Introduction to proprietary estoppel

What is proprietary estoppel?

Proprietary estoppel is an equitable doctrine that prevents someone from relying in certain facts or rights which are different to earlier ones – to the detriment of someone else. This, says the law, is unconscionable behaviour. Proprietary estoppel effectively provides a means by which a person may become entitled to a proprietary right despite the absence of express intention and appropriate formalities.

A proprietary right is where a representation or assurance has been made to someone that they have acquired (or will acquire) rights in respect of land or property. The law says that it is unfair for the other party to then go back on their word where the representation or assurance has been relied upon to their detriment.

The doctrine of proprietary estoppel can therefore assist a claimant where their rights are not protected by the Law of Property Act; for instance, where an assurance in relation to the transfer of property has not been formalised in writing.

Establishing a proprietary estoppel claim

Where a claimant can prove they are entitled to property rights by way of estoppel, an appropriate remedy will be awarded. There are two main elements required to establish an estoppel claim:

Establishing an ‘equity’

The claimant must first demonstrate that circumstances have arisen which entitle them to a proprietary estoppel remedy. Three factors are required to prove proprietary estoppel:

  • An assurance: this can be an express or implied, or an active or passive assurance that the claimant has or will have rights in the property. The assurance must generally be clear and unambiguous;
  • A reliance: the claimant must demonstrate through their conduct that they relied on that assurance. A causal link between the assurance and the reliance will need to be shown;
  • Change of position or detriment: the claimant must have acted to their detriment; for example, spent money on improving or buying land, or changing employment.

If any of these three elements cannot be satisfied, the claimant will not succeed in a proprietary estoppel claim.

Satisfying the ‘equity’

Once these have been established, the claimant may well be entitled to remedial relief. However, the mere existence of an ‘equity’ does not predetermine the appropriate remedial response. Rather, the court must decide what specific remedy would be appropriate in the circumstances to ‘satisfy’ the equity raised by the estoppel.

The court has the discretion as to what remedies to award, including the transfer of land, an easement and/or a monetary award. However, the court will order a remedy that is proportionate to the detriment in the circumstances of the particular case.

Scope of proprietary estoppel

The principles of proprietary estoppel have operated to create rights and interests in land, and other types of property right. However, it has been suggested that they do not apply in the context of public law matters, such as the grant of planning permission.

In Western Fish Products Ltd v Penwith District Council (1981), Megaw LJ in the Court of Appeal said:

“We know of no case, and none has been cited to us, in which the principle set out in Ramsden v Dyson and Crabb v Arun District Council has been applied otherwise than to rights and interests created in or over land. It may extend to other forms of property. In our judgment there is not good reason for extending the principle further. As Harman J pointed out in Campbell Discount Co Ltd v Bridge, the system of equity has become a very precise one. The creation of new rights and remedies is a matter for Parliament, not the judges.”

Although Megaw LJ considered that the doctrine of proprietary estoppel had no application in a public law context, the developing doctrine of legitimate expectation in public law provides a close analogy with proprietary estoppel.