Summary

A developer was not entitled to rely on proprietary estoppel to ensure that parking spaces were transferred to him in accordance with an oral agreement as, although he had relied to his detriment on that agreement, he had failed to satisfy other conditions in that agreement upon which the transfer depended.

Facts

The claimant (H) claimed that he was entitled to a transfer of parking spaces by the defendants (D). D counterclaimed, seeking damages, in lieu of an injunction, for the encroachment of H's property onto the parking spaces or a declaration that H was not entitled to the spaces. D owned the freehold of a dental surgery and parking spaces and leased part of an adjacent building from H. H owned the freehold of that building and other parking spaces. H had applied for planning permission to build houses. The proposed development encroached onto D's parking spaces. D allegedly informed H that they wanted acceptable parking arrangements, but they had made no formal objection to the planning permission, which was later granted. In February 2003, D and H reached an oral agreement, which purportedly included a provision for D to transfer their parking spaces in exchange for replacement spaces and an additional space. According to D, there were other terms in the agreement that H had to satisfy. In April 2003, H began to lay out areas to be excavated. D apparently agreed that the development could proceed on the basis of the February agreement. H proceeded with the development work without obtaining a transfer of D's spaces. In September 2003, some of the previous terms were varied. The houses were eventually constructed in the absence of a transfer of D's parking spaces. H, relying on proprietary estoppel, argued that D had given him an assurance that they would transfer their parking spaces to him, that he had relied on that assurance and that he had suffered an unconscionable detriment as a result of that reliance, in that he had changed his position by expending funds on the development while lacking legal title to the parking spaces. D argued that he had relied on H's assurances to fulfil all the terms of the agreement when allowing him to commence the development.

Held

1) If all the requirements were otherwise satisfied for a claim based on proprietary estoppel to succeed, the claim would not fail solely because it also consisted of an agreement that fell foul of the Law of Property (Miscellaneous Provisions) Act 1989 s.2. The court might give effect to the proprietary estoppel by recognising or imposing a constructive trust that enabled s.2(5) to apply, Cobbe v Yeoman's Row Management Ltd (2008) UKHL 55, (2008) 1 WLR 1752 considered. It was in reliance on the April agreement that H had proceeded with the development without obtaining a transfer of the spaces. H and D concurred that the terms of the April agreement had been those agreed in February. The essential terms of that agreement had included that H would grant leases of the building and a small shed at the front of the building, install electronic gates at the entrance of the car park, and would transfer or provide reasonably accessible parking spaces and D would transfer their parking spaces to H. D had agreed to allow the development to proceed, implicitly undertaking not to withdraw that agreement if the other agreed terms were satisfied. The agreement was not subject to contract in the sense that H and D would be free to withdraw from it at will. The variations agreed in September would not themselves be a bar to H's claim based on proprietary estoppel. They did not amount to the abandonment of the underlying basis on which D had agreed to allow the development to begin. H had relied to his detriment on the agreement reached in April by reference to the terms agreed in February and subsequently varied. That detriment consisted of not acquiring legal title at that date to the parking spaces and incurring the expense of the development. However, to obtain legal title to the spaces or equitable title by way of a constructive trust, H had to be in a position to satisfy all the terms agreed. H had failed to do so. It was, therefore, not appropriate to grant H the transfer. (2) D was granted a declaration in conditional terms that H would be entitled to a transfer of the spaces if he satisfied the required conditions of the agreement. (3) It was appropriate to award D damages in lieu of an injunction on the basis of loss assessed at April 2003 when D would have applied for an injunction if they had not reached agreement with H and on the basis that he could have built the houses without encroaching on D's land but decided not to do so. (4) The court would be reluctant to impose injunctions to restrain H from obstructing D's right of way and entering D's premises, other than the leasehold premises in accordance with the terms of the lease, if H was prepared to give undertakings in appropriate terms.

Judgment for defendants