Proprietary Estoppel and Responsibility for Omissions
| Date | 01 January 2015 |
| Author | Irit Samet |
| Published date | 01 January 2015 |
| DOI | http://doi.org/10.1111/1468-2230.12107 |
Proprietary Estoppel and Responsibility for Omissions
Irit Samet*
The ‘acquiescence’ category of proprietary estoppel is a rare example of responsibility for pure
omissions in private law. On liberal-individualistic theories of ownership, the policy considera-
tions against liability for nondoing are exceptionally powerful in the context of rights over land.
Nevertheless, I argue that in proprietary estoppel the law is justified in imposing a duty on the
right-holder to alert a stranger when his actions are based on a mistake. Owners of property rights
are under what Honoré termed a ‘special duty’ to contribute to the social good of efficient market
for land by publicising their rights. This ‘duty to speak’ is however relatively weak and cannot
completely suppress considerations against liability for omission. While liability in the acquies-
cence category can be justified in principle, the current law, in which owners who failed to
correct the mistake of the relying party incur similar liability to owners who actively encouraged
the other party to rely, is untenable.
SETTING THE SCENE
Proprietary Estoppel disrupts the good order of property law. When a Propri-
etary Estoppel (PE) claim is made, the court may respond by transferring,
changing the nature of, or altogether abolishing proprietary rights. It does this
without requiring first that the parties abide by the strict rules of formality that
normally govern transactions of that kind and ensure the stability and clarity of
proprietary rights. The doctrine also flies in the face of another semi-sacred
principle of property law, namely that interests in property should only be
transferred consensually.1Calls to limit its operation are heard time and again:
‘where the parties can reasonably be expected to regulate their relationship by a
binding contract, if they want to do so, equity should fear to tread’.2It is agreed
on by everyone, however, that PE occupies a unique and important place in the
matrix of property law.
*Senior Lecturer, School of Law, King’s College, London. For their useful comments, I am grateful to
Lyria Benet-Moses, Hanoch Dagan, Avihay Dorfman, Ori Herstein, Dennis Klimchuk, Nick
McBride, Ben McFarlane, Aruna Nair, Sandy Steel, Leslie Turano and the participants in the Moral
Values and Private Law conference II at KCL (2012), the conference on Shared Responsibility at
Oxford (2012) and the Theory of Private Law colloquium at Tel-Aviv University (2014), and two
anonymous referees for the MLR.
1 The idea being that the function of the law of property is to protect individual property rights and
that in applying it, the court must not engage in distributive justice, which should be left to the
legislator. For a critical exposition of this idea, and its strong influence, see C. Rotherham,
Proprietary remedies in context: a study in the judicial redistribution of property rights (Oxford: Hart, 2002)
ch 2.
2 D. Neuberger, ‘The Stuffing of Minerva’s Owl? Taxonomy and Taxidermy in Equity’ (2009) 68
CLJ 537, 544, and sources cited there. A most dramatic limitation of the boundaries of PE was
recently attempted by Lord Scott in his leading speech in Cobbe vYeoman’s Row Management Ltd
[2008] WLR 1752 HL. The supreme court has, however, reinstated much of PE’s power in Thorner
vMajor [2009] WLR 776 HL, see B. McFarlane and A. Robertson, ‘Apocalypse Averted:
Proprietary Estoppel in the House of Lords’ (2009) 125 Law Quarterly Review 535.
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© 2015 The Author. The Modern Law Review © 2015 The Modern Law Review Limited. (2015) 78(1) MLR 85–111
Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA
In this paper I explore one specific modus operandi of the PE doctrine, which
seems to break yet another legal tenet, namely, that pure omissions should not
normally entail legal liability. Let us see first how this very unusual civic liability
for omission is integrated into the scheme of PE. To make a successful PE claim,
the claimant must prove the following:
A. A statement or action (which can include silence or inaction) by the defend-
ant, who ought to appreciate that the claimant is likely to rely on it;
B. An act by the claimant in the reasonable belief that he has or will get an
interest in land, induced by that statement or action;
C. Consequent detriment to the claimant if the defendant is entitled to resile
from her statement or action.3
The three necessary elements for PE are therefore representation by an owner
of property (O) from which another person (R) can reasonably understand that
he will acquire proprietary rights in/on it, on which he then relies to his detriment.
PE claims have been accepted in situations that are very different from each
other, both in respect to O’s behaviour, and in respect to the relationship
between O and R. The various factual situations that are crowded under the
single roof of PE have traditionally been divided into three classes: ‘bargain’,
‘imperfect gift’, and ‘acquiescence’.4The crucial difference between the catego-
ries is that whereas in the first two categories the owner actively encouraged R
to acquire and/or rely on a mistaken belief that he is about to get a property
3 As defined by Lord Neuberger, ibid, 538. The limitation of PE to one kind of property, namely to
land, has been criticised. An extension of the doctrine may indeed be at hand: in Fisher vBrooker
[2009] UKHL 41, which involved a dispute about intellectual property rights, the court rejected a
PE claim on the facts and not for the reason that the subject was not land [11]. Nevertheless, the
explanation of acquiescence cases which I will offer here is tailored to disputes about rights in/on
land. Perhaps the fairly rickety basis of the liability in the acquiescence category cannot be extended
to support cases that are not about rights in land.
4 See for instance K. J. Gray and S. F. Gray, Elements of Land Law (Oxford: OUP, 5th ed, 2009) para
10.189. Note that the term ‘bargain’ is mine. ‘Bargain’ situations typically feature an R and an O
who planned to launch a joint project (such as land development, or a new business), or wanted to
give their existing relationship a new direction (for example, upgrading a lease in order to build up
R’s business), or just extend their proprietary relationship over time (eg by renewing an existing
lease); See respectively: Cobbe vYeoman’s Row Management Ltd n 2 above; Haq vIsland Homes
EWCA Civ 1076 (CA). In all of these cases, O made a representation to R that a formal agreement
would be signed in the future, and R, based on that assurance, started to push the project ahead (by
investing in the premises he is about to lease, taking a risk in mortgaging his own house, or even
starting to operate from the site and build a brand for the new business, as R did in, respectively,
we typically find an R who laboured under the assumption that O will keep a promise she made
to leave him some property in her will. R’s expectations often lead him to spend many years in the
service and company of O, where it is clear from the circumstances that the promise indeed was (at
least) a major component of his motivation for doing so. Alas for R, O died without fulfilling her
promise (or refuses to fulfil it while still alive), and the moral obligation to keep such a promise is
only enforced by law where the strict rules of testamentary gifts are complied with (Wills Act 1837,
s 9). PE would then come to the rescue and enable R to enforce O’s informal promise, if he can
show that he reasonably relied on it to his detriment (see eg, Henry and Mitchell vHenry [2010]
UKPC 3 PC).
Proprietary Estoppel and Responsibility for Omissions
© 2015 The Author. The Modern Law Review © 2015 The Modern Law Review Limited.
86 (2015) 78(1) MLR 85–111
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