Land Dixon, proprietary estoppel “is at heart an

Land
Law

   “Come to the Court with clean hands”, this
is a famous maxim used by the Courts of Equity, which means the person bringing
the claim in the Court must have acted lawfully himself. Proprietary estoppel
is an equitable estoppel. This doctrine is introduced by Equity in order to
protect ones right when one has not completely complied with the formalities.
This question demands a discussion on Proprietary estoppel while focusing
primarily on the statement of Lord Scott in the case of Cobbe v Yeoman’s Row Management Ltd1
which says that this doctrine cannot act against the statute. This discussion
will state the arguments in favour of his statement. Firstly, discussion will
be that something which is forbidden in law will not be enforceable through
Proprietary estoppel. Secondly, this essay shall argue that it is true that
this doctrine has become flexible but it still needs certain requirements for
its application. Lastly, it shall proceed to the discussion that proprietary
estoppel is judge made and judges don’t have power to contradict with the laws
made by the Parliament.

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 Proprietary estoppel is an equitable doctrine
which assists in establishing a proprietary right in land with the lack of
formalities complied with, according to Martin Dixon, proprietary estoppel “is
at heart an antidote to a lack of required formality in the creation or
transfer of property rights”2. Equity
has come up with a doctrine to protect ones right. Dillwyn v Llewelyn3
is a famous case where the claimant was given the right of his interest in
land even though he did not comply with the formalities. Lord Denning in Crab v Arun4
stated that the function of proprietary estoppel, which is “…to prevent a
person from insisting on his legal right…whether arising under contract, or on
his title deeds, or by statute…when it would be inequitable for him to do so
having regard to the dealings which have taken place between the parties. “Proprietary
estoppel being an equitable doctrine emphasise on element rather than
procedure. Recent English Courts approach illustrates the ever-expanding, but
organised understandings of proprietary estoppel. We shall notice the way
proprietary estoppel has stretched, yet it did not allow the Courts to make
their own law which contradicts with the statute, but merely implement what
would be unjust not to. As Lord Scott says, “proprietary estoppel cannot be
prayed in aid in order to render enforceable an agreement that statue has
declared to be void”.

1.     
PROPRITARY ESTOPPEL AND UNCONSCIONABILITY.

   Historically, proprietary estoppel was a
very strict principle. The requirements to be met were too high for a
successful claim. It was redefined in the case of Taylor Fashion Ltd v Liverpool Victoria Trustees.5
Now the core of proprietary estoppel lies with unconscionability aspect,
something that is not possible or legal cannot be unconscionable. Act of the
Parliament says that if something is impossible to get then how can it be
unconscionable? In this case, it was established that proprietary estoppel was
based on the holistic conduct. The requirements of assurance, detriment and
reliance shall simply be deemed unconscionable if evaluated from holistic
standpoint. Although it needs to comply with the law because if something is
not legal it shall not be enforceable for example if you are fourteen years old
and your brother tells you, if you wash my car every day for a year, I will let
you drive my car but by the end of the year you are only 15, you cannot drive
that car as the law says that a person should be 18 or more to drive a car.
Unconscionability is this drastic unfairness that take place if you did not
give the person his right so if we look at the example, it is not unfair for a
fourteen year old to drive a car so there seem to be no unconscionability.
Similarly, it would not be unconscionable in situations where law is
contradicted because a person should not have detrimentally relied and there
would be no assurance because the law itself does not give them that assurance
that is why the heart of this doctrine lies with unconscionability as it
protects both parties interest.

   If we look at the facts of the case of Cobbe v Yeoman’s Row Management6,
we see that there is a legal step missing they did not write down the terms of
the contract. While for a contract to be binding it needs to be in a written
form which was not the case here. They missed out a major legal requirement
asked in the section 2 of Law of Property Act 1989 for a contract to be
binding. Lord Walker of Gestingthorpe
also made a statement that “The Court of Appeal’s decision would tend to
introduce considerable uncertainty into commercial negotiations. The claimant’s
case fails on the fundamental point that both parties knew that there was no
legally binding contract and that either was free to discontinue the
negotiations without liability in equity or at law. The claimant took a
commercial risk with his eyes open”. He also agreed that equity will not
intervene in this case because they themselves took a risk to make a nonbinding
contract so equity will not help them by contradicting the law made by the
parliament. This proves that which is not possible or legal might not be
unconscionable too; as the crux of unconscionability is to provide fairness
under the law. In this area, Lord Walker makes a statement which needs to be
remembered, he says that, “If the other elements appear to be present but the
result does not shock the conscience of the court, the analysis needs to be
looked at again.” Lord Neuberger also admits in the case of Fisher v Brooker7 that
unconscionability plays a vital role in proprietary estoppel. In Gillett
v Holt8, it
was stated that the analysis of unconscionability could tell that whether the
detriment suffered was substantial or not. It is true that the relevant case
law can help by providing as to when the conduct of a person will be
conscionable but eventually every case is a substance of its “facts and
degree”.9

