|Thorner v Major|
|Court||House of Lords|
|Full case name||Thorner (Appellant) v Major and others (Respondents)|
|Citation(s)|| UKHL 18,  1 WLR 776|
|Judge(s) sitting||Lord Hoffmann, Lord Scott of Foscote, Lord Rodger of Earlsferry, Lord Walker of Gestingthorpe, Lord Neuberger|
Thorner v Major  UKHL 18 is an English land law case, concerning proprietary estoppel.
English land law is the law of real property in England and Wales. Because of its heavy historical and social significance, land is usually seen as the most important part of English property law. Ownership of land has its roots in the Anglo-Saxon system of Bookland and in the Anglo-Saxon multiple estate, a feudal system transformed by William the Conqueror and his influx of many new chief landlords after 1066. The modern law's sources derive from the old courts of common law and equity which includes legislation such as the Law of Property Act 1925, the Settled Land Act 1925, the Land Charges Act 1972, the Trusts of Land and Appointment of Trustees Act 1996 and the Land Registration Act 2002, and the European Convention on Human Rights. At its core, English land law involves the acquisition, content and priority of rights and obligations among people with interests in land. Having a property right in land, as opposed to a contractual or some other personal right, matters because it creates privileges over other people's claims, particularly if the land is sold on, the possessor goes insolvent, or when claiming various remedies, like specific performance, in court. Capital taxation, the industrial revolution and reform of the established church has resulted in a shift from predominant ownership by the church and landed gentry to largely agricultural, minority aristocratic ownership. This means today sites for development belong to a complex web of owners able meet market demand-side forces for development, tempered by supply-side forces including the values enshrined in public planning policy to protect green spaces and promote sustainable, locally diverse and socially useful development of land.
Proprietary estoppel is a legal claim, especially connected to English land law, which may arise in relation to rights to use the property of the owner, and may even be effective in connection with disputed transfers of ownership. Proprietary estoppel transfers rights if,
On Peter Thorner’s Steart Farm, Cheddar, Somerset, David Thorner, second cousin, worked for Peter for 30 years unpaid, as well as on his parents’ farm, where he got housing and money. He worked long hours and believed he would inherit the farm, encouraged by Peter’s conduct over 15 years, such as in 1990 giving a bonus relating to two assurance policies, saying ‘That’s for my death duties.’ But there was no explicit promise or assurance. Peter left the farm to David, and also money to others. But Peter destroyed the will when he fell out with the others and did not make a new will. So the property passed by statute to the others. David claimed proprietary estoppel.
Cheddar is a large village and civil parish in the Sedgemoor district of the English county of Somerset. It is situated on the southern edge of the Mendip Hills, 9 miles (14 km) north-west of Wells. The civil parish includes the hamlets of Nyland and Bradley Cross. The village, which has its own parish council, has a population of 5,755 and the parish has an acreage of 8,592 acres (3,477 ha) as of 1961.
Somerset is a county in South West England which borders Gloucestershire and Bristol to the north, Wiltshire to the east, Dorset to the south-east and Devon to the south-west. It is bounded to the north and west by the Severn Estuary and the Bristol Channel, its coastline facing southeastern Wales. Its traditional border with Gloucestershire is the River Avon. Somerset's county town is Taunton.
Death is the permanent cessation of all biological functions that sustain a living organism. Phenomena which commonly bring about death include aging, predation, malnutrition, disease, suicide, homicide, starvation, dehydration, and accidents or major trauma resulting in terminal injury. In most cases, bodies of living organisms begin to decompose shortly after death.
The Court of Appeal(Lloyd LJ, Ward LJ and Rimer LJ) held David had no proprietary estoppel claim because there was never a clear and unequivocal assurance.
Sir Alan Hylton Ward is a former judge of the Court of Appeal of England and Wales.
John Randall QC held David had a right to Steart Farm.
The House of Lords held that the only thing that mattered was whether a reasonable person could have relied on the conduct that looked like an assurance.
