A claim for proprietary estoppel can be satisfied by giving effect to the representations made or awarding compensation for the detriment suffered as illustrated by Morton v Morton [2022] EWHC 163 (Ch).
The case concerned a dispute between a son and daughter over their inheritance, which included farms in Cheshire and Staffordshire. In 1995, their parents had executed mirror wills, the effect of which was to leave the entirety of their respective estates to the other. Subject to those provisions, there were gifts of property to the son and the daughter, and an equal split between them of the remaining farmland, with the son being permitted to rent all of the land and having a right of pre-emption over the daughter’s share.
The father died in 2001 and his estate passed to the wife, with whom the son subsequently entered into partnership to farm the land. The partnership was terminable on three months’ notice, with an option for the remaining partners to purchase the outgoing partner’s share of the partnership assets.
Around 2013, there was a falling-out between the parties. The wife changed her will in 2014 and again, shortly before her death in 2016, to leave her estate to the daughter, with an option for the son to purchase, at market value, her share in any land farmed under the partnership. In 2015, the wife had served notice terminating the partnership, and while the son had exercised the option to purchase her partnership share, it had not been completed.
The court had to decide what comprised partnership property and whether the son could sustain a claim for all of the land farmed under the partnership, which had been enlarged considerably over the years. The son claimed that between 1977 and early 2014 his father and/or mother had made representations or assurances to him that he and his family would ultimately inherit “the farming business”, which he had relied on to his detriment.
The court found that the representations were made and that the son had acted to his detriment in reliance upon the representations since 1980, when he returned from agricultural college, by working long hours for only modest remuneration, introducing new management techniques and farming the land more intensively than before. His share of the profits of the business over the years did not fully reflect the extent of his working contribution, particularly after his father’s death.
In the circumstances, it was unconscionable for his mother to repudiate the assurances made to him when she changed her will. There was nothing in the partnership deed which was inconsistent with his claim: entering into the partnership deed and serving the option notice did not create a contractual estoppel preventing him from relying on the assurances made.
There were two ways of satisfying the claim: to give effect to the son’s expectations, unless disproportionate to do so; or to ensure that he was compensated for the detriment. The court strove for the former. It increased the amounts credited to the son’s share of the partnership capital to a half share and extended the period for him to exercise the option for a further three months. The court omitted from partnership property land which was clearly intended to be owned outright by the son or the daughter.
Louise Clark is property law consultant and mediator
