A.G. of Hong Kong v Humphrey’s Estate (Queen’s Gardens) Ltd. [1987] 1 AC 114

Land Law feature, Proprietary Estoppel, A.G. of Hong Kong v Humphrey’s Estate (Queen’s Gardens) Ltd. [1987] 1 AC 114

A.G. of Hong Kong v Humphrey’s Estate (Queen’s Gardens) Ltd. [1987] 1 AC 114 is a Land Law case concerning Proprietary Estoppel. 

Facts:

In A.G. of Hong Kong v Humphrey’s Estate (Queen’s Gardens) Ltd. [1987] 1 AC 114, the Privy Council examined an agreement which was ‘subject to contract’. This agreement had given up the right to change their mind and withdraw. In that case they had not.

The Government would acquire some flats owned the plaintiff Group of companies in return for the Government granting, inter alia, a lease to the Group of some Crown lands. Furthermore, the Government was allowed to and did take possession of the flats. Moreover, the Government spent money upon them and moved some civil servants into them. In addition, the Crown accordingly disposing of the premises where those civil servants had previously resided. On the other side of the bargain, the Government allowed the Group to enter the Crown land. Moreover, to demolish buildings upon it. However, the requisite forms of documents were never executed. 

Held:

In conclusion, the court held that a proprietary estoppel could not arise. 

Lord Scott explained:

The reason why, in ‘subject to contract’ cases, a proprietary estoppel cannot ordinarily arise is that the would-be purchaser’s expectation of acquiring an interest in the property in question is subject to contingency that is entirely under the control of the other party to the negotiations… the expectation is therefore speculative.

Thus, whilst the agreement did not preclude proprietary estoppel, for the claimants to succeed they should have indicated that they had given up the right to change their mind and withdraw.

Keywords:
 
Land law, Proprietary Estoppel, Breach, Remedies, Equity, Promises, Proprietary rights, Contract, Property.
 
Read our notes and our cases on Proprietary Estoppel for more information.