Until 2007 Mrs Whittaker owned a house, garden and adjoining land in Colchester. In 2007 she agreed to sell the property to Mr Kinnear. However, she remained in occupation of the house and garden following the sale and was granted a 12 month tenancy at a rent of £1 per month.
Mr Kinnear defaulted on a mortgage he had granted over the property, a possession order was obtained against him and receivers were appointed. They brought possession proceedings against Mrs Whittaker when she refused to vacate.
Mrs Whittaker argued that she had agreed to sell the house for £500,000 less than its true value on the basis of assurances given by Mr Kinnear that she could continue to live there for as long as she wanted. Although this was not recorded in the sale contract, Mrs Whittaker argued that it gave rise to a proprietary estoppel in her favour. She further argued that, as she was in occupation of the property, her estoppel was protected as an overriding interest and the mortgagee’s interest was subject to it.
The receivers argued that, as this was a property transaction, all terms had to be in writing under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 and that this would defeat any claim of estoppel based on oral assurances.
The Court held that, notwithstanding non-binding comments made by the House of Lords in the leading case of Cobbe v Yeoman’s Row Management Ltd,1 the doctrine of proprietary estoppel had survived section 2 and therefore Mrs Whittaker did at least have an arguable case. However, the case would be remitted to the trial judge to decide whether an estoppel had actually arisen on the facts.