ESTOPPEL

Proprietary Estoppel The classic case here is Ramsden v Dyson (1866). Two limbs of proprietary estoppel emerge from this case 1. Mistake Majority of speech by Lord Cranworth. 2. Expectation

Mistake Limb Where landowner fails to intervene when he sees another person expending money on land in the mistaken belief that it belongs to him, landowner will subsequently be estopped from insisting on his strict legal rights. McMahon v Kerry County Council [1981] In this case there was a generous application of this limb. Land that KCC sold to McM was meant to be a school. Council built 2 houses on land. McM noticed and told builders. Built anyway and so McM claimed he was entitled to houses. At the time there was a housing shortage so the policy behind this decision was that the judge did not want to give away 2 free houses. Here the KCC got the land but had to buy a new piece for McM. One could argue that although clearly a common sense approach, it was not a legally sound one. This decision is criticized quite a lot.

Expectation Limb Although he was in the minority, this stems from Lord Kingsdowns judgment in Ramsden. Smyth v Halpin [1997] Here the son wanted to build a house so the dad suggested he build it on his land. Son built a totally intergrated house extension. Father died but left land to the sister. Court found in favour of the son and he was given a fee simple remainder. Sister enjoyed the land until the mother died so in the end he got what he was promised as he wouldnt have got the land until the mother had died anyway.

Carter v Ross (2000) Interesting to compare this case to Smyth above. Here the plaintiff was not successful. The old man in this case met his nephew at a funeral. Nephew moved back home for uncle but lived within driving distance. He confronted the uncle after he was told that the uncle was going to leave the land to someone else. Nephew brought action. Representation was somewhat vague and detriment was not significant. Court refused the action.

There must be assurance This is a representation made with the intention that it will be relied upon. It can be express or implied but it must be clear. Ramsden v Dyson (1866)

There must be detrimental reliance This is usually comprised of two parts, reliance and detriment. Reliance is established if a representation was calculated ti influence the judgement of a reasonable man. It is the causal link between the assurance and detriment. As the case of Greasley v Cooke [1980] noted, where assurance is established, reliance is generally assumed. In this case, the plaintiff moved into the house as a maid. She became a lover and an unpaid maid. Took care of owner and daughter. He promised she would always have a home however she was not taken care of in the will. There was clearly assurance and reliance but was there detriment? Luckily it was Denning J in the court and the unpaid wages constituted detriment.

Sometimes, a very generous approach is taken in Irish law on detriment. An example of this is the case of Re JR (A Ward of Court) [1993]. Questionable detriment here. Couple met in psychiatric institution. Man invited woman to live in his house rent free with financial support.

Man developed dementia and was moved into a home. Where is the detriment? Costello J stated that she gave up a home somewhere however this was neither proven nor specified. Ignored the fact that she didnt have to pay rent and got finances. Maybe judge should have looked at the net detriment.

A stricter approach to detriment is evident in the case of McGuinness v McGuinness (2002) where it was held that detriment must be pleaded and proven.

Remedies There are numerous ways in which court may satisfy equity in favour of a claimant. In principle it seems that the remedy should normally seek to erase the detriment suffered by the claimant, rather than to fulfill the expectation raised in the claimant. Although this does not seem to be the position in Ireland there seems to be a movement away. Commonwealth of Australia (1990). The United States has taken a similar approach. And the English position seems to be a half-way house. In the case of Jennings v Rice [2002] the court said that there should be proportionality between detriment suffered and what you were getting out of the arrangement. Willmott v Barber (1880) Introduced restrictions known as the five probanda. Seemed to restrict the proprietary estoppel to cases involving a mistake on the part of the claimant

The problem with this was clearly demonstrated in the decision of Cullen v Cullen [1962]. Father suffered from incipit paranioia, tried ti get him into an institution. Fled to Dublin a contacted the family through priests. Agreed to sign over land if family agreed not to send him away. Family won a portable house and placed it on fathers land. Land never transferred. Court couldnt apply Ramsey as son hadnt made a mistake as to his legal rights. Court resolved issue on basis of promissory estoppel. As it can only be used as a shield, the court protected him by estopping the father form evicting the son. After 12 years the son would get adverse possession of the land.

The 5 probanda were effectively rejected in the case of Taylor Fashions (1982). Here the court said that the 5 probanda were not universal and instead focused on the notion of unconscionability that is that it would be unconscionable for a party to be permitted to deny that which knowingly or unknowingly he has allowed or encouraged another person to assume to his detriment.

This is broadly in line with the Australian position which removed the distinction between the two estoppels.

More limitations on Proprietary Estoppel Yeoman's Row Management Ltd v Cobbe [2008]. Experienced property developer reached an agreement (in principle) that if he got planning permission he could develop the land. Other party changed their mind but did not tell Cobbe. In the HOL Cobbe got restitution for the value of the work performed. The two speeches by Lords Walker and Scott are both controversial.

