05:22 PM Victor Yao Lida (Justices’ Law Clerk)

    Satisfying the equity in proprietary estoppel: expectation, or reliance, or both? Satisfying the equity in proprietary estoppel: expectation, or reliance, or both?


    In satisfying the equity that has arisen in a claim of proprietary estoppel, should the courts endeavour to fulfil the claimant’s expectations, or to compensate for the claimant’s detriment? This question has arisen with increasing frequency in English jurisprudence, and the Singapore Court of Appeal had the occasion to give some observations on this question in the recent decision of Low Heng Leon Andy v Low Kian Beng Lawrence (Administrator of the Estate of Tan Ah Kng, Deceased) [2018] SGCA 48 (“Andy Low”).

    It is important to state at the outset that strictly speaking the question did not arise for decision because the point was not argued by the parties, as the Court made clear at [31]. That said, the court’s lengthy dicta provide interesting hints as to how the court might deal with the question should it arise for decision on a future occasion, and it is these observations that are the subject of this short commentary.

    Background Facts

    The facts of the case are not complicated. The appellant had since birth resided in a five-room HDB flat in Hougang. The flat was held in joint tenancy by his grandmother and one of the appellant’s aunts. Both his grandmother and his aunt passed away in 2008 and 2007 respectively, leaving the grandmother’s estate the sole legal and beneficial owner of the flat. The appellant was evicted by the administrator of his grandmother’s estate in July 2009.

    The appellant brought a claim in proprietary estoppel against the estate, seeking equitable compensation for the loss of a life-long licence to reside in the flat. The appellant claimed that his grandmother had, before her passing, frequently emphasised to the appellant in the presence of his relatives and their family doctor that the flat was not to be sold upon her passing, and that the appellant would be free to live in the flat for so long as he wished. The appellant claimed that in reliance on those promises, he had taken care of his grandmother, who was suffering from tuberculosis, and his aunt, who was suffering from ovarian cancer, from 2005 until their deaths. The appellant identified as his detriment the following: (i) the time and effort spent on caring for his grandmother and his aunt, including paying for household expenses and his grandmother’s medical bills out of his own pocket; (ii) his decision to refrain from seeking regular full-time employment; (iii) giving up his employment as a financial planner; (iv) enduring the fear of contracting tuberculosis; and (v) sacrificing his social life by avoiding social contact for fear of infecting others while taking care of his tuberculosis-stricken grandmother.

    The appellant succeeded in the High Court in his claim in proprietary estoppel against the estate. The subject-matter of the appeal proper concerned the appropriate quantum to be paid as equitable compensation. The Assistant Registrar had assessed the appropriate amount to be $84,000. This was raised on appeal by the High Court to $100,000. On further appeal, the Court of Appeal, applying the settled principles set out in Lim Chin San Contractors Pte Ltd v Shiok Kim Seng (trading as IKO Precision Toolings) and another appeal [2013] 2 SLR 279 at [42], ultimately determined that the appropriate quantum would be $140,000.

    The Court of Appeal affirmed the Judge’s determination that $1,500 would be the appropriate multiplicand, as it took into account the basic monthly rent of the flats the appellant had rented as alternative accommodation ($1,000), and the monthly fee for the hire of furniture and fittings for that alternative accommodation ($500). The Court of Appeal disagreed with the Judge however, on the multiplier, and considered 10 years to be the appropriate yardstick, because although the appellant was promised a life-long licence to occupy the flat, he had expressed an intention to reside there only until he could be eligible to apply for a flat of his own. He would only become eligible 10 years after he was evicted from the flat. The initial starting point from multiplying the multiplicand with the multiplier would lead to $180,000, but this would be disproportionate to the appellant’s detriment. The Court of Appeal therefore discounted the sum to $140,000.

    The Court of Appeal’s observations on the expectation-based and reliance-based approaches

    For present purposes, it is of greater interest to examine the court’s observations in dicta as to whether it is an expectation-based approach or a reliance-based approach that should guide the court in satisfying the equity that has arisen upon a successful claim in proprietary estoppel. The expectation-based approach hews to the view that in satisfying the equity, the courts should typically fulfil the claimant’s expectation. The reliance-based approach, on the other hand, emphasises that it is the detriment incurred by the claimant that should be the focus of the assessment exercise.

    The Court of Appeal was alive to this controversy in the law. It noted at [18] that the High Court judge had endorsed the expectation-based approach in citing the observations of the English Court of Appeal in Jennings v Rice and others [2003] 1 P & CR 100 (“Jennings”) at [51] where Walker LJ noted that the “court’s natural response is to fulfil the claimant’s expectations”. The Court of Appeal went on to note at [20], however, that the judge might have overstated the legal position if what he meant was that the court in attempting to satisfy the equity should always fashion a remedy that first seeks to fulfil the claimant’s expectation and enforce the defendant’s promise before turning to consider the detriment suffered.

    The Court of Appeal concluded, however, that in the absence of comprehensive argument on this issue it would not express a definitive view on which was the normatively preferable approach (at [26]). Instead, because the appellant had at all times proceeded on the basis that the expectation-based approach should apply, this was also the approach the Court of Appeal applied (at [27]).

