Possession claim by a tenant by estoppel

May 23, 2023

Tsang Shu Wo v Person unknown in occupation of Lot No 2643RP in DD 120, Yuen Long, New Territories, Hong Kong ([2023] HKCA 644) concerned a possession claim by a person claiming to be the sub-tenant of a large plot of land in the New Territories (‘the Plot’). The claim concerned the possession of a house on the Plot which had been occupied by the defendant’s family since the 1920s.

The plaintiff claimed to be the sub-tenant of the Plot. There was, however, no valid tenancy in favour of the alleged intermediate landlord. This was because the Plot was owned by a Tso and one of the registered managers had refused consent to the grant of the alleged head-lease of the Plot. While not all registered managers need to sign leases of Tso land, they do need to consent to the grant ([27] Hon Yuen JA). Thus, there could be no valid sub-lease to the plaintiff.

The plaintiff claimed that there was a tenancy by estoppel and this entitled the plaintiff to bring the claim. Both in the Court of First Instance and in the Court of Appeal it was held that any such tenancy could only affect dealings between the alleged landlord and tenant. It did not entitle the tenant by estoppel to bring possession proceedings.

The outcome seems to be that, in the absence of a valid lease and so of any valid sub-lease, the right to bring possession proceedings remained with the Tso.

Michael Lower


Illegality and adverse possession in Hong Kong after Patel

April 21, 2023


Monat v All person(s) in occupation of part of the remaining portion of Lot No 591 in Mui Wo DD 4 No 16 Ma Po Tsuen, Mui Wo ([2023] HKCA 479) is an important case in several respects. First, it considers whether a squatter’s illegality has any possible impact on an adverse possession claim. Having decided that illegality can have an impact on the claim, the question is whether Hong Kong should follow England in moving from the Tinsley ‘reliance’ test to the Patel ‘range of factors’ approach. More fundamentally, the judgment addresses the status of judgments of the UK Supreme Court in Hong Kong.

The facts

The case concerned an adverse possession claim concerning land on which a squatter (the defendant’s father) built a house without obtaining the approval and consent for building works required by section 14 of the Buildings Ordinance.

The defendant’s adverse possession claim succeeded in the Court of First Instance (as explained in a previous post on Hong Kong Land Law). In the first instance judgment, Deputy Judge To said that illegality was generally not a factor to be considered in adverse possession claims unless the possession, or the manner of possession, was a breach of a statutory provision.

Adverse possession and illegality

Yuen JA (with whom the other members of the Court of Appeal agreed, referred to the statement in Les Laboratoires Servier and anor v Apotex Inc  that the ex turpi causa maxim should apply only to criminal acts, quasicriminal acts, non-criminal acts which engaged the public interest (eg dishonesty in the context of civil disputes), and infringements of rules enacted for the protection of the public ([23.5]).

Thus, the fact that the squatter’s use of the land contravened the Government lease restriction on uses other than agricultural use was irrelevant. Breach of section 14 of the Buildings Ordinance, however, was a criminal offence under section 40 of the Ordinance.

Tinsley or Patel?

Yuen JA decided that the effect of this illegality on the adverse possession claim should be assessed using the range of factors approach adopted in Patel v Mirza (again covered in an earlier Hong Kong Land Law post).

This approach requires the court:

‘(a) consider the underlying purpose of the prohibition which has been transgressed [e.g. in our case, s.14 BO];

(b) consider conversely any other relevant public policies which may be rendered ineffective or less effective by denial of the claim [e.g. in our case, the justification of adverse possession in the use of land as a natural resource, and in discouraging stale claims];

(c) keep in mind the possibility of overkill unless the law is applied with a due sense of proportionality.’ ([101 in Patel and [36.4] in Yuen JA’s judgment].

At first instance, Deputy Judge To said that even if the Patel approach were applied, the adverse possession claim would succeed. Yuen JA agreed. The squatter’s possession itself did not contravene the Buildings Ordinance and the Ordinance did not seek to penalize squatters ([62.2] Yuan JA).

Deputy Judge To identified the policies underlying the doctrine of adverse possession: ‘The interest of the squatter who has been enjoying uninterrupted peaceful possession and putting idling land to good use is the public interest which the Limitation Ordinance seeks to protect. Discouraging the paper owner sleeping on his right and allowing his land to go idle is the public policy reasons behind the Limitation Ordinance’. ([62] in the CFI judgment. Yuen JA agreed with this ([62.2]).


Although the breach of the Buildings Ordinance meant that the ex turpi causa principle was engaged, the squatter’s claim survived the application of the Patel approach and succeeded. The formal owner’s appeal failed.

The status of UK Supreme Court judgments in Hong Kong

Until now, the assumption has been that the Hong Kong approach to illegality is the reliance approach in Tinsley v Milligan (outlined in this blog post). Yuen JA argued that the CFA had not tied itself to the Tinsley ‘reliance’approach, not having had the opportunity to consider whether the Patel range of factors approach should be adopted. This was, therefore, an open question ([50.2]).

