Analysis
In 2011 the appellants sold a building to the respondents for use as a dwelling-house. In 2012, the respondents proposed that the appellants transfer the Green Land and Grey Land in return for the waiver of a debt. The respondents prepared the Green Land for use as a garden until relations broke down and the appellants sued for possession of the Green Land and the Grey Land. At first instance the judge found that the parties had made an oral agreement in 2012, and that although the provisions of s2 of the Law of Property (Miscellaneous Provisions) Act 1989 has not been complied with, this was not fatal to a claim in proprietary estoppel. The judge dismissed the appellant’s claim for possession and awarded the respondents a licence over the Green Land that was irrevocable so long as one of the respondents was alive and owned the house. No estoppel arose over the Grey Land as it was not precisely defined. The appellants appealed.
Held, dismissing the appeal:
It was doubtful that s2 of the Law of Property (Miscellaneous Provisions) Act 1989 was intended to affect the operation of proprietary estoppel given that s2 was concerned with the formation of contracts for the sale of land and estoppel was concerned with remedying unconscionability in the assertion of legal rights. In any event, if s2 did apply, it could only apply to bar the grant of equitable relief if the relief would give effect to a contract for the sale or disposition of an interest in land that was invalid under the Act. In the instant case, the estoppel had been raised to defeat the possession claim and the relief given to satisfy the equity was an irrevocable licence which would not offend s2 even if it applied (paras 48-55).
The general position is that s2 does not inhibit the grant of equitable relief on the basis of proprietary estoppel, provided that such relief does not amount to enforcing a non-compliant contract for the sale of land. A case did not have to be exceptional before proprietary estoppel could be founded. It could not be unconscionable for a defendant to rely on s2 as a defence to enforce a non-compliant contract for the sale of land, but if a claimant is seeking relief that amounts to the enforcement of a non-compliant contract, they need to point to something else as the basis of an estoppel based on unconscionability (paras 56-70).
The judge had been correct that the relief granted was not prohibited by s2, that no exceptionality test had to be met, and that no estoppel could arise in respect of the Green Land as the agreement for the Grey Land was not complete. The waiver of the debt was consideration for both pieces of land, but the equitable relief was not the enforcement of the transfer of the land, and the unconscionability and detrimental reliance related to the Green Land. The estoppel prevented the possession of the Green Land (paras 72-77).
JUDGMENT MR JUSTICE SNOWDEN: [1] This appeal concerns the requirements for a proprietary estoppel and the relationship between such requirements and the provisions of s2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 (s2). [2] Section 2 provides, in material part, ‘A contract for the sale or other disposition of an interest in land …Continue reading "Howe & anr v Gossop & anr [2021] WTLR 539"