As a reminder and as set out by Lord Walker in the leading authority of Thorner v Major  UKHL 18, the legal principles of proprietary estoppel are:
- a representation or assurance made to the claimant
- reliance on it by the claimant
- detriment to the claimant as a result of his/her reliance
All three elements must be satisfied to bring a successful claim. The burden of proof is for the defendant to show that the claimant's conduct has not been induced by the promise made.
Once all three elements have been established, the final question to be determined is: is it unconscionable for the promisor to be permitted to resile from his or her promise.
The House of Lords in Thorner v Major held that the assurance has to be "clear enough" (as opposed to clear and unequivocal) and looked at in context. Whilst this could be viewed as lowering the standard in terms of the 'quality' of the promise required, it is interesting to note that the majority of the 2018 cases failed. Only three managed to satisfy the Court of all three elements (see Thompson v Thompson  EWHC 1338 (Ch), Habberfield v Habberfield  EWCA Civ 890 and Gee v Gee & Anor  EWHC 1393 (Ch), but the latter is due to be heard on appeal).
Quality of the Assurance
In McDonald v Rose and Others  EWCA Civ 4 (where we acted for the Court appointed Administrators, VWV Partners Michelle Rose and Mary McCrorie), the Court of Appeal rejected the appellant's claim that he was entitled to the lion's share of the family farming business in Wales as a result of promises made to him by his parents. Rebuttal evidence was adduced that the parents had intended for all six siblings to share in their estates, which was backed up by evidence of the parents' friends.
In Shaw v Shaw  EWHC 3196 (Ch), representations were made by a farmer to his son that he would inherit the farming business, but the assurance was conditional upon the son working on the farm in a reliable and consistent manner. The son left the family farm to work elsewhere and the Court held that it was not unconscionable for his parents to change their mind, as the son had failed to demonstrate commitment to the family holding.
In James v James  EWHC 43 (Ch), the Court found that a father's comments to his son concerning the future of the farm did not amount to an assurance and could not reasonably be relied upon. The son was unable to give evidence of any particular promise or act which resulted in his expectation that the farm would be his. The subtle distinction between a promise and an intention was drawn. An indication of an intention is not enough to constitute an assurance.
In Gee and Gee & Anor, the claimant was one of two brothers who stayed working on the farm following a family dispute. He told his father that he wanted to run the farm, and his father assured him that he would one day. The son was not disabused by his father of his belief, the father having discussed with friends that the farm should go to the son who stayed. The claim succeeded, but is subject to appeal.
In James v James, the Court found that the claimant son was paid well for his work and could not be said to have suffered any detriment.
Likewise, in Dobson v Griffey  EWHC 1117 (Ch), the claimant's expectation of living at the farm for the rest of her life (after giving up her full time job to carry out improvement works) was not based, in the Court's findings, on any conduct of the defendant. The claimant's renovations were actions she might be expected to take as part of the relationship to build a home with the defendant. HHJ Matthews therefore held there was no detriment.
The Court has a very wide discretion in terms of the remedies that it can award. The recent appeal case of Habberfield v Habberfield perfectly illustrates this. Lord Justice Lewison referred to the importance of proportionality between the detriment and the remedy but emphasised that the Court, when deciding how to satisfy an equity, must "exercise a judgmental discretion, and may do so in a flexible way".
Here, the large cash award of £1.17m was upheld by the Appeal Court to compensate the respondent for her longstanding commitment to the family business for over three decades. This was - despite the fact that the elderly appellant faced having to leave the farmhouse, her home of some 40 years - to satisfy the payment, in the overall context of a farm worth £2.5m.
No Hard and Fast Rule
The merits of each case turns on its own facts and circumstances. The context in which the assurances are made is key. Success depends upon how the evidence emerges and the credibility of the witnesses. Poor witness evidence and lack of contemporaneous documentary evidence is so often the stumbling block to a successful claim, the claimant instead relying on the recollections of witnesses.
The recent cases highlight the importance of practitioners undertaking the painstaking, but essential exercise of establishing what the unwritten intentions and understandings between the parties were, in order to properly advise on the merits of a claim.
Ultimately, the outcome often depends on the Judge's findings on the day of trial, making it very difficult for practitioners to give definitive advice in these cases.
Some Counsel involved in the cases we have referred to consider (unsurprisingly) that a different result would have been achieved in a different court. It remains good practice to also consider whether there are any alternative claims that may have equal or greater merit, in order to provide well-rounded advice.