Proprietary estoppel – Representations – Remedy – Respondent claiming entitlement to farm on death of father on basis of proprietary estoppel relying on parents’ assurances – High Court allowing claim – Appellant mother appealing – Respondent cross-appealing – Whether unconscionable for appellant to resile from assurances – Whether respondent entitled to rely on assurances following offer of partnership – Whether award disproportionate – Whether judge’s award wrong in principle – Appeal and cross-appeal dismissed
A dispute arose concerning a family farm called Woodrow which was close to Yeovil in Somerset. The respondent was one of four children of the appellant and her late husband (F). In 1975 the farm was transferred to F and the appellant who carried on the farming business in partnership. The total acreage was about 220 acres including land at Mudford bought in 1989. The holding was worth about £2.5m. Following a dispute in 2013, the respondent left the farm. F died in April 2014 and the appellant became the sole owner. From 2015, the business focussed on beef and arable farming, rather than dairy farming.
The respondent brought proceedings claiming to be entitled to the whole farm or such lesser share as the court thought fit. The basis of the claim was proprietary estoppel. The respondent argued that she had devoted her working life for 30 years to the farm, concentrating on the dairy farm unit, because her father assured her that she would eventually take it over when he retired. In 2008, the respondent had refused an offer to go into partnership with her parents.
The appellant argued that no assurances had been made. In any event, even if the assurances alleged were proved, they were insufficient to found proprietary estoppel. Detriment was denied on the basis that the respondent had exaggerated her work on the farm and her contribution. Even if a case was made out, to pass the entire farm to the respondent would be disproportionate.
The High Court found that the respondent had established proprietary estoppel and made an order to that effect. The judge awarded the respondent a cash sum of £1,170,000, rather than the transfer of the farm, scaling down her expectation by the cost of reinstating a working dairy unit but giving her sufficient to acquire a viable dairy unit and associated land: [2018] EWHC 317 (Ch); [2018] PLSCS 41. The appellant appealed and the respondent cross-appealed.
Held: The appeal and cross-appeal were dismissed.
(1) An appeal court could only interfere with the trial judge’s wide judgmental discretion when deciding how an equity should be satisfied if he had misdirected himself in law, taken irrelevant considerations into account, failed to take relevant considerations into account or made a decision which no reasonable judge could have reached: Jennings v Rice [2002] EWCA Civ 159; [2003] 1 P & CR 100 considered.
(2) Underpinning the doctrine of proprietary estoppel was the idea that promises should be kept. The rejection of an offer did not mean that a claimant, who had kept her side of the bargain, received nothing. The judge had been entitled to conclude that the making of the offer did not amount to a complete defence to the respondent’s claim. To have waived whatever rights she might have had by 2008, it would have been necessary for the respondent have known that she had such rights; and to have communicated that she was giving them up. None of that happened on the facts. In addition, the judge made no finding that her parents thought that the respondent had abandoned her expectations. It followed that it would not be practically unjust to give the respondent a remedy merely because she refused the 2008 offer. However, the absence of a dairy unit had been a change of circumstance that made it inappropriate to give full effect to the respondent’s expectation: Sledmore v Dalby [1996] 72 P & CR 196, Jennings, Uglow v Uglow [2004] EWCA Civ 987, Clarke v Swaby [2007] 2 P & CR 2, Fisher v Brooker [2009] 1 WLR 1764 and Suggitt v Suggitt [2012] EWCA Civ 1140 considered.
(3) The appellant had failed to demonstrate any error by the judge as regards the detriment suffered by the respondent. The exercise upon which he embarked was a broad judgmental discretion and his finding was that only part of the detriment was quantifiable. It was not possible to recreate an alternative life for the respondent without the assurances. It was unprofitable, given the retrospective nature of the assessment that the doctrine of proprietary estoppel required, to speculate what might have been. The judge had found that, had it not been for the assurances, the respondent would have sought a farming tenancy elsewhere. It was not possible to go behind those findings of fact: Thorner v Major [2009] 2 EGLR 111 and Gillett v Holt [2001] Ch 210 considered.
(4) For the purposes of proportionality, the appropriate question was whether the relief granted had been out of all proportion to the detriment suffered. The relevant comparison was between detriment and remedy. The court had to exercise its judgmental discretion in a flexible way. On the judge’s findings, the respondent had performed her side of the bargain. Had her expectation been vindicated, she would have had control of the farm. Looking back from the moment when assurances were repudiated, the nearer the overall outcome came to the expected reciprocal performance of requested acts in return for the assurance, the stronger was the case for an award based on or approximating to the expectation interest created by the assurance. Save in the most exceptional circumstances, it could not be equitable to award a claimant more than her expectation. The expectation was not determinative of the relief to be granted. The judge was right to consider whether that expectation interest should be scaled down: Watson v Goldsbrough [1986] 1 EGLR 265, Baker v Baker (1993) 25 HLR 408, Wormall v Wormall [2004] EWCA Civ 1634 and Davies v Davies [2016] EWCA Civ 463; [2016] PLSCS 148 considered.
(5) The family breakdown made a clean break desirable. On the evidence, the judge was entitled to conclude that, if the farm had to be sold the appellant would have enough to house herself and make up the shortfall in her income. The judge’s order lay within the ambit of his wide judicial discretion: Sledman, Jennings and Moore v Moore [2018] EWCA Civ 2669; [2018] PLSCS 206 considered.
Richard Wilson QC (instructed by Wilsons Solicitors LLP) appeared for the appellant; Leslie Blohm QC and Christopher Jones (instructed by Stephens Scown, of Exeter) appeared for the respondent.
Eileen O’Grady, barrister
Click here to read a transcript of Habberfield v Habberfield
