regulations such as zoning that have large overall social benefits but which affect so many different people that there would be stratospheric transaction costs involved in paying monetary compensation to ensure that each burdened party is made whole.70 In such cases, the land-use burdens accepted by the wider community under the regulation may be sufficient to ensure that their imposition on any given member of the community is not exploitative or disrespectful, even if that particular member suffers a net loss as a result of the regulation.

Recognizing the operation of reciprocal duties of respect in the context of legitimating state action enables us now to see why justifications involving the notion of reciprocal advantages or in-kind compensation have considerable intuitive appeal: to the extent that the compensation and the burden share a common currency—that is, to the extent that it is the same burdens that are shared—the connection between the regulated owner’s burden and everyone else’s burden will be sufficiently tight that equality of civic status will be easy to recognize.

Moreover, a second important feature of respect is that involuntary restrictions on people can be less exploitative if the burdened individuals themselves benefit from the general imposition of those restrictions. Being compelled to benefit others is less disrespectful if the system which imposes that compulsion simultaneously is benefiting the party who suffers the compulsion. Under such circumstances, the imposed burdens are more easily understood as participation in a shared project of civic governance rather than a naked imposition of power for the benefit of others.71 Therefore, to the extent that a burdened property owner enjoys a reciprocal advantage from the general rule which imposes the burden, the risk of exploitation and disrespect diminishes. Because the presence or absence of average reciprocity of advantage can consequently serve as a proxy for the risk of exploitation and thus the amount of potential disrespect, attentiveness to that presence or absence can indeed play a valuable role in ensuring that regulatory burdens do not go beyond the bounds permitted by the requirements of civic equality, even when average reciprocity of advantage is insufficient to make each burdened party whole.

6. Conclusion

We can now briefly recapitulate the course of this chapter’s argument. The paradigm case of average reciprocity of advantage is one in which a restriction on property serves to solve a coordination problem, thereby leaving all of the affected

70The sensitivity of respect to considerations of necessity cuts both ways. Even large demands placed on a wide range of people to benefit only a few (or even one) may not be disrespectful if the demand reflects some vital necessity on the demander’s part. Space does not permit the development here of a detailed investigation of the functioning of the moral economy of respect, or of the normative foundations of that economy. Sufficient for present purposes is simply to recognize how a plausible account based on respect for civic equals can coherently make sense both of key elements of property law’s takings compensation practices and of the intuition that reciprocal advantage has a role to play in justifying those practices.

71Nicole Garnett has observed that a lack of in-kind compensation in the context of physical takings increases dignitary harms. Garnett 2006, 137.

parties better off by their own lights. One party may be burdened with a short-term loss, but it receives a longer-term gain that is at least as large, and in the very same currency as the loss. Under such circumstances, no rational person would object to the regulation, and consequently it is easy to see that the parties who are burdened by the regulation have no legitimate claim to monetary compensation. However, those circumstances are likely to be quite rare. When a restriction on property does not serve to solve a coordination problem, the diversity of personal interests and risk tolerances among property owners makes it likely that appreciable numbers of the owners who are burdened by the restriction will not be made whole by the benefits which the restriction provides. Thus to the extent that average reciprocity of advantage is intended to justify regulations on the grounds that those burdened by the regulations have been made whole and therefore have no cause to complain, the concept is unable to do the work asked of it. However, that fact does not compel us to conclude that vast numbers of common restrictions on property are therefore illegitimate, nor that courts and commentators have widely been mistaken in thinking that average reciprocity of advantage is relevant to justifying government’s imposition of burdens on property owners. Rather, the proper conclusion is that average reciprocity of advantage’s role is not to make burdened property owners whole, but, instead, to ensure that each property owner’s status as a civic equal is accorded proper respect.

