Can a person who expects to be granted a licence, and whose expectation is disappointed, bring a claim in proprietary estoppel?
The question is both simple and of obvious practical relevance. For instance, in a recent County Court trial at which the writer represented the defendant, a daughter had sued her elderly mother, inter alia on grounds of proprietary estoppel. The claimant said she and her children were to be granted a licence to live in her mother’s property unless and until it was sold with her (the claimant’s) consent. An extension was to be built, as the property was not large enough for everyone to reside there together. The extension ultimately did not proceed for reasons that were disputed. The parties were unable to agree on whether a disappointed expectation of a licence could in principle form the basis of a proprietary estoppel claim.
Clearly, the parties to that dispute are in good company, with similar disagreements occurring between the editors of the current editions of various textbooks. One can compare, for instance, these two passages:
‘An equity by estoppel arises where:
(Megarry & Wade: The Law of Real Property, 10th ed, 15-001)
‘As English law currently stands, it is certainly true to say that, as a general rule, the promise-based strand of proprietary estoppel can impose a liability on A only where A’s promise is to allow B a right (which need not be a proprietary right) in relation to land’.
(McFarlane, The Law of Proprietary Estoppel, 2nd ed, at 2.78; see Footnote 300 at 12-037 of Snell’s Equity, 35th ed, for a similar view)
Where does this leave licences to use another’s land, i.e. personal rights relating to identified land?
Some cases at High Court level strongly support the Megarry & Wade interpretation. Snowden J said in West End Commercial Ltd v London Trocadero (2015) LLP [2017] 2175 that the estoppel must ‘be one that gave a claimant an interest in property owned by the defendant, and not just a right in relation to a contract with the defendant’. He interpreted this as being the effect of Lord Hoffmann’s comment at para 2 of Thorner v Major [2009] 1 WLR 776 (‘promise or assurance that he will acquire a proprietary interest in specified property’; although the other judges in that case did not use the same wording). Similarly, at para 144 of Walton Family Estates Ltd v GJD Services Ltd [2021] EWHC 88 (Comm), Mr Andrew Hochhauser KC (sitting as a Deputy Judge of the High Court) said, ‘in relation to the claim now based on proprietary estoppel, I agree with Mr Cloherty’s submission that the right for which it contends, namely a licence, is a personal rather than a proprietary right, which is insufficient’.
Both McFarlane and the editors of Snell rely on Court of Appeal authorities that they say are inconsistent with these cases: namely Williams v Staite [1979] Ch 291 and Southwell v Blackburn [2014] EWCA Civ 1347. However, both decisions can be interpreted in such a way that no inconsistency arises between them and the view expressed in the High Court authorities referred to above.
Turning first to Williams v Staite, a mother had said to her daughter, ‘You can live in and have [the property]as a wedding present. You can live there as long as you wish’. Some proceedings then followed in which the court granted the daughter and her husband licences on grounds of proprietary estoppel. However, this happened prior to the reported judgment. The judgment records the outcome of the previous proceedings without discussing the reasoning on which this was based. The question it addressed was, instead, the extent to which the licence granted by the court protected the occupiers.
There are two observations to be made about this: first, the relevant expectation is likely to have been something more than a licence. Telling a person they could have a property ‘as a wedding present’ does imply them being gifted some interest in land. Secondly, the judgment mentions no finding that the occupiers expected a licence. The fact that a licence was what was ultimately granted to them does not affect this. The nature of the relief given is separate from the content of the original expectation. This can be illustrated easily with the example of money: it is trite law that a successful claimant in a proprietary estoppel claim may be awarded money; but it does not follow from this that a person expecting a payment of money can base a proprietary estoppel claim on this expectation.
As to Southwell v Blackburn, this was a case in which a woman gave up her home, having been told by her romantic partner that she would be able to stay in his home as long as she wished. The claimant’s primary case (that she had a beneficial interest in the partner’s home) failed. Her proprietary estoppel claim was granted. However, in granting it, Tomlinson LJ simply referred to Greaseley v Cooke [1981] W.L.R. 1306, a short and not particularly illuminating decision, and said, ‘Given that binding decision I do not think it necessary to attempt further juristic analysis of the proprietary interest promised’. That wording not only fails to characterise the right the claimant expected to obtain as a licence, but the reference to ‘proprietary interest’ makes it unlikely that a personal right was being referred to. It may be that the expectation in question was assumed to be a life interest, but it is extremely unhelpful that it was not defined either way.
In the County Court case mentioned at the start of this article, the Recorder accepted the above arguments on Williams and Southwell and held that an expectation of a licence did not suffice (and given his findings of fact, the answer to the question made no difference in any event). Generally, there is much to be said in favour of limiting proprietary estoppel so as to avoid blurring the lines between it and the ‘shield’ of promissory estoppel. However, whatever the answer is, a clear ‘yes’ or ‘no’ from the Court of Appeal would be preferable to the present uncertainty. As matters stand, both positions remain arguable, so that the dispute described here is destined to repeat itself over and over, until the point is finally addressed head on in a higher court.
This article was first published in Practical Law UK here.
On Wednesday, 29 January 2025, Edward Denehan obtained a decision of the First-tier Tribunal, Property Chamber Land Registration on the determination of an objection to the first registration of Edward’s lay clients as proprietors of land near Ashford in Kent.
Daniel Bromilow discusses recent court decisions that highlight the importance of understanding the legal and equitable interests in determining who qualifies as a landlord or tenant, for the purposes of right to manage (RTM) under the Commonhold and Leasehold Reform Act 2002.