Lord Hoffmann said that speaking in oblique and allusive terms does not matter if one could reasonably believe one was being given an assurance. What mattered was whether Peter’s conduct ‘would reasonably have been understood as intended to be taken seriously as an assurance which could be relied upon’. There was no requirement that Peter intended David to rely on him.
|“||8. There was a close and ongoing daily relationship between the parties. Past events provide context and background for the interpretation of subsequent events and subsequent events throw retrospective light upon the meaning of past events. The owl of Minerva spreads its wings only with the falling of the dusk. The finding was that David reasonably relied upon the assurance from 1990, even if it required later events to confirm that it was reasonable for him to have done so.||”|
Lord Scott held to the view that proprietary estoppel can only be used where the assurer believes they have or will have very soon acquired a right in someone’s land. He said though he would not disagree about proprietary estoppel, he would ‘find it easier and more comfortable to regard David’s equity as established via a remedial constructive trust.’ The elements of a claim are clear assurance, reasonable reliance, substantial detriment. Proprietary estoppel brings uncertain results, e.g. if Peter intended to give up the farm, but before then had wanted to use the farm as a home given his old age. Cases like Ramsden and Crabb can easily be understood as proprietary estoppel, but he finds inheritance cases easier to understand as being remedied through a remedial constructive trust, created by the parties’ common intention, since Gissing. Like Gillett.
Lord Walker held the elements for a proprietary estoppel are (1) a promise or representation by the defendant that the claimant has or will acquire some right in relation to the defendant’s land (2) the claimant’s reasonable reliance on this promise/representation (3) detriment suffered by the claimant by reason of his reliance on that promise/representation.
Lord Neuberger, agreed with Lord Walker, but wished to state the result in his own words.
|“||84. ... Just as a sentence can have one meaning in one context and a very different meaning in another context, so can a sentence, which would be ambiguous or unclear in one context, be a clear and unambiguous assurance in another context. Indeed, as Lord Walker says, the point is underlined by the fact that perhaps the classic example of proprietary estoppel is based on silence and inaction, rather than any statement or action - see per Lord Eldon LC ("knowingly, though but passively") in Dann v Spurrier (1802) 7 Ves 231, 235-6 and per Lord Kingsdown ("with the knowledge … and without objection ") in Ramsden v Dyson LR 1 HL 129, 170. |
85. Secondly, it would be quite wrong to be unrealistically rigorous when applying the "clear and unambiguous" test. The court should not search for ambiguity or uncertainty, but should assess the question of clarity and certainty practically and sensibly, as well as contextually. Again, this point is underlined by the authorities, namely those cases I have referred to in para 78 above, which support the proposition that, at least normally, it is sufficient for the person invoking the estoppel to establish that he reasonably understood the statement or action to be an assurance on which he could rely.
86. Thirdly, as pointed out in argument by my noble and learned friend Lord Rodger of Earlsferry, there may be cases where the statement relied on to found an estoppel could amount to an assurance which could reasonably be understood as having more than one possible meaning. In such a case, if the facts otherwise satisfy all the requirements of an estoppel, it seems to me that, at least normally, the ambiguity should not deprive a person who reasonably relied on the assurance of all relief: it may well be right, however, that he should be accorded relief on the basis of the interpretation least beneficial to him.
87. It was also argued for the respondents that, if there was an estoppel as the Deputy Judge had decided, difficulties could have arisen if Peter had changed his mind before he died. The short answer to that argument is, of course, that Peter's intention that David should inherit the farm appears never to have changed: Peter certainly never communicated to David or to anyone else that he had changed that intention. On the contrary: in 2002, twelve years after the original commitment and three years before he died, Peter was still making it clear to his solicitor, in David's presence, that David would inherit the farm (saying that "we" wanted the deeds in one place as it "would be better" for David). Thus, for at least fifteen years from 1990 to 2005, through assurances made from time to time, Peter made it clear to David that he would inherit the farm on Peter's death, and, up to, indeed at, the moment that those assurances fell to be fulfilled, they remained in force.
88. I should add that, if Peter had changed his mind before he died, the question as to what, if any, relief should have been accorded to David would have been a matter for the court, to be assessed by reference to all the facts. An example of such a case is Gillett v Holt  Ch 210, where my noble and learned friend, then Robert Walker LJ, had to consider just such an issue, and did so in a masterly judgment, to which I shall have to revert on the second issue on this appeal.
