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Promises Promises

In contentious probate work, a topic that comes up from time to time is proprietary estoppel.

What does it mean?

In basic terms, the principle says that if somebody makes a representation or promise that you will receive property and you rely on it to your detriment, the person making the promise cannot then go back on it. An example might be a farming family where most of the children leave home to make their own careers but one stays and works on the farm for little or minimal wages in the expectation of inheriting the farm in the long run.

Proprietary estoppel claims can be complicated, however, partly because they can depend upon the details of conversations that might have taken place decades ago and as such claims often arise in the context of estates one of the parties to the conversation will often no longer be around to give evidence. It can also be difficult to establish whether someone has truly relied on the promise given.

There have been two recent cases in the Court of Appeal which have looked at specific aspects of such claims. The case of Liden v Burton (2016) highlighted that such claims do not only arise in relation to estates; they can arise in other circumstances too. The case related to cohabitees who lived together in the man's property. During their time together, his partner paid £500 per month to him "towards the house". There was no specific discussion, however, about what "towards the house" meant.

When the relationship broke down she claimed that her understanding was that in return for her payments she would have an interest in the property, which was based partly on the fact that her partner had told her that the payments were needed to pay the mortgage. The Court of Appeal upheld the decision of the judge in the first instance that her claim should succeed holding that even though there had not been a specific representation or promise it was reasonable in the circumstances for the claimant to believe that her payments entitled her to an interest in the property and she was awarded an interest amounting to just over £30,000 in value. This was interesting from a lawyer's point of view because it established that proprietary estoppel claims do not necessarily require that there has been an explicit representation or promise.

The second recent case is that of Davies and Anor v Davies (2016). What was particularly interesting in this case was the fact that goalposts moved several times over the years with regard to the precise details. The claimant was initially promised land in return for working on her parents' farm for the rest of her life but after several years she left the farm after falling out with her parents over her choice of husband. She subsequently returned to the farm but fell out with her parents and left several more times only to return each time on various different terms.

The court held that notwithstanding the fact that she had not carried out her side of the original bargain in relation to the initial representation (she had not worked on the farm for the rest of her life) she was nevertheless entitled to succeed with a proprietary estoppel claim because in reliance on the various assurances made by her parents over the years she had worked for low wages and foregone an alternative career opportunity and accompanying lifestyle. The judge in the first instance awarded her £1.3 million but her parents appealed arguing that she should be entitled to a lump sum of £350,000 and the Court of Appeal upheld her claim but reduced the amount awarded, holding that the financial loss she had suffered in terms of lost wages and accommodation entitlement etc was roughly the amount suggested by the parents of £350,000 but there were other repercussions of her not inheriting the assets that had been promised to be taken into consideration such as the disappointment of her expectations. The Court also took into account the fact that on the occasions that she left the farm the claimant had done so in the belief that she was forfeiting her future entitlement and awarded her £500,000.

The case is interesting because as well as demonstrating the way in which the Court will seek to find a fair outcome in complicated situations it also demonstrated that it is not a case of all or nothing. The claimant was not awarded what she was originally promised, which would have amounted to a farm and other assets valued at more than £3 million, but was awarded financial compensation instead on the basis of the Court's view of what she had actually lost.

If you believe you may have a claim against an estate,  Ragan Montgomery


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