The Modern Law of Proprietary Estoppel

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Terese Kingman takes a look at an often misunderstood legal concept

What if someone is promised an interest in some land and relies on that promise (for example, by working on the land without payment) only to find that the landowner has gone back on that promise? Is there anything he can do? Can he enforce the promise?

It is in situations like this that the concept of proprietary estoppel can help.

How did proprietary estoppel develop?

Traditionally proprietary estoppel arose when a landowner assured another party he would receive an interest in his land or when both parties acted with each other in a way which lead one to believe he had acquired rights to the other’s land or where the landowner encouraged the other party to spend money on the land or to deal with the land knowing he was mistaken as to his legal rights but standing by and saying nothing. This situation arose in Dillwyn v Llewelyn (1862) when a son received a parcel of land from his father and then proceeded to spend £14,000 on building a house on the land with his father’s approval and encouragement and promise that the land would be his, only to later find that his father did not leave the property to him in his will!

How did the concept of proprietary estoppel progress through the years?

Proving a claim for proprietary estoppel was initially very difficult to establish. As a result the courts’ approach became less strict. The burden of proof lies with the defendant to show that the claimant did not rely on assurances made. Therefore to succeed in a claim for proprietary estoppel the following elements must be established:-

1. An assurance or representation
2. Reliance on the assurance or representation
3. Detriment
4. Unconscionability

Can someone rely on an assurance that property will be left to him in a will?

Yes. In a recent case Thorner v Major (2009) a farmer promised a young relative that in exchange for working on his land for little or no pay he would inherit the farm in his will. However, the farmer changed his will which meant the relative did not inherit the farm. The House of Lords decided the assurances together with the continuing pattern of conduct by the farmer over the previous 30 years (during which time the relative devoted his life to helping run the farm for little remuneration) amounted to proprietary estoppel. The result was that the relative received the farm as he had been promised.

Surely the farmer had every right to change his will?

Yes, but it was unconscionable for him to do so after the relative had acted in reliance on his assurances that he would leave the farm to him and would obviously have been disadvantaged if he had not received the farm.

So the relative relied on the assurances made for over 30 years believing he would inherit the farm. What happened next?

The overall requirement for proprietary estoppel is unconscionability. The court will look at the circumstances of the parties and decide whether it would be unconscionable for the promise to be withdrawn, taking into account the detriment arising from the promise.

What rights will someone have in a claim for proprietary estoppel?

A claimant can apply to the court to claim the “promised” right in the land and the landowner will be stopped for exerting his strict legal rights and denying the claim.

For further details contact our property team on 01271 372128 or email Terese at [email protected]