2.      PROPRITARY ESTOPPEL HAS EXAPANDED.

Proprietary estoppel has expanded but not abandoned a structural basis.
Oliver J reaffirmed this approach in
Cobbe and it was approved in the case of Habib bank v Habib bank10
by court of appeal and applied in the case of Lim Teng Hum v Ang Swee Chuan11
by Privy Council. The doctrine of proprietary estoppel has expanded and become
easier and flexible in its application. However, it still needs certain
requirements for a successful claim. It is not true to say that with the
further developments proprietary estoppel has become abandoned   because the criteria is still there to be
fulfilled, it is just that it has become easier to apply in practice and get
better results than before. Law needs certainty if judges began to contradict
the law there would be no need to follow or enforce this law.

   Proprietary estoppel has become
easier but is still not rendered. Holistic approach does not mean a completely
frivolous approach. It is flexible but it also needs a requirement of
assurance, detriment and reliance in order to illustrate unconscionability, it
needs to be kept in mind that it is not all about unfairness but it is a theory
which is used to distinguish between a valid and invalid estoppel claims12,
as stated before unconscionability cannot be proved where Parliament has made
something illegal otherwise it will become very random and discretionary making
it eventually unpredictable. They made it flexible but not completely random in
order to keep the law on proprietary estoppel certain that is why it follows a
certain mechanism and structure.  It has
to stay within the confines of certain principle in order to have checks and
balances. As elucidated in the case of Cobbe,
if these requirements are not acknowledged proprietary estoppel will lose
contact with its roots and there would be a risk that it might become
unprincipled and ultimately unpredictable. In order for proprietary estoppel to
exist it must be within the confines of law.

  Thorner
v Major 13 is a case where it is
stated that for a successful claim of proprietary estoppel there have to be
further three elements too which are assurance, detriment and reliance.
Assurance needs to be looked from the contextual view. In the case of Pascoe v Turner14 defendant made
sufficient assurance which was enough for proprietary estoppel claim. There was
sufficient assurance in the case of Griffith
v Williams 15too. Assurance and
detriment are interconnected in nature because there needs to be a causal link
between the assurance relied and detriment claimed. At that very moment when
the person who has given the assurance goes back to the promise, detriment will
be judged. Detriment needs not to be financial or quantifiable it could also be
in the form of a loss of opportunity or carrying out work for the defendant.
The case of Gillet v Holt 16is
an example of it; claimant suffered detriment in the form of loss of
opportunity to work. Inward v Baker17 is also the case
where claimant suffered detriment due to the assurance made by the defendant.
In Campbell v Griffin18 claimant suffered
detriment as he took care of the defendants on their assurance. Reliance is
another important requirement. It needs to be considered that the claimant
relied upon that assurance made by the defendant. Once the link between the
detriment and assurance is recognized the court would automatically presume
reliance. Greasley v Cooke19 is the case Lord
Denning also agreed that where there is detriment there is a presumption of
reliance too.

   In Cobbe v Yeomans Row Cable20,
House of Lords highlighted that all four requirement should be there for
Proprietary estoppel. This proves that the flexibility in the doctrine did not
affect the certainty of it. It still complies with the law and work according
to the guidelines given by the statue. Judges cannot give their own
interpretation for something that Parliament has deemed to be illegal as this
question states that “…proprietary estoppel cannot be prayed in aid in order
to render enforceable an agreement that statute has declared to be void”. This
means that you can only have detriment, assurance, and reliance when you follow
the pattern and one has completed their legal duties.

