Proprietary estoppel: Does a promise to transfer land have to be in writing?
The informal circumstances in which a proprietary estoppel can arise were reiterated in the recent case of Howe v Gossop  EWHC 637 (Ch).
Mr and Mrs Gossop ('the Gossops') had purchased some land from Mr and Mrs Howe ('the Howes'). They also purchased an area of land on the other side of a roadway from them.
The Gossops and Howes then reached an agreement whereby the Gossops would resurface part of the roadway, in return for a payment from the Howes of £7,000. After the resurfacing work had been completed, the parties agreed at a later meeting that in exchange for not receiving the £7,000, the Gossops would receive two pieces of land from the Howes situated near to their house and other land.
Unfortunately, the parties later fell out, and the Howes issued a claim against the Gossops for possession of the two areas of land they had previously agreed would be given to the Gossops in lieu of the £7,000 payment.
Mr and Mrs Gossop vigorously defended the Howes' claim, on the basis that a proprietary estoppel had arisen.
By way of summary, a proprietary estoppel arises where you have:
- A promise/ assurance;
- The 'promisee' (the person to whom the promise had been made) relies upon the promise;
- The promisee acts to their detriment in reliance on the promise.
Section 2 requirements
In response to the proprietary estoppel argument raised the by Gossops, the Howes argued that section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 ('Section 2') prevented an estoppel from arising. This is because Section 2 requires certain conditions to be fulfilled before a contract for the sale/transfer of land is valid, most notably, that such contract must be in writing. In this instance, the agreement reached between the parties that the Howes would transfer their two parcels of land to the Gossops in return for the resurfacing work was a verbal agreement, and was not put in writing.
The first instance judge rejected the Howes' attempts to thwart the Gossops' proprietary estoppel claim on the basis of the Section 2 technicality, and found that an estoppel had arisen.
The Howes decided to appeal the matter to the High Court, only to be met with the same result, and their appeal being rejected. Going into some detail on the reasoning behind its decision, the High Court judges reiterated that section 2 cannot be relied upon to prevent the operation of a proprietary estoppel.
The Court confirmed that proprietary estoppel is a distinct legal principle, which is safeguarded against the requirements of Section 2. It is a principle used to satisfy an equity that has arisen, resulting from unfair conduct, i.e. someone reneging on a promise that another person has relied on to their detriment.
This is yet another case which shows the willingness of courts to step in to assist parties who find themselves on the end of a broken promise. No matter how informal an agreement/promise may be, it is always worth seeking legal advice as to whether equitable principles might assist in correcting an otherwise unfair outcome.