In her latest series of articles, Nyree Applegarth answers the questions she is most commonly asked relating to property and land disputes and highlights the most relevant case law.
"I was promised I would inherit a property in the future and relied on that promise to my detriment, but it now appears that I may not inherit—is this lawful?"
In most situations, to be entitled to an interest in land, that promise needs to be written down to be enforceable. However, there is a legal doctrine known as proprietary estoppel that can step in to help a party who finds that they have been promised a house or part of the land, have relied on that promise to their detriment and then find that the promise is not going to be kept. This is something we see frequently in contested will and contentious probate cases.
Proprietary estoppel is a departure from the usual rules of the courts, who, in most circumstances, will not enforce gratuitous promises or compensate a party when they have offered the services voluntarily.
However, as the Court confirmed in Habberfield v Habberfield in 2019, "underpinning the whole doctrine of proprietary estoppel is the idea that promises should be kept".
Looking at the three elements that you need in order to persuade the Court to step in and grant an equitable remedy so that the promise can be enforced, there are various things that have to be established:
Encouragement
There must be active or passive encouragement concerning the original promise. If it is an active encouragement, then the landowner must represent and promise something to the other party that the promisee must reasonably have believed to be true. You would also have to show that the landowner intended the other person to adopt a particular course of conduct by relying on the promise.
If you are relying only on passive encouragement, then you would have to show the failure of the landowner to disabuse the other person of a known mistaken belief. The encouragement has to be clear and unequivocal. The property that has been promised must be completely identifiable.
Reliance
Looking at reliance, this will be readily inferred where encouragement and detriment can be proved. If there is a contentious issue about reliance, then it will be for the landowner to demonstrate that the promisee did not rely on the encouragement. In order to prove that there was no reliance, the landowner would have to show, beyond doubt that the other party would have acted in the same way regardless of the promise or acted on independent or professional advice.
Detriment
Detriment is not a narrow or technical concept. It will be judged when the person who was given the assurance seeks to go back on it. It does not have to be quantifiable; it can include financial expenditure, sacrificed opportunities, unpaid labour, assumption of burdens, etc. Where the reliance gives rise to both disadvantages and benefits, the Court will have regard to both and the balance of the two.
Faced with a request by a party to enforce the equity, the Court will take into account that the relief that the Court gives must be proportionate to the detriment. The key aim of the Court here would be the prevention or undoing of any unconscionable conduct. The fulfilment of the original promise is the starting but not necessarily the endpoint.
We have set out below, some recent examples of how the Court might apply its discretion.
The case of Horsford v Horsford [2020] [EWCA584]
There was a family farming partnership where the mother retired. The Partnership Deed provided for the remaining partners to acquire the interest of retiring partners at a price to be agreed. The son asserted that he was not required to pay anything for his mother's share because assurances had been given to him from early childhood that he would receive a share of the farm on his parent's death, and he argued that proprietary estoppel overrode the provisions of any later Deed.
The Court held:
- No sufficient assurance was proved because there was a crucial distinction between irrevocable promises and mere expressions of future intentions.
- The repeated family discussions that the son would inherit, were general statements as to the future of the farm and subject to further discussions.
- There was nothing right or reasonable in the mother asserting her rights under the deed, it was intended to be a comprehensive record of the parties' rights and obligations from the date it was signed.
The lessons to be learned from this case are:
- The expectation must be built on a clear assurance rather than hope or a misplaced assumption.
- Just because statements of intentions are repeated does not mean they become irrevocable assurances.
- The best evidence of intention is contemporaneous documents and conduct, not recollections years later.
- A subsequent contact may satisfy an equity – but its effects on an earlier oral promise mean it is fact sensitive.
- You should always consider the delay in bringing a claim and whether there is conduct equivalent to a waiver, which can wipe out the equity.
The case of Merriman v Merriman [2024] [EWFC58]
There were financial remedy proceedings between a father and stepmother. This involved the division of various properties as part of a farm business. The children lived (or had lived) and worked on the farm since finishing college and had entered into an agricultural charge to a value of over £1m. They claimed that the father and stepmother promised them an equal share in the farm and other properties and bought a claim based on Proprietory Estoppel which the Court did uphold in respect of the farm business properties only.
In the Merriman case, the claimants were unable to pinpoint any specific discussions or conversations or back it up with any documentary evidence, but despite that, the Court relied on the inference "natural assumption of everybody", "simply absurd and untrue to think I would deal with work for so little and for so long without the promise of a share in the business", to grant the equitable remedy.
The case of Heyes v Holt [2024] [EWHC] 779 (CH)
A father owned two farms. The daughter averred that in 2013, her father invited her into the farmhouse's drawing room and encouraged her and her husband to move closer to the farm so they could learn the ropes and one day take over.
In 2014, the daughter and her husband, therefore, relocated, relying on that promise and in 2019, the daughter was told that the father was drafting a will to leave everything to the mother for tax reasons but again repeated the assurance that they would take over the farm one day. When the father died, the farm passed to the mother under his will, and the daughter challenged the will based on proprietary estoppel. Her mother defended the claim and adduced audio evidence after the promise had been made, arguing that the daughter knew that any such assurances were neither intended nor, apparently, intended to be relied upon.
The prospects of success were determined on a summary judgment basis (without the full extent of evidence being brought before the Court) and the Court determined that the claim was very unlikely to succeed but it was not absolutely hopeless.
The daughter was permitted to go to trial if she paid a certain amount of money to Court.
The case of Winter v Winter [2024] [EWCA] CIV 699
Finally, it is important to consider the decision in the Winter v Winter case. The facts of that case were that the father owned a farm business and assets in Somerset. The three sons worked for a relatively low amount in the farm business from when they left school until their father's death. Critically, the sons had all benefitted very substantially from the business profits and increase in value of nearby farms acquired in their own names. The relationship between the first and second sons had broken down and the father left the farm business and assets to the third son in his will. The first and second sons, therefore, bought a claim based on proprietary estoppel against the third son, claiming an equal division of the father's interest in the farm and business. Their claim was upheld.
The Court determined that there was a reasonable inference of a promise that the farm would go to the three sons equally, which was relied on. It was determined that, but for the assurances, sons one and two would have pursued military or contractor careers, but they would not have made as much money as they made on the farm. Nevertheless, their lifetime commitment to working on the family farm was a sufficient detriment.
The third son then appealed the first decision about the finding of detriment. He argued that the judge had failed to properly assess or explain how the lifetime commitment was a detriment and outweighed the money that had been earned. The matter was then referred up to the Court of Appeal, who dismissed that appeal.
The lesson to be learned from that case is that detriment must be specifically pleaded in both specific and general terms. A receipt of substantial financial benefits will not always preclude a finding of detriment. Unquantifiable life changes and commitments may be enough to trump quantifiable advantages.
