Proprietary estoppel & licences

LL.09 — Proprietary Estoppel & Licences

Proprietary estoppel: the three elements

A claim arises where (per Thorner v Major [2009] UKHL 18):

1. Assurance — a representation or promise (active or passive/acquiescence) by D that C has or will get a right in D's land. It need not be precise but must be "clear enough" in context.
2. Reliance — C relied on the assurance. Reliance is presumed once assurance + detriment are shown; the burden shifts to D to disprove it.
3. Detriment — substantial, need not be financial (e.g. unpaid work, foregone career, life choices). Judged at the moment D resiles from the assurance (Gillett v Holt [2001]).

Plus an overarching requirement that it would be unconscionable for D to go back on the assurance.

Satisfying the equity (remedy)

The court has wide discretion to do "the minimum equity to do justice." Remedies range from a fee simple/lease, to a charge, occupation right, or money. The aim is to satisfy the equity, not automatically deliver the promised expectation. Guest v Guest [2022] UKSC 27: start from the expectation, but the remedy must not be out of proportion to the detriment; D may be allowed to satisfy it by paying compensation (often with a discount for accelerated receipt).

Key contrast — estoppel vs common intention constructive trust

• Estoppel = D's assurance + C's detrimental reliance; remedy is discretionary.
• CICT (Stack v Dowden, Jones v Kernott) = shared common intention + detriment; gives a fixed proprietary share quantified on the whole course of dealing. Don't conflate the two.

Licences

A licence makes lawful what would otherwise be a trespass; it is personal, not proprietary.

• Bare licence — gratuitous; revocable on reasonable notice.
• Contractual licence — governed by contract terms; revocation in breach gives damages/injunction but does not bind third parties (Ashburn Anstalt v Arnold).
• Licence coupled with an interest — attaches to a recognised property right (e.g. profit); irrevocable while the interest lasts.
• Estoppel licence — can be enforced and the equity may bind a successor under LRA 2002 if protected.

Common traps

• Estoppel is the classic exception to s.2 LP(MP)A 1989 — it can rescue a "deal" with no signed written contract (Cobbe v Yeoman's Row warns it won't normally cure a deliberately incomplete commercial deal).
• A licence is never an interest in land — so a bare/contractual licence does not bind a buyer (no Boland/Sch 3 overriding interest from a licence alone).
• Detriment is assessed when D resiles, not when the promise was made.
• Remedy is discretionary and proportionate — don't assume C gets the whole promised property.