REAL PROPERTY I

SEMESTER 1

ACADEMIC YEAR (2016-2017)

EQUITABLE INTERESTS:

ESTATE CONTRACT, PART PERFORMANCE

AND PROPRIETARY ESTOPPEL
Dr. Sharon B. Le Gall

No.5

INTRODUCTION

Before dealing with the specific equitable interests, some brief comments will be
made about specific performace. The remedy of specific performance consists of
an order of the court directing a party to a contract to perform his/her
obligations thereunder according to its terms. Lord Selborne LC in
Wolverhampton and Walsall Rly Co v. London and North Western Rly Co (1873) LR
16 Eq 433 at 439 said that the remedy of specific performance ‘presupposes an
executory as distinct from an executed agreement, something remaining to be
done, such as the execution of a deed or a conveyance, in order to put the parties
in the position relative to each other in which by the preliminary agreement they
were intended to be placed.’

Historically the basis for the grant of specific performance by courts of

equity has been the inadequacy of legal remedies, and particularly of damages. In
Johnson v. Agnew [1980] A.C. 367 at pp.400-401 Lord Wilberforce commented
that the general principle for the assessment of damages is compensatory, that is
‘the innocent party is to be placed, so far as money can do so, in the same
position as if the contract had been performed’. Thus, it follows, as a general
principle, that equity will not interfere where damages at law will give a party
the full compensation to which he/she is entitled and will put him/her in a
position as beneficial to him/her as if the agreement had been specifically
performed. For example, a normal contract for the loan of money, whether or not
on mortgage, will not be specifically enforced; for the borrower can obtain
money elsewhere, and if he/she has to pay more for it, he/she may sue for
damages: South African Territories Ltd. v. Wallington [1898] A.C. 309.1

There can be no specific performance unless there is a valid and binding

concluded contract, sufficiently certain to be valid at law, supported by

1 See Snell’s Equity, 32nd ed. (John McGhee, QC, ed.) (London: Thomson Reuters, 2010), at p.470.
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consideration and complying with any relevant requirements of form.2 (See

Joseph v. National Magazine Co. Ltd. [1959] Ch 14.)

EQUITABLE INTERESTS

Estate contract
A contract to create or transfer a legal estate in land is termed an ‘estate
contract’. This arises where the owner of a legal estate either agrees to convey it
to the other contracting party or to create a legal estate out of it in favour of that
other. Thus, if A, the owner of the fee simple absolute in Blackacre, agrees to sell
it to B or to create a term of years absolute out of it in favour of B, the equitable
interest in the land as measured by the terms of the contract passes at once to B,
although the legal estate remains with A until an actual conveyance or lease has
been executed. This is an application of a general doctrine, commonly known as
the doctrine of Walsh v. Lonsdale (1882) 21 Ch D 9, under which a specifically
enforceable contract to create or convey a legal estate or interest is treated in
equity as creating the equivalent estate or interest. (See also Metcalfe v. Edghill
(1963) 5 W.I.R., 422, 423.)
Metcalfe v. Edghill
In pursuance of an oral agreement for a lease for a fixed period exceeding three years the
tenant on 16 July 1960, entered into possession of the landlord's premises at Maraval.
Thereafter the tenant paid and the landlord accepted rent measured by reference to a
month. On 25 August 1960, the oral agreement was reduced into writing by the landlord
and signed by the tenant on 2 September 1960. The tenant subsequently gave one
month's notice to quit and on its expiry on 30 November 1960, vacated the premises.
The landlord disputed the validity of the notice and sued for specific performance of the
agreement. The tenant contended that the agreement sought to be specifically enforced
created a monthly tenancy and no more and this question was by consent ordered to be
determined as a point of law before trial of the action. The learned judge held that the
tenancy was not for a fixed term, nor a monthly tenancy, but one from year to year. On
appeal,
Held: the agreement sought to be specifically enforced was effective as an agreement to
execute a lease for the fixed term stated therein; Walsh v Lonsdale ((1882), 21 ChD 9, 52
LJCh 2, 46 LT 858, 31 WR 109, CA, 31 Digest (Repl) 255, 3905) applied.

Gray & Gray, at p.1057 state that

‘equity views the contractual purchaser as having acquired, as of the date of the contract
itself, certain substantial rights of a proprietary character. Thus, from the moment of
specifically enforceable contractual commitment, the purchaser of a land interest
acquires not merely a contractual right against the vendor but also a proprietary right
which is necessarily equitable. [No proprietary right passes, however, if specific
performance is for any reason unavailable]. Under a specifically enforceable contract for
the sale of land the purchaser is “treated in equity as the owner of the property whether
or not an order for specific performance has been made.” His interest under the contract
is “a proprietary interest of a sort, which arises…in anticipation of the execution of the
transfer for which the purchaser is entitled to call.” There may be some question as to
the exact nature of the proprietary entitlement conferred by contract and perhaps even
as to the precise moment at which it arises. There is, however, no doubt that the

2 See Snell’s Equity, at p.472.

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irresistable right to call for the disposition of a promised estate or interest effectively
transmits to the intended disponee a significant quantum of equitable property in the
land concerned. In effect, contract generates some form of equitable title.’

Equitable interests arising from part performance3

• Parole (oral) agreement for the sale or lease of land

• Informal agreement to create a legal mortgage (deposit of title

deeds)
Parole agreement for the sale or lease of land
The Statute of Frauds, 1677, s.4 provided, inter alia, that no action shall be
brought to enforce specified classes of agreements unless the agreement in
question or a note or memorandum thereof, is in writing and ‘signed by the party
to be charged or some other person thereunto by him lawfully authorised.’ The
class of agreement commonly affected has comprised contracts for the sale of
interests in land.4

The Statute of Frauds (UK) has, in part, been implemented in TT by the

Conveyancing and Law of Property Act, Chap.56:01, s.4, as follows:

4. (1) No action may be brought upon any contract for the sale or other disposition of
and or any interest in land, unless the agreement upon which such action is brought, or
some memorandum or note thereof, is in writing, and signed by the party to be charged
or by some other person thereunto by him lawfully authorised.

(2) This section applies to contracts whether made before or after the commencement of
this Act and does not affect the law relating to part performance, or sales by the Court.

There are, however, occasions when a plaintiff who at law has no cause of
action under the statute above, on the ground that the agreement in question is
unenforceable, will succeed in equity and will be granted specific performance if
appropriate. This position has arisen because the courts with equitable
jurisdiction have taken the view that in appropriate circumstances it would be
unjust that a defendant should be able to rely on the absence of sufficient writing
and so the plaintiff is accordingly granted specific performance.5

An oral contract of the sale of land might be specifically enforced in equity

even if there was no sufficient memorandum to satisfy the statutory requirements.
This would be the case where the party seeking relief had done a sufficient act of
part performance of the contract. The substantive principle underlying the
doctrine was that ‘if one party to an agreement stands by and lets the other party
incur expense or prejudice his position on the faith of the agreement being valid
he will not then be allowed to turn around and assert that the agreement is

3 See Kevin Gray and Susan Francis Gray, The Elements of Land Law, 5th ed. (Oxford: Oxford
University Press, 2009) at p.1050, et seq.
4 See I.C.F. Spry, The Principles of Equitable Remedies 7th ed. (Australia, UK, Canada: Law Book Co.,

Sweet & Maxwell, Carswell Co., 2007), at p.248.

