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The relevance of context in property law: a case for judicial restraint?

Published online by Cambridge University Press:  02 January 2018

Nicholas Hopkins*
Affiliation:
University of Southampton

Abstract

A distinction between the domestic and commercial context is commonly drawn in property law discourse and has been brought into focus by three recent House of Lords’ decisions. The thesis of this paper is that while the distinction is a useful explanatory tool, it runs into difficulties when given legal effect by the courts. There is a definitional problem in understanding what is included within each context. Indeed, the distinction assumes the existence of a dichotomy when, in fact, the domestic and commercial spheres are better seen as a continuum. In Stack v Dowden, the majority of the House of Lords gave legal effect to context and considered that different rules should apply to determine ownership of the home. This paper locates its decision in the broader debate on judicial restraint and creativity. By analogy with current discussion of due deference in public law, it is suggested that, in light of the policy issues involved and the broader ramifications of the decision, insufficient justification was given for the approach adopted by the majority.

Type
Research Article
Copyright
Copyright © Society of Legal Scholars 2011

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References

1. Harpum, C, Bridge, S and Dixon, M Megarry & Wade: The Law of Real Property (London: Sweet and Maxwell, 7th edn, 2008) para [6 007].Google Scholar

2. Ibid.

3. Birmingham Midshires Mortgage Services Ltd v Sabherwal (2000) 80 P&CR 256 at [28].

4. Hargraves, A ‘Modern real property’ (1956) 19 MLR 14 at 16.CrossRefGoogle Scholar This structure was retained until the seventeenth edition of the book.

5. [2007] UKHL 17, [2007] 2 AC 432.

6. [2008] UKHL 55, [2008] 1 WLR 1752.

7. [2009] UKHL 18, [2009] 1 WLR 776.

8. An approach the current author has termed ‘context specific’: Hopkins, N ‘Regulating trusts of the home: private law and social policy’ (2009) 125 LQR 310 at 311.Google Scholar

9. An approach the current author has termed ‘context neutral, outcome specific’: ibid.

10. See further Sloan, B ‘Proprietary estoppel: recent developments in England and Wales’ (2010) 22 Singapore Academy of Law Journal 110, para 52.Google Scholar He notes, ‘[i]n a sense the “context” could simply refer to the circumstances of the case’.

11. Mee, J ‘The limits of proprietary estoppel: Thorner v Major (2009) 32 CFLQ 367 at 374.Google Scholar

12. Sloan, above n 10, para 49.

13. A point noted, in a different context, by Bigwood, R Exploitative Contracts (Oxford: Oxford University Press, 2003) p 443, n 375.Google Scholar

14. Hopkins, above n 8, at 333.

15. Above n 5, at [101].

16. Hopkins, N The Informal Acquisition of Rights in Land (London: Sweet and Maxwell, 2000) p 5.Google Scholar

17. See below n 64 and text in which it is seen in the context of proprietary estoppel that over time ‘hope’ may turn into an ‘expectation’.

18. Neuberger, Lord ‘The stuffing of Minerva's owl: taxonomy and taxidermy in equity’ (2009) 68 CLJ 537 at 543.CrossRefGoogle Scholar

19. See, eg, Law Commission Report No 278 Sharing Homes: A Discussion Paper (2002) para [1.11]. Relationship breakdown is identified by the Law Commission as one of four situations in which ownership of the home may arise for determination.

20. Matrimonial Causes Act 1973, s 23, Civil Partnership Act 2004, Sch 5, para 2.

21. Law Commission Report No 307 The Financial Consequences of Relationship Breakdown (2007).

22. Above n 5, at [46]–[48]. See below n 81 and text.

23. Holiday Inns Inc v Broadhead (1974) 232 EG 951 has been interpreted as such a case (eg in Banner Homes Group plc v Luff Developments Ltd[2000] Ch 372 at 397–398) although this interpretation was doubted by Lord Scott in Cobbe at [24]. He preferred to analyse the case as involving the Pallant v Morgan[1953] 1 Ch 43 equity, though that doctrine has some overlap with proprietary estoppel; see N Hopkins ‘The Pallant v Morgan“Equity?”’[2002] Conv 35.

24. Eg JT Developments Ltd v Quinn (1991) 62 P&CR 33.

25. See, eg, Cobbe, above n 6, at [81].

26. B McFarlane and A Robertson ‘The death of proprietary estoppel’[2008] LMCLQ 449.

27. The use of estoppel in this context dates to the nineteenth century, but a notable cluster of claims followed Re Basham[1986] 1 WLR 1498.

28. See, eg, Nield, S ‘Constructive trusts and estoppel’ (2003) 23 LS 311 Google Scholar and Hopkins, N ‘Unconscionability, constructive trusts and proprietary estoppel’ in Bryan, M (ed) Private Law in Theory and Practice (London: Routledge Cavendish, 2007).Google Scholar

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30. Yaxley v Gotts[2000] Ch 162 at 176.