In A Solicitor v Law Society of Hong Kong ([2008] HKCFA 15) Li CJ explained the respect due to decisions of the House of Lords (and now the UK Supreme Court) (at [15]).

Yuen JA explained that it was, accordingly, appropriate to adopt Patel in the absence of any local Hong Kong factors making this inappropriate ([52.2]).

She continued:

‘In my view, it would be surprising if the common law as expounded by the highest authority in the UK (which the CFA has said should be accorded the greatest respect) is not to be regarded as the common law in Hong Kong simply because randomly, there may or may not happen to be a case involving the point being processed through the Hong Kong courts, which may or may not happen to reach the CFA.’ ([52.4]).

The CFA would, of course, be free to depart from the UK Supreme Court position ([52.5]).

This is potentially very significant. Even in the Land Law area, it is easy to think of UK Supreme Court decisions that might be treated as part of the common law of Hong Kong on this approach. The decision in Manchester Ship Canal Company Limited v Vauxhall Motors Limited ([2019] UKSC 46) (see this blog post) is probably an example.

Michael Lower

Fearn v Trustees of the Tate Gallery

March 13, 2023


The Trustees of the Tate Gallery created a viewing gallery on the top floor of the Blavatnik Building, part of the Tate Modern Museum. Visitors to the viewing gallery could see into some of the flats in a nearby development called Neo Bankside. Some visitors to the viewing gallery even brought binoculars, waved to the occupants of the Neo Bankside flats or took photos, some of which were posted to social media. The Neo Bankside residents were distressed by this intrusive behaviour. They brought proceedings in nuisance against the Trustees of the Tate Gallery (Fearn v Trustees of the Tate Gallery).

The Trustees argued that there was nothing objectionable about the installation of a viewing gallery. What’s more, to a significant extent the problem was caused by the unusual design of the Neo Bankside flats. The walls were made of glass from floor-to-ceiling. Clearly, this rendered the Neo Bankside residents unusually vulnerable to visual intrusion. In any event, the Neo Bankside residents could protect their privacy by, for example, using the solar blinds or having their windows treated to stop people being able to see through them from the outside. Further, the Trustees obtained planning permission from the local authority and this ought to be relevant to the question as to whether or not the viewing gallery created a nuisance.

The Supreme Court decision

The majority of the Supreme Court found that the Tate Gallery was liable in nuisance to the affected Neo Bankside residents. Lord Leggatt said:

‘It is not difficult to imagine how oppressive living in such circumstances would feel for any ordinary person – much like being on display in a zoo … it is beyond doubt that the viewing and photography which take place from the Tate’s building cause a substantial interference with the ordinary use and enjoyment of the claimant’s properties.’ ([48]).

The Supreme Court remitted the case to the High Court for the determination of the appropriate remedy ([133]).


The law of nuisance balances the sometimes-clashing rights of neighbouring property owners to use their properties as they see fit. Nuisance protects ‘the utility and amenity value’ of land; it does not seek to protect occupiers from personal discomfort ([11]). Lord Leggatt pointed out that the concept of reciprocity lies at the heart of nuisance; the law balances the conflicting rights of landowners ([18]); the governing principle is good neighbourliness ([35]). The interference complained of must be substantial ([22]). Visual intrusion can be a nuisance ([16]).

The common and ordinary use of land

Lord Leggatt emphasised the central importance of asking whether the acts of the landowner complained of, and the neighbour’s rights that are interfered with, fall within ‘the common and ordinary use of land’. A landowner can’t complain if the use interfered with is not an ordinary use ([25]). The common and ordinary use if to be decided on having regard to the character of the locality ([38]).

Application to the facts

The construction and operation of the Tate’s viewing gallery did not fall within a common and ordinary use of its land ([50]). This was not like a case of people looking out of the windows of their own property and happening to see into the property of their neighbours. The Neo Bankside Residents could not complain if the residents of nearby flats, acting normally, could see them ([63]).

Here, however, the Tate constructed a viewing gallery, expressly for the purpose of looking out and then invited hundreds of thousands of people to do so. Lord Leggat observed: ‘the nature and extent of the viewing of the claimant’s flats goes far beyond anything that could reasonably be regarded as a necessary or natural consequence of the common and ordinary use and occupation of Tate’s land’ ([74]).

Did the flat owners bring it on themselves?

The unusual design of the Neo Bankside flats (with their floor-to-ceiling glass walls) was relevant ([61]). The Neo Bankside residents have no claim in nuisance against the residents of nearby flats, acting normally, who look into the Neo Bankside flats ([63]). But the design of the Neo Bankside flats was no defence for the Trustees of the Tate Gallery when they were not using their land ‘in a common and ordinary way’ ([65] and [69]). There was no basis ‘for regarding the glass walls of the claimants’ flats as unusual, either in the context of modern high-rise blocks of flats generally or in the particular locality’ ([79]).

