Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 (the “Act”) formalises the procedure for transferring ownership of land. It provides that an agreement for the sale of land can only be made in writing and must be signed by or on behalf of each party.
If someone promises another person ownership of land in their possession and that assurance is reasonably relied upon to the person’s detriment, the promise may be found to be irrevocable even though it is not in writing. This is known as proprietory estoppel.
A wide range of acts have been found by the Courts to amount to detriment. For example spending money on a property, looking after a property owner and selling land without reserving a right of way over it.
In the recent case of Southwell -v- Blackburn [2014] EWCA Civ 1347 the Court considered whether if X promises Y a home for life, what detriment is required before Y can enforce that promise.
Southwell -v- Blackburn [2014] EWCA Civ 1347
The claimant had two children from a previous marriage and was renting a property from a Housing Association. Although she had limited financial resources, she had spent a significant sum on the house. In 2000 she began a relationship with the Defendant and in 2002 the Defendant bought a house (in his sole name and with his own money) for them both to live in.
A couple of years later the relationship broke down and the Claimant and her daughters found themselves homeless. The Claimant issued a claim on the basis that the Defendant was holding the property on behalf of both of them in equal shares.
At first instance the Judge ordered the Defendant to pay the Claimant £28,500 on the basis that he did own the property for the benefit of both of them in equal shares.
The Defendant appealed the decision arguing that any assurances he may have made to the Claimant were not specific enough for the doctrine of proprietory estoppel to apply. He also alleged that the Claimant had not suffered any detriment in relying on his promise and that although initially she gave up a secure tenancy, she had benefited by living with him for a nine year period.
The Defendant’s appeal was dismissed for the following reasons:
- The Judge was correct in finding that the actual promise made to the Claimant was that she would have accommodation which would be recognised in the event of a breakdown of the relationship. He rejected the Defendant’s claim that the assurance of a home was only whilst the relationship lasted. In reaching this finding the Judge had noted that the Claimant regarded the property as long term secure accommodation for herself and her two children. The Judge also considered it relevant that the Claimant was involved in choosing the property and giving her approval before purchase as this demonstrated her reliance and trust in the promise made.
- Although the Defendant had avoided a specific assurance of equal ownership, this did not mean that he had not given an assurance of security of occupation. The Defendant had reassured the Claimant that she would always have a home and be secure in the property. He made such promises as were necessary to encourage her to move, knowing and intending that she would rely upon them.
- The Judge was correct in refusing to put a value on the benefits which each party brought to the relationship. It was accepted that there are “a range of activities and mutual support” in such a relationship which are incapable of financial quantification.
- It was the Claimant’s detrimental reliance on the Defendant’s promise, which made it irrevocable and the fact that she had abandoned her secure home. She was promised security and the Judge found it to be “unconscionable” for the Defendant to do anything other than put her back in the same position that she was in prior to giving up her home.
- The Judge reached the figure of £28,500 on the basis that the Claimant had spent £15,000 on her own home and her remaining £4,000 to £5,000 on setting up home with the Defendant. He took those figures and updated them for inflation.
If someone has broken a promise, which you relied upon to your detriment, it maybe that the Court will uphold that promise and ensure that you are placed in the position which you would have been in if it had not been broken.
