possession and spending money while his purchase remains expressly
subject to contract”).
Although proprietary estoppel is not based on contract, it is therefore
always necessary to have regard to the nature and terms of any
agreement between the parties. In the absence of agreement, the
important starting point must be, firstly, whether there has been a
representation (or assurance) by the landowner, capable of giving rise to
an expectation that is not speculative, that she will not insist on her strict
legal rights. Secondly, there must be evidence of reliance on the
representation (or change of position on the strength of it) by the person
claiming the equity. And, thirdly, some resultant detriment (or
disadvantage) to that person arising from the unconscionable withdrawal
of the representation by the landowner must be shown. But
unconscionability, standing by itself, without the precedent elements of an
estoppel, will not give rise to a cause of action.
S. 46 of Limitations of Actions Act
[40] This outline of the doctrine of proprietary estoppel has to be viewed in the context
of the submission by counsel for the defendants that it is well established that in
claims of debt or simple contract, verbal acknowledgements or promises without
more are insufficient. Counsel submitted that there was no verbal contract
between the parties and in alleging that there was such a contract, the claimant
is unable to show that the circumstances of this case exempted the application of
the Limitation of Actions Act so as to make any such contract enforceable.
[41] Lord Denning MR in the case of
Crabb v Arun District Council [1975] 3 All ER
865, at p. 871 indicated that:-
The basis of this proprietary estoppel—as indeed of promissory
estoppel—is the interposition of equity. Equity comes in, true to form, to
mitigate the rigours of strict law. The early cases did not speak of it as
'estoppel'. They spoke of it as 'raising an equity'. If I may expand that,
Lord Cairns said in Hughes v Metropolitan Railway Co ((1877) 2 App Cas
439 at 448, [1874–80] All ER Rep 187 at 191): '… it is the first principle
upon which all Courts of Equity proceed … ' that it will prevent a person
from insisting on his strict legal rights—whether arising under a contract,
or on his title deeds, or by statute—when it would be inequitable for him
to do so having regard to the dealings which have taken place between
the parties. What then are the dealings which will preclude him from
insisting on his strict legal rights? If he makes a binding contract that he
will not insist on the strict legal position, a court of equity will hold him to
his contract. Short of a binding contract, if he makes a promise that he will
not insist on his strict legal rights—even though that promise may be
unenforceable in point of law for want of consideration or want of
writing—and if he makes the promise knowing or intending that the other
will act on it, and he does act on it, then again a court of equity will not
allow him to go back on that promise: see Central London Property Trust
v High Trees House, Charles Rickards v Oppenheim ([1950] 1 All ER 420
at 423, [1950] 1 KB 616 at 623). Short of an actual promise, if he, by his
words or conduct, so behaves as to lead another to believe that he will
not insist on his strict legal rights—knowing or intending that the other will
act on that belief—and he does so act, that again will raise an equity in
favour of the other, and it is for a court of equity to say in what way the
equity may be satisfied. The cases show that this equity does not depend
on agreement but on words or conduct. In Ramsden v Dyson ((1866) LR
1 HL 129 at 170) Lord Kingsdown spoke of a verbal agreement 'or what
amounts to the same thing, an expectation, created or encouraged.
[42] This authority indicates that equity mitigates the rigours of the strict law and a
defendant who has given the claimant a promise and/or assurance, that is not in
writing pursuant to the statute, will not necessarily be excluded from the
principles of equity. Equity will examine the words or conduct of a party and if,
on an assessment of all three elements of the doctrine of proprietary estoppel, it
is found that the defendant has acted unconscionably, equity will intervene and
prevent him from utilizing the rigours of the law to renege on his promise. It falls
to be determined therefore whether in the instant case all the three elements of
the doctrine of proprietary estoppel can be established.
[43] Counsel for the claimant contended that the defendants assured the claimant of
an interest in the property and in reliance on that assurance, she expended
her time and resources in constructing the house and is now suffering a
disadvantage as the defendants have unconscionably reneged on their promise.