Land – Proprietary estoppel – Remedy – Claimant son claiming interest in family farm following breakdown in relationship with defendant parents – Whether claimant establishing equity in his favour based on proprietary estoppel – Claim allowed in part
The claimant had worked on his family farm known as Tump Farm, Sedbury, Tutshill, Chepstow, Monmouthshire since leaving school in 1982 for at least 60 hours per week for a low wage. He also undertook an agricultural apprenticeship and courses in farm management. The freehold of the farm and buildings was owned by his parents (the defendants) who lived in the farmhouse. In 1981, the defendants made wills under which the claimant and his brother were to inherit the farm property and business in equal shares.
In 1989, the claimant moved into a cottage on the farm. In 2007, the business took over the tenancy of a neighbouring farm (Dayhouse Farm) and the two farming operations were integrated. In 2012, the business was split into two parts and into two new partnerships: the Ladysmith Farming Partnership between the claimant and the parents, running Tump Farm, and the Dayhouse Farming Partnership between the claimant’s brother and the parents, running Dayhouse Farm. Each son was to be the principal farmer of “his” farm.
In 2014, the relationship between the claimant and his parents broke down and the Ladysmith partnership was dissolved. The parents made new wills, excluding any entitlement for the claimant beyond his right to occupy the cottage. In 2017, they gave the claimant notice to quit the cottage. He left the farm and obtained alternative employment. In 2018, the first defendant made a new will which operated to remove the claimant entirely from its terms and his right to occupy the cottage was removed.
The claimant brought proceedings, based on proprietary estoppel, seeking declarations of entitlement to occupy the cottage and to the entire beneficial interest in Tump Farm and its business. Alternatively, he sought a capital payment by way of a clean break. The defendants denied making any representations about the claimant inheriting Tump Farm after the surviving parent had died.
Held: The claim was allowed in part.
(1) The three main elements of a proprietary estoppel claim were a representation or assurance made by the owner to the claimant, reliance upon it by the claimant, and detriment to the claimant in consequence of his reasonable reliance upon it. Consideration of one element might flow into one or more of the others because the nature of the assurance was likely to influence the degree of reliance reasonably to be placed upon it. Although such reliance might carry incidental benefits, it was through such reliance that the case on detriment would be built. There had to be some connection between the assurance relied upon and the detriment said to have been suffered by the claimant. The assurance had to be of sufficient clarity. It also had to be considered in the context of the relationship and dealings between the parties. Looking back, the court had to exercise its broad judgmental discretion, giving effect to the claimant’s expectation unless it would be disproportionate to do so: Thorner v Major [2009] UKLHL 18; [2009] 2 EGLR 111 and Davies v Davies [2016] EWCA Civ 453; [2016] PLSCS 148 followed.
(2) It was a necessary element of proprietary estoppel that the assurance should relate to identified property. The claimant’s expectation had diminished over time. His assumption that he would take over Tump Farm was displaced in 2012 by a realisation that he would inherit it jointly with his brother. However, the representation might be clear enough even though it left the claimant uncertain as to the precise extent of the promised interest. It was clear both from the retrospective nature of the exercise and from the fact that the equity might be raised in a case where the promise fell some way short of an initial “quasi-contractual” assurance that, provided he could identify the property in question, the claimant might be permitted some uncertainty as to the scope of his expectation. The evidence showed that, up to 2014, the first defendant had clearly encouraged the claimant to believe he would benefit substantially from Tump Farm. That was sufficient for a potential estoppel to be raised: Thorner and Gillett v Holt [2001] Ch 210 followed.
(3) On the evidence, the claimant had reasonably relied on the first defendant’s assurance to his significant financial detriment. He had worked hard on the farm for many years for little financial reward, even taking account of the provision of his home at the cottage and the payment of certain living expenses. He would not have done so had the first defendant not encouraged the idea of an inheritance. Detriment was to be looked at in the round rather than with mathematical precision. Its presence in this case was plain from the fact that the claimant invested a lifetime’s worth of work for a very modest reward, sacrificing the likely prospect of bettering himself elsewhere.
(4) The defendants had resiled from their assurance that, with his brother, the claimant would take over the farm on the basis that he would come to inherit a substantial share of it. The conclusion that the defendants should be kept to their assurance did not follow automatically from the court’s finding that he relied upon it to his significant detriment. However, on the evidence, in the circumstances prevailing by 2014 when the parents made their new wills disinheriting him, the claimant had established an equity in his favour.
(5) The court had to exercise its broad judgmental discretion in an endeavour to do what was necessary to avoid an unconscionable result or, alternatively, to identify the minimum equity to do justice. The correct approach was to look at the claimant’s expectation based on the nature of the assurance made to him. Satisfaction of that expectation should not produce a remedy disproportionate to the value of the detriment suffered. The promised extent of the claimant’s inheritance was too uncertain for his equity to be built upon an assurance of a quasi-contractual character. It was appropriate to make a clean break by awarding a lump sum payment to the claimant made up at 50% after tax of the market value of the dairy farming business and 40% after tax of the value of the Tump Farm buildings.
Philip Jenkins (instructed by Clarke Willmott LLP) appeared for the claimant; Guy Adams (instructed by Twomlows, of Chepstow) appeared for the defendants.
Eileen O’Grady, barrister
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