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Groom (2011) has stated that even before the publication of Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, it has been expected to raise the interest of those who belong to the legal profession. It served as a replacement of Section 40 of the Law of Property Act 1925 regarding the formal requisites and offered a new approach to the assignment and conveyance of legal and equitable interests in land either through sale and other modes of transfer. This enactment has cured the uncertainties relied upon by parties based on the vague interpretation of the timeworn legislation that needs amendment. However, despite the uncertainty, some bewailed the deviance from the doctrine of part performance and have reservations about equity and how to diminish the severe measures of the recent legislation.
Based on Section 2, there is a clear endeavor to give certainty with respect to contracts that involved sale of land. The objective is to simplify the law and to guarantee that the parties seek legal advice before they enter contracts in order for the courts to be able to be able to discern the terms of the agreement presented before them. The strict measures have been acknowledged to present the general distinctiveness of the prerequisites and justified the implementation for the strict rules. The rigidness is lessened due to the awareness of the formal lose for those who not have formal rules for the people who go to him for advice. Here, Lord Neuberger, he regarded the formality as an injustice for people who cannot liberally access sound advice from legal experts. This view has been supported in the work of Groom (2011).
In the view of Lord Neuberger, he has affirmed the application of proprietary estoppel within section 2 of the Act without the requirement to refer to the concept of a constructive trust. When Lord Neuberger wrote “The Stuffing of Minerva’s Owl? Taxonomy and Taxidermy in Equity” (2009) 68 CLJ 537, he suggested that section 2 of the Act does not prohibit a claim based in equity. This assertion was affirmed by Dixon (2011), when he stated there is a need to consider whether proprietary estoppel can be invoked by a claimant where said contract did not comply with Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. He further asserted that estoppel must be made available in the event of existence of “double assurance” of rights that failed to observe the formalities. He contends that the constructive trust result that has been approved by the courts should not undergo strict scrutiny which is unwarranted. It bears stressing that his view that all cases of proprietary estoppel share the same rationale that revolved within the clear meaning of unconscionability” that may be referred to as the “double assurance” theory of a “rights assurance” and a “formality assurance” (McFarlane, Hopkins and Nield, 2010). He further suggested that for the contract cases that did not observe the formal requirements, the very fact the parties endeavored to enter into a contract makes it harder to establish a “formality assurance” and it is for this very motive that claims to estoppel have a high probability to collapse.
However, in the cases of Yaxley v Gotts and Kinane v Mackie-Conteh, where, “formality assurance” can be proven, the estoppel claim should prosper even in the absence of invoking a constructive trust existed. The declaration that it is wholly rational to decline the effect to an oral or unwritten contract and yet implement some interests in the disputed land which have been previously promised orally, as appearing on its face must be considered as completely valid. In spite of the elimination of the doctrine which is required to be partly performed, the Commission acknowledged that there are possible circumstances that should remain, where injustice will take place due to the failure to plead the estoppel doctrine. This view has been supported in the work of Groom (2011). Here, people who are supposed to be protected from the enactment of the legislation that accidently contracting away their rights in land law has are the very people who will likely suffer from the strict implementation of the Act.
In the speech of the Lord Bedlam in the case of Yaxley v Gotts, the government did not have the intention to enact a law that will serve as a vehicle for equitable fraud. In this case it was held that proprietary estoppel was not expressly declared to be directly inconsistent with the enactment of a law or statute. Later in the decision of Lord Scott in the case of Yeoman’s Row Management Ltd v Cobbe, where it was reiterated that the persistent rationale that proprietary estoppel cannot be relied upon in order to enforce an agreement that statute has declared to be invalid where he stated that “Equity can surely not contradict the statute” (Groom, 2011). The same sentiment was echoed in the decision in the case of Halsbury’s Laws of England, where the Court of Appeal considered the ruling the cases of Yaxley v Gotts and Kinane v MackieConteh. This view has been supported in the work of Groom (2011). Hence, this will lead to the realization that a thorough consideration of the nature of the enactment of a law has a purpose for its enactment and there is a social policy that supported it.
