It is not unusual within the context of families for promises to be made by one family member to another as regards ownership of property but in circumstances where there is no formal recognition of the promise included by the member making the promise in their will. This often results in contentious disputes between the remaining family members as to what should happen to the property. This was the question which had to be considered by the Court in the recent case of Thompson v Thompson [2018] EWHC 1338 (Ch).

The family history & ownership of farm

Norman and Doreen Thompson married in 1955. Mr & Mrs Thompson had five children, Gilbert, Elaine, Norma, Pauline, and Karen. Mr & Mrs Thompson purchased a farm, Woody Close Farm, in about 1989. In 1994 Mr & Mrs Thompson entered into a partnership deed with Gilbert in relation to the farm.

The farm comprised a farmhouse and outbuildings with about 115 acres of freehold land. In addition, there was a bungalow on the land in which Mr & Mrs Thompson lived. Gilbert also lived there for large amounts of time with his parents, although there was also a period of time when he had moved out to live with his girlfriend. The bungalow was transferred into Mrs Thompson’s name in 1992. There was also further acreage amounting to about 120 acres held under various tenancies.

The partnership operating the farm had not reported significant profits. However, the land value had increased substantially over the years. The core of the farm acquired in 1989 had been purchased for about £255,000. In 2018 the farm was valued at between £1.2m and £1.4m.

Execution of wills

Mr Thompson died in August 2012. In December 1992, Mr and Mrs Thompson had made mutual wills leaving all their estate and interest to the other. Various other draft wills had been prepared wherein Gilbert would inherit the lion’s share of the farm but these were never executed. However, in December 2011 Mrs Thompson then made a further will leaving an insurance policy to her daughters but the residue of her estate to Gilbert. She then made a further will in August 2012 shortly after Mr Thompson’s death leaving her entire estate to Gilbert, the insurance policy having been written in trust for her daughters. A further will was executed by her in September 2014 providing that Gilbert should only receive a portion of her estate.

By this time her relationship with Gilbert had become very strained. Gilbert had not worked on the farm for several months as he had had time off for a holiday and, according to Gilbert, had then been prevented from doing so by Karen and/or Mrs Thompson and as a result of poor health. In the end, Gilbert did not return to work on the farm again until sometime in 2017.

The court proceedings

Shortly thereafter Gilbert arranged to issue proceedings. In those proceedings, he stated that both his parents had promised him the farm. The question for the court to decide was essentially whether a proprietary estoppel (the legal term for a promise given in such circumstances) operated in favour of Gilbert such as to give him an interest in the farm and if so, what that interest was?

Gilbert’s case, in summary, was that throughout his working life representations, promises and assurances had been made to him by his parents that, on their death, the farm (including the bungalow) would be his with his sisters having the benefit of the life insurance. He said that although the bungalow had a separate title and had been placed into Mrs Thompson’s name it was always treated as an integral part of the farm.

In reliance upon his parents’ promises he had, he said, to his detriment, worked on the farm all his life for a very low wage, never pursuing other jobs or any academic qualifications and never buying his own property - in effect he had given up the possibility of any independence and life outside of the farm. As a result, it would now be unconscionable for his mother to be free to dispose of her interest in the farm (and bungalow) other than to him – this would result in his interest being limited to the 1/3 interest in the farm (excluding the bungalow) that he had acquired by virtue of the partnership deed.

Mrs Thompson, on the other hand, contended that no representations or assurances were made to Gilbert and that there was no unfairness in the position – Gilbert would be entitled to a 1/3 share in the farm through the partnership and this, she said, should more than makeup for the lifestyle choice he had made in working on the farm. She also relied on the fact that Gilbert had stopped working on the farm at some point in 2014.

The family as a whole was divided over the issues – Karen supported her mother whereas the other children supported Gilbert.

The decision

The court found that the farm (including the bungalow) had been promised to Gilbert on the death of the last of his parents. The court could not pinpoint a specific occasion when this promise had been made but was satisfied that is was a very longstanding promise or assurance repeated to Gilbert and within the family (and others) on numerous occasions from when he was a young age and started to work full-time on the farm. The court further found that the promises or assurances had been made by both parents and had been clear and definite.

The court determined that the promises or assurances were part of an overall understanding and expectation that Gilbert would work on the farm and devote his time and effort to it and that in that capacity his eventual reward would be the farm, any financial reward and lifestyle in the interim being significantly lower than he could otherwise expect to earn or enjoy.

Finally, the court found that although the overall expectation was that Gilbert would work on the farm it was common ground that any equity had crystallized by 2014 and that events after that date could not affect it. In any event, the court held that Gilbert had been prevented from working on the farm other than on terms which were intolerable. The court was satisfied that by 2014 the relevant detriment had been established by Gilbert, such that it would now be unconscionable if the promises and assurances were not upheld.

In this respect, the court found that Gilbert did reasonably rely on the promises and assurances and that were they not to be given effect he would suffer detriment – the equity that arises must be satisfied by giving him the farm after Mrs Thompson’s death.

In the circumstances, the court concluded that Gilbert had made out his case of proprietary estoppel in relation to both the farm and the bungalow. On Mrs Thompson’s death, he would enjoy the benefits of those properties as well as Mrs Thompson’s interest in the partnership.

Conclusion

Whilst cases involving proprietary estoppel will be decided on their own individual facts this case is a good reminder of when such a claim might succeed notwithstanding passages of time and the fact that both parents had not yet died.