5 ibid., at p.249.

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unenforceable. Using fraud in its older and less precise sense, that would be
fraudulent on his part and it has become proverbial that courts of equity will not
permit the statute to be made an instrument of fraud.’6 In such circumstances,
the defendant was in reality ‘charged’ upon the equities resulting from the acts
done in execution of the contract rather than on the contract itself.
Note the recent statement by Lord Bingham of Cornhill in Actionstrength
Ltd. v. International Glass Engineering IN.GL.EN SpA [2003] 2 AC 541 at [1]-[3].
However, it is also necessary that the acts of part performance should be
of such a kind as to provide evidence of the agreement between the parties (see
Maddison v. Alderson (1883) 8 App. Cas. 467 at 478.
See also McCollin v. Carter (1974) 26 W.I.R.1
The plaintiff’s claim was that the defendant was a tenant of a house spot under a contract
of tenancy which was duly determined by notice and that the defendant had refused or
neglected to deliver up possession of the land. The plaintiff sought, inter alia, an order
for possession and arrears of rent. The defendant denied that he was the plaintiff’s
tenant. The defendant’s case was that he had entered into possession of the land in
pursuance of an oral agreement under which the land was to be sold to him and he was
given possession pending completion of the contract for sale. The defendant
counterclaimed for an order for specific performance and in the alternative, for damages
for breach of contract. The plaintiff denied the existence of any agreement to sell the
land and pleaded that there was no memorandum in writing of the alleged contract
sufficient to satisfy the Statute of Frauds which required contracts creating interests in
land for a period of more than three years from the time of execution of the contract
unenforceable if the contract was not evidenced in writing. The learned trial judge
examined the evidence and found a clear intention on the part of the plaintiff to benefit
Marva Carter, the defendant’s daughter. The trial judge was satisfied that the plaintiff
had held himself out as being willing to make a gift of an area of land next to his house to
the girl. He also found that the plaintiff had never contracted to sell the land to the
defendant for a reasonable or any other price and that the plaintiff permitted Marva’s
father to place his house on a portion of land which he, the plaintiff, intended to give
Marva sometime in the future.
Held that (i) in such circumstances, it could not be said that the defendant’s entry into
possession and execution of works on the land was ‘unequivocally referable to some
contract between the parties’ and the plea for specific performance failed; (ii) however,
there was no doubt that the plaintiff with full knowledge that there was no enforceable
agreement between the defendant and himself acquiesced in the defendant expending
money in the execution of improvement works on the land, and, on the principle laid
down in Chalmers v. Pardoe [1963] 3 All ER 552, there would be a declaration that if and
when the defendant gives up possession of the land he would be entitled to be repaid by
the plaintiff the amount so expended with interest.

The acts have to be performed by or on behalf of the plaintiff (see Williams

v. Evans (1875) L.R. 19 Eq 547 where repairs and alterations were executed by
the plaintiff’s lessee).

6 See Charles Harpum (ed.) Megarry & Wade The Law of Real Property 6th ed. (Australia, Canada,

USA, New Zealand, Singapore and Malaysia: Thomson, Sweet & Maxwell, 2004), at p.650,
referring to Lord Reid in Steadman v. Steadman [1976] A.C. 536 at 540.

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Williams v. Evans
A., a tenant in possession, filed a bill against B. for the specific performance of a parol
agreement for a lease of thirty years. A. had contracted to sub-let, and his sub-lessee had
expended money alterations and repairs with the knowledge and approval of B.
Held (reversing the decision of the County Court Judge), that the outlay by the sub-
lessee was as much a part performance of the agreement as if made by A., who was
therefore entitled to specific performance.

The acts must of themselves on a balance of probability establish the

existence of an oral contract, although it was sufficient that it proved a contract,
and need not refer to the precise terms of the contract on which the plaintiff relied
(see Kingswood Estate Co. Ltd. v. Anderson [1963] 2 QB 169 at 189, per UpJohn LJ,
approving a statement in Fry on Specific Performance, 6th edn., p.278, and
modifying the earlier strict view that the act must be unequivocally referable to
the particular contract.

It must be an act intelligible (understandable) only on the assumption

that some such contract as that alleged had been made, and if it were explicable
on some other equally good ground, it did not satisfy the test.7
There might be more than one act, and the acts when joined together
‘may throw light on each other; and there is no reason to exclude light’ (see
Steadman v. Steadman [1976] AC 536 at 564, per Lord Simon of Glaisdale).8

Acts of part performance

Entry into possession
Entry into possession by the plaintiff was very commonly an act of part
performance. In Kingswood Estate Co. Ltd. v. Anderson (supra), entry into
possession of a flat was a sufficient act of part performance to enforce an oral
contract of tenancy. However, remaining in possession, after the expiration of a
tenancy, without additional circumstances, would not be sufficient because it
was equivocal. ‘Where one holds over and remains in possession under
circumstances which are not different from what prevailed before the
termination of the previous tenancy, an oral agreement for a new tenancy cannot
be enforced. For his ‘remaining in possession is a mere continuance of the
character’ which he all along filled.’ 9 But, the payment of increased rent
constitutes an act of part performance of a contract for a new lease to a tenant
already in possession: see Nunn v. Fabian (1865) 1 Ch App 35.
Payment of money

Payment of money can often be equivocal, but that did not mean that it could
never be a sufficient act of part performance. Where the payment of money is

7 See E H Burn and J Cartwright, Cheshire and Burn’s Modern Law of Real Property 17th ed.
(Oxford: Oxford University Press, 2006), at p.867.
8 ibid., at pp.867- 868.
9 See Sampson Owusu, Commonwealth Caribbean Land Law (London and New York: Routledge

and Cavendish, 2007), at p.177. See also I.C.F. Spry, The Principles of Equitable Remedies 7th ed.
(Australia, UK, Canada: Law Book Co., Sweet & Maxwell, Carswell Co., 2007), at p.275.

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rendered unequivocal by other acts or circumstances, there will be sufficient

part performance.10

Alterations
Alterations and improvements effected on the property of another is sufficient
for the purpose of the rule. But alterations and improvements made on one’s
own land will not suffice. If, however, the improvements are effected at the
instance of an intending tenant, the doctrine can apply (see Rawlinson v. Ames
[1925] 1 Ch 96).