Should the Neo Bankside residents be required to take protective measures?

The Trustees argued that there were simple steps that the Neo Bankside residents could take which would allow the continued operation of the viewing gallery while protecting the residents from the distress caused by visual intrusion. The windows had solar blinds which could be lowered or covering them with a privacy film would do the trick as might having lace curtains. Lord Leggat, however, rejected the notion that the burden should be on the Neo Bankside residents to mitigate the impact ‘of the special use’ of the Blavatnik Building ([84]).

The relevance of planning consent

The fact that the Trustees of the Tate Gallery had planning consent for the viewing gallery is not a defence to an action in nuisance. Planning law and private nuisance have different aims ([109] – [110]).

The public interest

While the fact an activity confers a public benefit is not a defence to an action in nuisance ([121]), public benefit can be relevant when it comes to deciding on the remedy (injunction or damages) ([126]).


The Trustees of the Tate Gallery were liable in nuisance. The case was remitted to the High Court for the determination of the appropriate remedy ([133]).

Michael Lower

Guest v Guest – summing up (for now)

February 16, 2023

I’ve posted a contribution with some interim conclusions on Guest v Guest in CUHK’s Issues in Property Law blog. Here is the link.

Michael Lower

Guest v Guest: Aims of proprietary estoppel and principles governing relief: the detriment-focused approach in the minority judgment (3)

February 1, 2023


An earlier blog post outlined the facts and the judgment of the majority of the UK Supreme Court in Guest v Guest ([2022] UKSC 27).  A second blog post described the majority judgment in more detail.

This third blog post in the series looks at the minority judgment of Lord Leggatt (with whom Lord Stephens agreed). The majority judgment emphasized enforcement of the promise as the starting point in proprietary estoppel cases involving a promise of the future acquisition of property rights.

The minority judgment, by contrast, argues very strongly that preventing detriment is the central aim of proprietary estoppel and also provides the yardstick for the design of relief in successful cases.

This difference in approach can lead to very different outcomes, as a comparison of the majority and minority judgments illustrates.

This blog post will explain how the minority judgment read the major cases in the development of proprietary estoppel and the statement of principles that this reading generated. This statement will be compared and contrasted with the statement of principles in the majority judgment.

It is tempting to focus exclusively on the majority judgment. This temptation should be resisted since the minority judgment contains ideas that may prove influential in the future development of this area of the law.

Comparing and contrasting the statements of principles to emerge from the minority judgment sheds light on the choices made by the majority.

Differences in outcome

The relief awarded by the majority, applying an expectations-based approach is valued at GBP 1.3 million (less the value of the parents’ life interest) ([131]). The minority, taking a detriment-based approach would have awarded GBP 610,000 (more than half of which was interest on the detriment as determined by the minority).

These very different outcomes illustrate the practical significance of adopting one approach to equitable relief over another.

Different model of proprietary estoppel

Lord Leggatt’s reading of the development of proprietary estoppel led him to see the Court of Appeal decision in Crabbe v Arun District Council as a watershed moment.

Until then, proprietary estoppel operated defensively as a species of estoppel:

‘the equitable doctrine operated as an estoppel properly so called. The doctrine was not treated as an independent basis for acquiring legal rights, let alone one which might justify compelling A to transfer an interest in land to B. It operated negatively and defensively to prevent A (or A’s successors in title) from exercising a pre-existing property right against B. Where the relevant conditions were satisfied, A was estopped from asserting this right against B.’ ([146])

The distinctive feature of Crabbe was that a promise to confer a proprietary right (an easement in this case) created a new right. Proprietary estoppel became a positive cause of action ([147] – [148]) ‘valid against other persons generally’ ([154]).

The House of Lords decision in Thorner v Major ‘established beyond question’ the status of proprietary estoppel ‘as an independent cause of action and basis for acquiring new property rights’ ([151]). Thorner also established the essential features of this cause of action.

Lord Leggatt was of the view that this new type of proprietary estoppel is so different in its operation and effects that it should have a name which properly reflects its nature. He suggests that this type of claim should be called a ‘property expectation claim’ ([155]).

The purpose of proprietary estoppel

Clearly, proprietary estoppel is a response to a certain type of unconscionable behaviour, so that it is uncontroversial to say, as the majority judgment does, that the purpose of proprietary estoppel is to undo unconscionability.

The minority judgment is more specific as to what this means: ‘The equity is to be protected from detriment that B will suffer if the promise is not kept’ ([190]).

The focus on detriment is clear.

