How To Enforce An Oral Promise Relating To Land/Buildings?

The above issue was one which was faced by a landowner and considered by the High Court in the recent case of Howe & Anor v Gossop & Anor [2021] EWHC 637 (Ch).

Howe & Anor v Gossop & Anor

Case summary

In simplified terms, Mr and Mrs Howe had an obligation to pay Mrs Gossop £7,000. They proposed that, instead of paying her £7,000, Mrs Glossop would do some work and two additional pieces of land would be transferred to her. They shook hands upon it and Mrs Glossop did the work.

The problem was that there was nothing in writing to record the agreement and Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 requires agreements for the sale or disposition of an interest in land to be in writing and to be signed by both parties.

Section 2(5) of that Act does say that:

These are trusts implied by the Courts when they conclude the parties must have been intended, (or must be presumed to have been intended) there to be a trust. For example:

• Where ‘A’ makes a voluntary payment to ‘B’ or pays for the purchase of property which is vested either in B alone, there will be a presumption that the parties intended B to hold the money of the property on a ‘resulting trust’ for A (unless the presumption of ‘resulting trust’ is trumped by a presumption of ‘advancement’(i.e. gift) if the transfer was to a spouse or child. Although the actual facts can easily rebut these presumptions); Or
• Where a husband is the sole legal owner of the house, his wife had contributed towards the purchase price and they had agreed that ownership should be jointly shared – the husband will hold the house on ‘constructive trust’ for himself and his wife.

However, in Mrs Glossop’s case, the Court gave her relief, but not by enforcing Mr and Mrs Howes’ promise to transfer the land to her. That oral contract was unenforceable because of Section 2 of the Act.

Neither did the Court rely on an implied trust.

Rather the Court said that applying the legal doctrine of ‘proprietary estoppel’, Mr and Mrs Howes were ‘estopped’ from denying their assurance that Mrs Glossop should have the benefit of the land and Mrs Glossop was entitled to equitable relief.

So the Court awarded Mrs Glossop a licence to occupy the land, irrevocable whilst owning and living at the adjacent house.

Proprietary estoppel

So, notwithstanding Section 2 of the Act, parties who have received an oral promise relating to land/buildings are entitled to equitable relief if they can claim under the doctrine of ‘proprietary estoppel’. The four essentials for ‘proprietary estoppel’ are:

1. Assurances – an owner of land has encouraged the claimant to believe that he or she would enjoy some right or benefit over the owner’s property.
2. Detriment – the claimant has acted to his or her detriment.
3. Reliance – in reliance on that belief.
4. Unconscionability – it is unconscionable for the owner now to act in such a way as to defeat the claimant’s expectation.

A classic example would be a farmer who promises his son that if he works on the farm without proper wages, he will leave the farm to the son. In reliance on this promise, the son does so. The farmer dies leaving the farm to someone else. The son is entitled to relief against this breach of a promise under the doctrine of ‘proprietary estoppel’.

Of course, the better course of action, if you intend, to your detriment, to rely on a promise relating to real estate, is to employ a lawyer to get it in writing.