Summary

• Oral contract must refer to land or an interest in land

• Acts of part performance must establish the existence of a contract on a

balance of probabilities

• The remedy of specific performance of the contract must be available

Informal agreement to create a legal mortgage (deposit of title deeds)
According to a doctrine dating back to Russel v. Russel (1783) 1 Bro CC 269 at
270, 28 ER 1121 at 1122, it is possible to create an equitable mortgage of land,
without the necessity of writing or any other formality, through the mere deposit
by a landowner of his title deeds or, in the case of a registered estate, by deposit
of the relevant land certificate. The deposit of documents with a lender readily
gave rise to an equitable mortgage if coupled with an intention that the depositee
should hold the document or documents as his security for a loan of money. The
deposit of documentary title was generally construed as a sufficient act of part
performance to evidence a contract to create a mortgage (see Swiss Bank Corp v.
Lloyds Bank Ltd. [1982] AC 584 at 594H-595A; Thames Guaranty Ltd. v. Campbell
[1985] QB 210 at 218F; United Bank of Kuwait plc v. Sahib [1997] Ch 107 at
137A-B). The mere delivery of documents was normally effective without any
express written or verbal agreement to mortgage, since the court readily
inferred an intention to provide security as between debtor and creditor (see
Shaw v. Foster (1872) LR 5 HL 321 at 339-40; Re Wallis & Simmonds (Builders)
Ltd. [1974] 1 WLR 391 at 395A-E). This view was never entirely without
difficulty.11
Note also, Fitzritson v. Administrator-General (1969) WIR 94.

10 ibid., at p.179.
11 See Gray & Gray, at p.705.

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PROPRIETARY ESTOPPEL12
The basis of the doctrine
Proprietary estoppel, which is also sometimes referred to as ‘estoppel by
acquiescence’ or ‘estoppel by encouragement’ (see Taylor Fashions Ltd. v.
Liverpool Victoria Trustee Co. Ltd (1979) [182] Q.B. 133n at 151, per Oliver J.)
is a means by which property rights may be affected or created (see Western Fish
Products Ltd. v. Penwith D.C. (1978) [1981] 2 All ER 204 at 217; see also [1991]
Conv. 36 (G.Battersby). The term describes the equitable jurisdiction by which a
court may interfere in cases where the assertion of strict legal rights is found to
be unconscionable (see Taylor Fashions Ltd. v. Liverpool Victoria Trustee Co.
Ltd, supra). The flexibility of the jurisdiction is such that the criteria for relief
can only be stated in broad terms as the courts are unwilling to define too exactly
the ambit of the doctrine (see Amalgamated Investment & Property Co. Ltd. v.
Texas Commerce International Bank Ltd. [1982] Q.B. 84 at 103). However, the
essential elements of proprietary estoppel can be summarised as follows;
(i) An equity arises where –
(a) the owner of land (O) induces, encourages or allows the claimant
(C) to believe that C has or will enjoy some right or benefit over
O’s property;
(b) in reliance upon this belief, C acts to his/her detriment to the
knowledge of O; and

(c) O then seeks to take unconscionable advantage of C by denying

C the right or benefit which C expected to receive.

(ii) This equity gives C the right to go to court to seek relief. C’s claim is
an equitable one and subject to the normal principles governing
equitable remedies, namely that equitable relief is discretionary and
could be denied applying the various maxims of equity.

(iii) The court has a wide discretion as to the manner in which it will give
effect to the equity, having regard to all the circumstances of the
case and in particular to both the expectations and conduct of the
parties.
(iv) The relief which the court may give may be
a. either negative, in the form of an order restraining O from
asserting O’s legal rights
b. or positive, by ordering O either to grant or convey to C some
estate, right or interest in or over O’s land

12 See generally, Megarry & Wade, Chapter 13; Cheshire & Burn’s, at p.814 et seq.; and Gray &

Gray, at p.1196 et seq.

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c. to pay C appropriate compensation

d. or to act in some other way.
The issue in any given case is whether it would be unconscionable for O to deny
that which O has allowed or encouraged C to assume to C’s detriment. The courts
no longer inquire (as they once did) whether the circumstances can be ‘fitted
within the confines of some preconceived formula’13 as formerly prescribed in
Willmott v. Barber (1880) 15 Ch. D.96.
The elements of the doctrine
A claimant (C) who wishes to establish an equity arising by estoppel must satisfy
the court on three matters:
(1) Encouragement or acquiescence

(2) Detrimental reliance

(3) Unconscionability
Encouragement or acquiescence
The owner of land, O must have encouraged C by words or conduct to believe
that C has or will in the future enjoy some right or benefit over O’s property. The
mere fact that C acts to C’s detriment in the expectation of acquiring rights over
O’s land will not raise an equity in C’s favour unless O has encouraged that
expectation.
(a) Active encouragement. This includes conduct whereby
(i) a request that C should act in a particular manner (see Plimmer v.
Mayor etc. of Wellington (1884) 9 App. Cas. 699 at 712 where C
constructed a jetty and warehouse at O’s request);
(ii) a written or oral assurance that C would have certain rights over
O’s Land (see Dillwyn v. Llewelyn (1862) 4 De G.F.&J. 517 (where
there was a memorandum by O that he gave his lands to C to build
a house); Michaud v. City of Montreal (1923) 129 L.T. 417 (where a
written undertaking was given by O to give C certain land); Forbes
v. Ralli (1925) L.R. 52 I.A. 178 (where written assurance of a
‘permanent lease’ was given); Griffiths v. Williams [1978] 2 E.G.L.R.
121 (where oral assurance by mother that daughter could live in
her house for life); Pascoe v. Turner [1979] 1 W.L.R.431 (where
an oral assurance was given by O to his former mistress that the
house in which they lived was hers); see also Clarke v. Kellarie
Clarke v. Kellarie
In 1955, Thelma Clarke, the plaintiff, became the tenant by assignment of
leasehold premises which were occupied at that time by the defendant and his

13 See Megarry & Wade, at pp.727-728.

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family. Being assured by the plaintiff who was his sister-in-law that he and his
family could continue to occupy the premises until he died, the defendant
resolved to erect a new building on the land and so informed her. Although she
did not give the defendant express permission to build, the plaintiff regularly
visited the building site and neither said nor did anything to stop the
construction work. After the building was completed the plaintiff obtained from
the owner of the land and caused to be registered a 25-year lease, and shortly
thereafter commenced her endeavours to dispossess the defendant. In deciding
that the defendant was entitled to remain in possession, the court
Held: (i) that the plaintiff as legal holder of the land allowed the defendant to
spend money under an expectation encouraged by her that he would be able to
remain on the premises until he died, and thus created an equity by estoppel
whereby protection would be given to the defendant in order that his
expectation should not be defeated; (ii) that the defendant was a licensee whose
interest was subject to an equity created by estoppel.

