This essay has been submitted by a law student. This is not an example of the work written by our professional essay writers.
The modern law of proprietary estoppel?
1. The House of Lords has finally had the opportunity of reviewing and clarifying(?) the
equity known as proprietary estoppel in two of its recent decisions: Cobbe v
Yeoman’s Row Management Ltd  1 WLR 1752 and Thorner v Major  1
2. Of the two, Thorner is perhaps the more illuminating as it is a decision based upon
facts that, classically, form the basis for most of the reported cases on proprietary
estoppel (i.e. a farmer promising a younger relative that in exchange for his help on
the farm, for little or no remuneration, the farm will be his one day) but Cobbe is of
special significance as it seems to draw a line in the sand. Or does it?
3. Lord Walker of Gestingthorpe, who gave the lead judgment in Thorner, with perhaps
a wry smile, chose to commence his opinion  with a quotation from Simon
Gardner, An Introduction to Land Law (2007) page 101
“There is no definition of proprietary estoppel that is both comprehensive
and uncontroversial (and many attempts at one have been neither)."
4. Please note, as well, a revelatory aside of Lord Walker in Thorner :
“I would prefer to say (while conscious that it is a thoroughly question-
begging formulation) that to establish a proprietary estoppel the relevant
assurance must be clear enough. What amounts to sufficient clarity, in a
case of this sort, is hugely dependent on context."
5. But to begin at the beginning, as Lord Walker pointed out in the opening paragraph
 of his opinion in Thorner there was general agreement amongst academic writers
that the doctrine is based on three main elements:
(a) a representation or assurance made to the claimant
(b) reliance on it by the claimant
(c) detriment to the claimant in consequence of his (reasonable) reliance.
6. Earlier judicial formulations are to like effect:
(1) As formulated by Mr Edward Nugee QC in Re Basham Deed  1
WLR 1498 at 1503 and as approved by Robert Walker LJ (as he then
was) in Gillett v. Holt  Ch 210:
“The Plaintiff relies on proprietary estoppel, the principle of
which in its broadest form, may be stated as follows: where one
person, A, has acted to his detriment on the faith of a belief,
which was known to and encouraged by another person, B, that
he either has or is going to be given a right in or over B’s
property, B, cannot insist on his strict legal rights if to do so
would be inconsistent with A’s belief."
(2) Oliver J (as he then was) put the matter in Taylor Fashions Ltd v.
Victoria Trustee Co Ltd (1979)  QB 133n thus:
“If A, under an expectation created or encouraged by B that A
shall have a certain interest in land thereafter, on the faith of
such expectation and with the knowledge of B and without
objection from him, acts to his detriment in connection with
such land, a Court of Equity will compel B to give effect to
7. In its practical application the principle by which it operates is not very different to
common intention constructive trusts: Grant v. Edwards  Ch. 638 and Hiscock
v. Oxley  EWCA Civ 546. Both rely upon certain shared characteristics e.g. a
representation or promise, which is intended to be, or it is known that, it will be, relied
upon and in reliance thereon the promisee acts to his or her detriment.
8. The difference between the principles of constructive trusts and proprietary estoppel
is that the former concerns an agreement arrangement or understanding about the
ownership or sharing the ownership of property, generally (but not exclusively) before
it is acquired, whilst the emphasis of the latter is upon a representation whereby there
is the acquisition of rights in or over property which is already (or about to be) owned
by the promisor. And as we shall see, once proved, the Court must enforce the terms
of the constructive trust whilst in the case of proprietary estoppel it has more
9. One further characteristic of proprietary estoppel to note was described by Hoffman
LJ (as he then was) in Walton v. Walton  CA Transcript No. 479
“21. But none of this reasoning applies to equitable estoppel, because it
does not look forward into the future and guess what might happen. It
looks backwards from the moment when the promise falls due to be
performed and asks whether, in the circumstances which have actually
happened, it would be unconscionable for the promise not to be kept."
10. The person seeking to assert the estoppel (“A") must establish that the person who
owns the property (“O"), or his agent, or his predecessor in title, has represented that
he (A) will obtain an interest in property either by:
(i) making an express promise or
(ii) encouraging A to believe that he will obtain such an interest by words
or conduct or
(iii) encouraging A’s belief passively and by remaining silent i.e.
acquiescence see Snell’s Equity (31st ed) para. 10-17.