Gillett v Holt  is an English land law case concerning proprietary estoppel and a farming businesses' dispute. The case focussed on a farmer of a portfolio of farming businesses without any obvious heirs who made many promises and assurances of inheritance to two partial farm managers who were neighbours or tenants of his, one of whom was had farmed for 38 years, the other co-farmed for last 5 years of those 38 years.
89. Before turning to that second issue, I should add that, even if Peter's "implicit statement" may have been revocable, as the Court of Appeal thought, I should not be taken as accepting that it would necessarily follow that, once the statement had been maintained by Peter and acted on by David for a substantial period, it would have been open to Peter freely to go back on it. It may be that he could not have done so, at least without paying David appropriate compensation, unless the change of mind was attributable to, and could be justified by, a change of circumstances. It seems to me that it would be arguable that, even assuming that the "implicit statement" was not irrevocable, if, say in 2004, Peter had changed his mind, David would nonetheless have been entitled to equitable relief, in the light of his fourteen or more years of unpaid work on the farm. It is not as if Peter had given any sort of clear indication that statement was revocable. The Court of Appeal considered that it was not clear that the statement was irrevocable, not that it was clear that the statement was revocable. However, that point does not arise for decision in the present case, and I shall say no more about it.
90. Based on the reasoning of my noble and learned friend, Lord Scott of Foscote in Cobbe v Yeoman's Row Management Ltd  UKHL 55,  1 WLR 1752, paras 18-20 and 28, the respondents contend that the identity of the property the subject of the assurance or statement relied on to found a proprietary estoppel must be "certain". Accordingly, they argue, even if David would otherwise make good his proprietary estoppel claim, it must fail because the property the subject of the alleged estoppel in this case is not certain enough.
Cobbe v Yeoman's Row Management Ltd UKHL 55 is a House of Lords case in English land law and relates to proprietary estoppel in the multi-property developer context. The court of final appeal awarded the project manager £150,000 on a quantum meruit basis for unjust enrichment because Yeoman's Row had received the benefit of his services without paying for that. The court refused to find or acknowledge a binding contract, prior arrangement with a third party or promise, overturning a £2m award on the basis of a possible lien arising from a promise over the property. The court found a non-binding agreement in principle, entirely subject to the owner's final say to take into account for example their view of the market; this was the basis on the facts on which the parties were proceeding.
91. So far as the relevant facts of this case are concerned, the extent of the land owned and farmed by Peter varied. When he inherited Steart Farm in 1976, it comprised about 350 acres of freehold low-lying pasture and rough grazing. In 1990, he sold a large field for development, and used the proceeds to buy more land, so that, by 1992, he owned 463 acres, and the farm included another 120 acres which Peter rented. By 1998, he was farming only some 160 acres of that land himself, having let out the remainder on farm business tenancies. As at the date of his death, Peter was in the process of negotiating a sale of some 6 acres to developers.
92. In Cobbe  1 WLR 1752, Mr Cobbe devoted considerable time, effort, and expertise to obtaining planning permission for land owned by Yeoman's Row. Although they reached an oral "agreement in principle", the parties had decided not to enter into a contract, but Mr Cobbe went ahead on the basis, as appreciated by Yeoman's Row, that he expected them to do so once planning permission was obtained. Initially, this was also the intention of Yeoman's Row, but their intention changed about three months before planning permission was obtained, although they did not tell Mr Cobbe until afterwards. Mr Cobbe's estoppel claim failed (although he was entitled to a quantum meruit payment). As I see it, Mr Cobbe's claim failed because he was effectively seeking to invoke proprietary estoppel to give effect to a contract which the parties had intentionally and consciously not entered into, and because he was simply seeking a remedy for the unconscionable behaviour of Yeoman's Row.
93. In the context of a case such as Cobbe  1 WLR 1752, it is readily understandable why Lord Scott considered the question of certainty was so significant. The parties had intentionally not entered into any legally binding arrangement while Mr Cobbe sought to obtain planning permission: they had left matters on a speculative basis, each knowing full well that neither was legally bound - see  1 WLR 1752, para 27. There was not even an agreement to agree (which would have been unenforceable), but, as Lord Scott pointed out, merely an expectation that there would be negotiations. And, as he said, at  1 WLR 1752, para 18, an "expectation dependent upon the conclusion of a successful negotiation is not an expectation of an interest having [sufficient] certainty".
