Proprietary estoppel claims: Avoiding the “Er…” and the “um….” with reference to Davies v. Davies [2016] EWCA Civ 463

Lawyer: “Good news. We’ve got the threesome of promise, reliance and detriment, so an equity is raised in your favour”

Client: “Great. Give me some figures”

Lawyer: “Well, in deciding how to satisfy your equity the court will weigh the detriment you’ve suffered against the benefits you’ve enjoyed”

Client: “Fair enough”

Lawyer: “Now, proportionality lies at the heart of proprietary estoppel….”

Client: “So the likely sum is…?”

Lawyer: “….and in satisfying the equity the court has to exercise a broad judgmental discretion”

Client: “And in my case how will that discretion be exercised?”

Lawyer “Well, it must be exercised on a principled basis”

Client: “What principle would that be?”

Lawyer: Aha, well, you see there are two schools of thought relevant to this”

Client: “Just give me the correct “school” please”

Lawyer: “Er….”

Client: “…Ok, the basic aim of this principled discretion?”

Lawyer: “Um….. possibly to compensate your detriment, although it’s been said that your expectation is the starting point”

Client: “Yeah, but it’s the end-point I’m interested in”

Lawyer: “And I should perhaps add that detriment does not have to be quantifiable financial detriment…and the court could give you a remedy in specie..”

Client: “Remind me of your hourly rate again?”

Predicting how a court might “satisfy the equity” in a proprietary estoppel (PE) claim is, to say the least, difficult. Put another way, PE claims are “fact sensitive”.

The Court of Appeal’s judgment in the recent case of Davies v. Davies 2016 EWCA Civ 463 does not change this fact, but it does provide, via a characteristically pithy leading judgment from Lewison LJ, very useful guidance.

Herewith seven points on the judgment:

• At para 38 Lewison LJ concisely summarises, with brief references to the leading authorities, the principles applicable to proprietary estoppel (PE) claims. This paragraph is in my view an extremely useful first port of call when advising on any PE claim
• At para 39 Lewison LJ acknowledges, again with brief references to the leading authorities, the controversy over whether the essential aim of the court should be fulfilment of expectation or, alternatively, compensation for detriment
• Lewison LJ does not express a concluded view on the above but seems in my view to be more attracted to the logic of the “compensation for detriment” approach….
  …although in para 41 the learned judge describes the suggestion made by leading Counsel that: “The clearer the expectation, the greater the detriment and the longer the passage of time during which the expectation was reasonably held, the greater…the weight that should be given to the expectation” as a “useful working hypothesis”
• PE claims are, of course, not concerned with contracts. However, in assessing the likely relative weight to be attached to expectation/detriment it may be useful to consider whether the facts disclose a quasi-bargain between the parties and, if so, the degree to which such quasi-bargain has been fulfilled. Para 43 provides interesting reading in relation to this point
• Some PE cases involve one clear expectation held over many years. Others (such as Davies v. Davies) involve multiple, sometimes mutually incompatible, expectations raised and subsequently shot down or abandoned. If the latter is the case, then assessing remedy by calculating the detriment suffered as a result of each disappointed expectation may be the more appropriate approach to assessing remedy
• Apportioning blame for any relationship breakdown is “at best a tasteless, and generally an inept, undertaking”, and blame is generally irrelevant to remedy (para 62)