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PRINCIPLES OF AUSTRALIAN EQUITY AND TRUSTS
12.22 It is to be noted that there is not a great difference between the two streams of proprietary
estoppel. Rather, they simply reflect differing levels of passivity on the part of the landowner.
The actions of the landowner, in either encouraging expenditure or acquiescing in expenditure,
constitute fraud in equity. In Ward v Kirkland [1967] Ch 194 at 239, Ungoed-Thomas J observed as
follows:
It was suggested before me that there was a distinction between an act which is acquiescing or
encouraging a person in such circumstances to expend money and merely standing aside with the
knowledge that such money was being expended in reliance on having the right which is claimed.
I, for my part, fail to see any substance in this distinction. The fundamental principle of the equity
is unconscionable behaviour, and unconscionable behaviour can arise where there is knowledge
by the legal owner of the circumstances in which the claimant is incurring the expenditure as
much as if he himself were requesting or inciting that expenditure. It seems to me that abstention
as well as request or incitement can fall within the principle from which the recognition of the
claimant’s equity arises.
12.23 A commonly cited statement of the relevant elements of proprietary estoppel is that of Fry J
in Willmott v Barber (1880) 15 Ch D 96 at 105–6, where his Honour said:
A man is not to be deprived of his legal rights unless he has acted in such a way as would make
it fraudulent for him to set up those rights. What, then, are the elements or requisites necessary
to constitute fraud of that description? In the first place the plaintiff must have made a mistake
as to his legal rights. Secondly, the plaintiff must have expended some money or must have done
some act (not necessarily upon the defendant’s land) on the faith of his mistaken belief. Thirdly,
the defendant, the possessor of the legal right, must know of the existence of his own right
which is inconsistent with the right claimed by the plaintiff. If he does not know of it he is in the
same position as the plaintiff, and the doctrine of acquiescence is founded upon conduct with
a knowledge of your legal rights. Fourthly, the defendant, the possessor of the legal right, must
know of the plaintiff’s mistaken belief of his rights. If he does not, there is nothing which calls
upon him to assert his own rights. Lastly, the defendant, the possessor of the legal right, must have
encouraged the plaintiff in his expenditure of money or in the other acts which he has done, either
directly or by abstaining from asserting his legal right.
12.24 Later cases indicated that one did not have to establish all these elements to succeed in a
proprietary estoppel claim, with the ‘real test’ being, as Buckley LJ said in Shaw v Applegate [1978] 1
All ER 123 at 131, ‘whether on the facts of the particular case the situation has become such that it
would be dishonest, or unconscionable, for the plaintiff, or for the person having the right sought
to be enforced, to continue to seek to enforce it’. More recently, in Thorner v Major (2009) 3 All ER
945 at 957, Lord Walker of Gestingthorpe said that ‘the doctrine [of proprietary estoppel] is based
on three main elements: … a representation or assurance made to the claimant; reliance on it by the
claimant; and detriment to the claimant in consequence of his (reasonable) reliance’.
The consolidation of promissory and proprietary estoppels
12.25 In Waltons Stores v Maher, the High Court handed down its most significant decision on the
topic of estoppel. The significance of this case was that it consolidated promissory and proprietary
estoppels into the single, and broader, principle of equitable estoppel.
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