Published online by Cambridge University Press: 07 July 2005
This article focuses on a particular aspect of the operation of proprietary estoppel: it asks when a proprietary estoppel claim will give rise to a property right. The inquiry proceeds on the linked assumptions that proprietary estoppel is a means of acquiring rights and that rights thereby arising take effect immediately, without the need for any court order. Like any other means of acquiring rights, proprietary estoppel can give rise either to personal rights or to property rights: in some cases the estoppel claimant is acknowledged to have a personal right (e.g. to damages or a licence to use land); in others a property right (e.g. a lien; an easement; a lease; or a freehold). The central argument of this article is that proprietary estoppel should give rise to a property right only if that is necessary to protect the claimant’s reasonable reliance. Where a personal right gives sufficient protection that will have to do, whatever the claimant may have been promised or expected; this may well mean that the circumstances in which a property right arises are more narrow than has been thought.
1 McFarlane, B., “Proprietary Estoppel and Third Parties after the Land Registration Act 2002”  C.L.J. 661Google Scholar.
2 e.g. Jennings v. Rice  1 P & C.R. 100.
3 e.g. Parker v. Parker  EWHC (Ch.) 846.
4 e.g. Campbell v. Griffin (2001) EWCA Civ. 990, (2001) 82 P. & C.R. (D) 23.
5 e.g. Crabb v. Arun D.C.  Ch. 179.
6 e.g. Griffiths v. Williams  2 E.G.L.R. 121.
7 e.g. Pascoe v. Turner  1 W.L.R. 431.
8 Contained because of the fact that the advantages inherent in property rights necessarily confer burdens on other users of the property: see, for example, the approach in Hill v. Tupper (1863) 2 H. & C. 121 and Westdeutsche Landesbank Girozentrale v. Islington LBC  A.C. 669.
9 Similar debates as to whether and when a particular source of rights can give rise to property rights occur in the context of unjust enrichment and the law of wrongs: see, for example, Birks, P., Unjust Enrichment (Oxford 2003)Google Scholar, ch. 8; P. Millett, “Bribes and Secret Commissions”  R.L.R. 7
10 This was Hayton's argument in “Equitable Rights of Cohabitees”  Conv. 370 and “Constructive Trusts of Homes—a Bold Approach” (1993) 109 L.Q.R. 485.
11 There are cases in which courts have been too ready to recognise a property right; these are discussed later in the article under the heading “Proprietary Overkill”: see Part IV, section B3.
12 This phrase is used by Birks to explain how “discretionary remedialism” does not permit of B's having rights: Birks, P., “Three Kinds of Objection to Discretionary Remedialism” (2000) 29 U. Western Australia L. Rev 1 at 13Google Scholar. Compare Gray, K. & Gray, S., Elements of Land Law, 4th ed. (Oxford 2004)Google Scholar, at p. 968: a successful estoppel claimant has an entitlement “to bend the ear of the court of conscience to listen sympathetically to his plea for a restraint upon the landowner's exercise of his rights.”
13 This point is argued more fully in Bright and McFarlane, “Personal Liability in Proprietary Estoppel”  Conv. 14.
14 Moriarty's view that estoppel is a mechanism for the “informal creation of proprietary rights in land” cannot explain cases where B has a non-proprietary expectation, nor those where B is awarded a personal right after reliance on a proprietary promise (Moriarty, S., “Licences and Land Law” (1984) 100 L.Q.R. 376Google Scholar). Birks’ view that estoppels are “binding promises” cannot explain cases where A does not make a promise, nor those where a promise made by A is not enforced (Birks, P. ‘Equity in the Modern Law: An Exercise in Taxonomy’ (1996) 26 U. Western Australia L. Rev 1 at 60)Google Scholar. Similarly, proprietary estoppel cannot be seen as having the aim of reversing unjust enrichment as suggested by Goff and Jones: a remedy may exist even if A is not unjustly enriched; and even if he is, B's right may not be measured by the unjust enrichment (Lord Goff and Jones, G., The Law of Restitution, 6th ed., by Jones, G. (London 2002)Google Scholar, at pp. 230-235).