11. The promise can be vague or even equivocal, and certainly less than is needed to
enforce a contractual obligation, what however is essential is to show that it was
intended that it should be relied upon or that the promisee was reasonable in so doing:
see Thorner per Lord Walker at  and Lord Neuberger at  and . It is not
necessary therefore to show that O’s promise was said by him to be irrevocable what
matters is that it was reasonable for A to so act to his detriment: Gillett v. Holt 
12. A commonly encountered scenario involves the family farm: a son or other relative
stays at home to work on the farm for payment that amounts to little more than pocket
money, in course of time he wishes to marry and proposes to move away to earn a
reasonable wage, he is induced to stay at home with a promise that the farm will be
left to him by Will: Gillett v. Holt, and Uglow v. Uglow  WTLR 1183 CA.
13. Promises to leave businesses comprising of property and other assets made on the
same basis are also common Gillett v. Holt (farm/ agricultural business) Wayling v.
Jones  2 FLR 1029 (hotel).
14. The cases also show other types of relationships such as a needy older person who
promises to leave his or her estate, or property, or a house for life to A, if he or she
continues to look after O: Griffiths v. Williams  2 EGLR 121 Jennings v. Rice
 1 P&CR 8.
15. And note that standing by and thus encouraging A’s belief by acquiescence can also
amount to encouragement e.g. where a landlord and two tenants acted under a
common assumption that an option to renew was void: Taylors Fashions Ltd v.
Liverpool Victoria Trustees Co. Ltd.
16. Of course, it must be the case that normally O knows all of the material facts viz that
the property was his, that A was acting on O’s representation and that he, O, could
interfere. Otherwise O’s behaviour would not be unconscionable. On rare occasions
(which will indeed be very rare) O’s knowledge is not essential if O’s conduct in
encouraging A to act to his detriment would nevertheless make it inequitable that he
should be allowed to stand on his strict rights.
Reliance: Expectation or belief
17. A must have acted in the belief that he either has or would acquire a sufficient interest
in the property to justify acting to his detriment. For instance, the son who stayed on
the farm because he was promised he would inherit it or a housekeeper who was
persuaded to stay to look after O who promised A the house: Wakeham v. MacKenzie
 1 WLR 1175.
18. The conventional view has always been that there is no room for estoppel where
negotiations are expressly made subject to a “subject to contract" term and such
indeed is the usual outcome of estoppel claims in such circumstances: see note 92
para. 10-19 of Snell for a list of such decisions a view now endorsed by the House of
Lords’ see Lord Scott in Cobbe at .
19. Detriment suffered by A is essential to establishing the equity:
“The overwhelming weight of authority shows that detriment is required. But
the authorities also show that it is not a narrow or technical concept. The
detriment need not consist of the expenditure or money or other quantifiable
financial detriment, so long as it is something substantial. The requirement
must be approached as part of a broad inquiry as to whether repudiation of an
assurance is or is not unconscionable in all the circumstances."
per Robert Walker LJ (as he then was) in Gillett v. Holt.
Slade LJ in Jones v. Watkins said:
“the detriment which the representee must be shown to have suffered falls to
be judged at the moment when the representor proposes to go back on his
Dunn LJ in Greasley v. Cooke  1 WLR 1306 at 1313/1314:
“There is no doubt that for proprietary estoppel to arise the person claiming
must have incurred expenditure or otherwise have prejudiced himself or acted
to his detriment."
20. Balcombe LJ in Wayling v. Jones analysed what, in practical terms, amounts to
detriment. His analysis is quoted with approval by Robert Walker LJ in Gillett v.
“(1) There must be a sufficient link between the promises relied upon and
the conduct which constitutes the detriment –see Eves v. Eves  1
WLR 1338, 1345C-F, in particular per Brightman J, Grant v. Edwards
 Ch 638, 648-649, 655-657, 656G-H, per Nourse LJ and per
Browne-Wilkinson V-C and in particular the passage where he equates
the principles applicable in cases of constructive trust to those of
(2) The promises relied upon do not have to be the sole inducement for the
conduct: it is sufficient if they are an inducement – Amalgamated
Property Co v. Texas Bank  QB 84, 104-105.
(3) Once it has been established that promises were made, and that there
had been conduct by the plaintiff of such a nature that inducement may
be inferred then the burden of proof shifts to the defendants to establish
that he did not rely on the promises – Greasley v. Cooke  1
WLR 1306; Grant v. Edwards  Ch 638, 657."