What this means for the approach to equitable relief

Lord Leggatt points out that there are two ways of undoing detriment: either enforce the promise (or order payment of the financial equivalent) or provide a remedy which compensates for reliance loss ([193]).

If the focus is on protecting from detriment, then the question arises as to why compensation for reliance loss should not always be the preferred approach. Why should enforcement of the promise be considered at all?

First, difficulty in quantifying the detriment may be a reason to prefer enforcement of the promise (or its monetary equivalent) ([200]).  Even then, care should be taken to ensure that the remedy is not out of proportion to the detriment ([204]).

Second, there are cases where the promise is given in an exchange that is ‘something like a contract’. For example, A may promise B that B will inherit some property of A in return for providing caring services for the rest of A’s life.

Here, the parties have agreed that the expectation (that the promise will be kept / enforced) and the detriment are well-aligned ([220]). Cases involving family members are unlikely to fall into this category ([221])

Enforcing conditional promises and promises subject to unspoken qualifications

Lord Leggatt pointed to two situations which pose significant difficulties where the court proposes to take an expectations-based approach to equitable relief. The first is that there are cases where the promise is that B will inherit A’s property on A’s death and A is still alive. A successful claim in these circumstances interferes with A’s testamentary freedom.  

Enforcing the promise also raises the issue of ‘acceleration’ that was, logically enough, a major feature of the majority Supreme Court judgment in Guest ([238]). A backward-looking detriment-based approach is free of this problem since the detriment has already been incurred at the time of the claim.

Promises of a future inheritance are often ‘subject to unspoken and ill-defined qualifications’ (Walton v Walton [19], Hoffman LJ). It may be implicitly understood, for example, that the relevant property might be wholly or partly used up to pay for medical or care expenses.

Lord Leggatt points out that this consideration also gives rise to issues where the court proposes to enforce a promise before the due date for performance:

‘Any such assessment must in principle seek to take account of such “unspoken and ill-defined qualifications” as were implicit in the promise made and how they bear on what might happen in the future (or on what might have happened in the future in a counterfactual world in which the promise had not been revoked when it was). That may be a difficult and speculative exercise to attempt to undertake, potentially more so than quantifying the claimant’s reliance loss’ ([244]).

Remedial offers

One of the interesting features of the minority judgment is its brief exploration of the role of remedial offers.

Lord Leggatt explains:

‘Where A, for whatever reason, decides to revoke a promise on which B has relied that A will transfer property to B on A’s death (or some other event) before the event has occurred, A may satisfy such equity as has arisen by making a gift or offer of compensation to B sufficient to prevent B’s change of position from operating as a detriment’ ([249]).

The significance of such an offer is explained:

‘provided the prospective benefactor has endeavoured to treat the promisee fairly and has made a genuine and reasonable alternative arrangement or offer of amends, a court should be slow to find fault with it and to order more extensive relief’ ([252])

Lord Leggatt suggests that B’s rejection of a fair remedial offer might provide A with some protection against an adverse order for costs ([252]).

Summary of principles

Just as Lord Briggs and the majority had done, Lord Leggatt crystallises his approach to the design of equitable relief into a summary of principles:

  1. The prevention of detriment is the core aim of equitable relief in proprietary estoppel (or ‘property expectation claims’ as Lord Leggatt would have it) ([255]);
  2. This could be achieved either by enforcing the promise or by compensating for reliance loss ([256]);
  3. If both are practicable ‘the court should adopt whichever method results in the minimum award necessary to achieve that aim’ ([256]);
  4. Enforcement of the promise is often appropriate where the date for performance of the promise has passed AND where (a) reliance loss is difficult to quantify; and (b) enforcement of the promise is not clearly disproportionate to the reliance loss ([258]);
  5. Where the performance date has not passed and a fair offer for compensation has been made (a ‘remedial offer’) then relief should rarely exceed the offer ([259]);
  6. Otherwise, the relief should be calculated by reference: (a) to the prospective future gift (a discount may be necessary to deal with acceleration, unspoken qualifications and so on); or (b) to the reliance loss ([260]);
  7. The guiding principle is always that ‘the aim is to award a remedy which does all that is necessary, but no more than is necessary, to prevent B from suffering detriment as a result of having relied on a promise of a gift of property which A no longer intends to make’ ([261]).

Applying the principles to the facts of this case

The promise made to the son, Andrew, in this case was that he would inherit enough of his parents’ farm to allow him to carry on a farming business. This was no longer possible since the family break-up, and the fact that Andrew’s brother had an equal claim to the farm, meant that Andrew could no longer go back to the farm itself.

The financial award envisaged at first instance might well not be enough to set up elsewhere, even if Andrew should want to do so at his stage in life. So it was, in any event, impossible to give effect to the promise made to Andrew ([272]).

More important, from the minority perspective, is the fact that there was no evidence to indicate that the first instance award was even roughly proportionate to the reliance loss ([273]).

