This an assurance made are able to claim

This paper is to critically
analyse the statement of Lord Scott within Cobbe
v Yeoman’s Row Management Ltd1 which concerned the operation of the doctrine
of proprietary estoppel. Amongst others, Lord Scott within his majority opinion
proposed that “… proprietary estoppel
cannot be prayed in aid in order to render enforceable an agreement that
statute has declared to be void.”2
As said otherwise, this doctrine cannot be invoked by a claimant due to
non-compliance with statutory controls, specifically the rules contained in the
Law of Property (Miscellaneous Provisions) Act 1989.3
This paper will explore the principles of proprietary estoppel and consider the
relationship between equity and the statutory controls. After critically
analyzing both perspectives as to whether equity should or should prevail, this
paper will support Lord Scott and conclude that the doctrine should not able to
render an enforceable agreement where it does not comply with the statute
regulations within cases of a commercial context.


Section 2 of the 19894 Act requires that contracts
regarding the creation or transfer of an estate or interest in land must
satisfy certain provisions. The contract must be in writing, all terms that the
parties have expressly agreed must be incorporated into one document and
lastly, this contract must be signed by or on behalf of each party to the
transaction. The purpose of this
act is to declare void any agreement purporting to create or dispose of an
interest in land which does not comply with the mandatory formalities. An
exception arises for resulting, implied and constructive trusts according to Section
2(5) LPMPA5 however this section does
account for proprietary estoppel. Does an agreement for the acquisition of an
interest in land that does not comply with formalities, become enforceable
through the method of proprietary estoppel? In order to critically evaluate
this, we must firstly explore the nature the doctrine that applies.

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Proprietary estoppel is a means of creating an equitable interest within
land6 which may be acquired where
the correct formalities have not been followed allowing those who have relied
to their own detriment or an assurance made are able to claim to a remedy in
court. An example would be when A encourages B to believe he has a right over
A’s land or that A will confer such right on him, and B then, in reliance on
that belief, acts to his detriment and may be entitled to relief – a right in rem. The purpose of this doctrine is
best explained by Lord Denning in Crab v
Arun7 where the proprietary estoppel is “…to prevent a person from
insisting on his legal right…whether arising under contract, or on his title
deeds, or by statute…when it would be inequitable for him to do so having
regard to the dealings which have taken place between the parties”. This doctrine can operate as both a
‘sword’ and ‘shield’ where it is coined as a ‘sub-species’ of promissory
This is to be where the claimant is mistaken to his rights, has costs or conducted
some specific act as a result of the mistake. The owner (defendant) must be
aware of both his rights and the claimants mistake. The defendant must have
encouraged the claimants’ expenditure directly or not failing to enforce his


Ramsden v
Dyson9 is best known as the
foundation of the modern law of proprietary estoppel and is an early interpretation
to the doctrine.10
In order to succeed in invoking the Ramsden principle, the
representee has to show the existence of two basic requirements. Firstly, that
the other party, the representor that is, has raised an expectation which would
be such to influence a reasonable man. Secondly, that it would be
unconscionable for the expectation not to be fulfilled. However, in the last few
decades, there has been an increase of cases regarding this doctrine which has
resulted in a wider formulation of requirements of estoppel, suggesting a more
flexible approach. This more
modern, flexible approach ensuing an effective remedy was presented in Taylor’s Fashions Limited v Liverpool
Victoria Trustees Co Ltd11, founded on the concept of
unconscionability set out by Oliver J. Proprietary estoppel operates on the concept
unconscionable behaviour and can be used to award an interest in land as a
remedy where it would be unconscionable for the holder of the legal title to
deny the claimant’s entitlement. To summarise, a claimant will be able to
establish an estoppel if they can prove an assurance, reliance and detriment in
circumstances in which it would be unconscionable to deny a remedy to the


In the recent case of Cobbe,
the House of Lords emphasized that proprietary estoppel would only exist where
it was clear that the claimant believed he had a certain interest in another’s
property however it has held here that the claimant only had expectations of
further negotiations to enter into a certain contract, there was no interest in
land itself. B claimed
he had reached an agreement with A that, were he to obtain planning permission
in respect of A’s land, A would then sell that land to him. B then successfully
performed his side of the bargain. However, the alleged agreement had not been
recorded in writing. Moreover, both A and B had contemplated that a legally
binding contract would only be drawn up at a later date, covering outstanding
points such as the precise identity of the vendor and purchaser and the timetable
for the performance of their obligations.


To what extent should we allow estoppel to create property rights through
the back door when there is a clear public policy, expressed in statute, that
generally property rights should be created with a certain degree of formality?
To critically assess Lord Scott’s statement, it must be questioned, should
equity prevail over the statutes despite non-compliance with the formality
rules? Should an estoppel have been awarded to Cobbe? There has been uncertainty within this debate along with the
considerable uncertainty now as to the approach of the courts when faced with a
proprietary estoppel claim in which the agreement falls foul of s.2.