3.      EQUITY CANNOT CONTRADICT A STATUTE.

  Doctrine
of proprietary estoppel is an equitable doctrine. In Equity judges make laws,
if judges began to contradict the statute there would be no need to enforce
this law. Parliament is above all and its sovereignty cannot be affected at any
cost similarly the laws made by the parliament are also binding to everyone.
Judges have the authority to interpret it but they cannot amend it or make any
other law which contradicts the statute. Anything which the statute stops a
person from doing is illegal and if a person does something illegal he has no
right to claim it in the Courts of Equity as they will not be helped there. One
must be a law abiding person to get a remedy in the Courts of Equity.

   This
doctrine is not a global remedy that cures all flaws in the formalities because
if this was the case, formalities rules were of no use. Critics say that
proprietary estoppel challenges formalities stated in the statues, which might
accuse the court from exceeding their role which is against the Separation of
Powers. Nevertheless, Lord Scott disproved this criticism by determining that proprietary
estoppel does not help to a person who goes against the law. This tells that
this doctrine is only applicable when the circumstances comply with the
statutory provision.  Otherwise, this
doctrine would no longer be certain and the Courts of Equity will fail to do
the justice.

   Proprietary estoppel being an equitable
remedy, which is structured in such a way that it prevents a party depending
unconscionably on his or her firm legal rights. However, a statute cannot be
used as an engine of fraud as Equity will not let it do so. Therefore, in the
case of Yaxely v Gotts21,
the terms of the contract were not complied with the section 2 (5) of Law of
property act, now the concern was that whether proprietary estoppel will work
or not in this situation. However, Robert Walker LJ stated that the claim was
not defeated.

 It is also true that, proprietary estoppel is
an equitable doctrine; focus is on substance not form. In this doctrine
relationship also matters’, looking at the relationship of the claimant and the
defendant in that particular scenario a judgment is given. There is a
possibility that formalities might not be complied with but it can still be
relevant for proprietary estoppel claim, as this doctrine is all about
fairness.

   To conclude, it is opined it used to be a
very strict and rigid doctrine in application. However, in past years it has
expanded and became more flexible and in many cases fair by adopting
unconscionabilty. Proprietary estoppel is an equitable doctrine which does not
contradict with the statue; it basically helps to facilitate people with
interests in the property. Thus, statement made by Lord Scott is a justifiable
statement for the doctrine to be certain and within the confines of law and to
avoid unpredictability too.

 

 

1 Cobbe v Yeoman’s
Row Management Ltd 2008 UKHL 55, 2008 1 WLR 1752, para 29.

2 Confining and
defining proprietary estoppel: The role of unconscionability by Martin Dixon,
2010

3
Dillwyn v Llewelyn 1862 4 De G. F. & J. 517

4 Crab v Arun
District Council 1975 EWCA Civ 7

5 Taylor Fashion
Ltd v Liverpool Victoria Trustees 1982 QB 133

6 Cobbe v Yeoman’s
Row Management Ltd 2008 UKHL 55, 2008 1 WLR 1752, para 29.

7 Fisher v Brooker 2009 UKHL 41; 2009 1 W.L.R. 1764 at 63.

8 Gillett v Holt 2001 Ch. 210; 2000 3 W.L.R

9 Gray & Gray, 5th edn (2008), para.9.2.75, citing Watts and Ready v Storey (1983) 134 N.L.J. 631 per Dunn L.J.

10 Habib
bank v Habib bank A G Zurich 1981 1 WLR 1265

11
Lim Teng Huan v Ang Swee Chuan 1992 1 WLR

12 Confining and
defining proprietary estoppel: The role of unconscionability by Martin Dixon,
2010

13 Thorner v Major
2009 UKHL 18

14 Pascoe v Turner
1979 1 WLR 431

15 Griffith v
Williams 1978 2 EGLR 121

16 Gillet v Holt
2000 EWCA Civ 66, CA

17 Inward & Ors
v Baker 1965 2 WLR 212, CA

18 Campbell v
Griffin 2001 EWCA Civ 990, CA

19 Greasley v Cooke
1980 3 All ER 710

20 Cobbe v Yeoman’s
Row Management Ltd 2008 UKHL 55, 2008 1 WLR 1752

21
Yaxely v Gotts 1999 2 FLR 941