94. There are two fundamental differences between that case and this case. First, the nature of the uncertainty in the two cases is entirely different. It is well encapsulated by Lord Walker's distinction between "intangible legal rights" and "the tangible property which he or she expects to get", in Cobbe  1 WLR 1752, para 68. In that case, there was no doubt about the physical identity of the property. However, there was total uncertainty as to the nature or terms of any benefit (property interest, contractual right, or money), and, if a property interest, as to the nature of that interest (freehold, leasehold, or charge), to be accorded to Mr Cobbe.
95. In this case, the extent of the farm might change, but, on the Deputy Judge's analysis, there is, as I see it, no doubt as to what was the subject of the assurance, namely the farm as it existed from time to time. Accordingly, the nature of the interest to be received by David was clear: it was the farm as it existed on Peter's death. As in the case of a very different equitable concept, namely a floating charge, the property the subject of the equity could be conceptually identified from the moment the equity came into existence, but its precise extent fell to be determined when the equity crystallised, namely on Peter's death.
96. Secondly, the analysis of the law in Cobbe  1 WLR 1752 was against the background of very different facts. The relationship between the parties in that case was entirely arm's length and commercial, and the person raising the estoppel was a highly experienced businessman. The circumstances were such that the parties could well have been expected to enter into a contract, however, although they discussed contractual terms, they had consciously chosen not to do so. They had intentionally left their legal relationship to be negotiated, and each of them knew that neither of them was legally bound. What Mr Cobbe then relied on was "an unformulated estoppel ... asserted in order to protect [his] interest under an oral agreement for the purchase of land that lacked both the requisite statutory formalities … and was, in a contractual sense, incomplete" -  1 WLR 1752, para 18.
97. In this case, by contrast, the relationship between Peter and David was familial and personal, and neither of them, least of all David, had much commercial experience. Further, at no time had either of them even started to contemplate entering into a formal contract as to the ownership of the farm after Peter's death. Nor could such a contract have been reasonably expected even to be discussed between them. On the Deputy Judge's findings, it was a relatively straightforward case: Peter made what were, in the circumstances, clear and unambiguous assurances that he would leave his farm to David, and David reasonably relied on, and reasonably acted to his detriment on the basis of, those assurances, over a long period.
98. In these circumstances, I see nothing in the reasoning of Lord Scott in Cobbe  1 WLR 1752 which assists the respondents in this case. It would represent a regrettable and substantial emasculation of the beneficial principle of proprietary estoppel if it were artificially fettered so as to require the precise extent of the property the subject of the alleged estoppel to be strictly defined in every case. Concentrating on the perceived morality of the parties' behaviour can lead to an unacceptable degree of uncertainty of outcome, and hence I welcome the decision in Cobbe  1 WLR 1752. However, it is equally true that focussing on technicalities can lead to a degree of strictness inconsistent with the fundamental aims of equity.
99. The notion that much of the reasoning in Cobbe  1 WLR 1752 was directed to the unusual facts of that case is supported by the discussion at para 29 relating to section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. Section 2 may have presented Mr Cobbe with a problem, as he was seeking to invoke an estoppel to protect a right which was, in a sense, contractual in nature (see the passage quoted at the end of para 96 above), and section 2 lays down formalities which are required for a valid "agreement" relating to land. However, at least as at present advised, I do not consider that section 2 has any impact on a claim such as the present, which is a straightforward estoppel claim without any contractual connection. It was no doubt for that reason that the respondents, rightly in my view, eschewed any argument based on section 2.
The Law of Property Act 1989 is a United Kingdom Act of Parliament, which laid down a number of significant revisions to English property law.
Estoppel is a judicial device in common law legal systems whereby a court may prevent, or "estop" a person from making assertions or from going back on his or her word; the person being sanctioned is "estopped". Estoppel may prevent someone from bringing a particular claim. Legal doctrines of estoppel are based in both common law and equity.
Estoppel in English law is a doctrine that may be used in certain situations to prevent a person from relying upon certain rights, or upon a set of facts which is different from an earlier set of facts.
