I was privileged to share chambers with Jonathan Brock for twenty years. However, the next 20 years saw a transformation, in which Johnny played as large a part as anyone. His enthusiasm, energy, openness, loyalty, and lack of fear made him an outstanding member of chambers – not only as an advocate and adviser, but also more widely, both inside and outside chambers. In chambers, he was an excellent pupil master, a good companion, a regular and hilarious speech-maker at chambers dinners, a wonderful raconteur, and, above all a completely reliable, supportive and stalwart colleague. Out of chambers, he was the first member to get involved with bar affairs, rising high in the Bar Council and becoming chairman of the London Common Law and Commercial Bar Association. He did all this out of a mixture of commendable motives – commitment to public service, support for the Bar, personal ambition, and promotion of chambers. It is fitting that his exceptional abilities and contributions should be marked by an annual LCLCBA-sponsored lecture, and I am very privileged to be asked to give the second such lecture. I have chosen as my topic proprietary estoppel. If a lecture is to be of any interest, it must be a little controversial, as Johnny would have been the first to recognise. So let me make it clear that one of my main aims this evening is to stimulate, and that I am by no means always expressing my own opinion – and, even when I am, it is no more than a preliminary opinion, which, as so often happens, may well change on hearing full argument in court.
What is Proprietary Estoppel?
Although it had been described by Lord Eldon LC in Dann v. Spurrier,Footnote 1 proprietary estoppel first really hit the legal headlines when the House of Lords pronounced on it in 1865 in what Lord Walker has called, “the great case of Ramsden v. Dyson.”Footnote 2 For the ensuing 144 years, it was left to first instance and Court of Appeal Judges, as well as to academic lawyers and book writers, to develop the law on the topic. And then, within the past 12 months, for the first time since Ramsden, the Law Lords have dealt with it on two occasions – in Cobbe v. Yeoman's Row Management Limited and in Thorner v. Major.Footnote 3
In very summary terms, the ingredients of proprietary estoppel are the following:
(1) a statement or action (which can include silence or inaction) by the defendant, who ought to appreciate the claimant will rely on it;
(2) 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;
(3) consequent detriment to the claimant if the defendant is entitled to resile from his statement or action.
The two recent House of Lords cases, and this paper, concentrate on cases where the claimant believes that he will get, rather than where he believes he already has, the relevant interest. One should never let the facts get in the way of a good story, but it is necessary to recapitulate the facts of the two cases, as otherwise it is hard to make sense of the ensuing discussion. Just as in his enjoyable, if rather precious, Aspects of the Novel, E.M. Forster slightly despairingly said that, in the end, the most central feature of a novel is the story, so are the facts of a case fundamental to understanding any judicial decision.
In Cobbe, Mr.Cobbe, an experienced property developer, devoted considerable time, expertise and effort to obtaining planning permission for the development of land owned by Yeoman's Row Management Limited (“YRML”). The parties had previously discussed how they would proceed in terms of financing and implementing the development and the consequent profit-sharing if and when planning permission was obtained: they envisaged Mr.Cobbe buying the property for £12m., then developing and selling it, and sharing the proceeds, so far as they exceeded £24m., equally with YRML. However, they decided not to enter into an agreement until planning permission was obtained. Mr.Cobbe proceeded on the assumption that he had reached an understanding, binding in honour only, with YRML, that, if permission was obtained, he and YRML would enter into such an arrangement on a legally binding basis. YRML appreciated that this was the basis on which he was proceeding; indeed, until the last three months of Mr.Cobbe's efforts, they shared his assumption. Three months before the all-important planning permission was obtained, the anticipated profitability of the project had increased to such an extent that YRML decided to resile from the understanding. But they did not tell Mr.Cobbe until after planning permission had been obtained. They then offered him a much less financially attractive arrangement than had been discussed. He rejected that offer, and started proceedings, initially – and hopelessly – relying on the understanding as creating a contract, but then – more promisingly – raising a claim in proprietary estoppel.
The claim succeeded before the Judge (Etherton J.) and in the Court of Appeal.Footnote 4 Mummery L.J., Dyson L.J. and Sir Martin Nourse thought that YRML had stood by while Mr.Cobbe carried out work in the belief, known to, and arguably encouraged by, YRML, that he would get an interest in the property, or at least a substantial benefit from it, if, as happened, he obtained planning permission. YRML, “took an unconscionable advantage of [Mr.Cobbe]”, said the Judge, and awarded him a sum pretty much equal to his likely proceeds if the understanding had been implemented.Footnote 5 While deprecating YRML's conduct, the House of Lords disagreed, and held Mr.Cobbe was only entitled to a quantum meruit for the work he had done in obtaining planning permission. There was no “certain interest in land” which Mr.Cobbe could say he was anticipating, and any arrangement he relied on was subject to contract.
