Taylor Fashions v Liverpool Victoria [1981] 1 All ER 897

Key point

  • Mere passivity does not give rise to a proprietary estoppel unless there is knowledge of the true position

Facts

  • Options to renew leases had become unenforceable because they were not registered
  • The tenants, Taylor Fashions and Old & Campbell expended money on the premises in the expectation of exercising the options
  • Neither the landlord nor the tenants were aware of the registration problem

Held (High Court)

  • Taylor Fashion’s claim failed on the ground that D had only acquiesced and had not known that the options were unenforceable
  • Old & Campbell’s claim succeeded as D had actively encouraged their expenditure

Oliver J

  • In a case of mere passivity, there must be shown a duty to speak, protest or interfere which cannot normally arise in the absence of knowledge or at least a suspicion of the true position
  • But knowledge of the true position by the party alleged to be estopped is merely one of the relevant factors, or the determining factor in certain cases, in the overall inquiry