21. Detriment can be divided into expenditure and non expenditure or other detriment.
(a) the classic decision of Dillwyn v. Llewellyn (1862) 4
De G F & J 517 where A encouraged by O built a house
on O’s land and O failed to transfer the land to A: and
see Inwards v. Baker  2 QB 29 involving similar
(b) by contributing to the purchase price and providing cash
for repairs Jiggins v. Brisley  EWHC 841;
(c) it can include expenditure by A on his own land in
expectation of obtaining a right over O’s land as where
A built on his own land in expectation of a right to
obtain water from O’s canal: Rochdale Canal Company
v. King (2) (1853) 16 Beav 630.
(2) Other detriment: this takes the form most commonly of the provision
of services or foregoing opportunities elsewhere:
(a) On assurances that A would be granted a right of way
over O’s land, A disposed of part of his land: Crabb v
Arun D.C.  Ch 179;
(b) helping in a business or farm and giving up the chance
of other opportunities or more remunerative work
elsewhere: Re Basham and Gillett v. Holt;
(c) a giving up his job and going to live near O in a house
owned by O: Jones v. Jones  1 WLR 438;
(d) foregoing other business opportunities to run the family
business for 30 years at a reduced wage Newman v.
Blanton  All ER (D) 107 (Jun);
(e) a soi-dissant actress gave up what the Court thought
was not a promising career to look after an alcoholic
partner: Grundy v. Ottey  EWHC Civ 1176.
Land Registration Act 2002 s. 116
22. By section 116 of the LRA 2002 it is provided as follows:
“It is hereby declared for the avoidance of doubt that, in relation to registered
land, [each of] the following
(a) an equity by estoppel
has effect from the time the equity arises as an interest capable of binding
successors in title (subject to the rules about the effect of disposition on
23. The section builds on the old practice of HM Land Registry which was to permit a
caution or notice to be entered upon notification of the right. The new section
clarified the position by confirming the proprietary nature of such an estoppel by
declaring that it has effect as soon as it arises. The section cannot solve the difficulty
that until the Court makes a declaration the extent of the equity is uncertain – will the
Court grant A an interest in land or merely monetary or some other compensation?
Extent and Satisfaction of the equity
24. Once established how will the court satisfy the equity? One of the few differences
between proprietary estoppel and constructive trusts is that a constructive trust is
founded upon a common intention (i.e. agreement arrangement or understanding) so
once found, the Court must give effect to this common intention, whereas for
proprietary estoppel the courts will simply provide “the minimum equity to do
25. The starting point is to establish what was A’s expectation. That he would inherit the
entire farm, and the live and dead stock, be given the business, O’s residuary estate or
a home for life?
26. In cases such as Wayling v. Jones the promise made by O, the homosexual partner of
A, was that he would leave to A his hotel and in reliance upon those promises A acted
as O’s companion, chauffeur and business associate until O’s death and in exchange
he was given pocket money and some expenses. The Court ordered that the entire
proceeds of sale of the hotel should be transferred to A. In many of the farming cases
especially where the farm in question is a small family farm the order is to transfer the
entire farm together with the live and dead stock.
27. However, since Gillett v. Holt there seems to have developed a new, and stricter,
approach to satisfying the equity. Having placed the doctrine on a clear footing
Robert Walker LJ (as he then was) in the important decision of Jennings v. Rice
 EWCA Civ 159 set about reminding everyone that the job of the Court was to
do “the minimum equity to do justice" (Crabb v. Arun DC). In Jennings O had
promised A in exchange for looking after her, her house and contents which were
valued at £435,000 the Court awarded him £200,000.
28. In short, the issue is one of deciding whether to give effect to the expectation of A or
will justice be done by awarding him something less. So the court will consider:
(a) the conduct of O and A;
(b) the quality of O’s assurances;
(c) the extent and nature of O’s assets
(d) the extent of A’s detriment as for instance in Jennings v. Rice. Where
the Court considered what O would have paid had she employed carers
or gone into a nursing home viz Robert Walker LJ’s “cross check".
29. Therefore although the starting point will be A’s expectation which will be the
predominant consideration when satisfying the equity, that said there appears to be a
clear move away from a position where the Court was simply concerned to fulfil A’s
expectation to a more flexible and proportionate approach.
How is the equity to be satisfied?
30. (a) transfer of property or an interest in property – as the cottage in Re Basham; a
house and farm as well as business assets in Gillett v. Holt. The grant of a
lease Griffiths v. Williams  2 EGLR 121 or an easement Crabb v. Arun
DC  Ch 179.