(iii) the giving of consent to C to undertake construction work either on

O’s land (see Ahmad Yar Khan v. Secretary of State for India (1901)
L.R. 28 I.A. 211 (where construction of a canal was given with the
consent of government), or on his own in a manner which would in
some way affect O (Cotching v. Bassett (1862) 32 Beav. 101 (where
alteration by C to ancient lights with O’s permission).
In cases of active encouragement, it is no bar to an equity arising in favour of C
that he or she was under no misapprehension as to his or her rights (Plimmer v.
Mayor, etc., of Wellington, supra) or that either O alone, or both O and C acted
under a mistaken assumption as to their respective rights (Taylor Fashions Ltd. v.
Liverpool Victoria trustees Co. Ltd. (1979), supra) where the authorities are
reviewed).14

(b) Passive encouragement. Passive encouragement occurs when O, an owner

of land, stands by and allows C to act to C’s detriment knowing that C
mistakenly believes that he/she has or will obtain an interest in or right
over O’s land (Watson v. Goldsbrough [1986] 1 E.G.L.R. 265 at 267.) Thus
an equity arose in C’s favour where he constructed an engine shed on O’s
land and O both acquiesced in its construction and accepted rent for it
(Mold v. Wheatcroft (1859) 27 Beav. 510). In another case, in which a
lease had been forfeited, the lessors knowingly allowed the underlessees
to believe that their sub-leases were still subsisting. The underlessees
having acted to their detriment in this belief, the lessors were estopped
from denying the validity of the underleases (see Hammersmith and
Fulham L.B.C. v. Top Shop Centres Ltd. [1990] Ch. 237).15 Formerly the
courts adopted defined criteria for establishing acquiescence, commonly
referred to as the five probanda set out by Fry J. in Willmott v. Barber
(1880) 15 Ch.D. 96 at 105.16 Where these probanda/elements exist, there

14 See Megarry & Wade, at p.735.

15 ibid.
16 Namely, that acquiescence which will deprive a man of his legal rights must amount to fraud

and a man is not to be deprived of his legal rights unless he has acted in such a way as would

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is fraud of such a nature as will entitle the Court to restrain the possessor
of the legal right from exercising it.

The trend of authority is not to force C’s conduct into some prescribed
criteria/probanda (see Taylor Fashions Ltd. v. Liverpool Victoria
Trustees Co. Ltd. (1979), supra)at 151, 152, per Oliver J.), but to consider
whether in the circumstances it would be unconscionable for O to insist
upon O’s strict legal rights (see Ward v. Kirkland [1967] Ch. 194 at 239;
Crabb v. Arun D.C. [1976] Ch. 179 at p.195; Amalgamated Investment &
Property Co. Ltd. v. Texas Commerce International Bank Ltd. [1982] Q.B. 84
at 104.). The one element that is clearly essential is that O’s conduct
should have encouraged C to act as C did. Mere inaction by O in the face of
an infringement of O’s rights cannot therefore amount to acquiescence
because it does not induce C to act (see Proctor v. Bennis (1887) 36 Ch.D.
740 at 761; Moorgate Mercantile Co. Ltd. v. Twitchings [1977] A.C. 890 at
902.). It is unlikely that O’s conduct will be regarded as unconscionable
unless he was aware of

(i) his proprietary rights (see Armstrong v. Sheppard & Short Ltd.
[1959] 2 Q.B. 384);
(Gray & Gray state at p.1220 that ‘it used to be a precondition of all claims
of proprietary estoppel that, at the date of his representation, the
representor [O] must have been consciously aware of his own strict
proprietary rights. This requirement of knowledge is nowadays confined
to cases of “pure acquiescence”, where the only assurance given by the
landowner takes the form of sheer silence or, at most, passive
encouragement. Accordingly the landowner’s ignorance or
misapprehension of his strict legal rights does not preclude a claim of
proprietary where the relevant assurance takes a more forceful or active
form. An estoppel may therefore arise if one party, although unaware of his
precise rights, has by his words or conduct positively induced another
party to rely on the strength of a common expectation generated by their
dealings or negotiations.’

(ii) C’s expenditure (see Swallow Securities Ltd. v. Isenberg [1985]

1 E.G.L.R. 132; Barclays Bank Plc v. Zaroovabli [1997] Ch.321

make it fraudulent for him to set up those rights. The elements or requisites necessary to
constitute fraud of that description are
(i) the plaintiff (C) must have made a mistake as to his legal rights;
(ii) the plaintiff (C) must have expended some money or must have done some act (not
necessarily upon the defendant’s (O’s) land) on the faith of his mistaken belief;
(iii) the defendant (O), the possessor of the legal right, must know of the existence of his
own right which is inconsistent with the right claimed by the plaintiff (C) and if he
does not know of it he is in the same position as the plaintiff (C) since the doctrine
of acquiescence is founded upon conduct with a knowledge of one’s legal rights;
(iv) the defendant (O), the possessor of the legal right, must know of the plaintiff’s (C’s)
mistaken belief of his rights and if he does not, there is nothing which calls upon
him to assert his own rights; and
(v) the defendant (O), the possessor of the legal right, must have encouraged the
plaintiff (C) in his expenditure of money or in the other acts which he has done,
either directly or by abstaining from asserting his legal right.

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at 330, 331) or other detrimental acts (notice of C’s intention

to act to C’s detriment will suffice: Crabb v. Arun D.C. [1976]
Ch. 179 at 189, 198); and
(iii) C’s mistaken belief that C had or would acquire an interest in
or over O’s land.17
Gray & Gray state at p.1218 that the courts are reluctant to attach
significance to mere silence on the part of a landowner unless it is quite
evident that he deliberately intended that his silence should be construed
as endorsing the supposed entitlement of the estoppel claimant (see
Salvation Army Trustee Co. Ltd. v. West Yorkshire MCC (1981) 41 P & CR
179 at 196, per Woolf J.). In the absence of other encouragement, mere
delay in complaining of a neighbour’s trespass constitutes no
acquiescence in that neighbour’s assumption of right (see Jones v. Stones
[1999] 1 WLR 1739 at 1745G-1746A per Aldous LJ.), although failure to
repel the trespass may eventually lead to a successful claim of adverse
possession. Silence in the face of adverse occupation can be explicable on
the ground that the landowner ‘wanted to avoid trouble’ and therefore
‘made no fuss’ (see Williams v. Coleman (Unreported, Court of Appeal, 27
June 1984, per Fox LJ where no estoppel was upheld against a physically
disabled lady confined to a wheelchair). Likewise, sheer inaction by a
landlord in respect of past breaches of covenant by a tenant does not
amount to an assurance that the lease will not be forfeited by reason of
future breaches (see Boxbusher Properties Ltd. v. Graham (1976) 240 EG
463 at 465).

Where parties are negotiating ‘subject to contract’ or ‘subject to lease’

there will usually be no room for estoppel. Similarly, if a person incurs
expenditure in the hope of obtaining a contract relating to land by
preparing development plans, no equity will arise (see Haslemere Estates
Ltd. Baker [1982] 1 W.L.R. 1109 at 1119; Pridean Ltd. v. Forest Taverns
Ltd. (1996) 75 P & C.R. 447).
(c) Agents. In considering whether O encouraged C to act as C did, the court
will have regard not only to O’s own knowledge and conduct, but to that
of any agent of O. Thus if C acts to his/her detriment with the assent and
co-operation of O’s agent, that will be regarded as sufficient
encouragement (Rochdale Canal Co. v. King (No.2) (1853) 16 Beav. 630;
Laird v. Birkenhead Rly Co. (1859) Johns 500. In general, that agent will be
taken to have the authority which he/she purports to exercise (see Crabb
v. Arun D.C., supra, at p.193). If O considers that his/her agent has
exceeded his/her instructions, O can so inform C before C acts to C’s
detriment. In cases of acquiescence, only those matters which come to the
knowledge of O’s agent in the course of his/her agency will be imputed to
O (see Attorney-General to the Prince of Wales v. Collom [1916] 2 K.B.
193).

