What is estoppel?

Where common law is found to be too rigid and unable to fairly resolve a dispute, equity can sometimes be used to provide a resolution which is deemed to be fair and just.

Estoppel is an equitable doctrine, designed to promote fairness where one party has relied upon the promise of another to their detriment. It can trace its roots back to the Victorian divide of common law courts and the courts of equity.

Traditionally, and in most cases of estoppel, the doctrine can only be used as a ‘shield’ to defend a claim, and not as a ‘sword’ to bring a claim against another party. However, there is a unique exception for proprietary estoppel claims which can be used as either a sword or a shield.

What is proprietary estoppel?

Proprietary estoppel is a specific type of estoppel which concerns promises or assurances given in relation to rights or interest over property or land. It is often used by a party who is seeking to enforce a promise made by a landowner to give that party a right or interest in the land owned.

The modern basis of proprietary estoppel was established in Taylor Fashions v Liverpool Victoria Trustees (1982) QB 133 which states that there must be: (1) an assurance (2) a reliance on the assurance (3) detriment on the reliance (4) such circumstances that it would be unconscionable to allow the landowner to escape from his promise.

Successful uses of propriety estoppel

If a Claimant successfully uses proprietary estoppel as a sword, seeking to enforce a right against a landowner in consequence of an assurance, the court can award the Claimant any remedy it deems appropriate. However, it is unlikely the Claimant will receive more than what was originally promised. The purpose of the reward is to do the minimum necessary to achieve a result which is seen to be “fair” or “just” to the parties.

If a Defendant successfully uses proprietary estoppel as a shield, to defend a claim made against the right or interest promised, the landowner’s claim will be dismissed, and the Defendant will be left to enjoy the right that the landowner was seeking to deny.

Example of proprietary estoppel in 2023

The recent case of Michael John Spencer v Estate of John Mitchell Spencer (Deceased), Penelope Anne Spencer, Jane Mary Flower [2023] EWHC 2050 (Ch) successfully used proprietary estoppel.

The case

The Claimant’s son issued a claim against his deceased father’s estate on the basis he had not inherited the farmland promised to him by his father before his death.

The father and son worked together in farming the land for many years and in 1983 formed a partnership together which became very profitable. Throughout their time together, the father gave the son many assurances he would inherit the farmland as long as he did not take on any other projects, and the father made wills in 1993 and 2003 that left the farmland to the son.

However, in 2018 the son was diagnosed with multiple sclerosis, and the father became concerned the diagnosis would lead to a significantly shortened life span and the son would die early. The father subsequently changed his will so all his estate, including the farmland, was left in equal shares to the son and his daughters.

The son claimed he had relied on the father’s promise to his own detriment, and it was unconscionable for that promise to be reneged on. In contrast, the daughters argued the son was exaggerating the alleged assurances, and that he had suffered no detriment as he had benefitted financially from the farming partnership.

The Decision

The Court held the son had met all of the elements required for proprietary estoppel and gave Judgment in his favour, transferring the farmland to the son.

(1) The court accepted that the father had given the son several assurances that the son would inherit the land. This was evidenced by the fathers’ previous wills and corroborated by witness statements from neighbours and former workers who were aware from conversations with the father that the son was to inherit the farmland.

(2) The Court held the son had relied on the assurances given by the father which was a significant incentive to stay in the partnership.

(3) The Court held that the son had relied to his detriment and given up other opportunities due to the father’s threat he would be cut out of the will if he took on other ventures and did not commit himself exclusively to the farm.

(4) The Court decided it would be unconscionable not to enforce the promise made by the father, in circumstances where the son had done all that was asked of him and committed himself to the partnership. The Court also took the view the father’s reason for later changing his will i.e., because he thought the son was going to die early, was not a good reason for reneging on the promise, particularly as the father was misguided about the son’s life expectancy.

The risk versus reward of proprietary estoppel

This case is an example where proprietary estoppel was used as a necessary tool to achieve an equitable outcome that might otherwise have led to an adverse result. It may even have the potential to breathe new life into the old doctrine, usually considered as a last resort, when all other avenues have failed.

However, it should be noted that proprietary estoppel is still a risky endeavour and the successes of the Claimant in this case should not be taken for granted. The greatest strength of estoppel (to achieve an equitable outcome) can also be its greatest weakness as it relies wholly on a perfect storm of a favourable factual background and a Judge prepared to take an interventionist approach.

In this case the Claimant succeeded because he was able to provide substantial evidence to prove both the existence of the promise made and kept over a significant period of time, as well as the fact that he had relied on it to his detriment. It is dubious as to whether the son would have been as successful if, as is often the case in estoppel matters, he was only relying on his word without any evidence to support his claim.

The Hamlins Real Estate Disputes team has expertise in both commercial and residential matters. We seek to obtain the best outcome possible for every client, no matter how big or small the issue may be.

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