Reflections on Proprietary Estoppel Claims

19 June 2024

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You will come across in practice situations where proprietary estoppel will be mentioned or raised by a client. They obviously won’t use the phrase but they will know it when they see it. These cases arise where there is the “classic formulation” of promise and reliance to one’s detriment.

I’m not sure if you recall from University days the case of Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130 where the concept of promissory estoppel was established. You might also recall the phrase that we learnt at Uni/FE 1 studies and contract that promissory estoppel was “a shield but not a sword”. This is different with the proprietary estoppel claims as they are indeed a sword, and can be the basis of an action.

Property Interest

It is unclear the extent to which the proprietary estoppel matter gives rise to an actual property interest. The following is instructive from Keane on Equity

The result of the successful invocation of the equity is usually to give the party relying on it a proprietary interest in the land. In some cases, it may entitle that party to no more than a charge or lien on the land for the amount he spent. In others, the owners may be permanently restrained from interfering with his possession of the land, thereby giving him a form of irrevocable personal licence. And there have been cases in which the owner has been required to transfer his interest, or to grant some lesser form of interest, in the land, to the aggrieved party. Hence, these cases are frequently described as cases of proprietary estoppel, although this description has not been universally approved.

(Equity and the Law of Trusts in Ireland, 3rd ed., 2017, Bloomsbury Publishing, para 27.33]

I generally find that a lot of these cases fall down because of they lack the promise or they lack the detriment.

Weak Promise

So take the example of a close neighbour of a testator who as a child would call over to the neighbours house over the years and help out with the neighbour and the neighbour would be like a second parent to the child. It perhaps happened more often years ago than now, but facts such as this arise from time to time. During the course of the relationship over the years, the adult neighbour might give intimations to the child, but they may or may not be sufficient to establish a promise. So in my view phrases such as “What will I do with all of this?” or “You’ll be fine in the future” would not be sufficient to establish the promise.

Lack of Detriment

Also, at times, clients fail to establish the detriment. So, they might help out a neighbour over the years, but that might be work that they would do in any event. So they may have drove them to medical appointments, looked after their garden or even personal grooming. Work that would be done out of a sense of humanity in any event. They won’t have necessarily established the detriment. To establish the detriment, one needs to demonstrate altering your course of action which disadvantages you. So, forgoing a job opporunity, spending money of out of your own pocket. That type of activity.

Impact of Proprietary Element

An interesting question arose as to whether a property which is subject of a proprietary estoppel claim, thus falls in the estate of the deceased. One could view this in two ways. The first being that, “Well, if it is a genuine claim, then there is a property interest and the property belongs to the promissee and falls out of the estate”. The other view is that the claim is an “inchoat” right or a “contingent” right, in that while the right to the property might exist, it doesn’t come into existence unless claimed by the promisee.

This question does have important implications, in particular as to whether or not a surviving spouse can include that property as part of any legal right share claim. Whether the asset is in or out of the estate has important implications for that type of action.

Conclusion

Unfortunately, there are no clear-cut rules with respect to these types of cases. It is very much up to the judgment of a solicitor together with advice from counsel as to the viability of any proprietary estoppel claim. Like all litigation, the clear-cut cases pose no problem. The risks of costs become far more into play in cases where the facts are more on the outer perimiter of the “classic formulation”.

Hope this helps or is of interest and if you have any will drafting, probate or tax queries, please do not hesitate to get in touch at colm@theprobatehub.ie or through the query form on our site.