Proprietary estoppel is an illustration of the intervention of equity to mitigate the consequences of lack of compliance with the formal requirements imposed by a common law or statute (Dixon, 2011). It has been an accepted principle in English property law for several decades. In the case of Willmott v Barber (1880), Fry J has identified the five-probanda of proprietary estoppel which has to be established before a claimant can successfully file a claim. The five-probanda are: First: The claimant must have made a mistake to enforce their legal rights over a land that has been owned by another person; Second: The real and genuine owner is fully aware of the claimant’s mistaken belief; Third: The claimant must have spent funds and has acted on the faith of his mistaken belief; Fourth: The landowner must have encouraged the expenditure by the claimant, either directly or through inaction by abstaining to enforce his legal right; and Fifth: The land owner over which the right is being claimed is fully aware of the existence of his own rights, which are inconsistent with the alleged rights of the claimant. This view has been supported in the work of Dixon (2011). These conditions are considered as onerous since a successful claim of proprietary estoppel may create an interest over land has affected the existing owner of his current usage of the land, and can affect future buyers and transferees of the land.
However, the over the years, the formal requisites have been abandoned and a more flexible approach has been adapted in order to prove that proprietary estoppel has existed. The reflection of modern conditions has been discussed in the case of Taylor Fashions v. Liverpool Victoria, where the court held that the claimant can firmly establish estoppel upon proof of an assurance, reliance and detriment of circumstances in such manner that it will be unconscionable to deny the claimant to seek redress from the courts. Dixion (2011) stated that this approach has been affirmed as later on in the cases of Gillet v. Holt and Jennings v. Rice, wherein the four features of estoppel which are: assurance, reliance, detriment and unconscionability are not isolated requirements since each case must be treated individually for assessment in order to determine whether the owner of the land should be able to support his assurance to the claimant regarding the use of the land in question. Thus, in order to be able to make a complete assessment, it is advised that a holistic approach must be taken to establish proprietary estoppel. This was the ruling in the case of Thorner v. Major.
Dixon (2011) stated that proprietary estoppel is a flexible doctrine that acts on the conscience of the landowner. The land owner must give an assurance to the claimant that he shall refrain from exercising strict legal rights over his own land; or in most instances, the claimant has an existing right or use over the land at present or in the future. The assurance may refer to a specific property right over the land, such as the right to lease based on the ruling of the House of the Lords in Thorner v. Major in 2009, where it was held that assurance is not a requirement to establish proprietary estoppel. Based on the decision of Lord Walker, the assurance must be clear enough and is dependent mainly on the context. Based on the family arrangement context, it may refer to a land ownership over a farm land where a general assurance will suffice such as future ownership of the land. However, in the context of a commercial arrangement, a more specific assurance is necessary based on the decision rendered in the case of Cobbe v Yeoman’s Row Management Ltd. which was decided in 2008.
Further, in the case of Thorner, it was emphasized that there is no need to rely on the earlier ruling in Cobbe where an assurance of a specific property is required, even though such decision was justified based on the facts of the case. It bears stressing that it is not just a simple act of differentiating between family and commercial cases since everything is still dependent on the context of the arrangement. This view has been supported in the work of Dixon (2007).
Thomas (2009) stated that Lord Walker had already stressed in the opening paragraph of his opinion in the case of Thorner v Major that the assurance must be clear as possible in order for proprietary estoppel to exist. He stated that the proprietary estoppel doctrine is based on three essential elements which are: 1.) representation or assurance made to the claimant; 2.) reliance on the assurance by the claimant; and 3.) the detriment of the claimant and the consequence of his reliance. This view has been earlier applied in the case of Re Basham Deed and reiterated by then Lord Robert Walker LJ in when he penned the decision in Gillett v. Holt in 2001. In these two cases, it was ruled that where the plaintiff relied on the faith of a belief proprietary estoppel, which was known to and encouraged by the land owner, such individual either has or is going to be given a right in over the property in dispute and the land owner cannot insist on the strict enforcement of his legal rights if it will be inconsistent with plaintiff’s belief.
