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Analysis of Proprietary Estoppel: Applicable Principles and Caution in Application

Proprietary estoppel

Proprietary estoppel is an equitable doctrine that provides a high level of discretion to the court. This indicates flexibility in application of the doctrine. However, this does not mean there is lack of applicable principles to establish the doctrine in order to protect rights of claimants. The doctrine comes into play when there is unconscious behaviour and the courts have to apply reasonable and cautious principle to apply the doctrine. In this light, Lord Walker is right in presenting a caution in applying the doctrine. Due to the level of dicrfetion in determining behaviour of parties involve, the doctrine must be applied in a disciplined fashion.

The doctrine may entitle a person to a proprietary right and to establish the right, there are few core factors that the court must rely and the parties must establish. The case of Thorner v Major (2009) provides for three main elements that a claimant must establish to bring a successful proprietary estoppel. There must be a representation or assurance made to the claimant, upon which they relied and they suffered a detriment due to such reliance. Understandably, the representation made must have been a promise instead of a statement of intention to validate the representation. This is the way the doctrine has to be formulated and applied in a proper manner. Having made a representation is not enough and to arrive at finding a promise, the court must determine whether the representation was “clear enough” to be an enforceable promise. For doing so, the representation made has to be determined in its entire context. This could be seen in the case of Habberfield v Habberfield (2018). The claimant had worked on their family farm from the 1980s until the father's demise in 2014. The father left the entire estate to the mother. The claimant brought a claim stating that the parents assured her multiple times that the claimant would take over the family farm within their lifetime. The court looked at the case in its entire context and found that there was sufficiently a clear promise to effect a transfer of the property. This case and the principle applied here demonstrate that the court is cautious in its application of the applicable elements of proprietary estoppels.

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The doctrine seems to be not in favour of claimants in certain conditions. The necessity to differentiate between an intention and a promise seems to be marginal and it if entirely left to the court to determine the fate of the parties. If a party is not able to show any evidence in respect to their claims and defence, it goes against justice. For example, in the case of James v James (2018), the claimant also worked in his father’s farm for all of his adult life. He was aso a partner in the business. The partnership fell through and he disinherited. Unfortunately, he could not show any evidence of the intention of his father to transfer the farm to him despite what he understood. Just because there is no evidence of a promise, he got disinterested despite might be an existence of a statement of intention.

The observation in James v James (2018), somewhat contrasts the element of viewing the context of the case to establish entitlement. It depends on case to case and the flexibility of application of the doctrine is all subject to the existing current relationship between the parties, and this might disregard relationship between the parties until they find themselves in a dispute. This does not appear a fair outcome. This seems to be reinforced in James v James (2018), where the court is found to be endowed with great discretion. Context heavily shapes the outcome of a proprietary estoppel claim. In this case the court considered the personalities of parties while assessing the representation made by the by the father, which is “his son Sam would be "farming [the father's land] one day”. The court did not find this statement assuring when the fact of the case says the claimant worked most of his adult’s life in the farm. Just that the partnership fell through, the claimant got disinterested. The court went too much into the dynamics between the parties and deviated from the principle of looking the context correctly and its entirety. This observation might have been otherwise in cases like Tyrrell v Bowden (2018) where the tenants had a mistaken belief of eventually acquire the freehold over a land when there was not promise or assurance.

Overall, the court must formulate a proper set of rules and principle given the context, evidence and the relationship between the parties in the case. It must review the events, evidence, presentation made read with the context of the case and the relationship between the parties. The rules and principles must reduce uncertainties and ensure certainty in the representation made, whether it is a statement of intention or an assurance or promise. In this context, Lord Walker is right to a large extent in stating the approach to dealing with Proprietary estoppels claims.

Adverse possession of unregistered titles.

The Land Registration Act 2002 and the Limitation Act 1980 set out the requirement for adverse possession for unregistered land. These laws entitles a squatter certain rights to land subject to the length of time of squatting. A squatter can claim rights over an unregistered land he has been in adverse possession of land for period exceeding 12 years. He must have the intent to possess the land. There are cases such as Mr Best v Chief Land Registrar that are evidences of the rights of a squatter. In the former case, Mr Best repair work on the house and later moved in an abandoned property after having learned that the owner died long ago and the son had not been seen for many years. He successfully claimed adverse possession of the property.

The adverse possession regime is based on the principle of neutrality and that of fairness to parties involved. For example, the application for adverse possession of an unregistered land is dealt with paragraph 5 of Schedule 6 to the Land Registration Act 2002 where the owner requires so. The applicant has to show firstly, that it is unconscionable on the part of the owner to dispossess the applicant where the circumstances show that the applicant must be registered as the proprietor. Secondly, such circumstances and reasons entitle the applicant to be registered as the proprietor. Thirdly, the applicant has been under a reasonable belief that they were the owners and have been in adverse possession of land. Apparently simple, but it might be difficult to establish these points. For the first point, how will the applicant show that the circumstances, which may include that the owner encouraged or permit the applicant to have the belief that they owned the land? For the second point, how will the entitlement be proved when there is no evidence, such as a will or contract? For the third point, if the first two points are not answered, the adverse possession claim may not be successful at all.

