Tuesday, January 14, 2020
Proprietary Estoppel Essay
Ã¢â¬Å"In Thorner Ã¢â¬âv- Major, the House of Lords confirmed that a claimant seeking to establish a proprietary estoppel must prove three things: (1) that the defendantÃ¢â¬â¢s assurances or conduct in relation to identified property were sufficiently clear and unambiguous in all the circumstances, (2) to lead the claimant reasonably to rely on those assurances or conduct; (3) by acting significantly to his detriment, so that it would be unconscionable for the defendant to deny him any remedy.Ã¢â¬ (Per Hayton and Mitchell: Ã¢â¬ËCommentary and cases on the law of Trust and Equitable RemediesÃ¢â¬â¢, 13th edition, Sweet and Maxwell, page 78) Critically analyse and evaluate this statement in light of recent developments in the law of proprietary estoppel. Despite the lack of a definitive formulation, it is widely accepted that the elements of assurance, reliance and detriment must be present in order to found a claim of proprietary estoppel . The doctrine has however been widely criticised for being too flexible and uncertain. The main cause of this uncertainty is the lack of clarity surrounding the role of unconscionability. It has been stated that unconscionability is Ã¢â¬Å"at the heart of the doctrine,Ã¢â¬ and yet there is Ã¢â¬Å"little guidance as to what it means, little explanation of why it is at the centre and thus virtually no consideration of the role it might play in providing both a justification for, and a limitation on, successful estoppelsÃ¢â¬ . Commentators have largely agreed that there is a Ã¢â¬Å"need to develop clear parameters for the operation of the doctrine, else it really will be a discretionary panacea for all ills whose application is unpredictable and uncertain. Prior to Thorner v Major  and Cobbe v YeomanÃ¢â¬â¢s Row Management Ltd  it had been 142 years since a case of proprietary estoppel had reached the House of Lords. Therefore it was hoped that these cases would give the judiciary a long awaited opportunity to clarify the doctrine. In Cobbe Lord Walker stated that Ã¢â¬Å"Equitable estoppelÃ¢â¬ ¦is not a sort of joker or wild card to be used whenever the court disapproves of the conduct of a litigant who seems to have the law on his side. Flexible though it is, the doctrine must be formulated and applied in a disciplined and principled way.Ã¢â¬ The House of Lords appeared determined to address the criticisms and it was hoped that they were about to define and clarify the doctrine, especially the role of unconscionability. Lord Scott, who gave the leading judgement, stated that unconscionability alone is never enough to found a claim of proprietary estoppel. Ã¢â¬Å"To treat a Ã¢â¬Ëproprietary estoppel equityÃ¢â¬â¢ as requiring neither a proprietary claim by the claimant nor an estoppel against the defendant but simply unconscionable behaviour is, in my respectful opinion, a recipe for confusionÃ¢â¬ . Lord Walker addressed the uncertainty over whether unconscionability is a separate element, by stating that Ã¢â¬Å"unconscionabilityÃ¢â¬ ¦ does in my opinion play a very important part in the doctrine of equitable estoppel, in unifying and confirming, as it were, the other elements. If the other elements appear to be present but the result does not shock the conscience of the court, the analysis needs to be looked at againÃ¢â¬ . These emphatic statements confirmed that unconscionability alone is insufficient to give rise to a claim of proprietary estoppel and that the traditional elements must always be present. It is suggested however that these pronouncements did very little in practice to define or clarify the concept. The modern approach to proprietary estoppel which began with Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd  adopted a Ã¢â¬Å"broad test of whether in the circumstances the conduct complained of is unconscionable without the necessity of forcing those incumbrances into a Procrustean bed constructed from some unalterable criteria.Ã¢â¬ Despite this statement the judgement in Taylor Fashions did not rely on unconscionability alone. The court required the three traditional elements to be present, albeit adopting a new claimant centred approach to establishing them. Therefore the statements in Cobbe regarding unconscionability are uncontroversial and do not significantly alter its position within the doctrine. The judgement in Cobbe was regarded as a severe curtailment of the doctrine and was believed to have greatly narrowed the scope of its operation. It was even thought that it had led to the Ã¢â¬Ëthe death of proprietary estoppelÃ¢â¬â¢ This was not due to the outcome of the case, but due to the controversial reasoning behind this decision. Lord Scott attempted to rein in the doctrine by focusing on the traditional elements of proprietary estoppel and restricting the doctrine via their operation. He focused on the assurance or representation element, which requires that the claimant must have been led to believe that he has or he will acquire an interest in the defendantÃ¢â¬â¢s land. He stated that the required assurance was of a Ã¢â¬Ëcertain interestÃ¢â¬â¢ and this meant that the claimant must specify the interest in the