17 See Megarry & Wade, at p.736.

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Right over property. For an equity to arise, C must have been led to believe
that C had or would obtain some right or benefit in or over O’s property
(Western Fish Products Ltd. v. Penwith D.C. (1978) [1981] 2 All ER 204 at
217). A belief that C will acquire a right of a non-proprietary character will
not suffice. Thus a local authority was not estopped from refusing C planning
permission to build on his own land, because he had no expectation of
acquiring a right over the property of the authority (Western Fish Products
Ltd. v. Penwith D.C, supra).
Detrimental reliance18

C must have acted to C’s detriment in reliance upon his/her belief that he/she
was or will acquire some right over O’s land. In the absence of detriment, it
would seldom (if ever) be unconscionable for O to insist upon O’s strict legal
rights (see Watts v. Storey (1984) 134 NLJ, 631).

(a) Detriment. C must prove that he/she has acted to his/her detriment
(see Stevens & Cutting Ltd. v. Anderson [1990] 1 E.G.L.R. 95). Detriment
may take many forms, and the acts relied upon may be unconnected
with either O or C’s land.
(1) Expenditure. The most obvious examples of detriment have
involved expenditure by C on O’s land, as where he built a house (see
Inwards v. Baker [1965] 2 Q.B. 29), constructed a garage wall (see
Hopgood v Brown [1955] 1 W.L.R. 213), or installed drains (see Ward
v. Kirkland [1967] Ch.194) or carried out improvements on the
property (see Pascoe v. Turner [1979] 1 W.L.R. 431 (concerning home
improvements and decorations).
Inwards v. Baker
In 1931, a son wished to build a bungalow as his home, and to acquire for that
purpose a piece of land owned by a stranger; but the price of that land was beyond
his resources. His father, who owned some six acres of land in the district, said to
him: "Why don't you build the bungalow on my land and make it a bit bigger"? So
encouraged, the son gave up his plan to buy the other land, and built the bungalow
on his father's land, largely by his own labour. The cost was some £300, of which the
son provided £150 and the father the balance.
The son went into occupation and lived in the bungalow continuously thereafter, in
the expectation and belief that he would be allowed to remain there for his lifetime
or for so long as he wished. His father visited him from time to time. The father died
in 1951 without ever having made any binding contractual arrangement or promise
as to the son's occupation or its duration. Under the father's will, made in 1922, the
land vested in trustees for the benefit of persons other than the son. In 1963, the
trustees of the will brought proceedings for possession of the bungalow, and the
county court judge made an order for possession.
On appeal by the son:-
Held, allowing the appeal, that where a person expended money on the land of
another in the expectation, induced or encouraged by the owner of the land, that he
would be allowed to remain in occupation, an equity was created such that the court
would protect his occupation of the land, and the court had power to determine in
what way the equity so arising could be satisfied. Here the son's expenditure of his

18 See Megarry & Wade, at pp.738-740.

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money on the land of his father, in the expectation, induced and encouraged by his
father, that he would be allowed to remain in occupation for as long as he desired,
created such an equity and, having regard to all the circumstances of the case, the
court should satisfy the equity by allowing the son to remain in occupation of the
bungalow for as long as he desired.

(2) Other forms of detriment. There is sufficient detriment where C

(i) sold off part of his land in the belief that he would obtain a
right of access over property belonging to O (see Crabb v.
Arun D.C. [1976] Ch. 179)
The plaintiff owned a piece of land which had access at point A on to a
road owned by the defendants and a right of way from A along the road.
To enable him to sell his land in two parts the plaintiff sought from the
defendants a second point of access, at point B, and a further right of
way along the road. At a site meeting in July 1967 between the plaintiff,
his architect and a representative of the defendants the additional
access point, B, was agreed. Subsequently, the defendants fenced the
boundary between their road and the plaintiff's land erecting gates at
both A and B. After the plaintiff had sold part of his land, in October
1968, together with the right of access at A and easement over the road,
without reserving any right in favour of the land retained, the
defendants removed the gates at B and fenced the gap, leaving the
retained part of the plaintiff's land landlocked. The plaintiff brought an
action for a declaration and injunction, claiming that the defendants
were estopped by their conduct from denying him a right of access at B
and a right of way along the road. Pennycuick V.-C. held that in the
absence of a definite assurance by the defendants' representative no
question of estoppel could arise and dismissed the action.
On appeal by the plaintiff:-
Held, allowing the appeal, that the defendants, knowing of the plaintiff's
intention to sell his land in separate portions by their representative led
the plaintiff to believe that he would be granted a right of access at B
and, by erecting the gates and failing to disabuse him of his belief,
encouraged the plaintiff to act to his detriment in selling part of his land
without reservation over it of any right of way, thereby giving rise to an
equity in the plaintiff's favour (post, pp. 189D-E, 192C-D, 197F-G); that
that equity should be satisfied by granting the plaintiff a right of access
at B and a right of way along the road; and that in view of the
sterilisation of the plaintiff's land for a considerable period resulting
from the defendants' action the right should be granted without any
payment by the plaintiff (post, pp. 189H-190A, 192F, 199E-F).

(ii) looked after members of O’s family without payment (see

Greasley v. Cooke [1980] 1 W.L.R. 1306 at 1314);

(iii) refused employment with tied accommodation and worked

unpaid for O for many years (see Re Basham [1986] 1
W.L.R. 1498).
(3) Countervailing benefits. In considering what detriment C has
suffered, the court will take into account any countervailing benefits
that C has received from O (see Watts v. Storey (1984) 134 N.L.J. 631
where occupying rent-free accommodation outweighed the

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‘detriment’ of relocation, among other things, by C). In a number of

cases, C’s, enjoyment of O’s property rent-free has been considered to
outweigh any detriment that C may have incurred whether in
expending money (see Lee-Parker v. Izzett (No.2) [1972] 1 W.L.R. 775)
or giving up alternative accommodation (see Watts v. Storey, supra). In
such circumstances it is not unconscionable for O to insist upon O’s
strict legal rights (see Lovett v. Fairclough (1990) 61 P. & C.R. 385 at
402, 403 (where 12 years’ free fishing was considered adequate
compensation for modest expenditure on improvement of river
bank).19

