Having escaped substantive consideration by the Law Lords for over 150 years, proprietary estoppel recently paid two visits to the House of Lords inside twelve months. In the earlier case of Cobbe v. Yeoman's Row Management Ltd. ([2008] UKHL 55, noted [2009] C.L.J. 37), a property developer who had relied on a “binding in honour” commitment was prevented from invoking estoppel and forced to make do with a quantum meruit for work done in anticipation of a contract. In Thorner v. Major ([2009] UKHL 18), on the other hand, the House allowed the doctrine to circumvent the intestacy rules and satisfy the expectation of an unpaid farm worker on the basis of oblique assurances that he would inherit the farm. While the respective contexts justify these contrasting outcomes, there may be important differences in the House's opinions on the nature of estoppel.
A proprietary estoppel claim is possible where a defendant owner represented that the claimant had or would receive an interest in his property. The claimant must prove that he incurred detriment in reliance on the assurance such that the owner's failure to satisfy his expectation is unconscionable. David Thorner had incurred obvious detriment through 29 years of unremunerated work on the farm owned by his father's cousin, Peter. David had also passed up alternative employment opportunities in order to continue working on the farm, thus demonstrating reliance. The difficulty was Peter's aversion to speaking in direct terms. The strongest representation to which David could point was Peter's handing him a bonus notice relating to life assurance policies with the remark “that's for my death duties”: [2007] EWHC 2422 (Ch), at [94]. Nevertheless, Deputy Judge John Randall Q.C. was convinced at first instance that because of Peter's taciturn characteristics, it was reasonable for David to rely on these and other indications that he would inherit Peter's farm, and David was awarded the whole farm.
The Court of Appeal allowed an appeal by Peter's personal representatives. Lloyd L.J. accepted the factual findings that Peter wished David to inherit the farm and that he intended to indicate as much through the remarks. In spite of this, the Court decided that representations must be “clear and unequivocal” and “intended to be relied on” or reasonably taken as so intended: [2008] EWCA Civ 732, at [54]. In this case, the bonus notice event was insufficient since it was “at most, a statement of present intention”: [2008] EWCA Civ 732, at [72]. Lloyd L.J. emphasised that Peter knew nothing of the specific opportunities that David sacrificed in reliance on the alleged representations, which meant that the statements could not reasonably be taken as intended to be relied upon.
Shortly after the Court of Appeal decided against David, the House of Lords gave judgment in Cobbe. The result in that case was unsurprising, since the parties were dealing at arm's length and the arrangement was merely a non-binding agreement. More worrying for David were the wider remarks of Lords Walker and Scott in that case. Lord Walker opined that the claimant must believe that the defendant was legally bound to transfer the interest promised, although he seemingly made allowances for claimants in domestic cases. Lord Scott thought that proprietary estoppel was a mere sub-species of promissory estoppel and may have suggested that it operates only to prevent the denial of a point of fact or law standing in the way of an existing proprietary claim. This led McFarlane and Robertson to contemplate the “death” of proprietary estoppel ([2008] L.M.C.L.Q. 449).
David nevertheless brought an appeal to the House of Lords. It was unanimously upheld by a panel including Lord Scott, with Lord Walker himself rejecting McFarlane and Robertson's “rather apocalyptic” view of Cobbe: [2009] UKHL 18, at [31]). Lords Walker and Rodger were particularly critical of the “clear and unequivocal” requirement espoused by the Court of Appeal, preferring to stipulate that the representation must be “clear enough” in the circumstances: at [26] and [56]. Lord Hoffmann was unimpressed with the notion that the defendant must know of the claimant's specific acts of reliance when making a representation, and considered it sufficient that the representations were intended to be “taken seriously”, at [5]. While Lords Scott and Neuberger were willing to accept the “clear and unequivocal” requirement, all the Lords agreed that there was a qualifying representation on the facts and found it difficult to reconcile Lloyd L.J.'s acceptance of the factual findings with his conclusion that David's claim should fail. Finally, while the respondents pointed out that the extent of the property constituting the “farm” fluctuated over the remainder of Peter's life, the Committee held that there was sufficient certainty to render the property identifiable. The judge's order was therefore restored.
Thorner leaves much to discuss. Some elements of the controversy generated by Cobbe were addressed. For example, Lord Walker admitted that he was now troubled by Lord Scott's characterisation of proprietary estoppel as a sub-species of promissory estoppel. But Thorner and Cobbe may not be fully reconcilable and it seems that context is important. All the members of the Appellate Committee emphasised the particular features of the relationship between David and Peter, and the alleged strictness of Cobbe is therefore unlikely to be applied in the “domestic” sphere following Thorner. The Lords apparently took account of the reduced levels of legal knowledge, formality and business acumen that often characterise dealings between those in personal rather than commercial relationships. Laudable as this approach may be, the potential for additional complications is demonstrated by the attempt to modify equitable principles for the domestic sphere in Stack v. Dowden [2007] UKHL 17, [2007] 2 A.C.432; see Piska, [2008] Conv. 441.
Moreover, Lord Scott unnecessarily invited fresh controversy in Thorner by appearing to analyse testamentary promise cases in terms of the remedial constructive trust. This was in spite of previous pronouncements by the senior judiciary that the remedial version is not a current feature of English Law (see, e.g., Re Polly Peck International plc. (in administration) (No. 2) [1998] 3 All E.R. 812, 823–25).
On a pragmatic level, proprietary estoppel will continue to provide justice for many who undertake unpaid work in the genuine and encouraged belief that they will receive a proprietary interest in return. As is often the case, however, this may occur against the backdrop of legal uncertainty.