property he believed he had or would have. Cobbe dealt with a case of proprietary estoppel in a commercial context. Therefore Mr CobbeÃ¢â¬â¢s Ã¢â¬Å"was not an expectation that he would, if the planning application succeeded, become entitled to Ã¢â¬Å"a certain interest in landÃ¢â¬ but an expectation Ã¢â¬Å"of further negotiations leading, as he hoped and expected, to a formal contractÃ¢â¬ . Lord Scott stated that this was not Ã¢â¬Å"the sort of expectation of Ã¢â¬Ëa certain interest in landÃ¢â¬â¢ that Oliver J in the Taylors Fashions case or Lord Kingsdown in Ramsden v Dyson had in mindÃ¢â¬ and so the claim failed. This requirement for a specific assurance narrowed the scope of operation of the doctrine and was inconsistent with previous Court of Appeal decisions such as Gillett v Holt and Jennings v Rice where a claimant had an expectation of a future interest in land. Lord Walker further restricted the doctrine by stating that the claimant must believe Ã¢â¬Å"that the assurance on which he or she relied was binding and irrevocableÃ¢â¬ . Therefore the claimant must not only believe that the landowner has made a promise, but also believe that the promise is legally binding. He made it clear that context was important. Ã¢â¬Å"In the domestic or family context, the typical claimant is not a business person and is not receiving legal adviceÃ¢â¬ ¦The focus is not on intangible legal rights but on the tangible property which he or she expects to get.Ã¢â¬ As the parties involved in Cobbe were Ã¢â¬Å"persons experienced in the property world, both parties knew that there was no legally binding contract, and that either was therefore free to discontinue the negotiations without legal liabilityÃ¢â¬ ¦the fact is that he ran a commercial risk, with his eyes openÃ¢â¬ This restriction is also inconsistent with Gillett v Holt which Ã¢â¬Å"explicitly addressed, and rejected, the notion that the revocability of wills prevents a promise to make a will forming the basis of a proprietary estoppel claim.Ã¢â¬ Surprisingly it was Lord Walker who gave the leading judgement in that case and acknowledged here that Ã¢â¬Å"It may possibly be that some of the domestic cases might have been decided differently if the nature of the claimantÃ¢â¬â¢s belief had been an issue vigorously investigated in cross-examination.Ã¢â¬ Thus casting doubt on previous court of appeal authorities relating to testamentary promises . The reasoning in Cobbe left the doctrine in an uncertain position and Ã¢â¬Å"If taken literally, this reformulation would have curtailed the reach of estoppel, and perhaps that was the pointÃ¢â¬ . Thorner v Major gave the House of Lords a chance to address these uncertainties and a further opportunity to clarify the doctrine definitively via the role of unconscionability. From the beginning the Lords made it clear that the decision in Cobbe had not Ã¢â¬Å"severely curtailed, or even virtually extinguished, the doctrine of proprietary estoppel (a rather apocalyptic view that has been suggested by some commentators).Ã¢â¬ Thorner dealt with proprietary estoppel in the domestic context. One cousin had worked unpaid on the otherÃ¢â¬â¢s farm for nearly 30 years on the understanding that he would inherit the farm on his cousinÃ¢â¬â¢s death. The cousin died intestate and the claim of proprietary estoppel had been rejected by the Court of Appeal. One reason given for this failure was that the extent of the farm had fluctuated in the preceding years and so the interest the claimant expected to receive was not a sufficiently Ã¢â¬Ëcertain interestÃ¢â¬â¢ as required following Cobbe. The Lords in Thorner made it clear that Ã¢â¬Å"the reasoning in CobbeÃ¢â¬â¢s caseÃ¢â¬ ¦was directed to the unusual facts of that caseÃ¢â¬ and that in Cobbe Ã¢â¬Å"there was no doubt about the physical identity of the property. However, there was total uncertainty as to theÃ¢â¬ ¦property interestÃ¢â¬ ¦In this caseÃ¢â¬ ¦there isÃ¢â¬ ¦no doubt as to what was the subject of the assurance, namely the farm as it existed from time to time. Accordingly, the nature of the interest to be received by David was clear: it was the farm as it existed on PeterÃ¢â¬â¢s death. They confirmed that the assurances Ã¢â¬Å"should relate to identified property owned (or, perhaps, about to be owned) by the defendant.Ã¢â¬ and that Ã¢â¬Å"It would represent a regrettable and substantial emasculation of the beneficial principle of proprietary estoppel if it were artificially fettered so as to require the precise extent of the property the subject of the alleged estoppel to be strictly defined in every case.Ã¢â¬ Context is vital, whereas a specific certainty may be required in a commercial situation, this will not necessarily be required in a domestic context. The Court of Appeal had also required that the nature of the assurance be Ã¢â¬Å"clear and unequivocalÃ¢â¬ . This test for clarity of assurance was that required in promissory estoppel, and may have been adopted here due to the conflation of the two forms of estoppel by Lord Scott in Cobbe . The parties in Thorner were Ã¢â¬Å"taciturn and undemonstrative menÃ¢â¬ and the assurances mainly consisted of Ã¢â¬Å"oblique remarksÃ¢â¬ and therefore it was held that these assurances lacked the requisite certainty. The House of Lords loosened this restriction stating that Ã¢â¬Å"I would prefer to say Ã¢â¬ ¦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 contextÃ¢â¬ . As Ã¢â¬Å"the relationship between Peter and David was familial and personal, and neither of themÃ¢â¬ ¦had much commercial experienceÃ¢â¬ ¦Peter made what were, in the circumstances, clear and unambiguous assurances that he would leave his farm to David, and David reasonably relied on, and reasonably acted to his detriment on the basis of, those assurances, over a long period.