Proprietary estoppel can operate to enforce an agreement that does not comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 provided that the necessary ingredients of proprietary estoppel are satisfied.
The County Court has considered such issues in Conway v Conway and another [2024] EW Misc 19 (CC).
The case concerned a property known as the Barn which formed part of Church Farm, Bedworth, Warwickshire, comprising over 20 acres of land and buildings owned by the claimant.
Discussions took place in March 2019 for the defendants, Stephen Conway and his wife Amber Meek, to buy the Barn for £150,000. They intended to convert it to “a forever family home” for them and their family.
The terms of the discussions were not agreed. Peter Conway asserted that the purchase price reflected the renovation works required, that it would be deferred while those works were ongoing, and there would be a call option for him to repurchase the property which was necessary in the event of a sale of Church Farm for redevelopment.
The defendants denied the call option and argued that the boundaries and land sold with the Barn were agreed and they would be granted access across Church Farm land.
In reliance upon that agreement they undertook extensive works, sometimes with the claimant’s assistance, at a cost of more than £230,000.
The parties’ relationship broke down when they sought to finalise the oral agreement through solicitors in early 2020, with the option being the main bone of contention.
The claimant sought a declaration that the defendants were not entitled to enter Church Farm or the Barn. The defendants counterclaimed in proprietary estoppel for an order transferring the Barn to them.
The court decided, like Megarry & Wade, that proprietary estoppel may make it possible for an agreement that does not comply with section 2 of the 1989 Act to be enforced provided that the necessary ingredients of proprietary estoppel are satisfied.
Almost every contemporaneous document demonstrated that it was not until November 2021 that any option to repurchase the Barn was raised. The court concluded that no option was agreed between the parties.
There was a sufficiently clear and unequivocal representation by the claimant to the defendants that he would sell the Barn to them and clear-cut cases of reliance, detriment and unconscionability.
The claimant had allowed the defendants to renovate and carry out other works to the Barn at significant cost in time and money in the belief that he would sell it to them. They were entitled to enforce the oral agreement.
Louise Clark is a property law consultant and mediator