In Thorner v. Major, David Thorner went to work on the farm of his father's cousin, Peter in 1976. He toiled on the land, dealt with the paperwork, and provided Peter with emotional support, full time until 2005 when Peter died. During this period, David lived with, and received pocket money from, his father, and received occasional small sums from Peter. Peter was a man of few words, particularly in relation to personal matters, but, at least according to David, he led David to believe that he would inherit the farm, as a result of various indirect statements and actions. This was supported by statements he made to others, and by the terms of a will he executed in 1997, which he subsequently tore up because he had fallen out with a pecuniary legatee. When Peter died intestate, David claimed the farm on grounds of proprietary estoppel.
At first instance, he succeeded on the basis that Peter had made “implicit statements” which David had correctly understood to mean that he would inherit the farm, and upon which he relied. The Court of Appeal, however, held that the Judge (Mr.John Randall Q.C., sitting as a Deputy Judge of the High Court, Chancery Division) could not have found that the statements which were made by Peter were intended to be relied on. In particular, they said that “there was no material on the basis of which the Judge could have found, if he had asked the question, that the implicit statement was intended to be relied on”. They thought that “at most” the implicit statements represented Peter's “present intention, which might well be maintained, but as to which there was no commitment”.Footnote 6 The House of Lords disagreed, holding that the conclusion reached by the Judge in his careful judgment should stand. The meaning of words and actions was to be assessed within their factual context, which assessment the Judge had conscientiously and carefully carried out. They also rejected a new argument that, as the farm varied in extent and character over the years, there was an insufficiency of certainty of property to found a claim in proprietary estoppel.
I would like to deal with three points in relation to proprietary estoppel arising out of Cobbe v. YRML and Thorner v. Major:
(a) Unconscionability and honour;
(b) Proprietary estoppel and contract;
(c) Estoppels and constructive trusts.
(a) Unconscionability and honour
The parties in Cobbe knew that the understanding between them did not amount to a legally binding contract. However, the Judge and the Court of Appeal focussed on the fact that the understanding was “binding in honour” on each of them, and I think that the concept of honour provides the key to why the lower courts went wrong in that case. The notion, even dare I say it, the emotion, which persuaded them that Mr.Cobbe should succeed was that YRML had behaved dishonourably – that they had led him up the garden path. But equity is not a sort of moral US fifth cavalry riding to the rescue every time a claimant is left worse off than he anticipated as a result of the defendants behaving badly, and the common law affords him no remedy. As Deane J. said in the famous Australian case, Muschinski v. Dodds,Footnote 7 in a passage cited by both Lord Scott and Lord Walker in Cobbe, “proprietary rights fall to be governed by principles of law and not by some mix of judicial discretion, subjective views about which party ‘ought to win’ and ‘the formless void’ of individual moral opinion”.Footnote 8
Further away in time, but closer to home, in the very case which represents the foundation of proprietary estoppel, Ramsden v. Dyson, Lord Cranworth L.C. said this:
If anyone makes an assurance to another…that he will do or abstain from doing a particular act, but he refuses to bind himself, and says that for the performance of what he has promised the person to whom the promise has been made must rely on the honour of the person who has made it, this excludes the jurisdiction of courts of equity no less than of courts of law.Footnote 9
As Lord Walker pointed out in Cobbe, Lord Wensleydale said much the same thing.Footnote 10 In other words, it is not enough for the claimant to show that the defendant has behaved badly, or even to say that, to the defendant's knowledge, the claimant acted in the expectation that the defendant would behave in a certain way. In equity, as at common law, a defendant is entitled to say that the claimant took the risk that the defendant would not act honourably. It is like a subject to contract agreement: by using the words “subject to contract”, the parties are saying to each other that, however unattractive it might subsequently appear to be, each is entitled to renege. Equity, like the common law, will not permit a cause of action to be founded on such an agreement, save perhaps in thoroughly exceptional circumstances: see Attorney General of Hong Kong v. Humphreys Estate (Queen's Gardens) Ltd.Footnote 11
In Cobbe, the Court of Appeal relied on the fact that the mantric words “subject to contract” were not used, but that is abracadabra law. Equity looks to the realities not to formulae. Both parties knew there was no contractual arrangement: indeed, they intended it. They both appreciated that there was an arrangement binding in honour only. The message from the House of Lords is that it is simply not for the courts to go galumphing in, wielding some Denningesque sword of justice, to rescue a miscalculating, improvident or optimistic property developer from the commercially unattractive, or even ruthless, actions of a property owner, which are lawful at common law.
