Daily Archives: November 22, 2013

Proprietary estoppel.

Standard

much like the law relating to contracual   licences    the doctrine of proprietayr estoppel    has developed    on a striking manner    over the last 30 years

the sceope of the doctrine    has veen continuously      extended    by the sourts with little heed for the conveyancing   ptroblrms that may be caused

the boundary    between contractual licences    and estoppel    licnes may   smetime sbe diffciult    to draw but the diffetrence in results  may be striking

if the lement of request    or agreement  between the parties  is the distinctive  feature   of contractual licenses it is paradoxical   that the contractual  licensee  should be n a weaker position  – particularly  in relation to the third parties – than the estoppel  licensee.

the doctrine  is increasingly   used to give effect   to grants that fall foul   of the rules for the creation  of property   rights ass in cobbe  v yeoman’s row

it also provides   an increasingly   important exception to the principle  that equity  will not assist   a volunteer

in some cases  lim teng huan  v ang  swee chuan the doctrine  may fikll the riole of the old law if part performance

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DOCTRINE   – ESTABOLISHING   AN EQUITY  – AN EQUITABLE RIGHT

The classic statement   of the doctinre   awa made in lord kingsdown   dissenting speech in ramsden    v dyson

”  if a man   under a verbal agreement  with a landlord   for a certain interest   in land or what amounts   to the same thing under an expectation , created    or encouraged   by the landlord, that eh shall have a certain interest    take possession     of the land with the consent    of the landlord and ipin the faiht of such a promise or expectation    with the knowledge of the landlord and without objection  by him lays out      money upon the labnd     a xourt of equity   will compel     the labdlord    to give effect   to such  promise or expectation.”

kingsdown’s dictum   is frequently   quoted   with approval but the scope of the doctrine    has been considerably   extended   in recent times

where the owner     of land knowingly      encourages anither      to act or acquiesces         in his acting to his detriment       on the understading     that he is to have anj intyeres in tta land the owner will subsequently   be estopped froma sserting   his strict legal rights   – and may be   coimpelled ti give effect   to the equity   that has arisen   in favour of that other –

elements are

—————- a representatiion

——————— reliance/change of position

———————- detriment/ disadvantage    ie    an expenditure    or loss to the promisee

—————— unconscionability     i e   all the circumstances    it is unconsciobale   that the promisor   should be able   to rely upon   his strict legal  rights by breaking  his promise

Note –

the doctrine may still apply    where the ioner was ignorant of the true   legal psoton at the time he encouraged    the other person toa ct

the questions is simply whether it would be conscionable  to allow him ti insist  on his strict legal rights

taylor fashions   ltd v      liverpool   victoria trustees   co ltd

matahru    v matahru   1994           a claimant was successful    even thought eh owner  doe snot seem to have made any promise or representation       encouraging her to believe what she believed

————– though in many    earlier cases  the climant had spent   some money  on the labd it is sufficient  toay if he has suffered some detriment   as a resukt of his doing or omitting to do somethibng,.

no only do the courts   take a broad view  of what constitutes detriment   byt the CA has held     tyhat where   a repdsresantaitb  has been made   there is a rebuttable presumption    that the claimant     has acted  in reliance on it   . the onus is on the defendant to prove otherise

greasley v cooke

———– in most cases   the repsresnation has related to a parciula rproperty  in whcib the climant  has an existing intyerers. but the court in re basham     – where the cliamnt    lived in ehr own house at some distance  from the deceased   house – refused   to restrict   the operation of the doctrine     in this way

————— it was also held    in re basham   and again  in wayling  v jones    1993         that the doctrine   applied   to the situation where a person encourages    another to act to his detriment    on teh understanding  that he will inherit  certain   property  on that person’s death

——————– an important      change of [perspective   has occurred  in recent cases.  gillett  v holt    and  jennings     v rice      make it clear    that courts now applying a more holistic approach   to proprietary estoppel case nd judging fact  in the round    to determine whether   the claimant has an estoppel  equity   and how it should be satisfied     the need for the claimant      to prove unscioniobauility    has become a central factor in propoerty estoppel.

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THE REMEDY

once an equity  has been estabished     how will the court give   effect  to it?   it is difficult   to find any consistent   princople  running throygh the cases

in instances of dodsworth  v doswoerth       and burrows and burrows v   sharep     – compensation     for expenditure       incurred   was considered   the appropriate    remedy  – particularly     as it would have been   impracticable   to have required    the parties   tpo contiunue  living  together –

it must be admitted   that this solution   does avoid    conv4ynacing [problems

crabb v    arun district c council rights of access   and way were awarded

in griffiths    v williams    non assignable   lease for life was awarded

the CA     int his case was aware          – as was ther CA ibn   dodsworth –     that trhe award    of a life interest    , such as had been made in inwards   v baker       and jones v jiones    would have the effect of creation   a settlement under the settled land act 1925

and would therefore   give the claimant   a greater interest    than was within    the parties   expectation it is clear from dent v dent    wherever that an exclusive    right to occupy     property   for life does not necessarily    constitute   a life interests   under a settlement

finally   there    have been case whwrr the courts    have held that the equity    has arisen inj the claimant’s favor   can only be satisfied    by the transfer   of a fee simple  to him

ungurian v   lesnoff    ,       vinelott  J   held that   as it was   the intention  of the parties    that the defendant   should have the right    to reside in the plaintiff’s    house for life , the house becane settkled land within the SLA    and the defendant   was the trnant fior life

since the coming into force     of the Tursts iof Lan and Trsutrees Act 1996, a life interers  of this kind would take affect   under a trust of land

as examination of cases shows   the ranger of remedies   warded by courts   to satisfy   and estoppel  equitry    is great rnagung  from cpneptnsaiton to licnes    to leases   to freehols

there do appear to be   two methods  by whcuh cpurts have calcuated           the appropriate   tmrfy; sometimes  acourts appear  to be giving     effedct           to the climaiunts  reasonable expectionat   and in other cases c oruts     appear to have complete discretion    as to the choice     or remedy it now appesrs   that courts  a re combining   both approaches   by considering  the cliamnts expcetation  andf then snuring that there is proportionality     ebtween the detriment    and the rmyd awrded

jennings  v rice     the court considered     botha pporaches         and hedl that it was not appropriate      to grant     a  remdy merely    on the basis     of the climaints   expectionstions        nor could the court have   absolsute discretion

according to lord justice  Walker ”it cannot be doubted   that n this as in very other area of law”              the court   must take  principled   approach cannot exercise a complete unfettered discretion  according  to the individual judges notion.of what is fair   ub NT PARTICYlar case.”

hence    although the interest   expected  by the claimant   was a  relevant    consideration., the court    must do justice   by ensuring     that there is proportionality   b between the remedy and the detriment   – once    estoppel     equity   has been generated

”teh value     of that equity   will depend upon all    the circumstances   including    the exceptions    and the detriment.   the   mos essential    requirement   is that there must be proportionality    between    the expectations and the detriment”

the modern approach   is to award the minimum equity     to do justice on the fats of the individual case.    this might be nothing as  in

sledmore     v dalby

or a combination rm edy   as     gillett v holt

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