    The Court of Appeal then expressed the view that in any event, the controversy over favouring either approach might be a “false dichotomy” (at [28]). This was because the approach the court would follow ultimately depended on the plaintiff’s own election as to which approach to pursue. In this regard, an analogue could be found in contract law, where the claimant is free to elect either the expectation loss, or the reliance loss in seeking damages (at [29]). Whatever approach the claimant chooses, however, would be merely a matter of evidence and proof, and should not substantively affect the result (at [28] and [30]). This was because both the claimant’s expectations and detriment would have to be considered in the overall analysis set out in Lim Chin San, and thus there was “no need to choose one over the other as such” (at [30]).

    The above observations give rise to two areas for commentary. The first concerns the “false dichotomy”. The second concerns the analogy drawn with contract law.

    A “false dichotomy”?

    It appears that what the Court of Appeal means by a “false dichotomy” is that it is unnecessary for the court explicitly to declare a preference for either approach at a normative level, especially at this time when the point on the normative basis for the doctrine was not argued before it. Expectation loss or reliance loss would be considered in the round in any event.

    The dichotomy still exists, however, at another level – that of litigation strategy. The claimant has, as a matter of evidence and proof, to succeed on the case he presents. In respect of that case, the claimant must make a choice as to whether he wishes as a starting point to have his expectations fulfilled, or his detriment prevented.

    By this approach, the Court of Appeal has essentially taken a sort of via media between fulfilling expectations and preventing detriment. This, of course, marks a departure from the general line of cases and authorities cited in Andy Low itself at [22]-[25], which have fallen on either side of the divide. But the approach is not without precedent. Gardner “The remedial discretion in proprietary estoppel – again” (2006) LQR 492 has made the argument that because the equity reflects both the expectation and the reliance interest, the outcome of satisfying the equity should normally be somewhere between the two. In the recent decision of Davies v Davies [2016] EWCA Civ 463 (“Davies”), Lewison LJ made a note of this argument and expressed his view in dicta that “[l]ogically, there is much to be said for [this] approach”, seeing as the essence of proprietary estoppel is the combination of expectation and detriment, and “if either is absent the claim must fail”: at [39].                                                                                                                                                                                                                                                                                                                                                                                                    Adopting this middle way out of the problem thus seems practical. But this author queries whether it is entirely satisfactory as a matter of principle not to identify whether proprietary estoppel as a cause of action primarily addresses the claimant’s detriment, or seeks to give effect to the claimant’s expectations.

    This author’s respectful view is that the normative principle underlying the doctrine is the prevention of the claimant’s detriment. Proprietary estoppel, as with the other estoppels, is an equitable doctrine. As Prof Yeo Tiong Min has observed, the traditional intervention of equity was to prevent detrimental reliance: see T M Yeo, “The Future of Promissory Estoppel in Singapore Law” (2009 Yong Pung How Professorship of Law Lecture). Similarly, the High Court of Australia in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 indicated at 425 that “the measure of an equity created by estoppel varies according to what is necessary to prevent detriment resulting from unconscionable conduct”. And under Singapore law, proprietary estoppel protects against unconscionable conduct: see Menon JC’s decision in Hong Leong Singapore Finance Ltd v United Overseas Bank Ltd [2007] 1 SLR(R) 292 at [171], and see also Abdullah JC’s decision in Tan Bee Hoon & another v Quek Hung Heong & others [2015] SGHC 229 at [43].

    The question, therefore, involves the identification of the claimant’s detriment resulting from the respondent’s unconscionable conduct in betraying a promise to the claimant (that the claimant would come into some property) upon which the claimant reasonably relied. What detriment means will have to be developed through the case law, although conventional examples include such obvious things as spending money, or sacrificing one’s career, as in this case. But it would be stretching the bounds of unconscionable conduct, and the meaning of “detriment”, to say that the mere fact that the respondent has failed to provide the promised reward means that the respondent has acted unconscionably and the claimant has suffered detriment for which he ought to obtain relief. This, however, seems to be what the expectation-based approach aims to provide – the emphasis in that approach is in giving effect to the promised reward as the normative starting point, and then tempering that interim determination with an inquiry into the proportionality of the remedy with the detriment and the expectation (see Lim Chin San at [42(b)]). It is therefore hoped that if the Court chooses to commit to one normative position, it takes the view that proprietary estoppel aims to address the claimant’s detriment, and not fulfill his expectations.

    The contractual analogy

    A further observation in respect of the “false dichotomy” that merits examination is whether it is truly the case that a claimant can select only between these two choices – ie the expectation-based approach or the reliance-based approach.  In other words, is there truly a dichotomy, even at the level of litigation strategy? The Court of Appeal in Andy Low suggests that the element of choice is “inevitable” (at [30]), drawing on an analogy with contract law (at [29]). But it may not be so.