Having said that, unconscionabilty, which is close to dishonourableness, plays a central role in proprietary estoppel. The late Professor Peter Birks considered that it was unnecessary to establish unconscionability in the defendant's state of mind, but as Lord Walker explained in Cobbe, that is not inconsistent with the notion that unconscionability, “plays a very important part in the doctrine of equitable estoppel, in unifying and confirming, as it were, the other elements”.Footnote 12 However, because Mr.Cobbe knew where he stood, YRML's behaviour, while unattractive, even dishonourable, was not unconscionable. If that is said to be playing with words, and I accept that to some people YRML acted unconscionably, then another way of making the same point is that unconscionable behaviour is not always enough to give rise to an estoppel. I suggest that, before he can establish a proprietary estoppel claim, a claimant must show that he acted in the belief that he has something which can be characterised as a legal right – at least in a commercial arm's length context.
I add that qualification, because it is perhaps in this connection that the difference between commercial and domestic cases (which Lord Walker discussed in Cobbe at paragraphs 66–8, and which I also touched on in Thorner v. Major at paragraphs 96–7) comes into focus. The notion that a claimant takes his chance, where he knows that he has no legally enforceable right, is easier to accept in the context of a commercial and arm's length relationship than in a domestic or familial context. In a commercial situation, the absence of a contractual relationship normally arises from the parties, with easy access to legal advice, considering themselves better off, or at least choosing to take a risk, rather than being bound. Maybe Mr.Cobbe wanted to be free to walk away, rather than being committed to paying £12m. and developing the property, if the market went the wrong way. Maybe he thought that he might be able to negotiate a better deal once planning permission was obtained. But, whatever his reason for not having a contract, he faced no emotional or social impediment to insisting on some form of legally binding protection before he went ahead with seeking planning permission. Why should equity assist him, when YRML decided to negotiate a better deal?
But it is much easier to see why David Thorner should have been able to invoke proprietary estoppel. His older, gruff and taciturn cousin led him to believe that, if he continued to provide work and companionship, he would inherit the farm. The notion that David could or should have asked for a commitment in writing, in the context of an informal family relationship, seems somewhat unreal. It would have risked harming the relationship with Peter, and the only solicitor he knew would no doubt have been advising Peter. Unlike in Cobbe, formal contractual rights and obligations were simply not the stuff of the relationship between Peter and David Thorner. For the same sort of reason, unlike Mr.Cobbe, it is rather doubtful whether David Thorner would have been entitled to a quantum meruit payment for his work. Equity is, of course, much exercised by the concepts of trust and confidence. It is easy to accept that a quasi-nephew went on working hard on his uncle's farm for a pittance, because he placed trust and confidence in his uncle's unwritten somewhat oblique promises and indications that he would inherit the farm, without seeking a written legally binding assurance. On the other hand, as Amy Goymour said in her note of the case, “Cobbe was a knowing risk taker who could have ensured that the initial agreement was reduced to writing before relying on it”.Footnote 13 It is scarcely realistic to say that he placed trust and confidence in YRML to protect his interest at the expense of its own self-interest is not realistic.