15 The fact that the reliance is on an expectation that B has or will acquire a right in relation to A's land also distinguishes proprietary estoppel from other types of estoppel, such as promissory estoppel.
16 Gillett v. Holt  2 All E.R. 289.
17  Ch. 179.
18 Robertson, A., “Towards a Unifying Purpose for Estoppel” (1996) 22 Monash U L Rev 1Google Scholar; “Situating Equitable Estoppel Within the Law of Obligations” (1997) 19 Sydney L Rev 32Google Scholar; Reliance and Expectation in Estoppel Remedies” (1998) 18 Legal Studies 360Google Scholar. Spence, M., Protecting Reliance: The Emerging Doctrine of Equitable Estoppel (Oxford 1999)Google Scholar.
19 For a contrary view see e.g. Edelman, J., “Remedial Certainty or Remedial Discretion in Estoppel After Giumelli?” (1999) 15 J.C.L. 179Google Scholar.
20 (1990) 170 C.L.R. 394.
21 (1996) 72 P & C.R. 196 at 208-209.
22 per Scarman L.J. in Crabb v. Arun D.C.  Ch. 179 at 198.
23  1 P. & C.R. 100.
24  EWCA Civ. 1176.
25 See e.g. M. Thompson  Conv. 137.
26 See e.g. Rotherham, C., Proprietary Remedies in Context (Oxford 2002)Google Scholar, esp. at pp. 33-42 and 296-297.
27  1 P. & C.R. 100 at .
28 See e.g. Jennings v. Rice  1 P. & C.R. 100.
29 For a discussion of relevant authority, see Bright and McFarlane, “Personal Liability in Proprietary Estoppel”  Conv. 14 at 19-23. Indeed, it is argued there that A's personal liability will survive a transfer to C not only when B has a (mere) personal right but even when B has a property right. This is important as B may be unable to enforce his property right against C, as in Lloyd v. Dugdale  2 P. & C.R.13.
30  EWCA Civ. 1883.
31 Ibid, at .
32 As A had offered to re-imburse B, Beale does not provide definite authority for A's being under a persisting personal obligation.
33 This necessarily casts doubt on the interpretation of the Land Registration Act 2002, s. 116(a) favoured by the Law Commission and criticised by McFarlane, “Proprietary Estoppel and Third Parties after the Land Registration Act 2002”  C.L.J. 661 at 688-696 and by the editors of Snell's Equity, 31st ed., by McGhee, J., (London 2005), at p. 289Google Scholar.
34 This principle is discussed in Edelman, J., Gain-Based Damages: Contract, Tort, Equity and Intellectual Property (Oxford 2002) at 258–264Google Scholar. See too Burrows, A.S., “Proprietary Restitution: Unmasking Unjust Enrichment” (2001) 117 L.Q.R. 412 at 424-428Google Scholar.
35 Burrows & Burrows v. Sharp (1989) 23 H.L.R. 82 at 92: “In general [the court] would, if possible, want to avoid giving the claimant more than he was ever intended to have”. Crabb v. Arun D.C. is sometimes said to involve B's getting more than expected as the easement was granted to B without payment, but this is better understood as representing compensation for A's interference with B's easement: see Gardner, S., “Remedial Discretion in Proprietary Estoppel”  115 L.Q.R. 438Google Scholar at 445 and McFarlane, “Proprietary Estoppel and Third Parties after the Land Registration Act 2002”  C.L.J. 661 at 674-675.
36 (1973) 228 E.G. 1115.
37 per Russell L.J. at 1115. See too Baker v. Baker  2 F.L.R. 247 at 251, per Dillon L.J.
38 In some cases it will not be immediately clear whether B's expectation was of a freehold or a leasehold: see e.g. Inwards v. Baker  2 Q.B. 29.
39 See e.g. Pasoce v. Turner  1 W.L.R. 431; Ottey v. Grundy  EWCA Civ. 1176.
40 Lloyds Bank v. Rosset  1 A.C. 107. In practice, this has become a specialised area with its own set of rules: if not express, the assurance can be nonetheless be inferred from B's conduct (per Lord Bridge at 132-133); and the appropriate response takes account of the entire course of dealing between A and B, not simply A's assurances and B's reliance: see e.g. Midland Bank v. Cooke  4 All E.R. 562. However, if the courts are to take seriously the suggestion in Oxley v. Hiscock  EWCA Civ. 546 that the extent of B's rights in such a case should be governed by principles derived from proprietary estoppel, then it is submitted that the structure set out in this article may usefully be applied.
