No proprietary estoppel when the expectation depended on failed joint venture negotiations

In Pridean Ltd v Forest Taverns Ltd ((1998) 75 P. & C.R. 447, CA (Eng)) P owned a pub. It negotiated a potential joint venture with F whereby P would grant the joint venture company a lease of the pub. F entered into possession and spent time and money on the pub to prepare it for trading. The joint venture negotiations failed because the parties could not agree on the minority protection rights to be granted to P. P then sought possession of the pub. F argued that by allowing them to enter into possession and spend money on the property, P had encouraged them to believe that they would be entitled to occupy and trade from the property. They argued, on the basis of proprietary estoppel, that this equity had to be satisfied. This failed. The evidence showed that the only expectation that had ever been encouraged was that they would have an interest in the property through the joint venture company. Thus, when the joint venture negotiations failed, there was no basis for any continuing expectation that they would be entitled to remain in possession. There had never been a time when P had encouraged F to believe that it would have an interest in the property outside of the joint venture arrangement. F would have been entitled to compensation for its expenditure on the property but it had not asked for such compensation.


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