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32. Ibid, at [37].

33. [2000] Ch 162.

34. Dixon, M ‘Confining and defining proprietary estoppel: the role of unconscionability’ (2010) 30 LS 408.Google Scholar

35. Ibid, at 415. The current state of affairs is the subject of further and stringent criticism by Lord Neuberger, above n 18, at 546, whilst acknowledging that it is consistent with a number of Court of Appeal decisions.

36. Law of Property Act 1925, s 1(6).

37. Above n 5, at [68] per Baroness Hale.

38. Ibid, at [92] per Baroness Hale.

39. Ibid, at [109].

40. Ibid, at [110].

41. Ibid, at [123].

42. Ibid, at [122].

43. Ibid, at [69].

44. Ibid.

45. [2010] EWCA Civ 578.

46. Ibid, at [75]. See generally Rimer LJ's discussion of the significance of the parties' contributions to the outcome in Stack, at [72]–[75].

47. Stack, above n 5, at [107].

48. Ibid, at [136].

49. Ibid.

50. Hopkins, above n 8, at 335.

51. Lord Neuberger appears to go further, writing extra judicially, above n 18, at 543–544. Commenting on the view that Cobbe precludes estoppel succeeding unless the claimant believed he had a legally enforceable claim, Lord Neuberger says ‘I agree – and, at least in a commercial context, what's wrong with it?’ In contrast he explains that ‘at least in many domestic cases, it would be inappropriate to require strict adherence to a rule that the claimant must have believed that he had a legally enforceable right’. To the extent that this indicates that different principles should apply to estoppel claims depending on whether the case falls within the domestic or commercial context it runs counter to Lord Neuberger's own approach in relation to the trust in Stack discussed above n 47 and text.

52. Above n 6, at [18].

53. Gillett v Holt[2001] Ch 210; Jennings v Rice[2002] EWCA Civ 159, [2003] 1 P&CR 100. The creation of estoppel expectations is discussed by Robert Walker LJ in Gillett v Holt, but did not arise in Jennings v Rice in which the appeal was confined to the question of estoppel remedies.

54. Above n 6, at [69] (original emphasis).

55. So stated, this approach has resonance with Dixon's ‘double assurance’ theory, that estoppel requires an assurance of rights without compliance with formalities. The theory was first outlined in Dixon, M ‘Proprietary estoppel and formalities in land law and the Land Registration Act 2002: a theory of unconscionability’ in Cooke, E (ed) Modern Studies in Property Law vol 2 (Oxford: Hart Publishing, 2003)Google Scholar and is expanded in this journal in Dixon, above n 34. Mee, above n 11, at 373–374 is critical of the connection drawn by Lord Walker between the context of the case and the likely expectations of the parties.

56. Above n 6, at [91].

57. This issue is implicit in the judge's finding, referred to by the House of Lords, that the claimant had moved from a ‘hope’ to an ‘expectation’ of an inheritance: see below n 64 and text.

58. Above n 7, at [2] per Lord Hoffmann, citing Lloyd LJ's judgment in the Court of Appeal.

59. Ibid, at [59] per Lord Walker.

60. A description given by the judge at first instance [2007] EWHC 2422 (Ch) at [94] and cited by the Court of Appeal [2008] EWCA Civ 732 at [66] and by Lord Neuberger in the House of Lords, ibid, at [70].

61. Ibid, at [24] per Lord Rodger.

62. Above n 6, at [47].

63. The distinction between an (unenforceable) current indication of testamentary intent and an irrevocable assurance giving rise to an estoppel is discussed in Gillett v Holt, above n 53, at 227–229.

64. The events related to the handing over to David of bonus notices on life assurance policies by Peter ‘for his death duties’. Echoing the findings of fact by the judge, cited above n 7, at [40], Lord Walker, at [60], refers to these events as ‘[marking] the transition from hope to expectation’. Contrast, however, his judgment in Cobbe, above n 6, at [66] in which he suggested ‘the point that hopes by themselves are not enough’ is more commonly made in commercial cases.

65. This has become apparent following the decisions in Adekunle v Ritchie[2007] BPIR 1177 (Leeds CC) and Laskar v Laskar[2008] EWCA Civ 347, [2008] 1 WLR 2695.

66. Eg Lasker v Lasker, ibid. The current use of the property at the time of purchase was as a home for one of the purchasers who was entitled to a discount under the Right to Buy. The case was classified as commercial, however, as the property was bought as a ‘buy to let’ investment.

67. See further Cobbe, above n 6, at [66] in which the testamentary promise claims of Gillett v Holt, above n 53, Ottey v Grundy (Andreae's Estate)[2003] EWCA Civ 176 and Jennings v Rice, above n 53, are discussed by Lord Walker as examples of domestic claims.

