Can a Spouse Bring a Claim for Proprietary Estoppel to Secure the Matrimonial Home
CONTESTING A WILL WITH WILLCLAIM SOLICITORS NO WIN NO FEE SPECIALISTS – CAN A SPOUSE BRING A CLAIM FOR PROPRIETARY ESTOPPEL TO SECURE THE MATRIMONIAL HOME
What is a Proprietary Estoppel claim?
We have discussed this in a previous blog, see:
www.willclaim.com/proprietary-estoppel-inheritance-dispute/
Essentially the equitable concept of “proprietary estoppel” in Will dispute or Will contest claims is a device by which the courts can enforce a “binding” promise by one person to another over property, but where that promise isn’t actually a contract in common law (invariably because no direct payment has been made). The principles are helpfully explained by Lewison LJ in Davies v Davies (2016) EWCA Civ 463
www.bailii.org/ew/cases/EWCA/Civ/2016/463.html
We have copied and pasted the relevant part wherein he explains the basis on which these claims are made below:
- Inevitably any case based on proprietary estoppel is fact sensitive; but before I come to a discussion of the facts, let me set out a few legal propositions:
i) Deciding whether an equity has been raised and, if so, how to satisfy it is a retrospective exercise looking backwards from the moment when the promise falls due to be performed and asking whether, in the circumstances which have actually happened, it would be unconscionable for a promise not to be kept either wholly or in part: Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776 at [57] and [101].
ii) The ingredients necessary to raise an equity are (a) an assurance of sufficient clarity (b) reliance by the claimant on that assurance and (c) detriment to the claimant in consequence of his reasonable reliance: Thorner v Major at [29].
iii) However, no claim based on proprietary estoppel can be divided into watertight compartments. The quality of the relevant assurances may influence the issue of reliance; reliance and detriment are often intertwined, and whether there is a distinct need for a “mutual understanding” may depend on how the other elements are formulated and understood: Gillett v Holt [2001] Ch 210 at 225; Henry v Henry [2010] UKPC 3; [2010] 1 All ER 988 at [37].
iv) Detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether repudiation of an assurance is or is not unconscionable in all the circumstances: Gillett v Holt at 232; Henry v Henry at [38].
v) There must be a sufficient causal link between the assurance relied on and the detriment asserted. The issue of detriment must be judged at the moment when the person who has given the assurance seeks to go back on it. The question is whether (and if so to what extent) it would be unjust or inequitable to allow the person who has given the assurance to go back on it. The essential test is that of unconscionability: Gillett v Holt at 232.
vi) Thus the essence of the doctrine of proprietary estoppel is to do what is necessary to avoid an unconscionable result: Jennings v Rice [2002] EWCA Civ 159; [2003] 1 P & CR 8 at [56].
vii) In deciding how to satisfy any equity the court must 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: Henry v Henry at [51] and [53].
viii) Proportionality lies at the heart of the doctrine of proprietary estoppel and permeates its every application: Henry v Henry at [65]. In particular there must be a proportionality between the remedy and the detriment which is its purpose to avoid: Jennings v Rice at [28] (citing from earlier cases) and [56]. This does not mean that the court should abandon expectations and seek only to compensate detrimental reliance, but if the expectation is disproportionate to the detriment, the court should satisfy the equity in a more limited way: Jennings v Rice at [50] and [51].
ix) In deciding how to satisfy the equity the court has to exercise a broad judgmental discretion: Jennings v Rice at [51]. However the discretion is not unfettered. It must be exercised on a principled basis, and does not entail what HH Judge Weekes QC memorably called a “portable palm tree”: Taylor v Dickens [1998] 1 FLR 806 (a decision criticised for other reasons in Gillett v Holt).
In summary one requires:
(a) an assurance of sufficient clarity;
(b) reliance by the claimant on that assurance;
(c) detriment to the claimant in consequence of his/her reasonable reliance.
Why might a spouse have difficulty in bringing such a claim?
“Detriment” which means a cause of harm or damage is the key here. Ordinarily a spouse will enjoy the considerable benefit of being able to live in the property rent-free, so this is usually cited in Will contest, Will dispute or inheritance claims of this nature as a considerable counterbalance to any significant detriment or harm. After all, it is extremely expensive to rent most properties in England and Wales.
This issue was considered at length in a recent decision called Anaghara v Anaghara (2020) EWHC 3091 (Ch):
www.bailii.org/ew/cases/EWHC/Ch/2020/3091.html
Mr Justice Zacaroli who heard the case made a number of findings of significance, the primary one of which was that “rent-free” occupation was not a countervailing benefit:
In those circumstances, Alice’s occupation of the Property rent-free since the Chief’s death is not a countervailing benefit which either eliminates the equity (or causes it to have expired) or should be taken to reduce the value of the relief to be granted in satisfaction of the equity. Accordingly, although the point could have been more fully explained by the Judge, I do not think that he fell into an error of law in refusing to take account of it as a countervailing benefit in any of the ways for which the claimant contends. The facts of this case bear no relation to those in Sledmore v Dalby, where the only evidence of detriment was for a small period many years ago, where the claimant had reaped the benefit of the works he carried out by living rent free in the property for 15 years and where the defendant had a pressing need to occupy the property.
In fact he stated that he found this argument particularly unattractive in the context of a marital relationship because:
Her occupation of the matrimonial home is explained throughout the period of the Chief’s life by the fact she was married to him. Although Alice’s status as a “customary” as opposed to “statutory” wife was pointed out, no reason was provided why this should affect the legal analysis. It would be rare for there to be any expectation that one spouse would pay rent to the other for occupation of the marital home, just because it was the legal and beneficial property of the other. It would equally be inappropriate, therefore, to characterise a spouse as living “rent-free” in that property.
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