(b) Reliance. C must have acted as he or she did in reliance upon O’s active
or passive encouragement.20 Gray & Gray state that in order to raise
an equity based on proprietary estoppel, the claimant (C) must show
that he or she has changed his or her position in reliance on the
representation made by the owner (O) of the land (see Re Basham,
decd [1986] 1 WLR 1498 at 1504D per Deputy Judge Edward Nugee
QC). In the absence of such change in position, what remains is, at
best, an informal and unenforceable declaration of entitlement by the
legal owner and the claim of estoppel simply cannot succeed (see
Jones v. Stones [1999] 1 WLR 1739 at 1745H-1746C per Aldous LJ). It
is the element of prejudice to the representee (the person to whom
the representation was made) which confers a legal significance upon
the parties’ dealings and renders it unconscionable that the relevant
assurance, once given, should be subsequently withdrawn or denied.21
Reliance will be readily inferred once it is shown that O encouraged C,
and C acted to C’s detriment (see Greasley v. Cooke, supra). In such
circumstances, the onus will be on O to show that there was no such
reliance (see Grant v. Edwards [1986] Ch. 638 at 656). If therefore O
can prove that C would have acted as C did in any event (see Taylor
Fashions Ltd. v. Liverpool Victoria trustees Co. Ltd. (1979), supra) at
155, 156 (where installation of lift by tenants 18 years before expiry
of term not undertaken in reliance upon option to renew), that C acted
on the basis of independent advice, or that C’s conduct was motivated
by some other factor (such as natural love and affection) no equity
will arise.22
In discussing the state of mind of the representor or owner, Gray &
Gray state that in order that a proprietary estoppel be raised, it must
be shown that the representor (O) gave the relevant assurance of
entitlement, whether actively or passively, with the intention that it
should be relied on to the claimant’s (C’s) detriment (see Thorner v.
Major [2008] EWCA Civ 732 at [54], [59], [71] per Lloyd. It must be

19 See Megarry & Wade, at p.739.

20 ibid.
21 See Gray & Gray, at 1221.
22 See Megarry & Wade, at p.739.

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proved, moreover, that the representor (O) knew (see Ward v. Gold
(1969) 211 EG 155 at 161) or ought to have known (see Salvation
Army Trustee Co Ltd v. West Yorkshire MCC (1981) 41 P & CR 179 at
194) that the representee (C) was likely to undertake detrimental
action in the belief that C was acquiring some entitlement on the
strength of the assurance (and there is no absolute obligation on the
part of the representee (C) to point out to the representor (O) that C is
about to act in reliance by incurring expenditure (see Crabb v. Arun
DC, supra, at 198 A-D, per Scarman LJ). If there is no actual or
constructive knowledge of the representee’s intention to rely on the
assurance given, the claim of proprietary estoppel must fail: see
Franklin Mint Ltd. v. Baxtergate Investment Co. [1998] EWCA Civ 442.23
Unconscionability
In deciding whether an equity is established, the five probanda (referred to
above in note 16) set out in Willmott v. Barber, supra, have been listed and
applied in some cases (see Cheshire & Burn’s, at p.817, note 33) and ignored in
others. The modern cases show a preference for a much broader approach based
on the defendant’s (O’s) unconscionable behaviour. In Taylor Fashions Ltd. v.
Liverpool Victoria Trustees Co. Ltd. (1979), supra, Oliver J held that, contrary
to the requirements of Fry J in Willmott v. Barber, supra, proprietary estoppel
is not restricted to cases where the defendant knows his rights, and that it is not
possible to formulate strict and rigid rules:
‘The more recent cases indicate that the application of the Ramsden v.
Dyson principle24 - whether you call it proprietary estoppel, estoppel by
acquiescence or estoppel by encouragement is really immaterial –
requires a very much broader approach which is directed rather at
ascertaining whether, in particular individual circumstances, it would be
unconscionable for a party to be permitted to deny that which, knowingly,
or unknowingly, he has allowed or encouraged another to assume to his
detriment than to inquiring whether the circumstances can be fitted
within the confines of some preconceived formula serving as a universal
yardstick for every form of unconscionable behaviour.’
Taylor Fashions Ltd. v. Liverpool Victoria Trustees Co. Ltd. (1979),
supra, was applied in Hackett v. Inverugie Investment Ltd (1982) 32 WIR 3.
The effect of this approach is that the court now regards the five
probanda no longer as rigid criteria to be satisfied, but as being guidelines which

23See Gray & Gray, at p.1219.

24The principle was explained in a well-known and generally accepted dictum in a dissenting
speech of Lord Kingsdown in Ramsden v. Dyson (1866) L.R. 1 HL 129 as follows:
‘If a man, under a verbal agreement with a landlord for a certain interest in land, or, what
amounts to the same thing, under an expectation, created or encouraged by the landlord,
and upon the faith of such promise or expectation, with the knowledge of the landlord,
and without objection by him, lays out money upon the land, a court of equity will
compel the landlord to give effect to such promise or expectation.’

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will probably prove to be the necessary and essential guidelines to assist the
court to decide the question whether it is unconscionable for the
plaintiffs/owners to assert their legal rights by taking advantage of the
defendants/claimants. Oliver J. suggested that the five probanda may be
necessary where the defendant/owner has done no positive act, and merely
‘stands by without protest.’25
Unconscionability is the underlying principle. The representor (O) will be
held to his/her representation only if it will be unconscionable for him or her to
go back on it. It is not essential that the representor or owner should have also
been guilty of unconscionable conduct in permitting the claimant to assume that
he/she could act as he/she did: see Lim Teng Huan v. Ang Swee Chuan [1992] 1
WLR 113
The plaintiff and the defendant jointly purchased land which was transferred into their
fathers' names. In 1982 the defendant decided to build a house on the land for himself.
At his own expense preparatory works were carried out and construction commenced.
In March 1985, when the house had been partially built, the parties entered into a
written agreement whereby the plaintiff acknowledged that the construction was with
his consent and agreed to exchange his undivided share in the land for unspecified land
expected to be allotted to the defendant by the government. The house was completed
and the defendant went into occupation, fencing in nearly all of the land. Both fathers
having died the plaintiff as administrator of his father's estate brought an action against
the defendant claiming, inter alia, a declaration that he was the owner of a one half
undivided share in the land. The defendant resisted the claim and counterclaimed for a
declaration that he was the sole beneficial owner of the plaintiff's share, and for an
injunction to restrain the plaintiff from entering the land or dealing with his share in it.
At the commencement of the trial the plaintiff abandoned his claim. The judge dismissed
the defendant's counterclaim, holding that the plaintiff had not been guilty of any
unconscionable conduct so as to found a proprietary estoppel preventing him from
relying on his strict legal rights. The Court of Appeal allowed the defendant's appeal,
holding that since in all the circumstances it was unconscionable for the plaintiff to go
back on the assumption which he had permitted the defendant to make, that on payment
of compensation he would become the owner of the plaintiff's share, a proprietary
estoppel had been established, and that the declaration and injunction sought by the
defendant would be granted conditional upon him paying a specified sum to the plaintiff.
On the plaintiff's appeal and the defendant's cross-appeal to the Judicial Committee:—
Held, (1) that the unenforceable agreement constituted evidence of the parties'
intentions and it was to be inferred that the defendant had completed the construction of
the house in reliance on that agreement; that, even though the plaintiff had not acted
unconscionably in allowing the defendant to assume that he would have a sole absolute
interest in the house and land on paying compensation to the plaintiff for relinquishing
his half share in the land, it would be unconscionable for the plaintiff to renege on that
assumption; that he was therefore estopped from denying the defendant's title to the
whole of the land; and that, accordingly, the defendant was entitled to a declaration that
he was the beneficial owner of the plaintiff's former share of the land, conditional upon
payment of compensation, and an injunction restraining the plaintiff from entering upon
or dealing with the land or any interest therein (post, pp. 117E–F, 118B–C, D, 119F–G).

