Helen Bray
Posted on 27 May 2020

In Brief: Proprietary estoppel trumps written record

The recent case of Wills v Sowray [2020] has provided some useful guidance on the relationship between section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 ("LP(MP)A 1989") and proprietary estoppel claims.

The Court found that where a proprietary estoppel had arisen, the fact that it was not recorded in writing was no statutory bar to the equity being satisfied.

Section 2 LP(MP)A 1989

Section 2 of LP(MP)A 1989 requires contracts for the sale or disposition of interests in land (with a few limited exceptions) to be in writing and signed by or on behalf of both parties. 

The case

The case concerned a 50 acre farm near Harrogate owned by the Deceased. The Claimants – brothers who had been lifelong friends of the Deceased – argued that the Deceased had promised to leave the land to them, when he died. In fact, on his death, because of the absence of a will, the land passed to the Deceased's daughter, who had been estranged from her father until the last 6 years of his life.

The daughter, in defence of her statutory inheritance, argued that where section 2 had not been complied with, the alleged agreement to transfer land to the Claimants was void.  The Court's decision, however, was that the Claimants had acquired property rights in equity, which could not be defeated by the absence of a written contract. 

Claiming proprietary estoppel to avoid section 2

Concerns have been raised in the past that proprietary estoppel could be used – particularly in commercial cases – to circumvent the strict requirements of section 2, and that the intention of the statute could thus be undermined.   

This case provides reassurance that, where the claim is familial in nature, this is less of a concern, because a broader approach can be taken.

In Wills v Sowray, the Judge commented that section 2 is intended to apply to contractual, not equitable claims, and the law should be amended to clarify that section 2 has no effect on estoppel cases.

Getting things in writing

While we generally advise that any agreements are best documented, the outcome of this case shows that not doing so in respect of intended transfers of land will not be an automatic bar to a proprietary estoppel claim.  That said, this claim could have been avoided had the Deceased made a Will in accordance with his promises.