welcome to the fifth lesson in the contract law module in this lesson we will discuss the concept of estoppel estoppel is an equitable remedy which may apply to enforce a promise that is otherwise not enforceable as a contract this is often the case where no consideration has been given in exchange for the promise in this lesson we will briefly discuss two common types of estoppel promissory estoppel and proprietary estoppel promissory estoppel applies in circumstances where one party to a contract has promised that they will not strictly enforce their rights under the contract and then later goes back on that promise and attempts to enforce those rights the need to rely on promissory estoppel normally arises from the fact that the other party has not provided any consideration for the promise for example in hughes and metropolitan railway hughes had leased property to metropolitan railway under the terms of the lease hughes had the right to demand that metropolitan railway perform repairs to the property where a demand was made the repairs were to be completed within six months if the repairs were not completed in time hues could terminate the lease hughes issued a demand for repairs to metropolitan railway in october in november and december hughes and metropolitan railway negotiated the possibility of ending the lease at the end of december the negotiations ended and in april six months after hughes had issued the demand for repairs hughes asserted that metropolitan railway had breached the lease because the repairs were not done in time hughes asked the court to find that the lease had been terminated because of metropolitan railways breach the court held that hughes was a stopped from enforcing his strict legal rights under the agreement and as such there had been no breach by metropolitan railway this was because by entering into negotiations with metropolitan railway during november and december hughes had led metropolitan railway to believe that he would not strictly enforce his right to terminate the lease if the repairs were not completed in time once the negotiations ended hughes did not inform metropolitan railway that he still expected the repairs to be completed and therefore it would be unfair to now allow hughes to enforce his right to terminate the lease in reaching its conclusion the court found that a party to a contract will be a stopped from enforcing its strict legal rights where one party is led to believe that the other party will not enforce their strict legal rights and it would be inequitable in the circumstances to allow the other party to strictly enforce those rights promissory estoppel is said to be rights limiting in that it does not create new causes of action where none existed before and only prevents a party from insisting on their strict legal rights where it would be unjust to allow them to do so having regard to the dealings which have taken place between the parties the promise not to enforce their strict legal rights need not be explicit and can be inferred if the promissors conduct reasonably leads the promisee to believe that the promisor will not strictly enforce their legal rights finally in order to succeed in a claim for promissory estoppel the promisee must show that they reasonably relied on the promise to their detriment promissory estoppel will only apply where it would be inequitable to allow the promisor to strictly enforce their legal rights and without evidence that the promisee has suffered a detriment there can be no inequity unlike promissory estoppel which is said to be rights limiting because it only applies to limit the rights of the promissor proprietary estoppel can apply to enforce a promise that creates new legal rights in general proprietary a estoppel applies where person a has led person b to believe that they will enjoy some right or benefit over property and it would be unfair or unjust to allow person a to go back on their word for example in the crab case crab and oran district council both purchased land from the estate of a deceased person crabbe's parcel of land was further divided into a top lot and a bottom lot the parties had agreed that there should be an access to the two lots at point a which is indicated on the diagram on the next slide krabb decided that it would be easier for him to sell the top lot if there was a separate access for the bottom lot at point b the council agreed to this with some details to be worked out later crab built a fence between the two properties but put a gate at both points a and b crab sold the top lot to a third party without reserving access through point a because it was assumed that point b would be used to access the bottom lot after the transfer of the bottom lot to the third party the council tore down the gate at point b and fenced it over crabb offered to make a deal with the council but they wanted him to pay an unreasonable amount for the right to access the bottom lot at point b crabb sought a declaration stating that he had a right to access the bottom lot through point b the court held that the council was required to grant crabb the right of way in reaching this conclusion the court found that the council had led crabb to believe during their first meeting that they would allow him access at point b they did not object when a space was left in the fence nor did they object when the gate was put up at point b it would therefore be unfair to allow the council to go back on their promise the court also held that unlike promissory estoppel which is rights limiting a claim for proprietary estoppel can enforce a promise which creates new rights the fact that the council had never made a definitive promise also did not matter since an explicit promise is not necessary a court will intervene when someone by their words or their conduct leads another person to assume that they will enjoy some right or benefit in the property and the other person relies on this to their detriment the leading canadian case on proprietary estoppel is the decision of the supreme court of canada in calpers smith and morgan in that case elizabeth and arthur calpersmith had made it clear that after their deaths their property would be divided equally among their three children gloria nathan and max following arthur's death elizabeth made a new will that appointed gloria as executor and provided that her estate would be divided equally among gloria nathan and max eventually elizabeth was no longer able to live on her own so max gave up his life in england and moved back home to victoria to care for his mother before max agreed to move back to victoria gloria promised that max would be able to live in the family home permanently and eventually acquire her one-third interest in the property after elizabeth died max and nathan found out that elizabeth had signed documents that indicated gloria would be absolutely entitled to all of elizabeth's property including the family home following elizabeth's death gloria announced her plans to sell the family home in which max was still living max and nathan sought an order declaring that max and nathan were entitled to a share of elizabeth's property max and nathan also claimed on the basis of proprietary estoppel that max was entitled to purchase gloria's one-third interest in the family home the court found that the transfer of property to gloria absolutely was ineffective and that max and nathan were entitled to a share of that property however the majority of the british columbia court of appeal held that since gloria owned no interest in the family home at the time that she made the promise to max proprietary estoppel could not arise max appealed to the supreme court of canada on the issue of whether proprietary estoppel applied the supreme court of canada held that proprietary estoppel arises where a representation is made to a person which leads the person to believe that he or she will enjoy some right or benefit over property the person reasonably relies on that belief by doing or refraining from doing something and the person suffers a detriment and it would be unfair or unjust to allow the person responsible for the representation to go back on his or her word the supreme court of canada also affirmed that the representation or assurance may be expressed or implied and may require the recognition of new rights and interests the supreme court of canada also held that proprietary estoppel can apply even if the promisor did not have an interest in the property at the time the promise was made the relevant question is whether the promises reliance was reasonable the supreme court of canada found that both max and gloria had clearly understood for well over a decade that their mother's estate including the house would be divided equally among her three children upon her death as such it was sufficiently certain that gloria would inherit a one-third interest in the house and it was therefore reasonable for max to rely on gloria's assurance that he would be able to purchase her one-third interest in the house following elizabeth's death this concludes the lesson on estoppel thank you for listening in the next lesson we will discuss the meaning of breach of contract and the remedy of specific performance make sure to answer the knowledge check questions at the end of this lesson before moving on to lesson six if you have any questions please post them to the owl discussion forum your questions may be answered in writing on the discussion forum or during the weekly question and answer session