41 (1973) 228 E.G. 1115.
42 See the view that “rights requiring active cooperation and mutual trust and confidence between the right-holder and the landowner cannot be property rights”: Bright, S., “Of Estates and Interests” in Bright, S. & Dewar, J. (eds.) Land Law. Themes and Perspectives (Oxford 1998), at p 541Google Scholar.
43 Subject to proportionality performing a minor role where the extent of the requested reliance is not clearly set in advance and there is, as it turns out, a great disparity between expectation and reliance: see the discussion of promises to provide life-long care, text below from n. 52.
44 As to whether an in specie remedy will be available, see Parts 4B and 5, below.
45 Indeed, reimbursing the costs incurred by B in performing his side of the bargain will be an inadequate response as it will fail to take account of the parties’ perception of “the balance of risks and rewards” to B of performing his side of the bargain: see Etherton J. in Cobbe v. Yeoman's Row Management Ltd.  EWHC 266 (Ch) at .
46  1 P. & C.R. 100 at .
47 Other examples include Kinane v. Mackie-Conteh  EWCA Civ. 45, Yaxley v. Gotts  Ch. 162 (discussed below, text from n. 88) and Siew Soon Wah v. Yong Tong Hong  A.C. 836.
48 (1991) 62 P. & C.R. 290.
49 unrep. May 4th 1995, CA
50  2 F.L.R. 247. In the event, although B's expectation set the extent of his right, he was unable to enjoy the right in specie. This is discussed further below, text at n. 114.
51 If the agreement involves the creation of a property right, then it will only be contractually enforceable if it complies with the requirements of the Law of Property (Miscellaneous Provisions) Act 1989, s. 2.
52 The estoppel situation thus differs from that of a unilateral contract. Where there is a unilateral contract, if A withdraws a promise as B is attempting to perform the condition necessary to enforce that promise, A will be in breach of contract. The standard view (set out but queried by G.H. Treitel, The Law of Contract, 11th ed. (London 2003), at p. 41) is that B can then claim damages reflecting his expectation. On some facts, both an estoppel and a unilateral contract analysis may be possible: see Errington v. Errington  1 K.B. 290.
53  1 P. & C.R. 100 at .
54 (1991) 62 P. & C.R. 290.
55 Compare Ottey v. Grundy  EWCA Civ. 1176.
56 Where there are important terms outstanding the court has been unable to find an estoppel: Pridean Ltd. v. Forest Taverns Ltd. (1998) 75 P & CR 447; Orgee v. Orgee  E.G.C.S. 152; Willis v. Hoare, unrep. December 3rd 1998, C.A.
57 See e.g. Cobbe v. Yeoman's Row Management Ltd.  EWHC 266 (Ch) at .
58 This is a long established principle: see Lord Kingsdown in Ramsden v. Dyson (1866) L.R. 1 H.L. 129 at 170: “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 he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord, and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation.”
59  2 P. & C.R. 13.
60 ibid. per Sir Christopher Slade at .
61 (1991) 62 P. & C.R. 33.
62 ibid. at 51.
63 Compare Walton Stores (Interstate) Ltd. v. Maher (1988) 164 C.L.R. 387 where the sense of urgency pervading the negotiations, and B's having returned the executed lease, put A under an obligation (especially when it knew that B was proceeding with the demolition) either to complete or warn B that it was having second thoughts. The appropriate response to the consequent estoppel was the enforcement of B's expectation.
64 Edwin Shirley Productions Ltd. v. Workspace Management Ltd. and Others  2 E.G.L.R. 16. See also A-G of Hong Kong v. Humphries Estate  A.C. 114; Gonthier v. Orange  EWCA Civ. 873.
65 e.g. Salvation Army Trustee Co. Ltd. v. West Yorkshire Metropolitan County Council (1980) 41 P. & C.R. 179.