The relevant element of unconscionability relates, not to the initial

representation made, but to the later denial of the assumptions thereby
engendered in the mind of the estoppel claimant: see Crabb v. Arun, supra).

25 See Cheshire & Burn’s, at p.818.

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However, the claimant must still show the basic indicia of representation,
reliance and detriment and they are interrelated ‘and treated as one’. 26 The
courts will not invoke proprietary estoppel ‘as a general jurisdiction in equity to
relieve hardship resulting from the application of the general law’ or merely
‘because justice and good conscience’ seem to require it.27
In assessing whether unconscionability exists, one factor that the court
will take into account is the relative positions of O and C: see Sledmore v. Dalby
(1996) 72 P.& C.R. 196 where C had lived on the property rent-free for 18 years,
but his use of the premises had become minimal, whereas O had a pressing need
for the property to accommodate her.
Sledmore v. Dalby
Mr. and Mrs. Sledmore had jointly purchased the house in 1962. In 1965, Dalby had
married their daughter, and they had moved into the house as joint tenants of the
Sledmores. The Sledmores accepted rent from them until 1976, when their daughter had
become ill and Dalby became unemployed. The Dalbys continued to pay the outgoings.
The county court held that the tenancy had ended in 1976, and had been replaced by an
equity under which they occupied the property. Between 1976 and 1979, Dalby carried
out substantial works to the house in order to improve it as a family home, and was
encouraged to do so by Mr. Sledmore. Moreover, Mrs. Sledmore knew that her husband
had formed the intention to give the property to the Dalbys and that he had told them of
this. However, in 1979, Mr. Sledmore conveyed his share of the freehold of the house to
Mrs. Sledmore. Mrs. Sledmore also changed her will, in order to ensure that their
daughter inherited the property to the exclusion of Dalby. Mr. Sledmore died in 1980.
Dalby's wife died in 1983, and Dalby continued to occupy the house rent-free. He refused
to pay any requests for rent. In 1990, he was given notice to quit and proceedings for
possession were instituted. Dalby was in employment and spent only a few nights a
week in the house, spending the rest of the week in his new partner's house. Only one of
his two daughters still lived at the house, and she was now aged 27 and in employment.
Mrs. Sledmore's own house was in need of repair and she herself was now in financial
difficulties. She was on income support and the Department of Social Security was
paying the interest on her mortgage, which was in arrears.
Held, allowing the appeal, and making an order for possession in Mrs. Sledmore's
favour, that the minimum equity to do justice to Dalby was an equity which had now
expired. The court's function in determining the extent of the equity created by a
proprietary estoppel is especially important, as its effect is permanent. The extent of the
equity was to have made good, so far as may fairly be done between the parties, the
expectations of Dalby which the Sledmores had encouraged. Dalby had clearly assumed
that he would be allowed to stay in the house for the rest of his life rent-free. The county
court should have considered the present needs and situation of Mrs. Sledmore and
balanced those against the present use of the house made by Dalby and his need for it.
The court should have asked itself the question whether it was still inequitable to allow
Dalby's expectation to be defeated by permitting Mrs. Sledmore to enforce her legal
rights as the house's owner. The appellant was vulnerable as she was liable to loose her
present accommodation and had a pressing need for the house. Dalby had lived rent-free
in the house for over 18 years. His current use was minimal, and he had accommodation
elsewhere and was in employment. It was no longer inequitable to allow the expectation
created in his mind to be defeated.

26 See Cheshire & Burn’s, at p.819.

27 See Megarry & Wade, at p.740.

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Form of relief

• Discretionary nature of relief

• Factors relevant to the exercise of the discretion

Discretionary nature of relief
The court will look at the circumstances in each case to determine how the
equity can best be satisfied and it has a wide discretion as to the order which it
may make. This discretion is exercised according to equitable principles.
In some cases the court has

• restrained O from asserting O’s legal rights: see Marharaj v. Chand [1986]
A.C. 898)

• ordered O to grant to C a right over or an interest in his land (see Crabb v.

Arun, supra, where the court ordered the grant of an easement)

• conveyed the land to C either in fee simple (see Pascoe v. Turner [1979] 1
W.L.R.431)

• granted a term of years (see J.T. Developments Ltd. v. Quinn (1990) 62 P &
C.R. 33)

• ordered O to make a money payment to C by way of compensation (see

Dodsworth v. Dodsworth (1973) 228 E.G. 1115)
Dodsworth v. Dodsworth
P, owner of a bungalow, persuaded D, her brother, and W, his wife, to join her. D
and W spent over GBP 700 on improvements, being led to believe by P that they
could live there as though it were their home in circumstances which raised an
equity, though the parties did not intend to create a legal relationship. A few
months later P brought proceedings for possession. P then died intestate, the
administrators holding the bungalow on trust for sale.
Held, that on the facts the proper way to satisfy the equity was to declare that
possession could only be obtained against D and W if they were repaid their
outlay on improvements. To grant them a right of occupation would lead
unavoidably, by virtue of the Settled Land Act, to a greater interest than ever
contemplated by the parties.
See also Baker v. Baker [1993] 2 F.L.R. 247)

• granted C a mere licence (see Inwards v. Baker, supra).

Relief may be and commonly is given on terms whereby C may be required to
make some payment for the right which C is granted (see Lim v. Ang, supra).28

28 See Megarry & Wade, at p.741.

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Factors relevant to the exercise of the discretion

(a) Minimum equity
(b) Conduct of the parties

Minimum equity
In granting relief, the court will ‘analyse the minimum equity to do justice’ to C
(see Crabb v. Arun D.C., supra). It will not give C a greater right or interest than C
believed he/she had or expected to receive (see Dodsworth v. Dodsworth, supra).
Although C’s expectations provide an upper limit to the relief which may be
given, the court is not bound to give effect to them in the manner which C
envisaged if circumstances have changed so as to make it inappropriate (see
Burrows v. Sharp (1989) 23 H.L.R. 82 at 92). Thus if C has acted to C’s detriment
in the belief that C can live with O and the parties subsequently become
estranged, the court will not give C a right to reside on the premises but will find
some other means of giving effect to the equity. This will commonly take the
form of an order that O should pay C compensation for C’s expenditure (see
Dodsworth v. Dodsworth, supra), or for the loss of the right of occupation which C
expected to receive (see Baker v. Baker, supra). Furthermore, no relief of any
kind will be given if the ‘right’ which C claims is too indefinite to be adequately
defined or granted (see Willis v. Hoare (1998) 77 P& C.R. D42 where an
undertaking to offer C a sub-lease without any indication of terms was too
uncertain).
Conduct of the parties29
In determining the appropriate relief the court must look at the conduct of the
parties as well as the extent of the equity (see Baker v. Baker, supra, at p.258, per
Roch L.J.)The jurisdiction to give relief is an equitable one and the conduct of
both the claimant, C, and the owner of the land, O, is relevant to its exercise.
(1) Conduct of the claimant. A party seeking equitable relief must come with
clean hands. Although trivial misconduct will not be fatal to his/her claim,
the court will refuse relief if C has seriously misconducted himself/herself
as it did where C had submitted a fraudulent claim for improvements to
O’s property which had never been made (see J. Willis & Son v. Willis
[1986] 1 E.G.L.R. 62).
J. Willis & Son v. Willis
L brought proceedings against T for possession of a flat, on grounds that were
agreed to be good at law. T however claimed a proprietary estoppel on the
grounds that they had expended substantial sums on the property in reliance
upon an alleged representation by L that T could live in the premises rent free
for as long as they wished. In support of this claim they relied upon a letter
which the assistant recorder found was known to one of them to be a forgery.
He held that this behaviour disentitled T to any equitable relief.
Held, dismissing Ts' appeal, that this conclusion was quite correct.