    The dichotomy between the expectation measure and the reliance measure in contract law is a real dichotomy because the claimant can only pursue either measure. He either claims the expectation measure, ie damages intended to put him in the position he would have been had the contract been performed; or the reliance measure, ie damages to compensate him for his actual performance pursuant to the performance of the contract concerned: see Turf Club Auto Emporium Pte Ltd & others v Yeo Boong Hua & others [2018] SGCA 44 (“Turf Club”) at [125]-[126]. Some foreign cases and academic commentary suggest a separate category of restitutionary losses as potentially being claimable in contract law, but that has not been decisively determined in Singapore law: see Turf Club at [131], [179] and [254] (although it is now clear that Wrotham Park damages are compensatory in nature). That leaves expectation loss and reliance loss as the two types of loss responding to the general compensatory principle of contract law: Turf Club at [127]. An election is necessary in order to prevent a kind of double recovery: Turf Club at [126].

    It is not clear, however, that a claimant is necessarily bound only to claim either the expectation measure or the reliance measure in proprietary estoppel. If the above interpretation as to the court’s normative approach is correct, both the claimant’s expectation and detriment will be accounted for in identifying how the equity should be satisfied. Indeed, Lewison LJ in Davies gave weight to both these considerations. Without delving into the facts of that case, it is sufficient to note that Lewison LJ identified the fact that some award must be made to satisfy the claimant’s expectation of inheritance of the property (at [64]), and also that some award must be made to address the claimant’s non-financial detrimental reliance in giving up her shorter working hours to return to work on the property (at [65]). Thus, if there is indeed no normative preference for either fulfilling the claimant’s expectations or preventing his detriment, with both merely being factors to be considered in the round, it is not clear that the claimant must, even as a matter of litigation strategy, choose strictly to pursue either approach. He might do just as well by raising them as factors to be considered in the overall analysis. If the concern of preventing double-recovery persists, it may be that the best tool for addressing the concern is the balancing exercise inherent in proportionality, which is unavailable in damages for breach of contract. After all, principle (c) in Lim Chin San clearly indicates that the analysis concerning proportionality is a trilateral one, involving the balancing of the expectation, the detriment, and the remedy, whereas the adoption of a dichotomy as under contract law is in essence a bilateral one.

    Another concern that arises is whether it is appropriate to draw an analogy to contractual losses in the first place. There has been a trend in the case law to view cases involving proprietary estoppels through the lens of contract law. In Jennings, Walker LJ thought that there was a category of cases where “both the claimant’s expectations and the element of detriment will have been defined with reasonable clarity”. In those cases, which appear to fall just short of an enforceable bargain, the typical approach of the courts should be to vindicate the claimant’s expectations: at [45]. Lewison LJ in Davies also thought that these cases seemed to involve a “quasi-bargain”. But even if some cases bear features similar to the classic elements of an enforceable contract, it is not clear that all do. Walker LJ himself thought that there might be other cases where the claimant’s expectations are uncertain, or where the expectations are not focused on any specific property: Jennings at [46]-[47]. The analogy to contract law may not hold equally for those cases. 

    The underlying purpose of proprietary estoppel, moreover, is not the same as the law of contract. In PH Hydraulics & Engineering Pte Ltd v Airtrust (Hong Kong) Ltd & another appeal [2017] 2 SLR 129, the Court of Appeal identified the purpose of the law of contract as not to punish wrongdoing, but to satisfy the expectations of the party entitled to performance: at [62]. It is for that reason that the general aim of damages for breach of contract is to compensate: the plaintiff is to be placed, as far as a payment of money allows, in the same position as if the contract had been performed: PH Hydraulics at [62]. But this is not the aim of the doctrine of proprietary estoppel. As established above, proprietary estoppel aims to protect against the detriment resulting from unconscionable conduct. And as submitted above, the concern of protecting against such unconscionable conduct is best addressed by focusing on the claimant’s detrimental reliance, as opposed to giving effect to the claimant’s expectations.

    If the analogy to contractual damages is affirmed, however, another point deserving examination is whether the expectation measure assumes the same primacy in proprietary estoppel as it does in contract law. In contract law, the expectation loss is typically considered to be the preferred measure of damages to be awarded. As the Court of Appeal in Turf Club noted, the reliance measure is “usually awarded by the court where it is impossible to ascertain the expectation loss”, thus implicitly acknowledging the primacy of the expectation measure: at [126]. It may be an unintended effect of the contractual analogy that this same primacy is transposed to proprietary estoppel, thus undermining the approach that expectation and detriment are both merely factors to be considered in the round. If that is not the intention, it might be helpful for a subsequent Court of Appeal decision to make that clear.

    In conclusion, it is important to reiterate that the Court of Appeal has only expressed tentative views on the matters addressed in this commentary. But those were fascinating views, and it is hoped that this commentary examining those views will be helpful to the parties and the court the next time this question comes before it for determination.

    * This blog entry may be cited as Victor Yao Lida, “Satisfying the equity in proprietary estoppel: expectation, or reliance, or both?” (12 November 2018) (

    ** The opinions contained in this commentary reflect the authors’ own views and are not to be understood as reflecting the views of the authors’ employers.

    *** A PDF version of this entry may be downloaded here

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