proprietary estoppel

To establish a case for proprietary estoppel, the claimant must show that the defendant takes advantage of the claimant in a manner that is unconscionable, unjust or inequitable. The application of the doctrine requires the court consideration of all the circumstances of the case to ascertain whether it would be unconscionable for the defendant to deny that intentionally or unintentionally to accept a change of position. Proprietary estoppel acts to negative or take away rights that a party otherwise would have had and thus is a source of legal obligations (and not a mere rule of evidence).

Operation of Proprietary Estoppel

Proprietary estoppel applies in situations where the claimant has (1) made a mistake as to the extent of its legal rights in property, (2) where the claimant has been promised legal rights in property. Broadly speaking, these are concepts of detrimental reliance. The claimant must form the requisite belief or expectation and the defendant, who owned the property, must have either encouraged or induced that belief or acquiesced to it.

The doctrine may operate in appropriate circumstances to enforce:

1. non-contractual promises; or
2. an understanding of a shared expectation as to the outcome of a transaction, or some other basis of the relationship.

Usage: The claimant was awarded a reversionary interest in the property after the court ruled that a proprietary estoppel applied in the case.

Related Words: estoppel; res judicata; deed.