The only possible approach, then, was ‘to make an award of compensation calculated to put Andrew, so far as money can do it, in as good a position as if he had not built his career on those promises’ ([276]).

Unlike the majority, Lord Leggatt thought that it was possible to quantify the reliance loss and he does so in an Appendix to his judgment. This approach has the benefit that there is no need to deal with issues such as acceleration or to take into account the unspoken conditions to which the parents’ promise was subject ([277]).

Lord Leggatt thought that it was fair to assume that, but for the promise, Andrew would have pursued an alternative career in the dairy business ([278]).

The detriment-based relief in this case was the difference between the wages that Andrew would have worked if he had been employed elsewhere and the wages he earned working on his parents’ farm. This, including a sum for the interest that Andrew would have earned on the excess wages, came to GBP 610,000 (Appendix [30]).

Comparison of the majority and minority approaches

Both Lord Briggs (for the majority) and Lord Leggatt (for the minority) articulated a statement of principles concerning the award of equitable relief. The minority statement is set out in this blog post. That of the majority is described in my previous blog post on this case. It is instructive to compare and contrast these two statements.

  1. The aim of proprietary estoppel

    Lord Briggs said that the aim of proprietary estoppel is to undo unconscionability ([94]). No-one would dispute this. Lord Leggatt, however, thought that this was not clear enough. He said that ‘The equity is to be protected from detriment that B will suffer if the promise is not kept’ ([190])

    2. When enforcement of the promise is appropriate

    Lord Briggs thought that enforcement of the promise (or its monetary equivalent) is the starting point when considering the appropriate relief ([5]).

    This is subject to the caveats that this must not be disproportionate to detriment ([72]) and that other factors such as changed personal circumstances of the promisor or the acceleration of a promise due to be performed in the future need to be taken into account ([6]).

    Lord Leggatt did not see enforcement as a starting point but as something that may be appropriate where: (a) the date for performance of the promise has passed; (b) reliance loss is difficult to quantify; and (c) enforcement is not clearly disproportionate to the reliance loss ([258]).

    It may be appropriate where the date for performance is in the future, the court will need to decide whether to enforce the promise or to compensate for reliance loss ([260]). Enforcement of the promise is a possibility, not a starting point.

    Even if enforcement seems appropriate there may need to be adjustments to take account of unspoken qualifications and acceleration ([260]).

    3. Should the award be proportionate to the detriment?

    This is an area of agreement between the majority and the minority (at least on the face of it); each accepts that enforcement is only appropriate where it is not disproportionate to detriment ([76] and [258]).

    4. When are the consequences of reliance ‘incalculable’?

    This may be one of the most significant areas of divergence between the majority and minority approaches.

    Lord Briggs, as we saw in the previous blog post, thought that a central aspect of the harm suffered by Andrew was the ‘gut-wrenching’ realisation that the promise he had relied on was to be repudiated. This could not be calculated with any reliability ([11]). This pointed to the need to enforce the promise ([12] and [51]).

    Lord Leggatt accepted that it might be appropriate to compensate Andrew for the emotional harm ‘from having built his life on an expectation of inheriting Trump Farm which has been disappointed’? (Appendix [34])

    He thought, however, that it would be possible to assign a monetary value to this harm. In this case, he decided against doing so, partly because ‘it is inherently difficult to separate feelings of dislocation and distress at having to rebuild his life from other harm for which no compensation can be recovered – for example, the anger and sense of betrayal’ ([37]).

    We see in the minority approach a much greater willingness to assume that harm, even psychological harm and emotional distress, can be compensated for financially.

    Applying the minority principles, this makes compensating for the reliance loss a much more feasible option.

    Michael Lower

    Guest v Guest: Aims of proprietary estoppel and principles governing relief (2)

    January 9, 2023


    An earlier blog post outlined the facts and the judgment of the majority of the UK Supreme Court in Guest v Guest ([2022] UKSC 27).  

    One of the distinctive features of proprietary estoppel, in comparison with the common intention constructive trust for example, is the judicial discretion as to the relief to be awarded. This discretion gives judges some flexibility and an ability to seek solutions that are fair to all concerned in the circumstances of a particular case.

    It is desirable, however, that there should be a conceptual framework to guide the exercise of judicial discretion. Judges can then draw on this framework as they exercise their discretion and can use it to give reasons for their decision.

    Judges will then be helped to focus on, and properly assess, the facts of the case that are of most importance in the light of the guiding principles.  Clarity of exposition as to the relative importance of these facts and the part they played in designing the relief will help appeal courts to assess whether a first instance award was soundly based.

    This clarity must also be helpful to the parties and their advisers when negotiating a potential settlement, surely a good thing.

    This blog post outlines the approach taken by the majority in Guest v Guest which proposed an expectations-based model for relief. This approach gave rise to the outcome described in the earlier blog post. A minority of the Supreme Court advocated a different approach placing a heavier emphasis on detriment.