6

Some Strings Attached: The Morality

of Proprietary Estoppel

Irit Samet*

1. Introduction

Proprietary estoppel is a concept in flux. Within a span of two years two major House of Lords cases expressed significantly different views about its nature and scope.1 Academic views about its role and proper place within the law of property are just as diverse: for some, proprietary estoppel (hereafter PE) is a black horse threatening to introduce chaos and subjectivity into areas of law where clarity and objectivity are sine qua non. Others see it as an indispensible part of the property lawyer’s toolkit, a necessary mitigating device which enables the court to strike the right balance between the requirements of formality and interpersonal justice. Even if your sympathies, like mine, lie with the latter camp, you must still take seriously the concerns raised by the sceptical position. I believe that getting a clearer view of the justifying principle which underlies PE will help us to delineate the borders of the doctrine more accurately, get a better idea of the remedy it offers, and achieve a more informed balance between what it offers to a successful claimant and the formal requirements typical of property law. In this chapter I therefore set off to find what Lord Hoffmann once called ‘the moral values which underlie the private law concept of estoppel’.2

The argument is partly descriptive and partly normative in the following sense: whereas the justifying principle I suggest can be reconciled with the results in the majority of the case law and the court’s focus on ‘detrimental reliance’ as a constitutive element of the liability, it challenges the tacit assumption that when a PE claim is accepted the court enforces a promise made by the defendant. The function of PE, I will argue, is to enforce a different, less stringent kind of moral

* I am very grateful to Ben McFarlane, John Mee, James Penner, Prince Saprai, Andrew Robertson, Henry Smith, Rachael Walsh and the participants of the Philosophical Foundations of Property Law conference at UCL, and the Society of Legal Scholar (2012) Conference for their helpful comments. The usual caveat applies.

1 Cobbe v Yeoman’s Row Management Ltd 2008; Thorner v Major 2009. On the pendulum movement between the two cases see McFarlane and Robertson 2009.

2 R v East Sussex County Council, ex parte Reprotech (Pebsham) Ltd 2003, 35.

obligation, which is to compensate another person for the way in which he changed his position to his detriment in reliance on your representation, or to give him a timely warning not to rely on it (henceforth LPA obligations, for Loss Prevention Assurance). That is not to say that the court should expand the range of cases in which a PE claim is accepted. My quibble is with the present analysis of the commitment which the owners came under, not with the threshold beyond which the owner’s statements or conduct are considered as implying it. The practical effect of the interpretation suggested here will therefore be largely limited to the remedial aspect of the doctrine, and the range of situations in which it applies will be left intact.

To make a successful PE claim, the claimant must prove the following:

1.A statement or action (which can include silence or inaction) by the defendant, who ought to appreciate that the claimant is likely to rely on it;

2.An act by the claimant in the reasonable belief that he has or will get an interest in land, induced by that statement or action;

3.Consequent detriment to the claimant if the defendant is entitled to resile from her statement or action.3

The three necessary elements for PE are therefore representation by owner of property (O), on which another person reasonably relies (R) to his detriment. But, as the multiple caveats and disjunctives of the definition immediately reveal, PE is a legal umbrella that covers a wide range of factual scenarios. Still, I want to argue that in spite of the considerable differences between them, all the typical cases of PE in which the owner’s words or conduct induced reliance can be analysed as enforcing on the defendant her moral obligation to abide by her LPA, not a duty to fulfil a promise.4

The chapter proceeds as follows: I start in Section 2 with a discussion of the nature of the LPA obligation, and the way in which the ability to assume it is valuable for representor as well as representee. In Section 3 I am arguing that the state should enforce LPA obligations which are assumed by sellers of property rights in the pre-contractual period. This is because a legal rule that forces compliance with one’s moral duty in these circumstances will foster and encourage the socially valuable practice of efficient pre-contractual reliance. Private arrangements between the parties cannot do the work all on their own, and a default rule for allocating responsibility for pre-contractual reliance must be in place.

In Section 4 I want to show that proprietary estoppel sets out this rule. A careful reading of the case law shows, I believe, that the owners communicated willingness

3As defined by Neuberger 2009. The limitation of PE to one kind of property, namely, to land, has been criticized. All that is said in this chapter can be equally applied to other forms of property. An extension of doctrine may be at hand: in Fisher v Brooker 2009, which dealt with intellectual property the PE claim failed on the facts and not for the reason that the subject was not land [11].

4This definition is meant to exclude the ‘acquiescence’ group of cases where the owner’s obligation arises out of her failure to correct R’s mistake about her property rights. I believe that these cases feature a wholly different justifying principle which I discuss in my ‘Proprietary Estoppel and Responsibility for Omissions’ (Samet forthcoming).