66 Although it is interesting to note the possible tension between the cases cited above at n. 64 and Gillett v. Holt  2 All E.R. 289: see Lindsay J in Gonthier v. Orange at —.
67 Wroth v. Tyler  Ch. 30 shows how a rising market can impact on B. This was not an estoppel case: B sought specific performance of a contract to sell land. The contract price was £6,000, but by the time set for completion it would already have cost B £7,500 to buy an equivalent property, and by the time of trial that had risen to £11,500.
68 (1973) 228 E.G. 1115.
69  EWCA Civ. 1883.
70 See too Gillett v. Holt  2 All E.R. 28.
71 Decision of H.H.J. Boggis:  E.G.C.S. 125, The Times, 22 November 2000. The Court of Appeal had ordered a re-hearing when reversing the earlier judgment of H.H.J. Taylor: (1996) 73 P. & C.R. 515.
72 As to the further question of whether it was also necessary for B's expectation to be protected in specie, rather than by a damages award: see below at n. 105 and text at n. 117.
73  Ch. 179. Whilst Crabb is close to an “agreed interest” case, the negotiations between A and B had not yet progressed far enough to bring the case within that category: in particular, the question of payment for the envisaged easement had not been settled: see  Ch. 179, 185-187.
74 (2001) 82 P. & C.R. (D) 23.
75 Murphy v. Burrows and Burrows  EWHC 1900, a decision of Richard Sheldon Q.C. The amount of the award was obiter as the judge in fact found the estoppel claim unfounded. It is interesting, in the context of the discussion below (text from n. 87), to note that he also said at  that B's expectation could be met in financial terms.
76  1 P. & C.R. 100 at  : “It cannot be doubted that in this as in every other area of the law, the court must take a principled approach, and cannot exercise a completely unfettered discretion according to the individual judge's notion of what is fair in any particular case.”
77  1 E.G.L.R. 62.
78  1 P. & C.R. 100 at .
79  1 E.G.L.R. 62.
80  EWCA Civ. 873.
81 Hence misconduct operates, if at all, in an all or nothing fashion: see Gardner, , “Remedial Discretion in Proprietary Estoppel”  115 L.Q.R. 438, at 455Google Scholar.
82 See Gardner, ibid, at 455-457.
83 See above, text from n. 40.
84 See below, text at n. 114.
85 Winter Garden Theatre (London) Ltd. v. Millennium Productions Ltd.  A.C. 173; Verrall v. Great Yarmouth BC  Q.B. 202.
86  1 W.L.R. 431 at 438-9. As to which particular property right B should have acquired in Pascoe, see below, text from n. 136.
87 This argument is not inconsistent with the principle of English law that contracts for the transfer of an interest in land are specifically enforceable and give rise to an immediate equitable interest in the transferee. A clear distinction can be drawn between cases in which A is contractually obliged to transfer an interest in land to B and those cases in which A's obligation is simply to ensure that B's reliance on A is adequately protected. Nonetheless, it may be worth noting that in Canada the law is moving away from the automatic award of specific performance of contracts to transfer an interest in land. See, for example, the remarks of Ellen MacDonald J in Teresa Tsang in Trust, Sino Resources (Canada) Ltd. and 786567 Ontario Ltd. v. 853908 Ontario Inc. 6 W.D.C.P. (2d) 171: “The remedy of specific performance is … based on the fact that the real estate is regarded as unique and of particular importance to the purchaser. Specific performance is not the remedy when the land is purchased as an investment to be redeveloped and resold at a profit.” See also Semelhago v. Paramedevan  2 S.C.R. 415: “Specific performance should … not be granted as a matter of course absent evidence that the property is unique to the extent that its substitute would not be readily available.” Similarly, in Australia, there are signs that a specifically enforceable contract for the sale of land to B may not always give rise to a constructive trust in B's favour: see Tanwar Enterprises Pty Ltd. v. Cauchi  HCA 57, 77 A.L.J.R. 1853 at  and .
88  Ch. 162. See too Giumelli v. Giumelli (1999) 196 C.L.R. 101, where B's expectation was protected by a damages award secured on A's property.
89 (1999) 91 A.C.W.S. (3d) 1026 (decision of the Ontario Superior Court of Justice).
