Assessing Proprietary Estoppel in Property Rights

Question 2.

There are two legal issues in this situation. First, whether Frederick has an interest in the country cottage. Second, whether Michonne has an interest in the London house. The law related to proprietary estoppel is discussed with reference to these interests.

In Cobbe v Yeoman’s Row Management Ltd, proprietary estoppel was explained as a bar on the asserting some fact or law that stands in the way of a right claimed by the person entitled to the benefit of the estoppel. In Crabb v Arun District Council, proprietary estoppel was explained as an equitable doctrine that provides protection to a person acts in reliance on an expectation that they will receive an interest in the landowner’s land and consequently, prevents a person from insisting on legal rights when it would be inequitable to do so having regard to the dealings that took place between the parties. Proprietary estoppel can be used to claim an interest when a promise has been made by the landowner that the promisee will have interest in their land or property as in the case of Dillwyn v Llewelyn, where a son was allowed interest in the property under a promise made by the father that the son would have such interest if the son built a house on the land. In the present case, Clarence suggested that Frederick and Elizabeth could live in his country cottage and can live there “for as long as you like, and convert the outbuildings into studios’. Frederick and Elizabeth borrowed £20,000 from the Bank to convert the outbuildings. There should be an expectation of interest in the land at some point in the future as held in the case of Ramsden v Dyson. The expectation should be related to acquiring an interest in the property as held in Inwards v Baker.


Thus, the three important requirements that are to be satisfied for the application of the proprietary estoppel are representation or expectation as rights in land; reliance; and detriment. In this case, the expectation is that Frederick can live in the property for the rest of his life if he converts the outbuildings. While the expectation is not to acquire any other interest other than the interest of possession, this expectation is made out by the words of the father and the conduct of the son in converting the outbuildings at his detriment on the expectation that he can continue living there for life. In a similar case, Greasley v Cooke, the claimant was assured by family members that she could stay in the property for the rest of her life and she lived here while taking care of a mentally ill relative. It was held that she had a reasonable expectation and estoppel was applicable to protect her interest as she had relied upon these assurances as shown in her conduct. Thus, as per the decision of Coombes v Smith, this shifts the burden on the estate to prove that Frederick did not rely on the promises made by the father.

Detriment is also established in the case as Frederick has taken a loan to convert the outbuildings on the strength of the reliance placed on the words of his father. In Inwards v Baker building of a bungalow on the father’s land was held to be sufficient detriment to give rise to proprietary estoppel. In Pascoe v Turner, improvements made to the property was held to be sufficient detriment.

Based on the above analysis, Frederick can claim interest in the property to live in the property for lifetime based on the principles and law of proprietary estoppel.

With regard to Michonne, she moved into Clarence’s London house, to assist him in his old age. This move was done at the suggestion of Clarence. Clarence has made many suggestions as to leaving his house to her in his will, and she has kept house for him and even left her part- time work as a florist for two years to look after Clarence. Again, the principles of proprietary estoppel can be applied here to consider whether the principle can be applied to uphold an interest in the property for the benefit of Michonne. The three important requirements that are to be satisfied for the application of the proprietary estoppel as mentioned above, are representation or expectation of rights in land; reliance; and detriment. Clarence can be said to have made a representation or expectation of rights in the land. He has said time and again that he will leave the house to Michonne in his will. Reliance can be made out as Michonne came to live with Clarence and to take care of him.

Detriment can be considered next. Michonne not only looked after her father, she also gave up on work to do so. In Gillett v Holt, an important explanation of what detriment means has been provided where it has been noted that detriment is not a narrow or technical concept consisting only of expenditure of money or other quantifiable financial detriment. Detriment can also be something substantial. The court is required to acquire as to whether the repudiation of an assurance will be unconscionable (Gillett v Holt).

The question however, is whether Michonne’s actions amount to something substantial enough for there to be detriment. In Coombes v Smith, the court held that simply moving into a property is not sufficient to establish detriment because such as move can also be seen as a benefit. In the present situation, the move made by Michonne may be seen as a benefit to her because she got to live in a flat above the house after her divorce for which she did not have to pay any rent. In contrast, in Tanner v Tanner, where the move was held to be a detriment, Mrs Tanner had given up a secured tenancy to cohabit with Mr Tanner which could have been considered to be ‘something substantial’ enough if the case had been decided on the basis of proprietary estoppel (it was decided on the basis of licence). This was the case in Southwell v Blackburn, where the claimant had given up a secured tenancy on a house, on which she had spent considerable money to move in with Mr Southwell and she also gave up her job and contributed some amount to the purchase amount of the house due to which reasons the Court of Appeal considered that it would be unconscionable to not uphold her interest.

In the present situation, Michonne has not given up anything substantial to make this move. She has given up a part time job as a florist to look after her father for two years, but in this period she has also lived rent free in the house. Her job as a part time florist may also not amount to something substantial which can allow the court to see it as unconscionable to not uphold her right in the property. On the other hand, Michonne may claim detriment on the basis of the personal services that she provided to her father looking after his large house for no salary and also looking after him full time for a period of two years based on the case of Jennings v Rice, where the claimant’s right was upheld on the basis of his providing work as a gardener and handyman for assurance of house and furniture and the case of Greasley v Cooke, where claimant’s interest was upheld on the basis of his having looked after family members without any payment.

Based on the above cases, Michonne may claim detriment and consequently claim interest in the house based on proprietary estoppel.