68. Nield, S ‘Estoppel and reliance’ in Cooke, E (ed) Modern Studies in Property Law vol 1: property 2000 (Oxford: Hart Publishing, 2001) p 95.Google Scholar See also p 78.

69. Ibid, p 85.

70. Eg, the point would have arisen in Cobbe, above n 6, if the estoppel claim had not failed on other grounds.

71. Dixon, above n 34, at 416–417.

72. Lord Neuberger, above n 18, at 546.

73. Above n 50 and text.

74. Nield above n 28, at 312–313.

75. (1985) 160 CLR 583.

76. Above n 5, at [32].

77. Above n 65.

78. Above n 19.

79. Above n 5, at [46].

80. Above n 19, para [1.31].

81. Above n 5, at [46].

82. Ibid, at [104].

83. Royal Bank of Scotland v Etridge (No 2)[2001] UKHL 44, [2002] 2 AC 773 at [44]–[49].

84. For further analysis of these requirements, see Harpum et al, above n 1, paras [25–125]–[25–128].

85. Above n 83, at [87].

86. Ibid, at [88].

87. Ibid, at [87].

88. [1997] 1 All ER 144.

89. Above n 83, at [86].

90. (Unreported) 15 May 2009 (ChD) at [1].

91. Above n 83, at [87].

92. Ibid, at [86].

93. Above n 90, at [49].

94. Ibid.

95. Above n 5, at [69].

96. [2001] 2 AC 532 at [28]. I am indebted to Dr Emma Laurie for bringing the source of the quote to my attention.

97. Laurie, E ‘Judicial responses to bright line rules in social security: in search of principle’ (2009) 72 MLR 384 at 407.CrossRefGoogle Scholar

98. Burrows, A The Law of Restitution (Oxford: Oxford University Press, 2nd edn, 2002) pp 6975.Google Scholar

99. Swadling, W ‘Policy arguments for proprietary restitution’ (2008) 28 LS 506 at 520.Google Scholar

100. Lord Steyn ‘Deference: a tangled story’[2005] PL 346 at 349.

101. Ibid, at 348.

102. Kavanagh, A ‘Defending deference in public law and constitutional theory’ (2010) 126 LQR 222 at 248.Google Scholar

103. Above n 100, at 349.

104. King, JA ‘Institutional approaches to judicial restraint’ (2008) 28 OJLS 409 at 440.CrossRefGoogle Scholar

105. Allan, TRS ‘Human rights and judicial review: a critique of “due deference”’ (2006) 65 CLJ 671.CrossRefGoogle Scholar A response to his arguments is provided by Kavanagh, above n 102.

106. For a summary of these, see Dyson LJ ‘Some thoughts on judicial deference’[2006] JR 103.

107. Kavanagh, A ‘The elusive divide between interpretation and legislation under the Human Rights Act 1998’ (2004) 24 OJLS 259 at 280.CrossRefGoogle Scholar

108. See, eg, Edwards, RA ‘Judicial deference under the Human Rights Act’ (2002) 65 MLR 859 at 876.CrossRefGoogle Scholar

109. JA King ‘The pervasiveness of polycentricity’[2008] PL 101 at 101. The idea that such disputes are unsuitable for adjudication originates with L Fuller ‘The forms and limits of adjudication’ (1978–1979) 92 Harvard Law Review 353.

110. Steadman v Steadman[1976] 1 AC 536 at 542. The analogy is drawn by Allison, JWF ‘Fuller's analysis of polycentric disputes and the limits of adjudication’ (1994) 53 CLJ 367 at 367.CrossRefGoogle Scholar

111. King above n 109, and Allison, ibid.

112. King, ibid, at 110.

113. Kavanagh, above n 102, at 241.

114. Hunt, M ‘Sovereignty's blight: why contemporary public law needs the concept of “due deference”’ in Bamforth, N and Layland, P (eds) Public Law in a Multi Layered Constitution (Oxford: Hart, 2003) p 351.Google Scholar

115. Hopkins, above n 8, at 318–321.

116. See, in particular, above n 7, at [45] per Baroness Hale. Lord Walker observed, at [14], that he ‘cannot usefully add to, still less improve upon, [Baroness Hale's] account of the human and social issues involved....’

117. Ibid, at [43] per Baroness Hale.

118. Ibid, at [46]–[48] per Baroness Hale.

119. Ibid, at [27] per Lord Walker.

120. Through a mandatory declaration where property is registered in joint names: ibid, at [52]–[53].

121. In particular in urging a move away from a focus on direct financial contributions: see the discussion by Lord Walker, ibid, at [24]–[26] whose discussion is endorsed by Baroness Hale at [60].

122. Ibid, at [102].