90 ibid. at , per Himel J: “I am not persuaded that ordering the defendants specifically to perform their obligations under the alleged agreements is at this time, as opposed to awarding the injured party compensatory damages if the claim is successful, the only way of putting the plaintiff in the position it would have been in had the contract been performed.”
91 Compare Giumelli v. Giumelli  196 C.L.R. 101: partly due to the need to avoid interference with a third party, the High Court decided to protect B's expectation by a damages award rather than a constructive trust.
92 Cf. Rudden, B., “Things as Thing and Things as Wealth” in Harris, J. (ed.) Property Problems: From Genes to Pension Funds (London 1997) 147Google Scholar. When treated as “thing”, things are made use of for what they are; when treated as wealth, things are substitutable.
93  Ch. 179.
94  2 Q.B. 379 at 396. There was a difficulty in that case, glossed over by the Court of Appeal, as to whether an easement acquired by estoppel could bind C: see Battersby, G., “Informal Transactions in Land, Estoppel and Registration” (1995) 58 M.L.R. 637Google Scholar.
95  Ch. 194.
96 Such an award would be unnecessary if C agreed to allow B the expected easement.
97  EWCA Civ. 994.
98 B had never expected a permanent right, only one lasting as long as he lived on the adjoining land.
99 Although it is clear that this was intended to be a proprietary right, the court did not put it in legal form. It is probably best seen as a determinable fee simple.
100 unrep. May 4th 1995, C.A.
101 ibid., per Balcombe L.J.
102 (1862) 4 De G.F. & J. 517.
103  1 W.L.R. 431.
104  2 E.G.L.R. 121.
105  2 All E.R. 289. See too Habermann v. Koehler  E.G.C.S. 125, The Times, 22 November 2000.
106 (1991) 62 P. & C.R. 33.
107  2 P. & C.R. 13: on the facts, B's lease did not bind C.
108 e.g. Pascoe v. Turner  1 W.L.R. 431; JT Developments v. Quinn (1991) 62 P. & C.R. 33; Gillett v. Holt  2 All E.R. 289.
109 See, e.g., Leasehold Committee, Interim Report on Tenure and Rents of Business Premises, 1949, Cmd 7760, para. 34: “A tenant with a flourishing business, or with a business which is only beginning to get on its feet, necessarily feels qualms about the results of moving. This is particularly true of retail and other traders, whose customers get used to shopping with them in a certain place … But it applies with almost equal force to manufacturers and other businesses employing a skilled or trained labor force. Removal even within a relatively small area may involve losing valued workers, and consequent loss of production: it may interrupt carefully-organised arrangements for the supply of components, disposal of by-products, etc.”
110  1 P. & C.R. 100.
111  EWCA Civ. 1883.
112 per Peter Gibson L.J., ibid. at .
113  EWCA Civ. 994.
114 The courts frequently assert that the response to the proprietary estoppel cannot have an oppressive or excessive effect on A: see e.g. Griffiths v. Williams  2 E.G.L.R. 121; Dodsworth v. Dodsworth (1973) 228 E.G. 1115; Deane J. in Commonwealth of Australia v. Verwayen (1990) 170 C.L.R. 394 at 443; Giumelli v. Giumelli (1999) 196 C.L.R. 101 at . Note too the discussion of Crabb v. Arun D.C. in Bright and McFarlane, “Personal Liability in Proprietary Estoppel”  Conv. 14 at 27-28.
115  2 F.L.R. 247.
116 ibid. at 250. In this case B had already left the property because of the breakdown in the family relationship and there was no question of his enjoying any occupational right in specie.
117 Equally, it can be coupled with the need to support the use of other land in which B has an interest, as in Crabb v. Arun D.C.  Ch. 179.
118 Decision of H.H.J. Boggis:  E.G.C.S. 125, The Times, 22 November 2000.
119  2 All E.R. 289.
120  2 P & C.R. 13, per Sir Christopher Slade at .
121 unrep., 25th July 2001, Ch.
122 ibid, at .
123 ibid, at .
124 ibid, at .