Ben Macfarlane and Andrew Robertson have suggested that Cobbe represented “the death of proprietary estoppel,” not so much because the decision was wrong but because the reasoning precluded a proprietary estoppel claim unless the claimant believed that he had a legally enforceable claim.Footnote 14 I agree – and, at least in a commercial context, what's wrong with it? In the original cases such as Dann v. Spurrier, Ramsden v. Dyson and Rochdale Canal Co v. King Footnote 15, the basis of the estoppel claim was the plaintiff's mistaken belief that he was legally entitled to a property interest. Why should it be any different where the claimant believes he will receive a property interest? There is no reason to think that an estoppel claim should necessarily extend to some sort of moral right, which is unenforceable in law – especially in the light of what Lord Cranworth said. The recent attempt to get rid of the Lord Chancellor may have failed, but that does not mean that we should be introducing his foot as a measure of justice, a notion so rightly deprecated in Gee v. Pritchard, by Lord Eldon L.C., who on this basis would presumably have had reactionary feet which moved very slowly.Footnote 16
It may very well be that proprietary estoppel will not often assist a claimant in a commercial context, but that is probably all to the good: in the business world; certainty and clarity are particularly important, and judges should be slow to encourage the introduction of uncertainties based on their views of the ethical acceptability of the behaviour of one of the parties. This is consistent with Lord Millett's justified distaste for trust law poking its nose into commercial relationships in his important article, now ten years old.Footnote 17 In the family and domestic context, strict legal concepts and legally enforceable rights sit rather less happily than they do in the commercial arm's length world. Thus, in Hardwick v. Johnson, Lord Denning M.R. said “family arrangements” between spouses or between parents and children “are often not contracts which bind them”, but they “[n]evertheless … have legal consequences: and, time and time again, the courts are called upon to determine what is the true legal relationship resulting from them”.Footnote 18 To the same effect, in Walton v. Walton, Hoffmann L.J. said that, in contrast with commercial cases, “in many cases of promises made in the family context, there is no intention to create an immediately binding contract”.Footnote 19
Accordingly, at least in many domestic cases, it would be inappropriate to require strict adherence to a rule that the claimant must have believed that he had a legally enforceable right. But that is not inconsistent with the decision in a commercial case such as Cobbe. Where parties can reasonably be expected to regulate their relationship by a binding contract if they want to do so, equity should fear to tread. Not so where the relationship between the parties is such that they cannot be expected to have recourse to contracts. Macfarlane and Robertson also suggest that what they call, “the seminal case” of Crabb v. Arun District Council may be open to attack if the reasoning in Cobbe is correct.Footnote 20 That may be right, although Lord Scott seemed to assume it was correct in Thorner v. Major.Footnote 21 If Mr.Crabb believed, to the Council's knowledge, that he had been promised the grant of a right of way, and sold off his field in that belief, then there is no reason to doubt that his claim in proprietary estoppel was rightly accepted by the Court of Appeal. But if his claim was simply based on a “subject to contract” agreement (whether or not those words were used) or on moral indignation, then it may well be that it does not survive Cobbe.
(b) Proprietary Estoppel and Contract
In Thorner v. Major, in one of his last characteristically authoritative and elegant opinions in the House of Lords, Lord Hoffmann lifted a beguiling quotation from the philosopher Hegel. He said in relation to estoppel, that “the owl of Minerva spreads its wings only with the falling of the dusk”.Footnote 22 I think that that observation ties in with an equally elegant, if less poetic and intriguingly allusive, observation which that great Judge made when in the Court of Appeal, in Walton v. Walton, unlike “a contract … [which] must be performed come what may”,
Equitable estoppel…does not look forward into the future and guess what might happen. It looks backwards from the moment when the promise falls to be due to be performed and asks whether, in the circumstances which have actually happened, it would be unconscionable for the promise not to be kept.Footnote 23
The rights and obligations of the parties to a contract are determined by reference to what is in their agreement, which is to be judged by reference to the factual matrix and business common sense at the time that they said it or committed it to writing. It is a classic error to take into account what subsequently happened as having any bearing on the interpretation of their contract.
So contract looks forward. Estoppel, on the other hand, looks back. It involves assessing the parties' rights as at the date they fall to be satisfied. So although an estoppel may be established, it may lead to no relief. The detriment may be too slight to justify any relief (as in Jones v. Watkins Footnote 24), the benefits already received may have been sufficient to satisfy the estoppel (as in Sledmore v. Dalby Footnote 25), the right course may be to give only some of the promised assets to the claimant (as in Jennings v. Rice Footnote 26), or circumstances may have changed so as to override the claimant's equitable claim altogether (e.g. in Thorner v. Major, if Peter had wanted to sell the farm to pay for expensive medical treatment, as Lord Scott said.Footnote 27)
There is another aspect of the relationship between proprietary estoppel and contract, which arises out of that misconceived piece of legislation, section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. Section 2(1) of that Act declares void any agreement purporting to create or dispose of an interest in land which does not comply with the requisite formalities. Section 2(5) sets out certain exceptions, including implied, resulting, and constructive trusts, but not proprietary estoppel. Section 40 of the Law of Property Act 1925, which section 2 was designed to replace, had its quirks, but it worked perfectly well. Now that the Law Commission, by needlessly meddling, Parliament, with misconceived drafting, and the courts, through inconsistent decisions, have had their wicked ways with section 2, we are worse off than we ever were with section 40.
