Yaxley v Gotts [2000] Ch 162
Proprietary estoppel and constructive trusts.
Facts:
The claimant, Yaxley, made an oral agreement with the defendant that Yaxley would refurbish and convert a house belonging to the defendant into flats and in return the claimant would own the ground floor flat. However, the defendant arranged for his son to buy the property and refused to convey the ground floor flat to the claimant, denying any agreement had been made.
Issues:
The defendant argued that the oral contract was void as it did not comply with the formality requirements of s.2 of the Law of Property (Miscellaneous Provisions) Act 1989, which stated that all contracts for land must be in writing. They also contended that consequently the remedy of estoppel was inappropriate.
Held:
The Court of Appeal found in favour of Yaxley. The court held that under s.2(5) of the 1989 Act constructive or resulting trusts of land do not need to be in writing. Walker LJ said that estoppel should not be used to circumvent a statue. However, where there was a finding of an estoppel there would also be a constructive trust. As the two remedies are indistinguishable he used a trust analysis to find the agreement did not need to be in writing and so was valid. However, Beldam LJ disagreed and held that these public policy considerations were not enough to prevent a claim of estoppel. Therefore, he said that estoppel was the correct remedy despite s.2(1) of the 1989 Act. Consequently, the court ordered that Yaxley be given a 99 year lease or the equivalent sum in order to satisfy his equitable interest.
Updated 21 March 2026
This case note remains accurate as a summary of Yaxley v Gotts [2000] Ch 162 and the legal principles it established. The relationship between proprietary estoppel, constructive trusts, and section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 continues to be governed by the same statutory framework, which has not been amended in any way material to this case.
The tension identified in the judgments — between Clarke LJ’s trust-based analysis and Beldam LJ’s estoppel-based analysis — has remained a source of academic and judicial debate. Subsequent cases, including Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55 and Thorner v Major [2009] UKHL 18, have further developed the law on proprietary estoppel and its interaction with section 2, and students should be aware that those decisions provide important qualification and context to the principles discussed here. In particular, Cobbe imposed significant restrictions on the use of proprietary estoppel in commercial contexts where parties knowingly contract without the required formalities. Thorner v Major affirmed a more generous approach in domestic or family contexts. Readers should consult these later authorities alongside this case.
