Land – Proprietary estoppel – Representations – Claimant working on family farm throughout working life in reliance on representations by parents that farm would be his on their deaths – Breakdown in relations between claimant and defendant mother after death of father – Whether proprietory estoppel operating in favour of claimant entitling him to farm – Claim allowed
A dispute arose between the claimant son and his defendant mother concerning his right to Woody Close Farm, Iveston, near Consett in County Durham. The farm had been purchased in about 1989 by the defendant and her husband for around £255,000 and was farmed under a family partnership. Her husband died in 2012. The core of the farm comprised a farmhouse and outbuildings with approximately 115 acres of freehold land. In addition, there were approximately 120 acres held under various tenancies. Land values had increased substantially and the value of the farm land plus the bungalow was now between £1.2m and £1.4m.
The claimant’s main claim was that a proprietary estoppel arose in his favour, giving him an interest in the farm larger than his one third share of the partnership. The interest asserted was in effect that on the death of his last surviving parent, he was entitled to the entirety of the farm and any interest of the defendant in the partnership. He contended that, throughout his working life, representations, promises and assurances had been made by his parents that, on their death, the farm (including the bungalow) would be his. In reliance on the same, he had, to his detriment, worked on the farm all his life at a very low wage, never buying his own property, and in effect giving up the possibility of any independent life outside the farm. Accordingly, it would be unconscionable for the defendant to dispose of her interest in the farm (and bungalow) other than to him and distribute the two-thirds proceeds that would be hers through the partnership and the entirety of the bungalow (or its value) to family members as she felt fit.
The defendant argued that no representations had been made to the claimant about any inheritance. Further, there was no inequity or unfairness as the claimant was entitled to a one third share in the farm through the partnership which more than made up for his lifestyle choice in working on the farm.
Held: The claim was allowed.
(1) Any case based on proprietary estoppel was fact sensitive. However, in deciding whether an equity had been raised and how to satisfy it was a retrospective exercise looking backwards from the moment when the promise fell due to be performed and asking whether it would be unconscionable for a promise not to be kept either wholly or in part. The ingredients necessary to raise an equity were an assurance of sufficient clarity, reliance by the claimant on that assurance and detriment to the claimant in consequence of his reasonable reliance. The quality of the relevant assurances might influence the issue of reliance; reliance and detriment were often intertwined. Detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it was something substantial. There had to be a sufficient causal link between the assurance relied on and the detriment asserted. The issue of detriment had to be judged at the moment when the person giving the assurance sought to go back on it. The essential test was that of unconscionability. The question was whether (and if so to what extent) it would be unjust or inequitable to allow the person who had given the assurance to go back on it. In deciding how to satisfy any equity, the court had to weigh the detriment suffered by the claimant in reliance on the defendant’s assurances against any countervailing benefits he enjoyed in consequence of that reliance. Proportionality lay at the heart of the doctrine of proprietary estoppel and permeated its every application. In particular there had to be a proportionality between the remedy and the detriment which was its purpose to avoid: Davies v Davies [2016] P&CR 10; [2016] PLSCS 148 followed.
(2) On the evidence, the court was satisfied that the farm (including the bungalow) was promised to the claimant on the death of the last of his two parents; and that the promises and assurances were not mere expressions of intention or indications of intention but were definite promises and assurances. The claimant had reasonably relied on the promises/assurances and, if they were not given effect to, he would suffer detriment. The fact was that promises were made, they were reasonably believed and, in reliance on them, the claimant had devoted his entire working life to the farm and the business. The detriment was to be measured by what he gave up not by the means of the maker of the promise. The court rejected the submission that the claimant had suffered no detriment because he had been given a one third share in the partnership. That was the beginning of the fulfilment of the promises. This case fell squarely within the class of case in which the assurances and reliance had a consensual character not far short of a contract. It was implicit that the claimant had performed his part of the quasi-bargain. It would be unconscionable were the claimant now to be denied the farm on the defendant’s death and the equity that arose had to be satisfied by giving him the farm after her death. As regards the farm and the partnership, the matter could be dealt with by giving the defendant a life interest in her (effective) two third share in the partnership with a gift over to the claimant of her share on her death. The defendant would have an express right to reside for life at the bungalow, subject to any question of sale. Any sale of the farm including the bungalow would result in the sale proceeds of the bungalow being available to buy a substitute home for the defendant with a right for her to reside there for life: Moore v Moore [2016] EWHC 2202 (Ch) followed.
Stephen Fletcher (instructed by Gibson & Co Solicitors Ltd, of Newcastle upon Tyne) appeared for the claimant; Stephanie Jarron (instructed by Womble Bond Dickinson, of Newcastle upon Tyne) appeared for the defendant; The defendant did not appear and was not represented on 21 December 2017.
Eileen O’Grady, barrister