This paper will first consider the argument that the doctrine of
proprietary estoppel can be utilized to render an agreement enforceable despite
the lack of formalities, thus deviating away from Lord Scott’s judgement in Cobbe.


Firstly, it must be noted that the decision held in Cobbe of the
non-compliance with s2 where no equity was held, has been subject to notable
criticism as suggested by Goumer. The judgement has been regarded as a severe
curtailment of the doctrine and was believed to have greatly narrowed the scope
of its operation which lead to some commentators believing it was the ‘death of
proprietary estoppel’ within commercial cases. Those in objection with the
controversial reasoning in Cobbe
would argue that equity should prevail as when one party claims a proprietary
right, an estoppel is considered an antidote for formality defects.12 To support this argument,
we must consider the judges in favour of the doctrine for instance Lord Walker
in Cobbe, denoted that the doctrine was
‘flexible’ where the courts may use when appropriate to prevent injustice
caused by inconstancy of human nature. Therefore, we must analyse case law which
portray instances where the courts have done so. For instance, in the high
court case of Whittaker v Kinnear13, where the sale of land was concerned, had survived the
enactment of s2 LPMPA despite
Lord Scott’s dicta which suggested the contrary in Cobbe.


Furthermore, some may argue that equity should intervene to give a purchaser equitable rights
where no document compliant exists. This is demonstrated Yaxley v Gotts where Lord Walker
suggested “the doctrine of estoppel may operate to modify and even counteract the
effect of s. 2 of the 1989 Act. The circumstances in which s. 2 has to be
complied with are so various, and the scope of the doctrine of estoppel is so
flexible, that any general assertion of s.2 as a ‘no go area’ for estoppel
would be unsustainable … In this case that principle must of course be
applied consistently with the terms in which s. 2 of the 1989 Act has been
enacted, including the saving at the end of s.2(5)” This suggests the courts
here were willing to find an interest in land within equity. That a
constructive trust can be found as an exception however this may have little
significance to commercial cases like Cobbe where such trust was not found.


Another reasoning as to why
this doctrine should render an agreement enforceable is due to the perception
that proprietary estoppel should be available to cure absence of formality when
‘it would be unconscionable for the defendant to relay on lack of formality to
defeat the claimant’.

It is evident that there is
proportionality in its doctrine which may be applicable in certain
circumstances relating to statutory provisions. It is important to note that
this doctrine should be distinguished from the doctrine of constructive trust
although the two concept requires detriment and work on the basis that it would
be unconscionable for the legal owner to deny the existence of the beneficial


The doctrine has been noted as
‘flexible’ but is this sufficient enough to against formality rules?





Despite evidence in favour of the allowance of equity, the ultimate stance
of this paper is in agreement with Lord Scott where ‘equity cannot contradict
the statute’. Lord Scott, in supporting his view, indicated in his obiter
comments that the doctrine cannot be used to circumvent s2 1989 act, suggesting
a much stricter application of estoppel in the future cases than in earlier
cases such as Yaxley, a more
affirmative approach.  In Cobbe it was
unnecessary to decide the point because the agreement, being incomplete, fell
outside the section. But Lord Scott nonetheless stated (at para.29) that “My
present view, however, is that proprietary estoppel cannot be prayed in aid in
order to render enforceable an agreement that statute has declared to be
void.”. If this is correct, that could represent a substantial blow to the


In Hutchinson v B & DF Limited14 Peter Smith J expressed
his agreement with the obiter comments of Lord Scott, and said that a 5- year
lease term, having failed to comply with the s.2(1) formalities, could not be
made enforceable through proprietary estoppel. His comments were themselves
obiter because the case for proprietary estoppel had not been made out in other
respects. But if we consider this point, it is evident that where a term of a
lease fails with rules, proprietary estoppel cannot be relied upon. This
upholding the rules and requirements of the statute.


Equity should not conflict with the statute. A reasoning that must be
analysed is due to the principal of public policy. The question of whether
proprietary estoppel can be used to get round section 2 was first raised in the
Court of Appeal in Yaxley. Here
the claimant had entered into an ‘oral’ contract to purchase building, rendered
void by s2 LPMPA but held a constructive trust interest due to faith of a
contract plus money claimant spent. There it was argued, drawing on Halsbury’s
Laws (vol 16, para 962, 4th edn reissue), that: “‘The doctrine of estoppel may
not be invoked to render valid a transaction which the legislature has, on
grounds of general public policy, enacted is to be invalid …”. Robert LJ
identified what is known as the public policy principle. The use of estoppel
contradicts policy behind legislation by attaching an element of validity to an
arrangement that requires to be in a certain form – which parties have failed
to observe. We can see the importance of statutory controls, so why override
them? If we do not comply with statute, what purpose does the statute hold? This
suggests that intended dispositions of interests in land that the law requires
to take a certain form e.g. wiring a deed. May not be enforced by estoppel for
that would be to undermine the legislative purpose and policy (Classic analysis
can be found (Filler, Consideration and form 1941 Colombia Law review 799. In further support of this argument of
public policy, we can refer to the privy council case of Kok Hoong Appellant v Leong Cheong Kwneg Mines Ltf15
where it was considered to be against the general principle of social
public policy to allow an estoppel to effect Parliaments aims. It is evident
that there is a necessity for the certainty of contracts whereby the statute
should be obeyed subject to these policy rules.


