Sledmore v Dalby (1996) 72 P&CR 196

Facts

• Mr. Dalby lived in a property owned by his mother-in-law, Mrs. Sledmore, for over 30 years.
• During this time, Mr. Dalby made significant financial contributions to the property, including renovations and mortgage payments.
• Mr. Dalby acted on assurances from Mrs. Sledmore that he would inherit the property upon her death.
• Later, Mrs. Sledmore sought possession of the property, contending that her own financial situation had deteriorated and she required the property for her use.
• The dispute concerned whether Mr. Dalby's proprietary estoppel claim—based on past assurances and his reliance—remained enforceable in light of the changed circumstances.

Issues

1. Whether the equitable rights conferred to Mr. Dalby through proprietary estoppel could be extinguished due to changed circumstances.
2. Whether the elements of proprietary estoppel (assurance, reliance, and detriment) justified ongoing enforcement of Mr. Dalby's claim.
3. Whether proportionality allowed the court to override Mr. Dalby’s equitable rights in favor of Mrs. Sledmore’s current needs.

Decision

• The Court of Appeal held that proprietary estoppel may establish equitable rights, but these rights are not absolute and can be modified or ended by significantly changed circumstances.
• The court determined that Mrs. Sledmore's worsened financial condition and current need for the property warranted extinguishment of Mr. Dalby's equitable rights.
• The remedy must be proportionate, balancing the loss suffered by Mr. Dalby against the present needs of Mrs. Sledmore.
• Mr. Dalby's contributions, though substantial, did not justify a permanent right to the property under the prevailing circumstances.

Legal Principles

• Proprietary estoppel requires assurance, reliance, and detriment, but equitable rights arising from it are subject to alteration or extinguishment based on changes in circumstances.
• Equitable remedies must be proportionate and reflect the balance between the interests of the claimant and the legal owner.
• The flexibility of equity permits courts to respond appropriately to the practical realities facing the parties.
• Changed circumstances may defeat previously established equitable rights if enforcement would be unjust or cause hardship.

Conclusion

The Court of Appeal in Sledmore v Dalby (1996) 72 P&CR 196 clarified that equitable rights founded on proprietary estoppel are not fixed and may be extinguished where circumstances have significantly changed, with remedies tailored to achieve a fair balance between the parties.