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Brandace Duncanson

Law of Real Property I

Proprietary Estoppel (Acquiescence)
The Doctrine of Acquiescence arises in situations of passive encouragement and active
encouragement. In Ramsden v. Dyson Lord Cranworth LC explained that if a stranger begins to build on
anothers land supposing it to be his own, and the owner, perceiving his mistake, abstain from setting
him straight and leave him to persevere in his error, a court of Equity will not allow the owner to assert
his title on the land which the stranger has spent money to improve. In Dilwyn v. Llewellyn, Lord
Westbury LC explained that where A tells B I give you this land that you may build a house on it, and
B on the strength of that promise, with the knowledge of A, expends a lot of money in building a house,
there is no doubt that B acquires a right to call on A to perform the contract and complete the promise.
The main ingredients of this doctrine found in Wilmot v. Barber are:
1. P must have made a mistake as to his legal rights;
2. P must have spent money or done some act or suffered some detriment due to the
mistaken belief;
3. D, the owner of the legal title, must know that his rights are inconsistent with the right
claimed by P. The Doctrine of Acquiescence is founded upon conduct with
knowledge of your legal rights;
4. D, the owner of the legal title, must know of P mistaken belief. If he does not know,
there is nothing which calls upon him to assert his own rights;
5. D must have encouraged P in his expenditure or other acts, either directly or by not
asserting his legal right.
This Doctrine is based on fraud. Thus, according to Fry J in Wilmot v. Barber, a man will not be
deprived of his legal right unless he has acted fraudulently in setting up those rights.
To invoke this doctrine successfully, one has to establish all the conditions stated above. The
first element to be considered is the Ps mistaken belief. In incurring expenditure or altering his position
for the worse, P should have been laboring under the delusion that he owned the interest. In Pilling v.
Armatage Lord Grant MR explained that it should be a case where the act is done under the influence of
a mistake. Therefore, if P has full knowledge of the facts and the true state of affairs relating to the land
the Doctrine will not apply in his favor. In Derrick v. Mohammed the defendant could not rely on the
Doctrine because he knew that he was encroaching on land that was not his.

The second condition requires P to establish that on the faith of the representation he has acted to
his detriment or altered his position for the worse. This was emphasized in Greasley v. Cooke. In this
case, Doris Cooke relied on the encouragement of her late concubine and his brother, the plaintiff, to
believe that she could regard the property as her home for the rest of her life. The Court of Appeal held
that she could not be ejected. Her reliance detriment was foregoing wages and lost of opportunity for a
job. The expenditure and detriment can take any form, provided it was suffered on the faith of some
representation. Even if the expenditure results in some improvement of the owners land, as it happened
in Ives Investment Ltd. v. High the Doctrine can be invoked.
The belief or delusion of the developer must have been induced and sustained by the owner, his
agent or predecessor in title. There should be some form of encouragement. Where the P fails to
establish that either by language, conduct, silence or inaction he was encouraged, or his activities were
even acquiesced in by the owner, he would not succeed. There should therefore be active or passive
encouragement. Such encouragement was given in McClurg v. Rogers et al, where in an action to
enforce payment of a loan secured with the property of Ps father-in-law, it became evident that the
father-in-law permitted P to build his house on one portion of the property. The property was built by Ps
father-in-law with Ps materials. The court found that expenditure of money on the land under an
expectation encouraged by the father-in-law that he would be able to live there, gave rise to the equity
conferring a license on the P.
The owner cannot be said to have encouraged where he does not know of his interest and that the
acts of the developer were incompatible with his rights. For the element of fraud which induces the
Chancellor to intervene is not present. This lack of such knowledge on the owner was one of the
grounds on which the defendants plea of acquiescence failed in Derrick v. Mohammed. P did not know
that Ds building was encroaching on his land. D, however, did know that he was encroaching on land
that was not his, but he did not know that the land belonged to P, who succeeded in an action to recover
the land with the improvement developed by the defendant.
Taylor Fashions v. Liverpool Victoria Trustees modified this requirement to the effect that the
Doctrine is not restricted to cases where the defendant knew his rights or the mistaken belief of the
other. The question is simply, whether in the circumstances of the case, it was unconscionable for the
defendant to take advantage of the mistake which, at the material time, everybody shared. In Taylor
Fashions the P sought to exercise an option to renew a lease of commercial premises. The option had
not been registered under the Land Charges Act 1925, and was void as against the defendants. The

question was whether the defendants were estopped from asserting their strict legal rights against
Taylors, who had spent some UK$12,000 on improving the premises, including the installation of a lift,
in the expectation that the option would be enforceable. The defendants had acquiesced in the works
carried out by Taylors, and at the time did not suspect that they might have any reason for challenging
the validity of the option. The fourth criterion in Wilmot v. Barber was therefore not fulfilled. The
second plaintiffs, Olds, had been granted a lease in 1949 adjacent to Taylors premises, and a further
lease in 1963 of another property. The 1949n lease contained a clause permitting the defendants to
determine that lease, if Taylors did not exercise their option. The 1963 lease contained an option
enabling Olds to renew, if Taylors in fact exercised their option. It was held that Taylors were not
entitled to obtain a renewal of their lease, but the defendants were estopped from denying that Olds were
entitled to exercise their option. Taylor Fashions Case is one of mutual mistake. It established that there
is no need to prove all five of the conditions laid out in Wilmot v. Barber. However, where there is no
mutual mistake, the court will follow the old rule regarding the five conditions.
The dictum in Taylor Fashions could be used to buttress the decision in Skinner v. Daniel Reeves
et al, where the founder of the property in dispute died without making a Will. The 1st and 2nd Ps and the
D all grew up on the land, living in the houses of their respective parents. All the parties to the dispute
made improvements to the land without hindrance from whoever at the time was entitled to the legal
estate of the founder. Husbands J concluded that, in respect of the areas of land they each claim, the Ps
were licensees.
The new principle introduced by Oliver J in Taylor Fashions is gradually gaining currency. It
was adopted in Amalgamated Investment v. Texas Commerce, and the recent case of Re Basham. The
deceased in Re Basham led his stepdaughter to believe that he would leave all his property to her. She
and her husband served the deceased by cooking, cleaning, carpeting, gardening, etc. No Will was
made, but she was given everything by Nugee QC, who was not persuaded by the defendants argument
that proprietary estoppel is restricted to beliefs relating to an existing right rather than a future right, e.g.
one arising under a Will. The learned judge took the view of Oliver J in Taylor Fashions.
The Court tries to help the developer realize his expectations, which have been encouraged by
the owner. It therefore means that the Court will do what is just and convenient under the
circumstances. A cause of action can be founded on it the facts warrant the award of a positive remedy.
The Doctrine thus operates as a shield and a sword.