Question of Testament: Proprietary Estoppel claims – what you need to know. 

What is proprietary estoppel?  

Estoppel is the legal principle that prevents someone who has led another to believe in a particular state of affairs from going back on their word.

Proprietary estoppel relates specifically to estoppel principles related to property.

In order to make a successful claim the claimant must show that the testator has acted to their detriment and that they have been reliant on their previous assurance. The claimant must prove that the testator lead them to believe that they would get an interest in the property. They must also prove that they reasonably rely on the assurance. In summary the key elements of a proprietary estoppel case are –

  • assurance
  • reliance
  • detriment

What is unconscionability?

In order to understand the themes of proprietary estoppel cases, it is important to understand the concept of ‘unconscionability’. This is a word used in litigation to describe conduct that does not conform to the dictates of conscience. When something is judged as unconscionable, a court will refuse to allow the perpetrator of the conduct to benefit.

In contract law an unconscionable contract is one that is unjust or extremely one-sided in favour of the person who has the superior bargaining power. Unconscionable conduct can also be found in acts of fraud and deceit, where there is a deliberate misrepresentation of fact which deprives someone of a valuable possession.

Case study:

In order to further investigate the arguments surrounding proprietary estoppel cases, I have summarised a key case (Uglow v Uglow) which will helps contextualise some of the issues of proprietary estoppel and unconscionability.

Legal principles of the case: 

To look at the principles in more depth, please find below a useful summary given by Lord Justice Mummery in the Uglow v Uglow case, which outlines some key principles which apply to testamentary cases

  1. The overriding concern of equity to prevent unjust conduct is relevant to all the different elements of propriety estoppel: assurance, reliance, detriment and satisfaction are all intertwined.
  2. The broad inquiry in this case is whether it is unconscionable for the testator to make a will giving a specific property to one person, if they have already created the expectation in a different person that they will inherit the land.
  3. The expectation may be created by a) an assurance made by the testator to the receiver which is intended to be relied upon. b) consequent reliance on the assurance; and real detriment (not necessarily financial) consequent on the reliance.
  4. The nature and quality of the assurance must be established in order to see what expectation it creates and whether it is unconscionable for the testator to leave the property to someone else.
  5. Proprietary Estoppel is an antidote to a lack of a required formality in the creation or transfer of property rights
  6. The case opened the question of the degree in which the testator had asserted something which was contrary to what was implied in a previous statement (estoppel). The question remained to what was the minimum equity necessary to give justice to the claimant and to avoid an unconscionable result.