125 In both Giumelli v. Giumelli  196 C.L.R. 101 and L&A Management Services Ltd, v. Gentra Inc, (1999) 91 A.C.W.S. (3d) 1026 the court accepted that damages awards reflecting B's expectation could be made: see above, text from n. 89.
126 See e,g, Holiday Inns v. Broadhead (1974) 232 E.G. 951. In attempting to allow B the monetary value of his expectation, Goff J. ordered that A should hold his reversion on trust for sale for A and B in equal shares. It seems that B acquired this property right simply because it was a more convenient route to B's receiving the necessary monetary award.
127 (2001) EWCA Civ. 990, (2001) 82 P. & C.R. (D) 23.
128 Similarly, no explanation was given for the charge over A's property ordered by the High Court in Giumelli v. Giumelli  196 C.L.R. 101. This is strange as the High Court rejected the contention that A's land was held on constructive trust for B, emphasizing at 113 that “[b]efore a constructive trust is imposed, the court should first decide whether, having regard to the issues in the litigation, there is an appropriate equitable remedy which falls short of the imposition of a trust”; yet there was no consideration of why a lien was more appropriate than a simple award of damages. See also the failure to explain why a lien was thought appropriate in Murphy v. Burrows and Burrows  EWHC 1600 at  and Cobbe v. Yeoman's Row Management Ltd.  EWHC 266 (Ch) at .
129 See Halsbury's Laws of England, vol. 28, para. 754.
130  1 P. & C.R. 100 at .
131 As in Cobbe v. Yeoman's Row Management Ltd.  EWHC 266 (Ch).
132 Although there is no consensus on why liens are given, it is the case that they are only found when there is a close link between B's claim and A's property. With the unpaid vendor's lien, A has only acquired the property from B on the contractual promise of payment. With the solicitor's lien, B is entitled to a lien over A's property as the fruits of his time and effort. With the insurer's lien, the property is a fund of money to which B is entitled.
133 (1973) 228 E.G. 1115.
134 (1858) 25 Beav. 72.
135 See McFarlane, “Proprietary Estoppel and Third Parties after the Land Registration Act 2002”  C.L.J. 661, 688-693.
136  1 W.L.R. 431.
137 The court rejected a lease on the basis that A could exploit the landlord—tenant relationship to harass B. Given there are other means by which to address such a risk (e.g. an injunction) it is highly doubtful that it justified A's being permanently deprived of the property.
138  EWCA Civ. 1176.
139 For example, continuing occupation by B may constitute a sufficient attachment to the land to justify a property right: the case may move from Beale v. Harvey  EWCA Civ. 1883 to Bibby v. Stirling  EWCA Civ. 994.
140 (1996) 72 P. & C.R. 196.
141 See e.g. Adams, “Is Equitable Estoppel a Wasting Asset?”  Conv. 458 at 463. See too Rotherham, Proprietary Remedies in Context, p. 30.
142 See McFarlane, “Proprietary Estoppel and Third Parties after the Land Registration Act 2002”  C.L.J. 661 at 681-683.
143 (1996) 72 P. & C.R. 196 at 204-205.
144 Birks has noted (e.g. in “Proprietary Rights as Remedies” in Birks, P. (ed.), Frontiers of Liability (Oxford 1994), at p. 214Google Scholar) that a careless use of the word “remedy” can cause such confusion.
145  1 P. & C.R. 100 at : see above, text at n. 78.
146 Patel v. Ali  Ch. 283.
147 Wroth v. Tyler  Ch. 30.
148 Thompson v. Park  K.B. 408: per Goddard L.J. at 409: “the court cannot specifically enforce an agreement for two people to live peaceably under the same roof.”
149 Taxation consequences can be taken into account by the court when exercising its powers under the Trusts of Land and Appointment of Trustees Act 1996 or under the Variation of Trusts Act 1958. For example, where B has acquired a beneficial life interest he may wish to avoid the Inheritance Tax consequences of such an interest by terminating it in favour of receiving a capital lump sum.
150  1 W.L.R. 798.
151 This is the best explanation of Wayling v. Jones (1993) 69 P. & C.R. 170: see Bright and McFarlane, “Personal Liability in Proprietary Estoppel”  Conv. 14 at 19-20.