Question 3.

The issue in this case is whether the agreement between Martin and Elizabeth on one hand and Annette on the other amounts to a tenancy or a licence. The law related to tenancy will be discussed to assess the status of the agreement. In the event that they are deemed to be tenants, they will have the protection of the Housing Act 1988 and Protection from Eviction Act 1977. The nature of these protections is discussed in the latter part of this essay.

Even where the agreement is termed specifically as a licence and not a lease, the law can establish a tenancy between the two parties if the terms of the agreement satisfy the establishment of tenancy and not a licence. In Street v Mountford, the court has explained that the law will infer a tenancy and not a licence where the agreement includes the right to exclusive use of possession of the property; possession is for a fixed or periodic term; and the consideration for the same is an agreed to lump sum or periodical payments. Tenancy can be inferred with respect to agreement for an identifiable land and a right of reversion for the landlord. As per Ashburn Anstlalt v Arnold, the essential element for the construction of a tenancy is the grant of interest to exclusive use or possess property for a certain period of time and not even the payment of a periodic or lumpsum rent. A tenant has more protections with reference to the possession of the property as compared to a licensee, for which reason, tenancy is preferred over licence for the protection of the interests of Martin and Elizabeth.

The point to be noted here is that even though the agreement mentions that the agreement “is a licence and will last for five years or until Anne needs the flat back for her own occupation”, this terminology by itself does not infer licence because if the conditions for this to be a tenancy are present in the case, then the court will infer tenancy regardless of the use of the term ‘licence’. As mentioned, these conditions are exclusive use or possess property for a certain period of time and payment of rent although the last condition is not mandatory. In this case however, such periodic rent is charged as per agreement where it is written that an occupation charge of £250 per week shall be charged. Periodic rent can be charged per week, month or annually. Therefore, this occupation charge can be argued by Martin and Elizabeth to be a rent.

In this case, there is an identifiable property, a fixed period mentioned for the agreement and also condition with reference to the payment of rent. However, the question is whether there is exclusive possession of the property because this is the most important condition for the establishment of tenancy. One of the terms of the agreement is that Annetta will retain keys to the flat. This raises a question as to whether the possession of the flat can be said to be exclusive for the couple. The facts and judgment of Aslan v Murphy may be considered here to assess the nature of the agreement between Martin and Elizabeth and Annette. In Aslan v Murphy, Aslan occupied a basement room and the agreement with the landlord expressly stated there was no right to exclusive possession for Aslan under the agreement. Similar to the present case, the landlord also was entitled to keep a key to the premises, and Aslan was required to leave the property for 90 minutes every day. The question of whether Aslan was a licensee or a tenant arose when the landlord sought to evict him and Aslan challenged an order for possession by arguing that the retention of the key and his exclusion from for 90 minutes every day from the property was a sham so that he could not claim rights as a tenant under the law. The court agreed with the claims of Aslan in the case and held that despite the agreement being described as licence and the landlord retaining a set of keys and excluding Aslan from the property for 90 minutes daily, did not mean that the agreement was to be considered a licence. Importantly, the court held that they should examine the reasons why the landlord retains the key to the property and if this is done for the purpose of emergencies, meter readings, repairs, or other such reason, then the tenancy could be established. However, the court also held that if the keys are retained for cleaning services, then the occupier could be deemed a lodger and not a tenant. In this case, the agreement did contain a term that “Spotless plc will provide cleaning services every Sunday morning between 10.00am and 11.00am.”

Therefore, the landlord may claim that the key is retained for housekeeping suggesting that the agreement is a licence and Martin and Elizabeth are lodgers and not tenants. However, Martin and Elizabeth could argue that they are tenants because despite retaining the key, the housekeeping services have not been provided to them barring the one time and despite Martin emailing Spotless plc with a reminder. Therefore, they could claim that the key is not retained for that purpose and this could be used by them as a ground for claiming that the keeping of the key and the clause about housecleaning are pretexts to deny tenancy of Martin and Elizabeth. Therefore, there may be a need for the court to consider why really the keys were retained before ascertaining that the keys were kept for housekeeping or emergencies. In this case, as housekeeping has not really taken place on a consistent basis, Martin and Elizabeth could claim the retention of the key does not signify absence of exclusive possession for them. Continue your exploration of Understanding the Dual Nature of Leases with our related content.

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Under the Protection from Eviction Act 1977, the interest of the tenant to be protected from evictions without order of the court is provided under Section 3. Section 5 requires that tenants be provided four weeks’ notice for removal from the property. Under Section 1(2), unlawful eviction is actionable. Furthermore, under Housing Act 1988, Section 27, the tenant has a civil action for damages for unlawful eviction. These are the important protections that tenant gets but licensees or lodgers do not. Therefore, it would be important for Martin and Elizabeth that they be recognised as tenants and not as licensees because that would offer them more protection under the law.

To conclude, Martin and Elizabeth may claim that this agreement is not a licence but a tenancy agreement regardless of the terminology used by the landlord. In the event that the agreement is a tenancy agreement, there are certain protections that come into effect for them. The issue of the key is central to the assessment of their tenancy. As per the common law as it stands at present, the courts assesses the reasons for the retention of the key by the landlord to ascertain whether the retention of the key amounts to exclusion of exclusive possession or not. In this situation, it can be argued that as the house has only been cleaned once, it cannot be argued that the retention of the key amounts to the parties being lodgers and not tenants.

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