Ã¢â¬ The House of Lords had made it abundantly clear once again that everything is dependent on context. In a domestic context such as Thorner an oblique assurance may be Ã¢â¬Ëclear enoughÃ¢â¬â¢ even though a commercial case such as in Cobbe may require a much more specific assurance. Lord Walker also rejected Lord ScottÃ¢â¬â¢s characterisation of estoppel Ã¢â¬Å"I have some difficulty with Lord ScottÃ¢â¬â¢s observationÃ¢â¬ ¦that proprietary estoppel is a sub-species of promissory estoppel.Ã¢â¬ The House of LordÃ¢â¬â¢s in Thorner also clarified that the correct approach for landownerÃ¢â¬â¢s intention was an objective test and that it was Ã¢â¬Å"enough that the meaning he conveyed would reasonably have been understood as intended to be taken seriously as an assurance which could be relied uponÃ¢â¬ ¦It is not necessary that Peter should have known or foreseen the particular act of relianceÃ¢â¬ . The House of Lords allowed the proprietary estoppel claim to succeed even tho ugh there was no evidence that the claimant believed that the assurance was legally binding, therefore also rejecting Lord WalkerÃ¢â¬â¢s restriction in Cobbe. Thorner had maintained a flexible approach to proprietary estoppel making it clear that everything was Ã¢â¬Å"hugely dependent on contextÃ¢â¬ , re-affirming the holistic approach found in Gillett that Ã¢â¬Å"in the end the court must look at the matter in the round.Ã¢â¬ Lord Neuberger stated that Ã¢â¬Å"it appears to me unlikely in the extreme that Lord Scott was intending impliedly to disapprove any aspect of the reasoning or decision of the Court of Appeal in GillettÃ¢â¬â¢s caseÃ¢â¬ Thorner effectively placed the doctrine back in the position it stood before Cobbe. It was said that the decision in Thorner had Ã¢â¬Å"brought proprietary estoppel back from the brink. The apocalypseÃ¢â¬ ¦has been averted and proprietary estoppel can continue to function as an independent source of rights. It can thus perform its vital role as a broad and flexible doctrine.Ã¢â¬ Thorner has clarified some of the uncertainties surrounding the traditional elements of proprietary estoppel that had been raised in Cobbe and followed in the Court of Appeal. It returned the formulation to a flexible and broad definition requiring Ã¢â¬Ëidentifiable propertyÃ¢â¬â¢ that the assurance must be Ã¢â¬Å"in the circumstances, clear and unambiguousÃ¢â¬ and that the assurance must Ã¢â¬Å"reasonably have been understood as intended to be taken seriously as an assurance which could be relied upon. Thorner did not however say anything regarding role of unconscionability, only affirming the uncontroversial position taken by Cobbe, whilst confirming the flexibility of the doctrine. Ã¢â¬Å"Concentrating on the perceived morality of the partiesÃ¢â¬â¢ behaviour can lead to an unacceptable degree of uncertainty of outcome, and hence I welcome the decision in CobbeÃ¢â¬â¢s caseÃ¢â¬ ¦However, it is equally true that focussing on technicalities can lead to a degree of strictness inconsistent with the fundamental aims of equityÃ¢â¬ . Some commentators believe that this was an opportunity missed as Ã¢â¬Å"Lord Scott may have chosen the wrong train to ride in YeomanÃ¢â¬â¢s Row, but it is not clear that he chose the wrong destinationÃ¢â¬ Defining Ã¢â¬ËunconscionabilityÃ¢â¬â¢ is a difficult task and commentators have their own competing theories. Dixon believes that Ã¢â¬Å"an estoppel is made out when a landowner makes a Ã¢â¬Ëdouble assuranceÃ¢â¬â¢ Ã¢â¬â an assurance that the claimant will have some right over the representorÃ¢â¬â¢s landÃ¢â¬ ¦combined with an assurance that the right will ensue even if the formalities necessary to convey that right are not complied withÃ¢â¬ ¦Unconscionability exists when a Ã¢â¬Ëformality assuranceÃ¢â¬â¢ is withdrawn after detrimental reliance Ã¢â¬ Balen and Knowles believe that Ã¢â¬Å"this Ã¢â¬Å"extra ingredientÃ¢â¬ , for so long described as Ã¢â¬Å"unconscionabilityÃ¢â¬ , requires the court to ask whether the basis, or condition, on which the claimant incurred her detriment has failed.Ã¢â¬ There is no consensus as to how unconscionability should be defined only that it should. It may be that the judiciary have missed an opportunity to clarify the doctrine or it could be that they have no desire to Ã¢â¬Å"define unconscionability and thereby limit the application of the doctrineÃ¢â¬ ¦Uncertainty can be a benefit as well as a burden, and while unconscionability of itself cannot generate an estoppel, the claim can be denied despite t he presence of an assurance, reliance and detriment by judicious deployment of the Ã¢â¬ËunconscionabilityÃ¢â¬â¢ cardÃ¢â¬ .