However, the point about section 2 for present purposes is that, at least on one view of Lord Scott's speech in Cobbe, it seemed to have put paid to proprietary estoppel. He said that his “present view [was] that proprietary estoppel cannot be prayed in aid to in order to render enforceable an agreement that statute has declared to be void”.Footnote 28 If the proprietary estoppel also gives rise to a constructive trust, it is different because constructive trusts are excluded from the ambit of section 2 by subsection (5). So, save to the extent that proprietary estoppel claims can be said to be grounded in constructive trust, or are based on a mistake as to present ownership, it seems to me that Lord Scott's approach may either serve to defeat any proprietary estoppel claim, or else it means that the weaker the claim the less the section 2 problem.
Consider the facts in Crabb v. Arun or in Thorner v. Major. As in the great majority of proprietary estoppel cases, the defendant made a statement or gave an indication, which was relied on by the claimant as meaning that he would be granted an interest in land. If Lord Scott's approach is right, there are two possibilities. First, as section 2 would prevent the claimant from mounting a claim in contract, every proprietary estoppel claim must fail, as the statutory formalities were not complied with. Alternatively, section 2 presents no problem where the statement or indication is so imprecise that we are not near contractual territory. Either alternative is unpalatable. The first would mean that any proprietary estoppel claim based on an indication or promise that the claimant will get an interest in land will fall foul of section 2, unless the claimant happens to be able to erect a constructive trust out of the arrangement. On that view, it would seem that Lord Hoffmann's owl is stuffed, as it could never fly. The second would mean that the clearer and more precise the defendant's indication or promise, and therefore the stronger the claimant's case in principle, the more likely it is that section 2 will scotch any proprietary estoppel claim. On that view, Lord Hoffmann's owl would be rather perverse – scarcely a wise old owl.
However, it is only fair to acknowledge that Lord Scott's approach was consistent with a number of previous Court of Appeal decisions, including two to which Lord Walker and I were parties – Yaxley v. Gotts and Kinane v. Mackie-Conteh.Footnote 29 However, in agreement with the Court of Appeal and Etherton J. in Cobbe, I suggest that section 2 has nothing to do with the matter. In cases such as those in Crabb v. Arun and Thorner v. Major, the estoppel rests on the finding that it would be inequitable for the defendant to insist on his strict legal rights. So the fact that, if there was a contract, it would be void is irrelevant: indeed the very reason for mounting the proprietary estoppel claim is that there is no enforceable contract. I accept of course that it is not open to a claimant to take the unvarnished point that it is inequitable for a defendant to rely on the argument that an apparent contract is void for not complying with the requirements of section 2. But where there is the superadded fact that the claimant, with the conscious encouragement of the defendant, has acted in the belief that there is a valid contract, I suggest that section 2 offers no bar to a claim based in equity.
Taking the honour point and the section 2 point together, a successful claimant in a proprietary estoppel claim accepts that he has no enforceable common law claim, but is able to invoke equity, because he believed that he had an enforceable claim, and, to the defendant's knowledge and with his encouragement, he acted on that belief. Certainly, no section 2 point was taken in Thorner v. Major, and rightly so, as I said.Footnote 30 So, like the stuffed owl, in James Field's mediocre if engaging poem, “The Owl Critic”, Lord Hoffmann's owl of Minerva appears alive and well. Indeed, like the owl in the poem, it may be hooting to us,
(c) Estoppel in the Round and Constructive Trusts
The suggestion that a proprietary estoppel claim may have to be shoe-horned into constructive trust in the light of section 2 prompts the wider question as to how proprietary estoppel fits in with other estoppels and with other equitable claims more generally. Lord Scott caused some sharp intakes of breath when he suggested in Cobbe that proprietary estoppel was “a sub-species of promissory estoppel”.Footnote 31 Lord Walker understandably said that he had, “some difficulty” with this in Thorner v. Major, although, as he rightly added, “the terminology and taxonomy of this part of the law are … far from uniform”.Footnote 32 Indeed, proprietary estoppel is often called equitable estoppel. And to many lawyers, the categorising of different estoppels is a game for legal academics, which obfuscates rather than illuminates. At the risk of sounding like some madly optimistic physicist seeking the unified field theory which eluded Einstein, may I suggest that there may be a general principle applicable to all estoppels? As Joshua Getzler has pointed out, Lord Scott, “seemed to assimilate all estoppels to estoppel by representation of fact, with promissory estoppel as one version of this idea and proprietary estoppel as a subset.”Footnote 33 But such an approach not only is sensible in its simplifying effect, but it also has respectable judicial support.