A constructive trust. This is an equitable remedy resembling a trust imposed by a court to benefit a party that has been wrongfully deprived of its rights due to either a person obtaining or holding a legal property right which they should not possess due to unjust enrichment or interference, or due to a breach of fiduciary duty, which is intercausative with unjust enrichment and/or property interference.
A concept of English law, a misrepresentation is an untrue or misleading statement of fact made during negotiations by one party to another, the statement then inducing that other party into the contract. The misled party may normally rescind the contract, and sometimes may be awarded damages as well.
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Tracing is a legal process, not a remedy, by which a claimant demonstrates what has happened to his/her property, identifies its proceeds and those persons who have handled or received them, and asks the court to award a proprietary remedy in respect of the property, or an asset substituted for the original property or its proceeds. Tracing allows transmission of legal claims from the original assets to either the proceeds of sale of the assets or new substituted assets.
English trust law concerns the creation and protection of asset funds, which are usually held by one party for another's benefit. Trusts were a creation of the English law of property and obligations, but also share a history with countries across the Commonwealth and the United States. Trusts developed when claimants in property disputes were dissatisfied with the common law courts and petitioned the King for a just and equitable result. On the King's behalf, the Lord Chancellor developed a parallel justice system in the Court of Chancery, commonly referred as equity. Historically, trusts were mostly used where people left money in a will, created family settlements, created charities, or some types of business venture. After the Judicature Act 1873, England's courts of equity and common law were merged, and equitable principles took precedence. Today, trusts play an important role in financial investments, especially in unit trusts and pension trusts, where trustees and fund managers usually invest assets for people who wish to save for retirement. Although people are generally free to write trusts in any way they like, an increasing number of statutes are designed to protect beneficiaries, or regulate the trust relationship, including the Trustee Act 1925, Trustee Investments Act 1961, Recognition of Trusts Act 1987, Financial Services and Markets Act 2000, Trustee Act 2000, Pensions Act 1995, Pensions Act 2004 and the Charities Act 2011.
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Crabb v Arun District Council  EWCA Civ 7 is a leading English land law and contract case concerning "proprietary estoppel". Lord Denning MR affirmed that where agreements concern the acquisition of rights over land, there is no need for both parties to provide a consideration for upholding the bargain. While promissory estoppel cannot found a cause of action it was held that in the peculiar situation of land, consideration is not necessary at all.
Yaxley v Gotts  is an English contract law case with specific relevance to formalities in land law. The case deals with whether section 2 of the Law of Property Act 1989 which requires that contracts be in writing prevents an oral contract from taking effect where otherwise an interest would arise by proprietary estoppel, i.e. whether the provision in subsection 5 on resulting, implied or constructive trusts covers also proprietary estoppel.
Collier v P & MJ Wright (Holdings) Ltd  EWCA Civ 1329 is an English contract law case, concerning the doctrine of consideration and promissory estoppel in relation to "alteration promises".
Jennings v Rice  EWCA Civ 159 is an English land law case concerning proprietary estoppel.
Dillwyn v Llewelyn  is an 'English' land, probate and contract law case which established an example of proprietary estoppel at the testator's wish overturning his last Will and Testament; the case concerned land in Wales demonstrating the united jurisdiction of England and Wales.
Taylor Fashions Ltd and Old & Campbell Ltd v Liverpool Victoria Trustees Co Ltd  is a leading case in English land law on proprietary estoppel. Due to a common mistake and no element of enticement to believe that mistake, estoppel was not available on the facts.
Greasley v Cooke  3 All ER 710 is an English land law case concerning proprietary estoppel.
Commonwealth v Verwayen, also known as the Voyager case, is a leading case involving estoppel in Australia. Bernard Verwayen sued the Australian government for damages caused by a collision between two ships of the Australian Navy. A representative of the Government initially indicated to Bernard Verwayen that the Government would not raise the statute of limitations as a defence to their negligence. In court however, the Government relied on this defence. While the decision of the High Court was spilt, a majority of judges found that the Government could not rely on this statement as a defence. Justices Toohey and Gaudron came to this conclusion on the basis that the Government had waived their right to rely on this defence. However, Justices Deane and Dawson came to this conclusion under the doctrine of estoppel, which provides that a defendant can not contradict a previous representation or promise made that has established an assumed state of legal affairs. This case is most frequently referred to in relation to its influence on the doctrine of estoppel.