This essay focuses on proprietary estoppel, where modern equity is mostly concerned with informal promises of interests in land.
It is argued that equity, in enforcing informal promises of interests in land per se, has not been taken too far: this is consistent with equity’s role in supplementing the law. However, enforcing promises should not be the presumptive response in proprietary estoppel cases. This takes equity too far, for it threatens to undermine equity’s supplementary (and not supplanting) role.
Where A’s promise does not relate to land, equitable estoppel operates negatively, to control A’s assertion of a right (Baird Textile Holdings v Marks & Spencer plc [2001] EWCA Civ 274).
Where A’s promise relates to land, however, estoppel may provide a cause of action, an independent source of rights – rights which may be personal (eg Jennings v Rice [2002] EWCA Civ 159) or, as is often the case, proprietary.
Yet, the enforceability of promises to dispose of interests in land is governed by contract law, as supplemented by statute, which requires specific formalities (section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989).
Arguably, equity is effectively supplanting the law in enforcing non-contractual promises of interests in land (even in “imperfect gift” cases, eg Thorner v Major [2009] UKHL 18) – and a fortiori promises that could, but for the failure of formalities, have been contractually binding (Cobbe v Yeoman’s Row Management Ltd and another [2008] UKHL 55; [2008] 3 EGLR 31).
A useful example is Rojob v Deb [2022] EWHC 1572 (Ch). A and B orally agreed that if B sold his matrimonial home to A at an undervalue and maintained the mortgage repayments on it, B would acquire a right to buy back the property from A. B performed his side, and sought to exercise the right, but A resisted the sale.
The court held an equity arose in B’s favour, based on A’s “failed” contractual promise – satisfied by reconveying the property to B on payment of the agreed sum. Equity thus enforced A’s informal promise, despite the statute rendering it ineffective as a promise to create an interest in land.
Substance and form
This argument obscures an important distinction between substance and form. Even where equity “enforces” A’s promise, it does not hold that A came under an immediately binding duty of performance – it accepts A’s promise is legally invalid.
Rather, equity “looks backwards from the moment when the promise falls due to be performed and asks whether, in the circumstances which have actually happened, it would be unconscionable for the promise not to be kept” (Walton v Walton [1994] Lexis Citation 3926).
Dixon (“Painting Proprietary Estoppel: Howard Hodgkin, Titian or Jackson Pollock?” [2022] Conv 30) argues “unconscionability is not the same as ‘making a mistake’”: cases such as Rojob simply involve “failed land contracts, and the fact that one person is disadvantaged by that, where this is not caused by the unconscionable conduct of the other, is not something that should be alleviated. It is, rather, the pursuit of the legislative policy found in the formality rules.”
But, importantly, the equity is not founded simply on the invalid informal promise, but also on A’s accompanying representation to B, “by his words or conduct, including conduct in the provision or delivery of the agreement, that the agreement created an enforceable obligation” (Kinane v Mackie-Conteh [2005] EWCA Civ 45; [2005] PLSCS 14).
This distinguishes such a case from, eg Cobbe, where A and B knew A’s informal promise was legally ineffective, and where equity (rightly) withheld from enforcing it.
A similar argument might be made about equity’s potential to undermine A’s freedom to decide, and change their mind, about the devolution of their estate on death – as in Guest and another v Guest [2022] UKSC 27; [2023] EGLR 2, where B’s successful estoppel claim effectively reversed A’s testamentary choices.
However, the key point here is that equity’s ostensible qualification of these legal rules is a corollary of its important supplementary, second-order role.
Whereas promissory estoppel restrains the abuse and unconscionable assertion of legal rights, proprietary estoppel mitigates the risk inherent in the existence of legal power-conferring rules – such as those enabling inter vivos or testamentary dispositions of interests in land – and of strict formalities regulating their use that they will be abused: in particular, by causing B to suffer a detriment through reasonable reliance on a promise that such a power will be exercised.
How far is too far?
Consistent with this supplementary function, though, equity should only go so far as is necessary to insure against that risk – to protect against the harm B would suffer following withdrawal of a promise that induced, and was seriously intended to induce, reasonable reliance.
Enforcement of A’s promise may well be justified: eg where the “extent of imponderable and speculative non-financial detriment” cannot be measured (Davies v Davies [2016] EWCA Civ 463).
But, with respect to the majority in Guest, it goes too far to hold that enforcement of A’s promise should be the presumptive or “primary remedy for the unconscionability threatened or occasioned by its breach”, with proportionality to B’s detriment relegated to a negative, “cross-check” role.
Suggitt v Suggitt [2012] EWCA Civ 1140 demonstrates the potential excesses of this approach, where A’s valuable promises of inheritance were enforced, overriding A’s will, far outstripping the meagre value of B’s reliance.
In such cases, equity is taken too far, generating unforced obscurity around the conceptual distinctions between equitable estoppel and A’s exercise of a power to give B a right by contract/will.
However, Suggitt is arguably an outlier; and enforcing A’s promise in Guest itself may be appropriate given the “incalculable whole-life consequences” of B’s reliance.
Yet the extent of courts’ willingness and ability, post-Guest, to maintain discipline about their equitable jurisdiction to give some effect to – and where appropriate, enforce – informal promises of interests in land remains to be evaluated.
This year’s winners
In this year’s Property Bar Association student essay competition, entrants were set the following question: “Has equity been taken too far in enforcing informal promises of interests in land?”
First prize of £1,000, a hardback copy of Megarry and Wade: The Law of Real Property and publication in EG went to Zachariah Pullar of the Inns of Court College of Advocacy Bar Course.
The final round judges (Tiffany Scott KC, chair of the PBA, and Philip Rainey KC, deputy chair) praised it as “a wide-ranging review… placing the principles in a broader context”. They added: “The author impressively contrasted between the equitable and contractual regimes, proprietary and promissory estoppels and differences in remedy. Really interesting, clear and well-written.”
Second prize (£500 and a copy of Megarry & Wade) went to Anaya Price of the University of Bristol (LLB). Third prize (£250 and a copy of Megarry & Wade) went to Ruari Clark of City University (LLB).
