Proprietary owner of the land will give

Proprietary estoppels can be used as a defence rather than a remedy as it is another method whereby a person may receive the equitable interest that they deserve without the appropriate formalities. Proprietary estoppel comprises three main elements. Firstly, the owner of the land will give an assurance to the claimant that he/she will have some rights over the land. Secondly, the claimant must belief that he/she would receive interest in the property.

Thirdly, the claimant must have to be acted to his detriment. This detriment has to be substantial and this is illustrated in the case of Gillet v Holt. Constructive trusts describes the circumstances in which property is subjected to a trust by operation of law.

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This was illustrated in the case of Paragon Finance V DB Thackerer stating if it can be Irrational for the owner of a property to proclaim his beneficial interest, constructive trust will arise by law. Constructive trusts do not need to be in writing as they are exempted from the operation of Law Property Act 1925 s 53(1) (b), by s 53(2). Mere denial of an informal arrangement or understanding is of itself generally insufficient, since equity will not assist a volunteer. The owner should be unjustly enriched or the claimant must have acted to their detriment. Many may regard proprietary estoppel and common intention constructive trust are the same. This is due to the methods that are used by the claimant to obtain a proprietary interest in a land without the need of formality auch as deed or a will. One must be clear that in spite of the tremendous similarities between the two, these principles must be kept separately and its up to the court to decide which principle is more appropriate when deciding the case before them.

Therefore, it is necessary to differentiate the two principles as they have a totally different historical background.The development of the doctrine of Proprietary estoppel can be seen through the way courts approach this doctrine and it can be seen in early cases such as Ramsden v Dyson that the courts initially adopted a broad approach in establishing this doctrine. Since a successful claim in proprietary estoppel could result in the creation of interest in land that affects estate owner and future purchasers and transferee of land, it is not surprising the conditions have become stricter.

These conditions were first codified by Fry LJ in Willmott v Barber where he identified the five probanda of proprietary estoppel which is quite big of a hurdle for claimants. As a reflection of modern condition, the five probanda by Fry LJ have been largely abandoned and a more modern approach which is much more flexible is introduced. According to Oliver J in Taylor Fashions v Liverpool Victoria Trustees, a claimant will be able to establish an estoppel if they can prove an assurance, reliance and detriment in circumstances in which it would be unconscionable to deny a remedy to the claimant. This modern approach provided more effective remedy as the requirement needed to make a claim has significantly been ‘watered down’. This shows that the doctrine of PE has changed in the sense that it had become more flexible with less difficult hurdles for claimants. It was established in Jennings v Rice that these four features should not be looked at separately but must be looked at ‘in the round’.

The House of Lords in Thorner v Majors reiterated that a holistic approach should adopted when establishing proprietary estoppel. In order to claim under this doctrine, there must be some kind of assurance made by the owner of the land to the claimant that either he can abstain from exercising his strict legal rights over his own land or that the claimant might have some present or future right or use over the land. Mostly, in cases the assurance will be as to some specific property right over the land.

However, in the case of Thorner v Major, this is not always necessary. On the facts, there was an implied understanding that David was going to inherit the land. The COA in determining whether implied understanding can amount to assurance held that PE could not be given since assurance has to be based on clear promise.

The HOL reversed the decision of the COA and Lord Walker explained that assurance is determined depending on context and awarded PE in favour of David and the farm was granted to him. Furthermore in Ramsden v Dyson, it was established that a representation can be made by conduct even by remaining silent. Assurance that have been taken to be enough can be seen in the case of Gillett v Holt where Mr Holt said he wanted to Geoffrey to run the farm which he saw as being a ‘permanent arrangement’. As discussed above “assurance” may be entirely informal, but whatever form it takes it essential that it produces an effect on the claimant. Reliance may be hard to prove and a claimant can show reliance through change in conduct. The court of appeal in Greasly v Cooke held that, if clear assurance have been made and detriment has been suffered, it is permissible to assume that reliance has occurred.