29 See Megarry & Wade, at pp.742-743.

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(2) Conduct of the landowner. The conduct of the owner of the land may
influence both the extent of the relief granted and the terms upon which it
is given (see Baker v. Baker, supra). In one case, the court ordered O to
transfer the fee simple in a house to C rather than merely giving her a
licence to live there for her lifetime. Only in this way could it adequately
protect C against O, who intended to evict her from the house by any
means available (see Pascoe v. Turner, supra). In a case in which C’s equity
was satisfied by the grant of a right of way over O’s property, the court
did not require C to pay anything in return because O had rendered C’s
land sterile for several years by its high-handed conduct (see Crabb v.
Arun, supra)
(3) Misconduct after the grant of relief. Once a court has given effect to C’s
equity, C’s subsequent conduct will not normally affect the right which he
or she has been granted. Where C has been given some proprietary right
over O’s land which C then abuses, O has the usual tortious remedies of
trespass and nuisance against C.

Note that relief will not be granted in circumstances where to do so will

contravene some statute (see Chalmers v. Pardoe [1963] 1 W.L.R. 677 where
relief was refused because its grant would have contravened a prohibition on
dealing with land without the consent of a statutory body).30
The nature of the equity
Gray & Gray, at pp.1234-1235, state that a proprietary estoppel arises in an
inchoate form as soon as the conscience of the representor landowner (O) is
affected by the transactions of the parties. This inchoate equity is brought into
being when the landowner unconscionably sets up his rights adversely to the
legitimate demands of the estoppel claimant. From this point onwards, the
claimant has ‘an equity which would attract the discretion of the Court’ entitling
him to bend the ear of the court of conscience to listen sympathetically to his
plea for a restraint upon the landowner’s exercise of his rights. It then becomes
the task of the court to decide whether, and if so in what form, to vindicate or
perfect the ‘equity’ which has been claimed. It is now clear that long before the
inchoate equity of estoppel is formalised in any court-ordered remedy, this
equity is proprietary in character.
The proprietary nature of the right means that the benefit of it will pass
on a transfer by C of his/her land and which may in appropriate circumstances
bind a third party who acquires O’s land. There is another view that the equity is
a purely personal right enforceable only by C against O. This is because the
‘flexible claim does not seem certain or stable enough to qualify as a property
interest’ (see (1990) 106 L.Q.R. 87 at 97 (D.J. Hayton; [1998] Conv. 502
(P.Critchley)). This is questionable, according to Megarry & Wade. Although
there are decisions which support the view that an equity is a personal right, the

30 See Megarry & Wade, at p.744.

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weight of both authority and practice suggests that it is proprietary. However,

the point is not settled, according to Megarry & Wade.31

Note effect on third parties: Megarry & Wade, at pp.746-748.

Proprietary estoppel and licences
A licence is no more than permission to do on another’s land what would
otherwise be a trespass. It is now settled that a contractual licence does not
create a proprietary interest in land, and the same is probably true of other
forms of licence (see Ashburn Anstalt v. Arnold [1989] Ch.1). Proprietary estoppel
has no necessary connection with the law of licences. However, if C is a licensee,
one form of relief which the court may give is to declare that C’s licence is
thereafter irrevocable.
There is a similarity between proprietary estoppel and one aspect of the
law of licences. A licence once acted upon cannot be revoked. Thus if A gives B
permission to build B’s house in such a way that it interrupts A’s right to light, A
cannot thereafter revoke B’s licence and require B to demolish his/her house.
This doctrine differs from proprietary estoppel in that it is a common law and
not an equitable doctrine, and it can operate even where A is unaware of his or
her proprietary rights when A acquiesces in B’s conduct.32
LICENCES
There are generally four types of licences

(a) a bare licence

(b) licence coupled with an interest
(c) contractual licence; and

(d) estoppel licence

See Kodilinye, Chapter 6, 3rd edn.
See Owusu, pp.203-209.

TUTORIAL QUESTIONS
1. Mr. Cheapskate was the owner of six acres of land called Cheapspread. His
home is built on ¾ acre of land. Four acres were developed for farming. In
January 1988, John, one of Mr Cheapskate’s sons told Mr Cheapskate of his
intention to ‘marry and settle down’. John said he wanted to build a house but he
had no money to buy a ‘house spot’. Mr. Cheapskate replied by telling John the
story of how he, Mr Cheapskate, worked hard to acquire Cheapspread although

31 See Megarry & Wade, at p.745.

32 ibid., at p.751.

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Dr. Sharon B. Le Gall
Equitable Interests
October 2016
For student use only

his father had land. He told John that he was glad and proud that he, Mr.
Cheapskate, had never been a parasite on anybody because he does not like
parasites.
Three months later, John started to build a concrete structure on one acre of his
father’s land. Mr. Cheapskate asked John if he (John) was offering to buy the land.
John shook his head and said ‘this the one acre, is the amount I expect to inherit
very soon if you my dear father attempt to interfere with my plans’. Mr.
Cheapskate said he did not see it that way.
John’s house was completed in August, 1988. Mr. Cheapskate died sometime in
September.
By his will, Mr. Cheapskate left Cheapspread to his daughter Willa and his son
Joshua, equally ‘because they showed the will to help themselves in life and
respect for their father’.
Advise John.

2. Francis, a multi-millionaire, owned a mansion with an adjacent cottage,

‘Wyndover’. Five years ago, he learned that his nephew, Roger, a promising
photographer, with limited financial resources, was looking for suitable premises
for use as a photography studio and for living accomodation.

Francis wrote a letter to Roger in which he told him that he would be happy to
allow him the use of Wyndover. In his letter to Roger, Francis stated that ‘It is in
need of some renovation, but it would make an ideal place for you to live and
establish your photography studio. You don’t have to pay rent and Wyndover
will be yours when I die.’ Roger was happy to accept the offer and, after doing
the renovation work, he went to live in Wyndover and established his studio.

In 2014, Roger learnt that one year ago, Francis entered into a written
agreement to sell the mansion and Wyndover to Mike. Francis died one month
ago and Mike is asserting that upon payment of the purchase price, he is entitled
to the mansion and the adjacent cottage, Wyndover.

Advise Roger and Mike.

Dr. Sharon B. Le Gall

October, 2016
For student use only

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