    Guest v Guest concerned the promise of a future right

    Lord Briggs made the point that Guest v Guest concerned the promise of a future interest, rather than an assurance of a supposed existing right. The same doctrine applies, he thought, but he implies that the relevant considerations might differ ([8]).

    Expectation v detriment

    A description of the detriment-based approach of the minority in the Supreme Court in Guest v Guest can help us to understand why the difference in approach can have very significant practical consequences.

    The majority took the plaintiff’s expectation (of sufficient land to run a viable farming business) as the starting point, modified so that accelerated receipt of the award did not mean that the plaintiff got more than his expectation.

    The minority took the plaintiff’s detriment as the guiding principle. It thought that the detriment was easy to identify and quantify. The plaintiff worked for many years at low wages on his father’s farm because of the assurance. The detriment was the difference between market-level wages for the work he did and the wages he actually received ([278]).

    This could be identified with certainty (GBP 267,748). The plaintiff was also entitled to interest on the sum at 2% above base rate (GBP 342,162). Rounded up, he total relief that the minority would have awarded was, thus, GBP  610,000.

    The value of the majority’s award is not specified in the judgment but it is presumably much more valuable than the sum arrived at by the minority’s detriment-based approach.

    Proprietary estoppel seeks to undo unconscionability

    While the main focus of the judgments is on the principles governing equitable relief in proprietary estoppel, some attention is paid to the broader question of the aim of proprietary estoppel.

    Giving the majority judgment, Lord Briggs said:

    ‘neither expectation fulfilment nor detriment compensation is the aim of the remedy. The aim remains what it has always been, namely the prevention or undoing of unconscionable conduct’ ([94]).

    Fulfilling expectations while avoiding an award that is out of all proportion to the detriment

    Lord Briggs’ review of the authorities led him to the conclusion that expectation fulfillment has always been the starting point for equitable relief ([5]).

    But specific enforcement of the promise might sometimes be disproportionate to the detriment and so be much more than is required to undo the unconscionability ([6] and [10]).

    So ‘the concept of a proportionality test does appear to have taken root in England, as part of the assessment of whether a proposed remedy to deal with the proven unconscionability based on satisfying the claimant’s expectation works substantial justice between the parties’ ([72]).

    And ‘the best summary of the proportionality test is that the remedy should not, without some good reason, be out of all proportion to the detriment, if that can readily be identified. If it cannot, then the proportionality test is unlikely to be of much use’ ([72]).

    Lord Briggs close his discussion of proportionality by observing that, ‘the question of proportionality is not to be carried out on the basis of a purely financial comparison’ ([73]).

    Other factors that might mean that it is not appropriate to fulfil the plaintiff’s expectation

    Proportionality is a relevant factor, then. Other factors too may mean that specific performance of the promise would be unjust:

    ‘The promise may be incapable of specific enforcement, for example where the underlying property is no longer in the hands of the promisor or his estate. The promised date for performance may lie so far in the future, or the date may be so unpredictable, that an order for performance on the promised date would be too insubstantial as a remedy. Or the early enforcement in full of a promise which, although repudiated, is years away from the due date for performance may give the promisee too much, or something radically different from that which was promised. The promisor may have other powerful equitable or moral claims on his bounty, so that the appropriation of the whole of the promised property to meet the claim of the promisee may be unjust to those other claimants, and be more the cause of unconscionable conduct than a remedy for it. Finally the magnitude of specific enforcement in full may be so disproportionate to the detriment undertaken by the promisee that something much less than full specific enforcement is needed to clear the conscience of the promisor ([6]).

    In some cases, as in Guest v Guest itself, the need for a ‘clean break’ between the parties might also be an important factor ([64]) so that solutions that would require the parties to live or work together might be unworkable.

    The majority’s principles for the design of equitable relief

    Lord Briggs argued that the court should approach equitable relief in the following stages:

    1. Decide whether repudiation of the promise is unconscionable in the circumstances ([74]);
    2. Start with the assumption that the appropriate relief is full performance of the promise performance (or a monetary equivalent) but be aware that there may be factors which would render this disproportionate ([75];
    3. The burden of proof is on the party arguing that full performance is disproportionate ([76]);
    4. Full performance is likely to be appropriate in cases that fall just short of a contract ([77];
    5. Just because full specific performance is inappropriate does not mean that detriment should be taken as the yardstick ([79];
    6. ‘In the end the court will have to consider its provisional remedy in the round, against all the relevant circumstances, and ask itself whether it would cause injustice to third parties’ ([80]).

    Appropriate to focus on detriment where it is specific and short-lived

    Despite the insistence on performance of the promise as the starting point, Lord Briggs acknowledged that it might be appropriate to focus on detriment (and undoing it) ‘where the detriment is specific and short-lived, and in particular shorter than the parties are likely to have contemplated’ ([72]).

