8. Estoppel at law and in equity

What estoppel means

Estoppel prevents a person from denying a state of affairs he represented, where the other party relied on it. It is a shield in most cases. Proprietary estoppel can also be a sword, because it can found a claim.

Estoppel by representation

This is the common-law form. A person who makes a clear representation of existing fact, intending or knowing it will be relied on, cannot later deny it against someone who relied on it to his detriment. It is about facts, not promises about the future.

Promissory estoppel

Promissory estoppel deals with promises. Where one party to a legal relationship clearly promises not to enforce his strict rights, and the other relies on it, the promisor cannot go back on it where that would be inequitable. Central London Property Trust v High Trees House is the leading case. A landlord halved the rent during the war, when flats were empty. Denning J said the landlord could not claim the full rent for that period, though he could return to the full rent once the war ended.

The limits matter.

Existing relationship: there must already be a legal relationship between the parties.

Shield, not a sword: it does not create a new cause of action. In Combe v Combe a wife could not sue on her husband's promise of maintenance, which she had given no consideration for. Promissory estoppel could not be used to found the claim.

Inequitable to go back: the promisee must have relied on the promise, so that it would be unfair for the promisor to resile.

Suspensory: it often suspends rights rather than ending them. The promisor can usually restore his rights on reasonable notice.

Proprietary estoppel

Proprietary estoppel concerns land and other property. It arises where an owner encourages or allows another to believe he has, or will get, a right in the property, the other relies on that belief, and he suffers detriment. Then it is unconscionable for the owner to deny the right. Thorner v Major is the modern leading case. A farmer gave his cousin to understand over many years that he would inherit the farm, and the cousin worked it for nothing. The House of Lords held that the assurance, though never spelt out, was clear enough in context. The cousin got the farm.

In Crabb v Arun District Council the council led Crabb to believe he would have a right of access to his land, and then blocked it. He sold part of his land in reliance and was left landlocked. The Court of Appeal gave him the right of access.

The remedy is flexible. The court does the minimum equity requires to satisfy the equity. It may give the property, a lease, a right of way, a licence or money. Unlike promissory estoppel, proprietary estoppel can found a cause of action.

Comparing them at law and in equity

Estoppel by representation is the common law's rule about statements of fact. Promissory and proprietary estoppel are equitable. Promissory estoppel only defends. Proprietary estoppel can create a right in property. Lanbuk on the Law of Contract treats promissory estoppel and consideration, and Lanbuk on the Law of Land treats licences by estoppel.