Scarman L.J. in Crabb v. Arun,Footnote 34 and Lord Denning M.R. in Amalgamated Investment & Property Co Ltd (in liquidation) v. Texas Commerce International Bank Ltd,Footnote 35 suggested that estoppel should now be seen as a unified system. And so did Mason C.J. in The Commonwealth v. Verwayen.Footnote 36 At least in broad terms, may not estoppel now be seen to be a generic term for a claim by a claimant who has changed his position in the reasonable and foreseeable belief that a defendant's act, statement, silence or inaction has a particular consequence, so that it would now be unconscionable for the defendant to repudiate that consequence (wholly or to an extent), at least without giving the claimant some compensation? A fuller proposed formula is to be found in Elizabeth Cooke's monograph, The Modern Law of Estoppel.Footnote 37 There are problems with this idea, most notably that it would probably involve weakening proprietary estoppel or strengthening other estoppels, as “proprietary estoppel is an extremely muscular doctrine,” (according to Wilken and Villiers).Footnote 38 Further, the different estoppels can be said to involve different features, but it may be said with some force that the differences are more hypothetical than practical, and, in so far as they have any effect, that they should not exist.
So, goodbye proprietary and promissory estoppels, goodbye estoppels by convention, acquiescence or representation, goodbye shields not swords, hello estoppel in equity. Of course my suggested formulation raises many questions which have to be answered in each case, such as the reasonableness and foreseeability of the claimant's belief, and the extent to which it governed his behaviour. But the particularly difficult questions are whether the defendant's repudiation would be unconscionable, and what the precise remedy should be. Strangely enough, I don't think any of those questions were really in play in Cobbe or even in Thorner v. Major. In Cobbe, there was no relevant belief: Mr.Cobbe knew that YRML could walk away, just like he could have done himself, and probably wanted the option of doing; he just hoped, and maybe expected, that they would not. In Thorner v. Major, the issues were intention to rely and certainty of property.
Proprietary estoppel was not the only equitable concept discussed in Cobbe and Thorner v. Major. Constructive trust was discussed by Lord Scott in both those cases. It was relied on by Mr. Cobbe because of its application in cases such as Pallant v. Morgan.Footnote 39 In that case, the parties were both interested in buying development land, but agreed that only the defendant would bid, and that, if he was successful, the land would be divided between them. After the defendant bought the land, the parties could not agree a mutually acceptable development scheme or a mutually acceptable division. Harman J. held that the land was held by the defendant on constructive trust for both parties in equal shares. This approach has been applied in subsequent cases, mentioned in Cobbe, where Lord Scott seemed to approve them.Footnote 40 However, he explained that they had no application to a case such as Cobbe, where YRML had held the land for many years before Mr.Cobbe came on the scene: the mere fact that they envisaged a sharing of the development gain, with YRML putting in the land, and Mr.Cobbe the expertise effort and money, could not justify a constructive trust argument.
While the ground for distinguishing Pallant v. Morgan is understandable, Sir Terence Etherton made a fair point in his Chancery Bar lecture earlier this year, when he said that Pallant v. Morgan was nonetheless an example of equity stepping into a commercial transaction, and filling a gap in the common law on the grounds of conscience.Footnote 41 But the essential point seems to me to be that, in order to give rise to a constructive trust, the property in question must have been acquired by one party under an agreement with the other party, so that it can be said that equity is simply giving effect to an underlying agreement. The nature of requirement which must be satisfied before such an equity can arise was well characterised by the first Jonathan Brock lecturer, Lewison J, as being one “of a pre-acquisition agreement which colours [the defendant's] acquisition of the [property concerned]” – Kilcarne Holdings v. Targetfollow (Birmingham) Ltd,Footnote 42 quoted with approval by Lord Scott in Cobbe.Footnote 43
Three of Lord Scott's colleagues agreed with his opinion in Cobbe, but none of us said we agreed with his opinion in Thorner v. Major, where he thought the claim should have succeeded in constructive trust rather than (as the rest of us thought) in proprietary estoppel. He considered that cases where the claimant relied on a promise he would be left property on the owner's death could not conveniently treated as estoppel cases because circumstances might make it inequitable for the estoppel to be satisfied at all or at least fully – e.g. if, in Thorner v. Major, Peter had needed to sell the farm for medical treatment. There is, however, real force in the notion that those observations overestimate the flexibility of the constructive trust concept, and, indeed, that they fail to appreciate the flexibility of the remedies available in proprietary estoppel, as a result of the lateness of the flight of Minerva's owl.