Wilken and Ghaly (2012) have asserted that the essential common elements of proprietary estoppel arise from the equity’s response to three broad categories of circumstance. These categories consist of imperfect gift cases; common expectation cases; and unilateral mistake cases. In the first category, when one person has told another that a gift of property was given in favor to that person but has failed to formally effect a valid transfer. This case has been illustrated in Dillwyn v Llewelyn. In the second case, it deals with the situation where a person expects that he or she will be granted an interest or right over the property of the person as a consequence of the dealings with property owner. Such expectation is formed by one or two methods that has resulted from an express promise by the property owner that such right will be granted or as a product of mutual dealings between parties as expressed in the case of Ramsden v Dyson. In the third classification that involves unilateral mistake cases, it involves the belief of one person that he or she owns a property that is actually owned by another person. This was illustrated in the case of Rochdale Canal Company v King.
The preoccupation of the judiciary with the policy behind the Law of Property (Miscellaneous Provisions) Act 1989 has been consistently criticized by the academic community (Groom, 2011). These observations were echoed in the rulings rendered in the cases of Yaxley and the present case of Cobbe’s rejection of the proprietary estoppel doctrine. It can be gleaned from the decisions that more emphasis should be placed by the courts in the application of the estoppel doctrine outside of Section 2 of the Act. A claim under proprietary estoppel must be considered as entirely independent of Section 2, which leaves any discussion to have observed the merits of compliance with the policy behind the act immaterial. This view has been supported in the work of Groom (2011).
As recognized by Lord Walker, he stressed that there is no person can question the operation of proprietary estoppel in a case wherein it is independent of Section 2, firmly declaring that no contract can be established. However, this qualification that was set by Walker is only made applicable where a contract is regarded to have no binding effect for the sole reason of noncompliance with Section 2 of the Act, noted by both Lord Bedlam and Lord Walker. They considered it as an unacceptable policy because it denied an available remedy to a claimant who was close to have entered a valid contract. This situation was further highlighted by Lord Neuberger when he pointed out the concept of extrajudicial or out-of-court interpretation. When he extra-judicially wrote “The Stuffing of Minerva’s Owl? Taxonomy and Taxidermy in Equity,” he stated that Section 2 propose no impediment to file a claim based in equity. He further averred that whether solely through non-observance of Section 2 alone or other various reasons, the mere fact that the situation between the parties has failed to comply with the formal requisites is synonymous to the conclusion that there is no valid and binding contract between the parties. Such being the case, no part of Section 2 shall be applied. It is clear that the Act only dealt with contractual validity. Hence, any equitable attempt to salvage the agreement by means of proprietary estoppel should be regarded to have occurred beyond the boundaries of Section 2 of the Act. This enables any person to file a claim based on equity.
Conclusion
In sum, the interpretation of Lord Neuberger has shown that it is rational to refuse effect
an oral or unwritten contract, but there is a possibility to enforce some interests in land that have been earlier promised orally, though the enforcement of the contract raises it dependence on the doctrine of proprietary estoppel. Such doctrine may be relied upon without any fault since it symbolized as the most reliable method that can be availed of in the enforcement of such interests. Since at present, there is no clear intervention made by the government, the current basis is still anchored on the pronouncements made in the ruling in the case of Cobbe. However, the case of Thorner gives a renewed anticipation that the view of Lord Scott on proprietary estoppel in connection to Section 2 may be bear a narrow interpretation. Groom (2011) has stated that the suitability of the commercial domestic split in the application of equity enunciated in the cases of Cobbe and Thorner deserve credit. It is through the principle of equity that correctly diminishes the strictness of the law. On the hind side, Lord Walker’s view…
