Proprietary Estoppel Gathers Pace

Will claim Solicitors, specialist no win no fee will dispute and will contest Solicitors, discuss the developing will contest and will dispute area of law called “Proprietory Estoppel”

What is “Proprietary Estoppel”?

It is the Court enforcing a promise which otherwise ought not to be enforced because there is no contract or written agreement which can be used as a basis for doing so, if it can shown the promise was relied upon to the detriment of the person relying on it. We have written a number of blogs on the issue including one in 2021 commenting that one of the inherent risks associated with a claim relying on this concept, is that the very thing leading to the claim (the lack of formality), can completely undermine it:

The Inherent Danger of a Proprietary Estoppel Claim – Will Claim Solicitors

In other words and as in all civil claims, if there is insufficient evidence, then the claim will fail. It must be more than mere fancy – or assumption based on an individual’s personal view on what is morally right or wrong.

A developing trend?

Whilst we haven’t carried out a detailed analysis, there does seem to be a trend towards more (possibly successful) claims relying on Proprietary Estoppel. The latest is:

Winter v Winter [2023] EWHC 2393 (Ch)

Winter & Anor v Winter [2023] EWHC 2393 (Ch) (29 September 2023) (bailii.org)

Winter proved to be a successful Proprietary Estoppel claim. Here are a number of excerpts:

Outline of the elements required to establish a claim (paragraph 39):

A recent, comprehensive outline of the elements required to establish a claim in proprietary estoppel was provided by Lewison LJ in Davies v Davies [2016] EWCA Civ 463, at §38: “(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, [2009] 2 FLR 405, 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 [2009] UKHL 18, [2009] 1 WLR 776, [2009] 2 FLR 405, 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 Page 8 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 FCR 501, 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 [2002] EWCA Civ 159, [2003] 1 FCR 501, 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 His Honour 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).” 40. The question of the appropriate remedy must now be determined in accordance with the decision of the Supreme Court in Guest v Guest [2022] UKSC 27; [2022] 3 WLR 911. The approach to be taken is set out by Lord Briggs at §74 to §80.

An assumption that the Claimants would inherit can be induced by things said to them over a long period of time (paragraph 104):

Mr Troup was correct to submit that an assumption made by the sons that they would inherit everything on their parents’ death is not enough to found an estoppel. There is a fine line, however, between a mere assumption, and an assumption (or belief) induced in the sons by things said to them by their parents over a long period. In my judgment, this case falls on the right side of that line so as to be sufficient foundation for an estoppel.

Reliance can be established by working over a long period of time (in the family business)(paragraph 114) on the basis of the promises made:

In my judgment, reliance is clearly established in this case. It is common ground that each of Richard and Adrian did in fact devote their working lives, from before they left school until Albert’s death in 2017 to working in the family business. I consider that at least an inducement to them doing so was the fact that assurances were made by Albert and Brenda, as I have interpreted them above.

Detriment can be loss of an opportunity to build an alternative life elsewhere (ignoring even the substantial benefits secured whilst working in the family business)(paragraph 133):

The Spencer case also reinforces, however, a point relied on by Mr Sims, that it is not possible to put a money value on the unquantifiable detriment of committing an entire Page 25 working life to a family business, giving up the chance to build an alternative life elsewhere, and that such commitment is likely to constitute detrimental reliance. I agree that the lifetime commitment by Richard and Adrian to working on the farm is not capable of being quantified. It is true that the benefits received by them are largely capable of being quantified – by reference to the value of the distributions made, and still to be made, following the sale of the farming assets and the winding-down of the Partnership and the Company. But it is still not possible to conduct a meaningful comparison in financial terms with the detriment suffered by them.

If you consider any of these facts and matters are of interest, are likely to apply to you, or you would like to ask us for more information about our no win no fee arrangement, or you simply want us to assess your claim, then please do not hesitate to contact us for a confidential no strings chat and/or visit us at www.willclaim.com.

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