Similarly in Wayling v Jones, the court of appeal only looked for a ‘sufficient link’ between the assurance made and the detriment incurred by the plaintiff, and the burden would be on the defendant to show that there was no reliance. The crucial point seems to be that there will be no reliance only when it can be shown that the claimant would have incurred detriment completely irrespective of the defendant’s conduct as can be seen in the case of Orgee v Orgee. However, there are some cases such as Campbell v Griffin which shows that a detriment which is not caused by defendant’s conduct may also be considered reliance. Hence, it can be said that the existence of reliance is critically dependant on the peculiar facts of each cases which cannot be discounted merely because of family or emotional ties that might otherwise explain a course of action.In order to establish Doctrine of Proprietary Estoppel the claimant must prove that he has suffered detriment in reliance on assurance and it can be in any form either minimal or trivial. An example of detriment is to work for low pay or no pay as can be seen in the case of Gillett v Holt. As Campbell v Griffin and Jennings v Rice show, it is not necessary that the detriment be related to land at all as long as there is detrimental reliance which makes retraction of assurance unconscionable.

In Jennings v Rice, the COA held that proportionality was essential between expectation and detriment in deciding how to satisfy equity based on PE. It should be noted that detriment alone is insufficient as seen in Taylor v Dickens, where the plaintiff worked for a number of years without pay with the expectation the he would inherit from the deceased. In the case, the deceased changed her will and left it to another and the plaintiff could not claim proprietary estoppel as there was no assurance despite there being detriment.

Although this may seem harsh, it remains the case that an unencouraged detriment is not sufficient for the purpose of this doctrine. The case of Lloyd v Dugdale cleared this doubt as it made it clear that the detriment must be incurred by the person to whom the assurance is made.Oliver J regraded unconscionability as the very essence of a claim of Proprietary Estoppel. Unconscionability frees the court from the strict formality requirements imposed by statute and allows the claimant to succeed in claims where it would be unconscionable to retract assurance. It is submitted that although unconscionability is required due to equitable interest involved, unconscionability alone may not necessarily lead to remedy.

This view is supported by Nigel Gravells in his book where he stated that ‘unconscionability alone, without detrimental reliance on a representation, is insufficient in itself to found proprietary estoppel claim’. This is substantiated by the House of Lords decision in Yeowman’s Road v Cobbe, where Lord Scott held that ‘proprietary estoppel should be limited to the representations only of specific facts’. In this case it was ultimately determined that unconscionability of a conduct alone will not lead to remedy, the claimant must show that there was assurance and they relied upon it to their detriment. In Cobbe, the court held that a businessman who had taken a risk cannot claim estoppel and the court should be careful of causing uncertainty by awarding estoppel in commercial situations. Moving on, it is important to note that this doctrine is not a universal remedy that cure all defects in formalities, because if it was, there would be no point in having formality rules.

Some argue that this doctrine undermines formalities which are contained in statutes, this may lead to allegations that the courts have overstepped their jurisdiction which is against separation of powers. However, Lord Scott negated this argument by stating that PE cannot render enforceable an agreement that statute declares void. He also said that ‘equity can surely not contradict statute’. Conversely, Dixon was of the view that this doctrine is available to cure absence of formality when ‘it would be unconscionable for the defendant to relay on lack of formality to defeat the claimant’. This shows that there is proportionality in tis doctrine and that it may be applicable in certain circumstances relating to statutory provisionsOver the years the English Courts have been trying to define constructive trust but it has long been recognized that it hard to define the principle.

According to Lord Bridge in Llyods Bank v Rosset , for a successful claim on Constructive trust, the claimant must prove that there are common intention and detrimental reliance. When a constructive trust is established, the claimant will be entitled to a share of the equitable interest. Legal title will continue to be held by the legal owner, but now as a trustee holding for himself and the successful claimant in equity under the statutory trust pf the land as imposed by the Law of Property Act 1925 and regulated by Trust of Land.Both doctrines depends upon a promise which has been relied upon and a detriment due to the reliance of promise. In Grant v Edwards it was proven that both depend upon shared characteristics, assurance, reliance and detriment.

Lord Brown-Wilkinson suggested that proprietary estoppels might provide an alternative route for claiming an interest in the home, to that of the constructive trust. The assurance must be made by the person against whom the estoppels are claimed that will usually be the owner of the freehold or leasehold estate in the land. In Llyods Bank Plc v Carrick it was an attempt to stop the holder of an adverse encumbrance. For an example, a mortgagee from asserting their rights which the possession have been rejected as the claimant has to act to their detriment as a results of common intention or mistaken belief that was neither encouraged nor consented by the third party. However this does not rule out the possibility that an interest which has successfully asserted against the owner on the estoppels may bind a third party according to the rules of priority.Constructive trust and proprietary estoppels are ways of enforcing a promise made by a landowner to a claimant being informal.