Nevertheless, to place an in depth analysis of whether proprietary
estoppel can override the statute, we must focus on the context in which
estoppel is being claimed, in relation to commercial or domestic situations. To
question does proprietary estoppel have relevance to?


The case of Thorner v Major
involved a successful proprietary
estoppel claim based upon tacit remarks and conduct, where there was a domestic
context. In its later decision in Thorner v Major, a proprietary estoppel case
based on the claimant working his father’s cousin’s farm for no pay on the
expectation of receiving it on the owner’s death, the Lords were at pains to
distinguish the “classic farm and family” proprietary estoppel case, which has
no “contractual connection” from the more commercial, contractual claims such
as in Cobbe.


Lord Neuberger stated at para 99: “I do not consider that section 2
has any impact on … a straightforward estoppel claims without any
contractual connection”. The emphasis in Thorner was on the fact that this had
been a gift rather than a contract, which is why s.2 did not apply. Thorner
indicates a sharp demarcation between gifts and contracts and possibly
commercial and non-commercial proprietary estoppel claims. In non-commercial situations,
the estoppel claim tends not to be dependent on facts suggesting the sort of
agreement requiring formality, so these types of cases are unlikely to be
affected by the decision in Cobbe, as was the case in the “farm and family”
case of Thorner (domestic) It
may be that s.2 can be overcome in the domestic context but the position
remains largely unresolved.


However, we must contrast this within commercial contexts like Cobbe. The status of claims of
proprietary estoppel in commercial situations is still somewhat unsettled. It
appears that such a claim will only succeed if allied to a claim for a
constructive trust. Whether the courts are as flexible as they have been in
finding such trusts in the future remains to be seen. The strictness in Cobbe
may be due to the commercial/contractual relationship between the parties.


If we refer back to Whitteaker – Bean J – suggested a distinction between
commercial and domestic cases. It is the nature of party’s dealings; estoppel
succeed in domestic cases.



Lord Walker’s speech is
very much in the same mould. After an extensive review of the authorities,

his Lordship’s conclusion
was that in both the commercial and family/domestic cases, the requisite

estoppel was established
because “the claimant believed that the assurance on which he or she

relied was binding and
irrevocable”: at 66. In the commercial context, however, the “subject to

contract” rubric provided
obvious evidence of a high degree of revocability or negotiability, which

would also be apparent where
the terms of the agreement had not been written down at all (or only in

part) leaving the contract
vague and incomplete pending further negotiation. Here, the expectation of

“persons experienced in the
property world” would be the same, namely, that matters were still at

large with neither party
legally bound either at law or in equity: at 91. This highlights the

theme in Lord Walker’s
speech that “conscious reliance on honour alone” will not give rise to a

proprietary estoppel.


To conclude, it is evident that proprietary estoppel is an equitable
doctrine where claimants may be able to rely on when acquiring a property right
in land. As to the question of whether this doctrine can render an agreement
enforcement where there has been non-compliance with s2 still remains to be
unsolved, but with the direction of case law, it is evident that cases
regarding a commercial context like Cobbe and McFarlane, proprietary estoppel
will fail, however in cases like Thorner where s2 did not apply, a domestic
context may allow equity to prevail.


1 Cobbe
v Yeoman’s Row Management Ltd 2008 UKHL 55, 2008 1 WLR 1752

ibid 1, para 29, per Lord Scott of Foscote

3 Law of Property (Miscellaneous Provisions) Act
1989 s2

4 ibid 4

5 Section 2(5) LPMPA 1989

6 (ibid)
Land Law Textbook. Ben McFarlane
page 166

7 Crab v Arun District Council 1975 EWCA Civ 7

8 Lord Scott
in Cobbe (at para.14) of proprietary estoppel as a “sub-species” of promissory

9 Ramsden v Dyson 1866 LR 1 HL 129

10 Lord
Neuberger ‘The Stuffing of Minerva’s Owl?’ Taxonomy and taxidermy in

(2009) 68 CLJ 537 541


12 Elizebeth Cooke (Modern Studies in Property
Law, Volume 2)

13 Whittaker
v Kinnear 2011 EWHC 1479 (QB)

14 Hutchinson v B & DF Limited 2008 EWHC 2286 (Ch)

15 Kok
Hoong Appellant v Leong Cheong Kwneg Mines Ltf 1964 AC 993.