“I was promised something before the testator died”

Proprietary estoppel claim
If someone promises you something such as land but doesn’t take steps to carry out that promise before they die, you may be able to make a claim against their estate.

Known as ‘proprietary estoppel’, this type of claim often arises within the farming industry where the farmer promises a member of their family or an employee that they’ll inherit in exchange for working on the farm, often for very little or no payment.

When can a proprietary estoppel claim be made?

Per Thorner v Major, a claim may be possible where there is evidence that:

  1. Person A made a promise or assurance that Person B would acquire land or property
  2. Person B relied on that promise or assurance
  3. Person B suffered a ‘detriment’

So, for example, if a farmer promised the farm in exchange for the worker’s labour which was unpaid or paid at a much lower than typical rate (on the basis that they would inherit the farm in future), the labour would be the ‘detriment’.

How are proprietary estoppel claims decided?

The court’s overriding consideration in a proprietary estoppel case is fairness (also called ’unconscionability’). This means that even if all of the above three elements are established, the Court will only order a remedy if would be unconscionable (i.e., contrary to good conscience) not to do so.

Unfortunately this means that just because you win your case does not mean you will be transferred the land or property that you were promised. It may be that the Court decides another remedy would be more appropriate, taking into consideration all of the individual circumstances of the case.

How likely is it that my proprietary estoppel claim will succeed?

Proprietary estoppel claims can be difficult to prove and the outcome can be hard to predict. However, this hasn’t stopped people from claiming and the number of cases has risen in recent times, with more than ever taking their claim all the way to court. Remember that often with a contested probate case, a settlement is reached before court action becomes necessary.

Habberfield v Habberfield [2019] – a successful claim

A very recent case, Habberfield v Habberfield [2019] EWCA Civ 890 (which we reported on when it was heard last year) involved a farming business operated by a husband in partnership with his wife. The business had a value of approximately £2.5 million. His daughter worked on the farm for 30 years, focusing in particular on dairy farming and this soon became the centre of their business.

The daughter worked for very long hours and was paid little, with hardly any holidays. Her claim was that she did this because her father had assured her she would take over the business on his retirement.

The daughter left the business after a dispute with her other sister and she turned down an offer to go into partnership in 2008. The father passed away in 2014 and left the farm to his wife, who closed the dairy section.

The High Court ruled that the daughter had a claim based on Proprietary Estoppel, because she suffered a detriment in reliance on the assurances her father had made.

The rejection of the partnership offer in 2008 did not defeat her claim: however, this was taken into account when determining what order should be made. The daughter received £1.2 million enabling her to acquire a viable dairy unit and associated land. Although her mother made an appeal to the Court of Appeal, this was dismissed.

Of note, the Claimant did not get the farm she was promised and in fact, she argued that the judge should not have reduced her award to £1.2 million. The court had to decide whether it would be unconscionable for the original promise not to be kept. Relevant in this case was the promisor’s change of circumstances in closing the dairy unit. There was no suggestion that this closure was culpable. Therefore the closure of the dairy unit was a change of circumstances that the Court could take into consideration, and this change of circumstance mitigated against making an award for more than £1.2 million.

The case therefore demonstrated that proportionality is key in these cases. Just because the claimant expects to receive exactly what they were promised, does not mean the court will award it. Instead, the Court will make an award proportionate to the detriment. Lord Justice Lewison said:

‘The relevant comparison for the purposes of proportionality is a comparison between detriment and remedy. Nevertheless, proportionality is not a question of mathematical precision. Like all cases in which the court decides how to satisfy an equity, it must exercise a judgmental discretion, and may do so in a flexible way.’

To pay the Claimant her award, it would be necessary to sell the farm, thereby doing away with the Defendant’s home. However, the fact that the Defendant had sufficient means to rehouse herself and manage the shortfall in her income was relevant. Immediate sale of the farm was necessary so that the 51-year-old Claimant could begin farming herself. Further, since the family relationship had broken down, a clean break was desirable.

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