If a person wishes to have an interest in land, without having the specific formalities i.e a deed or by writing, these two doctrines can enforce this whilst it being an exception to the formalities required in regards to land transactions. These are similarities between the two equitable doctrines. On some occasions the courts have not made it clear upon which doctrine they have relied in reaching their decision. For instance, in Gissing v Gissing 1971 when considering implied trusts Lord Diplock thought it was “unnecessary for the present purposes to distinguish between these classes of trust” although now there are signs that the courts are more aware of the importance of the distinctions between the two doctrines.

To an extent, both doctrines are similar, however the significant differences between them. Intention, detriment and remedy are the three sections which cause differences to arise between proprietary estoppels and constructive trusts.A resulting trust is based upon the presumed intention that arises where a person provides funds for the purchase of property. A constructive trust is founded upon a common intention that can either be expressed or inferred but cannot be based upon an intention that the parties never in fact had. Estoppels may be claimed where there has been either a representation or acquiescence that an interest in property is to arise. Certainly a representation could equally be interpreted as leading to an express common intention.

In a constructive trust, once a common intention has been found between the parties, they will now be entitled to the intended property. A comparison can be seen with proprietary estoppels whereby it is for the court to resolve and to decide which remedy is the most appropriate for the case, taking into account “the minimum equity to do justice,” which was an important statement made in Crabb v Arun DC 1975.There is no separate requirement for detriment in the case of a resulting trust – the provision of funds by itself gives rise to the presumption.

In a similar way there is a close, if not invisible link, between an inferred common intention and the detriment where a constructive trust is based upon financial contribution. The distinction is that a resulting trust is based upon a presumed intention at the time of acquisition but a constructive trust can arise afterwards. In the case of both a constructive trust based upon an express intention and estoppels there may be a more questionable link between intention and detriment. It is thus perhaps not surprising that there is a broader view of what is acceptable detriment in these situations. For the remedy, the clearest distinctions lie in what result will flow from each of the doctrines.Gillet v Holt 2001 was a case which clearly showed the distinction between the two doctrines and its importance when a defendant has already discarded the property. When there is a claim regarding proprietary estoppels, the court will look back and will take everything into consideration when deciding what interest to give.

Only then can an interest in the property be definite. Nevertheless, constructive trust arises by the operation of law, which can be recognised by the court. Proprietary estoppels usually can be seen as more beneficial to a claimant when a testator disposed of his personal assets e.g.

home during his lifetime. Contrast this with constructive trust, whereby it is more likely to be gainful where one party still has possession of and is a resident in the property.It is important to note that this doctrine should be distinguished from the doctrine of constructive trust although the two concept requires detriment and work on the basis that it would be unconscionable for the legal owner to deny the existence of the beneficial interest. In Yaxley v Gotts, Robert Walker LJ recognised the numerous grounds of similarities between the two doctrines since both are derived from equity’s intervention to provide relief. His Lordship also held that at a high level of generality, there is much similarity where they coincide in the area of a joint enterprise for the acquisition of land. Mark Pawlowski in his writing stated that in both the cases of Gissing and Edwards, ‘equity acts on the conscience of the legal owner to prevent him from acting in an unconscionable manner by defeating the claimant’s belief.’ In other words, the similarity envisaged between the two is that they are derived from equity which is concurrent with the opinion of Robert Walker as mentioned earlier.

The main difference between the two doctrines is that proprietary estoppel is based on representation whereas constructive trust rely upon bargains or common intention.To conclude, it is opined that the doctrine of Proprietary estoppel may have not always been consistent in terms of flexibility, proportionality and fairness although often being considered. However, this area of law have been relatively dynamic and can be seen to have evolved over the years. Today, with reference of case laws discussed, it can be seen that this doctrine is moderately flexible, proportionate and in most cases fair. The doctrine has developed from one difficult to establish and unreliable doctrine to one which operates based on unconscionability and less strict requirements. Dr.

Zaid Muhmoud Al-Aqaileh concluded in ‘The English Law Doctrine of Proprietary Estoppel and the Extent to which it could be Applied in Jordanian Law’ that proprietary estoppel plays an effective role in the context of English land law as it can be used to found a claim, as well as to defend one. Thus, it can be regarded as a mechanism by which the law sanctions the informal creation of proprietary rights in property.