The reasoning in favour of the adverse possession is to encourage the owner to register their property. It is meant to given more protection to the rights of the owners while projecting as a measure to balance the rights of adverse possessor. This could be seen in the procedure required in establishing adverse possession such as the three points mentioned above. In order to establish and register the possession, a claimant must show efforts in identifying the owner of the property and extending the protection to the owner by permitting them to veto any adverse possession through the process of filing the required application. Unless this procedure is followed, the claimant is deprived of their ability to lay a rightful claim. This reasoning and procedure is made to make adverse possession of unregistered land more difficult. However, the harsh result falls on the owners of unregistered land where they might have failed to register the property and are hence deprived of the protection afforded by the applicable laws.

The fairness question of the outcome of adverse possession claims also relies on the principle of human rights law as well. The ECtHR held in the case of Pye v UK (2017) that the law of adverse possession is consistent with the human rights law and complies with public interest in regard to the need to limit claims. Landowners do not have a right to claim recovery of the land. This is supported by the decision of the Court of Appeal in Ofulue v Bossert (2008), which states that the principle of adverse possession complies with human rights law and a landowner cannot challenge a loss of title on the ground of human rights unless the ground is extraordinary. The principle of adverse possession on an unregistered land is bound by the principle of limitation. If the claimant meets this principle, the owner cannot have a successful claim.

This gives a better title to the adverse possessor. This acts as a negative principle and applies a doctrine of relativity of title. However, if the adverse possessor has never been in adverse possession, the time cannot start against the owner at all. This means the owner never loses the title. This is supported by the case of Smith v Lawson (1997), where the claimant was given a license of the land for life. The possession cannot be held adverse. Thus, the principle of adverse possession on the face of it gives the right to adverse possessor to seek possession of the land within the stipulated limitation period. However, the law itself gives the ultimate protection of the owners of the land. This is seen in the application procedure where the owner is given a right to veto the application. Alternatively, it could also be viewed that the law directly or indirectly encourages the owners to get their properties registered. The adverse possession principle became challenging for those owners who face difficulty in registering their property.

Whether John is a licensee or a tenant of the Flat

It does not matter what language or words are used in the agreement. What matters is the substance of the agreement between the parties. There has to be a distinction made between what is considered a lease and what is a licence.

The Law of Property (Miscellaneous Provisions) Act 1989, s2 provides that a lease of three years or less could be created informally. It does not require a written contract as per Section 54(2) of the 1989 Act. In Street v Mountford (1985), if the licence agreement provides for exclusive possession of the property for a definite period of time and at the payment of rent, then notwithstanding whether there is a licence agreement, the agreement will be considered a lease. Thus, even if the parties signed a signed licence agreement, it will not be relevant and in effect the court will consider it to be a lease.

The important thing to consider is whether there is a tenancy or a licence. Necessary elements need to be considered. For tenancy or lease, one of the elements is the right to exclusive use of possession for a fixed or periodic term. Another element is payment of consideration in a lump sum or periodical payments. The land or property has to be identifiable. There has to be a definite period of occupation. The lessor must have a right of reversion. In the current case, Clause 1 provides for period of three years. This is an element proving lease. Clause 2 provides for periodically payment of licence fee of £1,500 per month. This is another element of lease.

John raised concern about Clauses 5 and 6 being included by mistake and Iain did not object to it. Further, Iain did not raise concern over John’s absence from the property in regard to the terms under Clause 6. This establishes fixed or periodic term of possession.

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All these elements are enough to show that John has exclusive use of the property and the licence is in fact a lease. Clause 4 giving Iain to enter the building in an emergency does not take away the exclusive possession of John. Also, Iain (or his agent) does not have a right to one hour every Wednesday in order to clean it. Iain also cannot enforce Clause 6 as the agreement is a lease giving exclusive possession to John.

Whether Iain is responsible for the central-heating system

A landlord will be responsible for extraordinary repair. He has the duty to replace or renew obsolescent the system. In case of ordinary repairs, the holder of the system will be responsible. However, it all rests with the agreement between the parties. If the lease is for a shorter term (less than 7 years), more often the burden falls on the landlord, as per Landlord and Tenant Act 1985. The landlord has the general duty to keep in repair the structure and exterior of the property and to repair and keep installations in proper working conditions, including water, gas, sinks, space heating and heating water. In the current agreement, the lease is for a period of three years. It comes under the short term lease. As such, Iain as the landlord will take up the burden of repairs. As per the Act 1985, Iain has the duty to keep in repair and proper working conditions of the property in general, including the repair of the central heating system. Moreover, if the central-heating system has become obsolescent, it is an extraordinary repair and he as the landlord will be responsible to replace the system. Clause 4 of the agreement also provides that Iain or his agent may enter the Flat at any time for the purpose of effecting emergency repairs. Iain can arrange an agent to get the system fixed at any time.


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