    But, ‘wherever the relevant detriment has (as here) had lifelong consequences, a detrimental valuation analysis will fall upon stony ground’ ([72]).

    Fulfilling expectations where the promise has had life-changing consequences: harm v detriment

    Throughout his judgment, Lord Briggs distinguishes between ‘detriment’ and ‘harm’. Detriment is an essential element of a proprietary estoppel claim and, as we have seen, the court should consider whether the proposed award is proportionate given the detriment; this presupposes that detriment can always be measured in some way.

    ‘Harm’ seems to be a broader concept, less susceptible to being reduced to a specific sum of money. The idea seems to be that repudiation of a promise may give rise to harm that is incalculable or difficult to calculate. In such cases, it seems that the court should be more ready to give full effect to the promise.

    Lord Briggs explained the harm in Guest:

    ‘In a case like the present, the harm consists of the soul-destroying, gut-wrenching realisation of being deprived, and then actually being deprived over the rest of a lifetime, of an expected inheritance of land upon which the promisee has spent the whole of his life and work to date and which, in due course, he expected to be able to pass on to one or more of his own children, making the same promise to them as his father made to him  … this cannot necessarily be valued with any reliability ([11]).

    Specific performance recognises the inability to assign a monetary value to expectations concerning land ([12]). It also seems appropriate where the promise has induced ‘life-changing choices’ ([51]).

    A detriment-based approach, ‘mistakenly treats the detriment rather than the loss of expectation as the relevant harm’ ([53]).

    In Guest, the fact that the father’s promise induced the son to make decisions ‘with incalculable whole-life consequences’ ([95]) meant that it would be inadequate for relief to be based on the detriment (reduced wages over the course of a career).

    Thus, it would be, ‘simply impossible to identify some monetarised value of his detriment in a way which would render a fulfilment of his expectation disproportionate’ ([95]).

    Michael Lower

    Guest v Guest: Aims of proprietary estoppel and principles governing relief (1)

    December 5, 2022


    The judgment of the UK Supreme Court in Guest v Guest ([2022] UKSC 27) provides an authoritative review of the fundamental aims of proprietary estoppel and the principles governing equitable relief. The majority judgment was given by Lord Briggs (with whom Lady Arden and Lady Rose agreed).

    This blog post provides a description of the facts and of the outcome. The next blog post looks at the account of the fundamental principles concerning equitable relief and the structured approach proposed by the majority of the Supreme Court.


    A father (David) owned Trump Farm (‘the farm’) and promised one of his sons (Andrew) that on the death of his parents, Andrew would inherit enough of the farming business, and of the farm where the business was carried on, to establish a viable farming business. In response, Andrew worked for many years for low pay on the farm and did not pursue any alternative career opportunities.

    Andrew and David fell out and David made it clear that Andrew would not receive the promised inheritance. Andrew brought proceedings in proprietary estoppel. The claim succeeded but there was disagreement as to the approach to be taken to the relief to be awarded.

    At first instance and in the Court of Appeal, Andrew was held to be entitled to a monetary payment equivalent to 50% of the market value of the farming business and 40% of the market value of the farm. This sum was to be reduced by the value of the parents’ entitlement to a life interest in the farmhouse (see [88] in the Supreme Court judgment).

    The problems with this were that the order would probably require the parents to sell the farm during their lifetimes and it meant that Andrew would enjoy accelerated receipt of the sum, in effect giving him more than his expectation.

    The Supreme Court therefore gave the parents an option either:

    • The creation of a trust over the farm and business under which the parents were to have a life interest with Andrew to be entitled to 50% of the farming business and 40% of the farm only on their death, thus overcoming the accelerated receipt problem. Andrew would not be entitled to compensation for being off the farm in the meantime ([101] – [102]); or
    • The original first instance award but with a sufficient discount for early receipt built in  ([103]). The first instance approach of reducing the award by the value of a notional life interest in the farmhouse could be taken as the discount if the parents agreed. This would avoid the costs of a further dispute over the discount ([105}).

    It was appropriate to allow David to make the choice since:

    ‘Either remedy if afforded to Andrew would draw the sting of unconscionability from the outright repudiation of their promises to him. Since the aim of the remedy is to prevent or remove unconscionability, then where there are two different ways of doing so the persons against whom the equity is asserted should in principle be the ones to make that choice.’ (104)


    This post describes the facts and the outcome in Guest. Its importance lies in its approach to the roles of expectation, detriment and other factors in the design of equitable relief. The next blog post looks at what the majority judgment had to say about these fundamental issues.

    Michael Lower

    Licence with no provision for termination – implied term

    October 17, 2022

    The Hong Kong Polytechnic University v Rehabaid Society ([2022] HKCFI 2830) concerned a licence granted by the Hong Kong Polytechnic University (‘the licensor’) to Rehabaid Society (‘the licensee’) in 1988.

