Equity’s Escape Hatch – can Proprietary Estoppel outflank s2 LP(MP)A 1989?

Another proprietary estoppel claim involving a farm?! The recent High Court appeal in Conway v Conway CH-2024-BHM-000020 seeks to put to rest the question of whether Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 can operate as a bar to the operation of the doctrine of proprietary estoppel. Cameron Stocks acted for the successful Appellant at first instance and on appeal to the High Court.

The facts

The Appellant is the registered freehold proprietor of a farm comprising over 20 acres of land and buildings including a formerly derelict barn (the “Barn”).

The Appellant and the First Respondent are cousins. In March 2019, they held a meeting in relation to the potential purchase of the Barn and its conversion into residential accommodation.

Both parties agreed that they negotiated the purchase by the Respondents of the Barn for the sum of £150,000 and that solicitors would be subsequently instructed to give effect to the transfer. It was common ground that the purchase price was never paid to the Appellant.

The Respondents then went into occupation of the Barn and began renovation works which they claim were in excess of £150,000 although such sum is disputed. Solicitors were then instructed by the parties and sought to negotiate the terms of a transfer to the Respondents. Those negotiations fell apart due to disagreement as to whether a call option in favour of the Respondent had been agreed at the meeting in March 2019.

When negotiations ceased, the Appellant demanded that the Respondents cease work to the Barn. When they failed to do so, he issued a claim seeking declaratory relief that they had no proprietary interest in the Barn and an injunction preventing them from accessing it further.

The Respondents counterclaimed in proprietary estoppel only. Crucially, the only relief sought in the counterclaim was for an order that the Barn be transferred to them in accordance with the agreement reached. No alternative claim was pursued seeking equitable compensation or alleging a constructive trust.

First Instance

The matter came to trial before HHJ Mithani KC over 8 days between March-May 2024. The Appellant’s case at trial was that the Respondents were not entitled to the relief sought in the form of specific performance of the oral contract because of s2 LPMPA 1989, which requires all contracts for the sale of land to be made in writing.

It was not argued that s2 operates as an absolute bar to the operation of proprietary estoppel but rather that the doctrine cannot be used in order to obtain specific performance of a contract rendered invalid by s.2(1). The Appellants argued that the intention of this subsection is to bar the grant of relief which has the effect of enforcing, or otherwise giving effect to, the terms of a contract for the sale of land that the statute has rendered unenforceable. A recent line of authority confirms this approach, including Howe v Gossop [2021] EWHC 637 (Ch) and Thandi v Saggu [2023] EWHC 2631 (Ch).

On 31 May 2024, HHJ Mithani KC found for the Respondents on their factual case as to the terms of the agreement and ordered specific performance of the oral contract. The Respondents were ordered to pay the agreed purchase price of £150,000 to their solicitors, to be held pending a completed transfer.

Addressing the interplay of s2 and proprietary estoppel, the Judge recognised the force of the arguments raised in Howe and Thandi. However, she relied on the decisions in Yaxley v Gotts [2000] Ch 162 and Whittaker v Kinnear [2011] EWHC 1479 (QB) as examples of a “court being prepared to enforce an agreement that did not comply with the requirements of s. 2(1)”. She concluded that the “minimum relief” to satisfy the equity which had arisen was an order “enabling the Defendants to enforce the terms of the oral agreement by an order for specific performance.”

Appeal

The Appellant appealed on three grounds. The primary ground was that the Respondents were not entitled to rely on proprietary estoppel as a means of obtaining specific performance of, or otherwise giving effect to, an oral contract for the sale of land, which would otherwise be unenforceable pursuant to s2 LPMPA 1989.

Mr Justice Michael Green, in a decision handed down on 10 October 2025, allowed the appeal. The Court followed the reasoning in Howe and the recent decision of Pathway to Relief v Ali [2024] EWHC 1284 (Ch), in which Mr Justice Zacaroli (as he then was) held that proprietary estoppel could not protect a right that is “contractual in nature” where the relief sought is an attempt to enforce an otherwise ineffective oral agreement which was wholly executory.

Green J concluded that it was not open to the trial judge to make an order which effectively granted specific performance of an unenforceable oral contract for the sale of land.  The Court then grappled with the issue of what should have happened to the counterclaim in circumstances where the Respondents’ case at trial only sought specific performance, no alternative claim for equitable compensation was pursued and no Respondents’ notice had been filed seeking alternative relief.

Recognising the potential injustice of dismissing the counterclaim, Green J remitted the question of equitable compensation for the work carried out to the Barn for a further trial in the County Court. The Appellant was awarded his costs of the appeal, and 75% of costs incurred in the County Court in recognition of the lack of any alternative claim pursued by the Respondents and the Respondents’ failure to engage in ADR at first instance..

Comment

This recent line of authority goes some way to detangle the thorny issue of whether s2 LPMPA operates as a bar to the operation of the doctrine of proprietary estoppel. What appears clear for now is that s2 LPMPA 1989 only bars relief which would have the effect of ordering specific performance of an otherwise void contract for the sale of land.

What it does not do, as was the case in Howe and in this decision once remitted, is prevent the Court from ordering some other form of relief to satisfy the equity. That might be a lesser interest, or equitable compensation, to put the promisee back in the position that they were in.

The moral of the story is, where the agreement which gives rise to the estoppel is “contractual in nature” and enforcement would involve specific performance of an otherwise void oral contract, look to alternative forms of relief that the Court could grant which would still do justice in the circumstances but which would not fall foul of s2.

Article by Cameron Stocks