Estoppel in land law

• Author: R.J. Smith
• Position: Fellow of Magdalen College, Oxford
• Pages: 204-225

R.J. SMITH*

The topic concerning the ways in which estoppel may operate in land

law is a large one and so I shall confine myself to three principal

issues. The first concerns the discretionary nature of

the

remedy given

to a claimant when an estoppel has been established. The second

concerns the proprietary nature of estoppels: or, in other words, do

they bind purchasers? The third issue is whether licences may be

protected by estoppel. This is against the background that a contractual

licence does not bind purchasers. This was recently held by the English

Court of Appeal in 1988 after a full review of the cases in

Ashburn

Amtalt v. Arnold}

Before proceeding, what is the importance of estoppel in land law?

There are two main answers. The first is that it may enable an interest

to be created without the normal formalities being present. With a few

exceptions, legal interests have to be created by deeds and equitable

interests in writing. A slight extension of this formality point is that

promises will be enforced without consideration. What is important is

that the claimant believes that he or she has a right to the land, rather

than the category (gift or contract; covenant or grant) that lawyers

would employ. The second importance is that estoppels may create

rights that are otherwise not recognised. This is the third of my three

issues for full discussion later.

A. WHEN WILL AN ESTOPPEL ARISE?

Before turning to these three issues, I should summarize very briefly

when an estoppel will arise.

Estoppel has at its heart the proposition that a person should not

make a representation or allow another to labour under a

misapprehension and then, after the other has acted upon it to his

detriment, be allowed to deny that which has been represented or

misapprehended. Estoppel has many applications in different

Fellow of Magdalen College, Oxford. The substance of

this

article was first

delivered in a lecture by the author at the Faculty of

Law,

University of the

West Indies, Cave Hill, Barbados, in April 1993.

1 [1989] Ch. 1.

204

circumstances: we are interested in what is generally described as

proprietary estoppel. This form of estoppel, at least in its modern

form, is usually traced back to Ramsden v. Dyson2 in the mid-

nineteenth century. Over the past thirty years, there has been a distinct

revival of interest in proprietary estoppel.

The requirements for estoppel were for many years treated as laid

down by Fry J. in 1880 in Willmott v. Barber.3 Five so-called

probanda

were listed:

1 the claimant (C) must have made a mistake as to his

rights.

2 C must have expended money or done some act

because of the mistake.

3 0 must be aware of his right (otherwise it is not

unconscionable for him to assert his title).

4 O must be aware of C's mistake.

5 O must have encouraged C's expenditure, either

directly or by not asserting his rights.

These requirements are not always insisted upon: the judgment of

Oliver J. in

Taylors Fashions

Ltd. v. Liverpool

Victoria Trustees

Co.

Ltd.4

in 1979 has adopted a broader approach and this has been widely

accepted.5 Let me quote from his judgment, in which he accepts:6

"A very much broader approach which is directed to

ascertaining whether, in particular 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 rather than enquiring

2 (1866) L.R.I H.L. 129.

3 (1880) 15 Ch.D.96.

4 [1982] Q.B. 133 (decided 1979).

5 Habib Bank Ltd. v. Habib Bank AG Zurich [1981] 1 W.L.R. 1265 (Court

of Appeal). See also Robert Goff J. at first instance in Amalgamated

Investment and Property Co. Ltd. v. Texas Commerce International Bank

Ltd. [1982] Q.B. 84. The rules may be stricter in the case of pure

acquiescence, which was the context of Willmott v. Barber

itself.

6 At pp 151-152.