    The licence contained no express provision as to how it could be ended.

    Part of the motivation for the grant of the licence was that the parties foresaw the possibility of fruitful collaboration between the licensee and the licensor’s Rehabilitation Engineering Centre (‘the REC’).

    This collaboration ceased and the licensor was very short of space for its other activities.

    It argued that there was an implied term that the licence was revocable on reasonable notice should the collaboration between the licensee and the REC end.

    The licensee argued that the licence was intended to be irrevocable.

    The court agreed that whether a licence was revocable or not depended on the proper construction of its terms ([73]).

    The party who seeks to terminate the licence has the burden of proving its right to do so ([82]).

    The court reviewed the law on implied terms (Marks & Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Limited [2016] AC 742 and Lo Yuk Sui v Fubon Bank (Hong Kong) Limited [2019] HKCA 261).

    The court found on the facts that there was no implied term that the licence would end should the collaboration between the licensee and the REC cease.

    The licensor’s claim that it was entitled to possession was dismissed and specific performance of the licence was ordered.

    This did not mean that the court accepted that the licence was irrevocable ([125]) only that it could not be revoked in the circumstances argued for by the licensor.

    Michael Lower

    Meaning of covenant to reinstate to ‘bare shell’ condition

    September 19, 2022

    AFH Hong Kong Stores Ltd v Fulton Corporation Ltd ([2022] HKCA 1243) concerned the interpretation of a tenant’s covenant to reinstate the demised premises to a ‘bare shell’ state on the determination of the lease.

    The premises were retail premises over five floors of a building in the Central district of Hong Kong. When it took possession, the tenant removed the entire floor slab of one of the floors and part of the floor slab of three others. It installed lifts and staircases.

    The lease required the tenant to yield up the premises to the landlord at the end of the lease, ‘in a “bare shell” good clean state of repair and condition on each floor of the Premises to the reasonable satisfaction of the Landlord’ (emphasis added).

    The landlord contended that this wording required the tenant to reinstate the floor slabs it had removed while the tenant argued that it was under no such obligation.

    There was, perhaps surprisingly if reinstatement had been intended, no express covenant to reinstate the removed floor slabs in the lease nor, so far as can be seen in the judgment, in any license to carry out the alterations.

    There was, by contrast, a clause that gave the landlords the option to require the tenant to remove fixtures that the tenant added to the demised premises.

    The Court of Appeal referred to the principles of contractual interpretation in the Court of Final Appeal in Eminent Investments (Asia Pacific) Ltd v DIO Corp ([2020] HKCFA 38).

    It decided that the reference to ‘on each floor’ supported the landlord’s contention that the tenant had to reinstate the floor slabs that had been removed ([26.1] and [43]).

    Michael Lower

    Priority contest between a charging order and an assignment

    August 27, 2022

    Asparouh Ianov Dimitrov v Dominic Tak Ming Lau ([2022] HKCA 1146 ) was a dispute between a creditor with a charging order over the debtor’s property (‘the Property’) and the debtor’s ex-wife to whom the debtor assigned the Property.

    The sequence of events was:

    • 20 November 2017 –  charging order nisi obtained
    • 23 November 2017 –  charging order nisi registered
    • 3 January 2018         – debtor assigned the Property to his ex-wife
    • 15 January 2018       – charging order absolute obtained
    • 19 January 2018       – assignment registered
    • 25 January 2018       – charging order absolute registered

    The creditor sought a declaration that the charging order had priority over the assignment and an order for sale and succeeded at first instance. The debtor’s wife appealed.

    There was no difficulty in confirming that the charging order had priority over the assignment: the priority date for the charging order absolute relates back to the priority date for the charging order nisi ([20]).

    Section 5A of the Land Registration Ordinance specifies that a charging order has priority from the day after its registration. The priority date of the charging order was 24 November 2017 (the day after the 23 November 2017 registration).

    Section 5 of the Land Registration Ordinance says (in effect) that assignments registered within one month take effect as from the date they were executed. The priority date of the assignment was 3 January 2018.

    The debtor’s wife relied (unsuccessfully) on an argument that she had a prior unwritten equitable interest to which the charging order was subject.

    She argued, for example, that there was an oral gift of the Property to her before the date of the charging order nisi. She relied on Re Rose to argue that she had an equitable interest because her husband gave her the title deeds.

    Hon Chow JA pointed out that her husband had not executed a deed of gift at the relevant time and so had not done everything in his power to divest himself of his interest in the land.

    Arguments based on proprietary and / or promissory estoppel failed because, even assuming there to have been an assurance, the wife incurred no detriment.

    The declaration that the charging order had priority and the order for sale were upheld.

    Michael Lower