“In many ways a tragic case… the bitterness between the parties was such that each had few, if any, good words to say about the other,” concluded Lord Justice Floyd in the long-running dispute of Davies & Anor v Davies1. The case was unfortunate but demonstrates a recent application of the doctrine of proprietary estoppel in the trust and family context.
The Court of Appeal upheld the trial judge’s finding that Eirian, the “Cinderella” in this case, was able to establish an interest in the family farm and avoid the eviction order sought by her parents, Tegwyn and Mary. The exact amount of that interest was left for a further trial, although it was hoped that the parties would be able to resolve the rest of the matter more amicably.
The doctrine of proprietary estoppel has three main elements:
- Assurance made to the claimant
- Reliance on the assurance by the claimant
- Detriment to the claimant in consequence of his (reasonable) reliance
If the claimant is successful, the court will order the defendant to transfer to the claimant an interest in the property that is proportionate to the detriment that the claimant has suffered. The doctrine prevents the defendant from behaving unconscionably by estopping him from reneging on his assurance. Unlike most forms of estoppel, proprietary estoppel can be a sword as well as a shield.
Henllen is the name of the Davies’ family farm in West Wales. Between them over the years, the family built up a highly successful dairy business from their “prodigious pedigree Holstein milking herd”. They achieved this together “by hard work, great skill and passionate dedication”.
During her childhood and early adulthood, Eirian was passionate about the business of the farm. She was not paid for working on the farm until later in life, but she was given board, lodging and money for clothes and leisure. Her father said to Eirian that the farm and the business one day would be hers.
The case is worth reading for a full picture of the family saga that ensued, which included numerous family fallings-out, and Eirian moving out and then returning to the farm on a few occasions over the years. She worked full-time and part-time at the farm at different times and the family also drew up a number of partnership agreements, draft wills and plans to allot shares in the family business to Eirian, but ultimately nothing was signed for various reasons.
A fight in the milking parlour between Eirian and Tegwyn brought matters to a head in 2012. This led to the termination of Eirian’s employment and the service of proceedings to evict Eirian.
There was no doubt that over the years many assurances were made to Eirian that she would have an interest in the farm. The question was whether her reliance on those assurances met the threshold that entitled her to some equitable relief.
Although Eirian had received “not insubstantial” payments and other benefits over the years, the judge at first instance found that they did not amount to full compensation for her
contribution to the farming business. The judge also concluded that had Eirian not worked on the farm she would have earned better money elsewhere. On that basis, he held that she had established a proprietary interest in the farm. The Court of Appeal upheld his judgment and method of evaluation.
This case does not create any new law, but demonstrates the court’s approach when asked to decide on a proprietary estoppel case.
According to the Court of Appeal, the judge “had to carry out an evaluative exercise, contrasting the rewards and better lifestyle of another job she had at one point with those of working on the farm (including the free accommodation at Henllan) and its greater burdens in terms of working hours and more difficult working relationships.” The Court of Appeal could not fault the approach or reasoning taken by the judge at first instance; it was “a classic evaluative exercise which he performed with care”.