(b) monetary compensation as in Dodsworth v. Dodsworth (£700 compensation
for improvements but a licence to occupy until it was paid) and Jennings v.
Rice. In Wayling v. Jones as noted above the court ordered the proceeds of
sale of the hotel be transferred to A. In Gillett v. Holt the Court ordered the
transfer of real property but also damages of £100,000 to compensate Mr
Gillett for his exclusion from all the rest of the farming business.
(c) charge for expenditure: a charge or equitable lien may be ordered to cover A’s
expenditure on or value of his improvements.
Does proprietary estoppel still have a role in commercial transactions?
31. In the light of Cobbe it seems unlikely.
32. Lord Neuberger in Thorner stressed the role of equitable estoppel in “the familial and
personal"  and in distinguishing Cobbe from the decision in Thorner he identified
two factors  to .
33. First, the nature of the uncertainty in two cases is entirely different (the appeal in
Thorner had been defended on the basis that the promise to leave “the farm" was
insufficiently certain in that its extent might change) and secondly the relationship
between the parties in Cobbe “was entirely arm’s length and commercial, and the
person raising the estoppel was a highly experienced businessman." In Thorner,
however, the relationship was “familial and personal." .
34. However there are two important cases worthy of note: one pre, and the other post
Cobbe. These cases seem to point to the conclusion that where a proprietary estoppel
can be said to amount to a constructive trust, then, it can have a role in a commercial
transaction. The first is a decision of the Court of Appeal in Kinane v Mackie –
Conteh  EWCA Civ 45 and the other Herbert v Doyle and Talati  EWHC
3423 (CH) (Mr Mark Herbert QC sitting as a Deputy Judge of the Chancery
35. Kinane was cited in argument in Cobbe but not referred to in the opinions. The issue
in the appeal was whether a security agreement was enforceable notwithstanding
section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989. The Court
of Appeal held that it was, on the basis of a constructive trust, so it was within section
2(5) of the 1989 Act i.e. a constructive trust which is an exception to the provision
requiring that contracts concerning land have to be in writing.
36. Neuberger LJ (as he then was) in coming to his conclusion relied heavily upon the
decision in Yaxley v Gotts  Ch 174 in which it had been pointed out by Robert
Walker LJ that “there are large areas where the two concepts [proprietary estoppel
and constructive trusts] do not overlap" but that it was well established that “the two
concepts coincide" “in the area of a joint enterprise for the acquisition of land."
37. In Kinane, Mr Kinane advanced a sum of $80,000 on the strength of a letter of 8
November 2001 which he believed, on the Defendant’s assurances, gave him
adequate security i.e. a mortgage or equivalent. The letter was not sufficient for the
purposes of s. 2(1). He pleaded a proprietary estoppel which could also properly
amount to a constructive trust , so as to come within s. 2(5) of the 1989 Act.
38. In coming to his conclusion Neuberger LJ specifically reminded himself that :
“When considering that question, one must, I think, avoid regarding the
subsection as an automatically available statutory escape route from the
rigours of section 2(1) of the 1989 Act, simply because fairness appears to
Arden LJ in her judgment considers the same points at some length: see paragraphs
 to .
39. In Herbert v Doyle and Talati the Learned Judge delayed giving judgment in order to
consider the decision of the House of Lords in Cobbe.
40. The facts were as follows: the claimant alleged that under an oral argument, a
dentists’ practice, which owned nine parking spaces in a car park on a property owned
by him, agreed to transfer certain car parking spaces to him, in return for replacement
car parking spaces. On the strength of this agreement the claimant went ahead and
developed his property.
41. Distinguishing Cobbe and following Kinane the Deputy Judge found that if all the
requirements of a proprietary estoppel were found, and that the estoppel can properly
be said to amount to a constructive trust, then the claim will not fail simply because
all the requirements of section 2 were not met. And this despite Lord Scott’s
admittedly obiter view in Cobbe 
“My present view, however, is that proprietary estoppel cannot be prayed in
aid in order to render enforceable an agreement that statute has declared to be
That said, he seems to have answered his own point a little further on into the
“As I have said, however, statute provides an express exception from
42. So the conclusion seems to be even if it is a “commercial" transaction do not give up
on proprietary estoppel but only, that is, if you can succeed on establishing a
constructive trust as well.
Cite This Essay
To export a reference to this article please select a referencing style below: