Proprietary estoppel

Proprietary estoppel is a legal claim, which may arise in relation to rights to use the land of the owner, and may even be effective in connection with disputed transfers of ownership.

Outline

Proprietary estoppel can be broken into a number of steps. A proprietary estoppel may arise if,

• one party represents that he or she is transferring an interest in land to another, but what is done has no legal effect, or
• merely promises at some time in the future to transfer land or an interest in land to another, and
• knows that the other party will spend money or otherwise act to his or her detriment in reliance on the supposed or promised transfer

In Dillwyn v Llwellyn (1862) 4 De GF&J 517 a father promised a house to his son who took possession and spent a large sum of money improving the property. The father never actually transferred the house to the son. When his father died, the son claimed to be the equitable owner and the court ordered the testamentary trustees to convey the land to him. See also Inwards v Baker [1965] 2 QB 29.

In Willmott v Barber (1880) 15 Ch D 96, Fry J considered that five elements had to be established before proprietary estoppel could operate:

• the claimant must have made a mistake as to his legal rights;
• the claimant must have done some act of reliance;
• the defendant, the possessor of a legal right, must know of the existence of his own right which is inconsistent with the right claimed by the claimant;
• the defendant must know of the claimant's mistaken belief; and
• the defendant must have encouraged the claimant in his act of reliance.

Although proprietary estoppel was only traditionally available in disputes affecting title to real property, it has now gained limited acceptance in other areas of law. Proprietary estoppel can be closely related to the doctrine of constructive trust (see dicta of Lord Scott and Lord Walker in Cobbe v Yeoman's Row [2008] UKHL 55 and Thorner v. Majors [2009] UKHL 18).

The term "proprietary estoppel" is not used in American law, but is part and parcel of the general doctrine of promissory estoppel. In English law, proprietary estoppel is distinct from promissory estoppel.

See also

• Promissory estoppel
• Estoppel
• Crabb v Arun DC [1975] EWCA Civ 7
• Cobbe v Yeoman's Row Management Ltd

Notes

References

• McFarlane, “Proprietary Estoppel and Third Parties after the Land Registration Act 2002” [2003] C.L.J. 661
• Bright and McFarlane, “Proprietary Estoppel and Property Rights” [2005] C.L.J. 449
• Gardner, “The Remedial Discretion in Proprietary Estoppel – Again” (2006) 122 L.Q.R. 492