This decision could have had potentially serious implications for the existing doctrine of proprietary estoppel but there was an apparent retreat by the House of Lords in Thorner v Major [2009]. The primary difference was that this case involved a domestic context as it concerned two farmers. There was an oblique promise one would inherit the farm. They were reserved men. Younger one gave up working opportunity and the work was unpaid. The older one had a fight with another beneficiary and tore up the will. There was no inheritance for the younger man as the will had been revoked. HOL found he was entitled to the farm. Lord Neuberger wrote after this case that in a commercial context you need an irrevocable promise whereas this is not required in a domestic setting.

An Cumann Peile Boitheimeach Teorenta v Albion Properties Ltd [2008]. There were negotiations to buy part of Bohemians Football Clubs land. Got money from property developers. Got a better offer, told developers that the deal was off and gave them back the money. The high court found in favour of the property developers and found a valid claim to proprietary estoppel. The contract in this case was not finalised similar to Cobbe. The HC followed the COA decision on Cobbe case which was subsequently overturned.

Relationship Between The Two Estoppels

Walton Stores v Maher (1988). Here, the High Court of Australia held the distinctions between the different forms of estoppel should be dissolved.

Maher was in negotiations with Walton Stores. The deal was that Maher would demolish a building on his land and custom build one to suit Walton Stores. Exchanged contracts but never signed them. They reassured Maher that contracts were a mere formality. Walton stores decided not to go ahead with agreement and Maher had incurred a lot of detriment. He wanted to enforce them but this would be a positive remedy, so proprietary estoppel wouldnt work here (there was no interest in land). As well as this, promissory estoppel can only be used as a defence, so Maher was fucked. The HC dissolved the distinction and created a new one broadly based on the notion of unconscionability.

Does this undermine the principle of consideration in contract law? Not really as it is not enforcing a contract, merely remedying a detriment. This was followed in Australia in the case of Commonwealth of Australia (1990). Irish Developments England are not following this position however Ireland has not really considered it. There is an atmosphere of confusion surrounding this topic in Ireland, following the case of Cullen. This in turn led to confusion in the KCC case. It appears to be messiness due to confusion as opposed to a deliberate merging. The case of Re JR (A Ward of Court) [1993] adds to this confusion. The judge gave a positive remedy based on promissory estoppel. Costello J. disposed of the case on the basis of promissory estoppel even though the remedy he ordered seems more appropriate to proprietary estoppel. This could be viewed as a deliberate attempt to merge the two doctrines. Delany referred to this decision as one of the most controversial decisions in this context. Coughlan points out Costello Js failure to address fully the implications of the radical step he was taking.

Courtney v McCarthy [2007]. Contract for the sale of land worth 1.8 million euro. Delayed for a long time as the potential buyer didnt have enough money contract rescinded kept deposit. Negotiated further, new deadline set so deal could go ahead. Had to put forward finalising as the seller and her husband solicitor had gone on holiday. There was a mix up. Buyer argued detriment as he took out mortgage now paying a mortgage although admittedly small.

SC found that he had acted to his detriment and he won the case.

A major argument on behalf of the vendor which featured particularly in the High Court was based on the old adage that estoppel was a shield and not a sword. Again, some of the modern English case law placed before this court convincingly demonstrates that while there may be a technical truth in that adage it is largely irrelevant as far as having any operative effect. It certainly does not mean any longer, if it ever did mean it, that estoppel can only be a matter of defence and can never ground a cause of action. Estoppel is regularly raised as a matter of reply to a defence. Liberty Asset Management Ltd v Gannon [2009]. 2 businesses wanting to move to bigger premises. The judge enforced the contract in this case. Noted that even if contract was not binging the claim would succeed on the basis of estoppel. Plaintiff was never going to get an interest in the land. This decision seems to go some way to the unification of the two estoppel doctrines however it is not clear and does not seem to be intentional.

In the case of Crabb (1976) Scarman LJ commented on the distinction between the two doctrines, claiming that it is not helpful. Treitel believes that a doctrine as all-embracing as the Australian position could not possibly provide the basis for predictable results, which is of coarse desirable. Delany holds the view that it is questionable if such a broad doctrine based on unconscionability is desirable. Although Costello Js reasoning in Re JR appear to follow the Australian position, it is not proper to judge the direction the Irish law is going on the matter on a judgment which in all honest does not address the important implications of its reasoning. Mee states that there has been nothing resembling a carefully considered (or even conscious) decision to merge the estoppels in Ireland and that as such the two doctrines retain their individuality. What he does believe has happened is that in a number of cases, justice was done without proper regard to the niceties of the legal doctrine. Delany supports this view stating that it would be unlikely to see a unified doctrine of estoppel any time soon. What does seem to be clear however is that the notion of unconscionability is becoming a more integral aspect of estoppel. Perhaps in time this common foundation will set the scene for the unification of the doctrines in Ireland, but before any advancement may take place the current position must be clarified.