Introduction to Proprietary Estoppel

A means of creating proprietary interests

An equitable proprietary interest can be created informally by means of a resulting or constructive trust. Such trusts have proved particularly significant in the context of cohabitation. The doctrine of ‘proprietary estoppel’ provides another means by which a person may become entitled to a proprietary right despite the absence of express intention and appropriate formalities. As Stephen Moriarty has observed:

‘The role of proprietary estoppel seems self-evident: it provides for the informal creation of interests in land whenever a person has acted detrimentally in reliance upon an oral assurance that he has such an interest. Oral grants of interests by themselves, therefore, are insufficient; but act in reliance upon some such assurance, and proprietary estoppel will validate what the law of Property Act says has no effect.’

Establishing a claim by way of proprietary estoppel

A claim by way of proprietary estoppel is not in itself a remedy. However, where a claimant can demonstrate an entitlement by way of estoppel, an appropriate remedy will be awarded. The estoppel is therefore best seen as a species of cause of action which demands an appropriate remedial response. Whilst the general doctrine of estoppel is only capable of acting as a shield to protect against a person asserting his rights, proprietary estoppel ‘may be relied on as a sword, not merely as a shield.’

There are therefore two essential stages to the process of claiming a remedy by way of proprietary estoppel, namely establishing an estoppel ‘equity’ and satisfying that equity through an appropriate remedy.

Establishing an ‘equity’

A Claimant must first demonstrate circumstances which entitle him to demand a remedy.

In other words, a claimant must show that the cause of action, namely a proprietary estoppel, has been raised. Modern cases have stated that three factors are required to establish a proprietary estoppel: (1) an assurance; (2) a reliance; and (3) change of position or detriment. An estoppel ‘equity’ will only arise if these three elements are proved.

Satisfying the ‘equity’

Once an estoppel ‘equity’ has been established, the claimant is prima facie 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 enjoys the discretion to select from a range of possible remedies.

Scope of proprietary estoppel

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

In Western Fish Products Ltd v Penwith District Council, Megaw LJ 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 does, however, provide a close analogy with proprietary estoppel.