The Learning & Resource Section

Proprietary Estoppel

Proprietary Estoppel:

What is proprietary estoppel?

Proprietary estoppel is a body of principles that was developed by the courts to deal with a situation in which an owner of land confers some sort of right or privilege to another person. It is the means of cresting a proprietary interest in land when the correct formalities are not followed. Essentially it can be used to allow an interest in land as a remedy where it is deemed unconscionable to deny the claimant entitlement. There are three requirements to establish proprietary estoppel:

1. There must be an assurance through a representation that would give rise to an expectation that the claimant would have an interest in the land

Two Types of Assurance:

  • Active Assurance:

This occurs where an owner of land, by his words or conduct, leads the claimant to an expectation that he will have an interest in the land ( Pascoe v Turner [1979])

  • Passive Assurance:

This occurs when there is inaction or silence that constitutes a representation (Ramsden v Dyson [1866])

For example, this would be when a stranger builds something on someone else’s land thinking it is his, but the owner knows it is not and lets him do it anyways—equity would see this as unfair and would not allow for the owner to take the profits

2. The claimant must demonstrate that they relied on that to their detriment

  • The claimant must show that he has changed his position to his detriment in reliance of the representation made by the owner or landlord in order to raise the equity at the heart of promissory estoppel
  • The burden of proof then shifts to the owner or landlord to show that there shouldn’t have been such reliance on this statement
  • Reliance catches the assurance that was made to the detriment that was suffered

3. And that it would be unconscionable to deny any such entitlement

  • An assurance in itself cannot generate estoppel because there is no consideration and one is allowed to go back on their promises if there was no consideration from the other party but if we connect assurance to some sort of detrimental reliance, then it would be unconscionable to change positions

Satisfying the Estoppel:

Once you have raised proprietary estoppel, the Court then needs to identify the appropriate remedy. The Court has discretion as to what kind of remedy to award. The court must look at the circumstances in each case and decide in what way the equity can be satisfied, which allows them discretion to award remedies on a case by case basis. Courts can choose from the following as remedies that can be awarded:

1. Conveyance of a Freehold (Gillett v Holt [2000])

2. Grant of a Lease (Grant v Williams [1977])

3. Share of a Beneficial Ownership in Land

  • If that occurs, then we have a constructive trust

4. An Occupational Right ( Inwards v Baker [1965])

5. Compensation (Dodsworth v Dodsworth [1973])

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