt

  • There must be a sufficient causal link between reliance on the assurance and the detriment suffered.

  • It is to be judged at the moment the person who gave the assurance seeks to go back on it.

  • The gravity of the detriment should be such that would render it unjust or inequitable to allow the assurance be disregarded.

  • The detriment need not be of a quantifiable financial nature as long as it is substantial – though in practical terms, detriment not of this nature may be difficult to prove.

• Bracken v Byrne (HC)

  • A case where the detriment suffered was too insubstantial.

  • Plaintiff contended that she had entered into an arrangement with the defendant, whereby the she would be given a plot of land and allowed to build a house.

  • Plaintiff sought to assert proprietary estoppel after this was refused.

  • Held that, any detriment that had been suffered was insubstantial – all plaintiff had done was make a planning application and hold a meeting with a builder.

• McDonagh v Denton (HC)

  • The plaintiff was looking for a declaration that the defendants were estopped from asserting that they owned a disputed plot of land.

  • The plaintiff's solicitor had made it clear to the defendants that the plaintiff believed himself to the landowner and they had not responded.

  • Held that, any expenditure in this case (consisting of minor repairs) was insufficient to establish detriment.

  • The plaintiff, believing that he owned the land, entered a contract for sale and was later sued for specific performance after the doubts about his title.

  • This was held to be sufficiently detrimental.

Imperfect gifts

• Dillwyn v Llewelyn

  • A son built a house on his father's land with his father's consent and an informal memo was drawn up establishing that the father's intention was to transfer the land to his son.

  • Held that, the father's intention to convey the land should be carried into effect by the court.

  • All the ARD elements were present – the only problem was that the court was perfecting a gift.

  • Explanation: voluntary agreements will not be completed by equity, it was rather the subsequent acts of the donor that grounded the claim.

• Cullen v Cullen (HC)

  • Kenny J stated that a person claiming under a voluntary agreement will not be assisted by a court of equity, but subsequent acts of the donor may give the donee a ground of claim which he did not acquire from the original gift.

• Pascoe v Turner (CA)

  • A variety of gifts may arise from proprietary estoppel – not just a fee simple, but also lesser interests reflecting the plaintiff's expectations and detriment.

  • The parties had lived together for some time in a house owned by the plaintiff.

  • They split up and the plaintiff assured the defendant that she could remain and it would belong to her.

  • She then carried out substantial repairs to the property, but the plaintiff later sued for possession of the property.

  • Court refused to give the plaintiff possession and found the defendant entitled to a fee simple interest in the land.

• Smith v Halpin (HC)

  • The plaintiff had been assured by his father that he could build a house on a site on his father's property.

  • The son, at the father's urging, eventually built an extension on to the father's house instead.

  • The father then left the entire house to his wife for her life and thereafter to his daughter.

  • The son sued for a reversionary interest in the property after his mother's death.

  • Geoghegan J referred to Dillwyn and Pascoe

  • This was an imperfect gift but the father's conduct necessitated the court upholding the claim.

  • The father clearly guaranteed the property to the son and the expenditure made, resulted in it being inequitable to deny the claim.

Common expectation

• Ramsden v Dyson (HL)

  • Lord Kingsdown: Where there is a verbal agreement or an expectation created or encouraged by the landlord of property, that a certain individual shall have an interest in the property, and this individual takes possession of the property and expends money on it, equity will compel the landlord to give effect to such promise or expectation.

  • This will apply even where the agreement or expectation is too uncertain to enforce under the law of contract.

  • Where the tenant improves the land without encouragement or inducement from the landlord, he will not have gained an interest in the land.

• Plimmer v Mayor of Wellington (PC)

  • Ramsden followed – the equity arising from expenditure on land need not fail merely on the ground that the interest to be secured has not been expressly indicated.

  • The court must look to the circumstances of each case to decide in what way the equity may be satisfied.

• Inwards v Baker (CA)

  • In this case, the defendant, having represented to the plaintiff that he could have the house at issue as his home, was estopped from removing him from the property.

• AG of Hong Kong v Humphrey's Estate (PC)

  • The plaintiff company allowed the defendants (government of Hong Kong) to enter and spend money on flats belonging to them, on the basis that they would acquire them in exchange for a...

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