Estoppel

Issues:

Do Annie & Billy have a contract for the sale of land?

Are there any remedies available for Billy under equitable estoppel?

Law

Statute of Frauds

The Statute of Frauds requires that contracts involving land be evidenced in writing. This includes sales, leases, mortgages, the creation of easements and other interests in land. The document must contain the details of the agreement, including names of the parties, the subject matter of the contract, the consideration, and the material terms and it must be signed by the party being sued. The statute of frauds does render a contract void but it makes a voidable by one party such that if one party wishes to rescind the contract he or she may do so.

Exception to Statute of Frauds

An action in estoppel does not require that agreements be evidenced in writing. In Walton v Maher, the court held that the statute of frauds does not apply where the basis for the enforcement of rights is estoppel and not contract. An action in estoppel does not require a contract to be in writing but only for the elements of estoppel, assurance, reliance and detriment, to be fulfilled.

Proprietary Estoppel

A special branch of estoppel that deals with land called Proprietary estoppel. A claim in proprietary estoppel arises where a claimant has acted to his or her detriment in reliance on a belief or expectation that he or she has, or will be granted, rights over an item of property and it’s owner acquiesces in, or encourages, that belief or expectation.

A case of proprietary estoppel is common expectation. In cases of common expectation, the claimant relied on a shared expectation with the landlord that he will acquire rights in the latter’s property. In Ramsden v Dyson, Lord Kingsdown formulated the underlying principle that if a claimant, relying on a share expectation with the landlord, improves the land and with the landlord’s knowledge and without objection from the landlord, the Court of Equity will compel the landlord to fulfill such promise or expectation. Proprietary estoppel also does not require active encouragement from the landlord. It may arise where the landlord simply stood by and allowed someone to use the land. The court considers it unconscionable for a landlord to insist on his rights after kept silent and allowed the claimant to act on his mistaken belief and incur such detriment. The same principle was applied in Walton v Maher.

There are several remedies available to the claimant. The court may deny the landlord’s claim to possession and allow the claimant to occupy the property for life. The court may also allow the claimant to occupy the property for as long as he desired by issuing a lease or a license. The court may also award damages where it is impossible for the claimant to occupy the land. There are also cases where the court will grant ownership of the land to the claimant. The court may also issue a restraining order that will stop the landlord from preventing the claimant to fully enjoy the land.

Application:

As the contract between Annie and Billy involves the sale of land, the statute of frauds applies.

Annie orally promised Billy the sale of the land once the approval of the subdivision was obtained. This agreement was evidenced by a document which stated the details of the sale of land, including the price, the weekly payments, the deposit and the interest charged. However, Annie, the owner of the land and the other party to the contract, did not sign the document. The contract between Annie and Billy is voidable as the contract does not fulfill the formality requirements of a contract for the sale of land to be valid. Under contract, Annie may choose not to go through with the contract and may ask Billy to vacate the property.

Although Billy is unable to find relief in contract law, he may turn to the laws of equity specifically estoppel. Under estoppel, he does not need to conform to the requirements set by the statute of frauds.

In Annie and Billy’s case, all three elements of estoppel are present. Billy was assured by Annie that sale of the land will push through upon the approval of the subdivision application and this assurance was further encouraged by Annie’s knowledge and silence during the building construction. Billy relied on Annie’s promise that the land will be sold to him and on her silence regarding the construction work led Billy to believe that Annie did not disapprove and will not insist on her