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11/12/2007

Proprietary Estoppel yet again

Blimey, who declared this Estoppel month? The latest is Powell & Anor v Benney [2007] EWCA Civ 1283. Although the case itself is not that interesting, the judgment is worth a look as it gives a clear overview of the Court of Appeal’s current thinking in this area. The only judgment is by Sir Peter Gibson.

Some points:

The distinction between a ‘bargain’ form of estoppel in which relief should vindicate the Claimant’s expectations and a ‘non-bargain’ form in which relief is open to a wider judicial discretion including proportionality with detriment, as proposed by Robert Walker LJ in Jennings v Rice, is followed in this case. However, interest is expressed in a critique of this distinction by Simon Gardner in ‘The remedial discretion in proprietary estoppel – again” in (2006) 122 LQR 492.

The bargain form is potentially close to constructive trust in that an effectively contractual arrangement has been reached which would be effective save for s 2 of the Law of Property (Miscellaneous Provisions) Act 1989, such that fulfilling the expectation is akin to establishing the beneficial ownership. Akin, but not the same. The Court adopts Lord Justice Walker’s comment in Stack v Dowden that:

I have to say that I am now rather less enthusiastic about the notion that proprietary estoppel and ‘common [intention]’ constructive trusts can or should be completely assimilated. Proprietary estoppel typically consists of asserting an equitable claim against the conscience of the ‘true’ owner. The claim is a ‘mere equity’. It is to be satisfied by the minimum award necessary to do justice (Crabb v Arun District Council [1976] Ch 179, 198), which may sometimes lead to no more than a monetary award. A ‘common intention’ constructive trust, by contrast, is identifying the true beneficial owner or owners, and the size of their beneficial interests.

The Court is firm that where the claim is against the conscience of the ‘true’ owner, it is satisfied by the minimum award necessary to do justice. Where the elements of a common intention constructive trust are not made out, it cannot simply be used or pleaded interchangeably with proprietary estoppel, as apparently happened in this case.

Gardner argues that a wider judicial discretion should be available in all proprietary estoppel cases. On the case as pleaded here, the Court couldn’t pursue this further, but I think the indication that this is the direction in which it is leaning is clear, particularly in the distinction drawn against constructive trust.

What is more clearly indicated is that a detrimental reliance on a promise must be clearly established. Any benefit also obtained can and should be considered against the detriment (at least in a non-bargain case). The scale of the detriment is key and must be carefully pleaded.

Anyone looking to claim proprietary estoppel should be thinking very carefully about both pleadings and evidence, I’d say.

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

2 Comments

  1. Eva Price

    Is the author not called Simon Gardener?

    I thought he was actually advocating a more regimented approach to judicial discretion relating to proprietary estoppel as per the conclusion of the article? He also implied that the present situation re the judicial discretion could be remedied through measures that he specifies?

    Reply
  2. contact

    Eva,

    You are quite right that the author is Simon Gardner. In my frenzy to get the case comment out, I must have conflated him with Robert Walker LJ. Edit made.

    Now, I haven’t read the Gardner piece yet – pressure of time – although I shall shortly, as I have a potential estoppel case surfacing. My comments are based on those in Sir Peter Gibson’s judgment. At paras 20 – 21:

    “In considering that issue, I have been much assisted by the analysis conducted by Simon Gardner in his article, “The remedial discretion in proprietary estoppel – again” in (2006) 122 LQR 492. In an earlier article, “The remedial discretion in proprietary estoppel” (1999) 115 LQR 438, referred to with much praise by Robert Walker LJ in Jennings v Rice, paragraph 42, and by Mummery LJ in Cobbe v Yeoman’s Row Management Ltd [2006] 1 WLR 2964, paragraph 3, Mr Gardner addressed the question what was meant by the exercise of discretion involved in the determination of relief in proprietary estoppel. In his further article Mr Gardner described the position in the light of further authorities, including in particular Jennings v Rice. He noted Robert Walker LJ’s division of the range of possible situations into two classes with their differing approaches to relief. As he said at p 494, in the former category, which he called the bargain category, the relief should vindicate the claimant’s expectation; in the latter category, which he called the non-bargain category, the relief is arrived at by the exercise of a wider judgmental discretion, influenced – as relevant – by a number of factors including “the claimant’s expectation, but also proportionality with [his] detriment”.

    Mr Gardner powerfully criticises Robert Walker LJ’s dichotomy, arguing instead for amalgamating the two categories so that a discretion as to outcome is always present, but it is unnecessary to decide whether that criticism is valid as Ms Bailey accepts as correct what the Lord Justice said and relies on his description of the bargain category, into which, she claims, the facts of the present case fall. ”

    Based on these comments, Gardner is clearly being read as arguing for a wider exercise of discretion, with the removal of the (non)bargain distinction. Whether that discretion is itself more regimented isn’t discussed.

    Thus, while I might well agree with you once I have read the Gardner piece, in the meantime, you may have to take the issue up with Sir Peter Gibson, not me .

    Reply

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