Promises, Promises And Proprietary Estoppel

Proprietary estoppel is a legal remedy that has featured in a number of cases this year and often crops up (excuse the pun) in farming disputes.

It commonly features where a party works on the family farm relying on the promise that, one day, they will inherit it, then only to find, on the death of their parents, that promise has been broken.

Earlier this year judgment in Maile and others v Maile and others was handed down. The case featured such a claim to ownership of a farm by way of proprietary estoppel.

So, what happened? What is proprietary estoppel? How does it operate? What is needed for it to succeed and what was the outcome in this case?

The Background

The case centred around West Hook Farm in Devon ("the Farm").

The Farm was owned and operated by, the deceased, Mary Stevens. Mary had two daughters, Ruth and Sheila.

Ruth was married to Peter Maile and they had two sons, Steven and John.

Sheila was married to James Kempthorne.

Mary, Peter, Ruth, Steven and John lived and worked on the family farm and continued to occupy the farmhouse even after Mary's death.

In 2006, Mary made a Will leaving (amongst other things) the residue of her estate, which included the Farm, to Ruth and Sheila equally.

In 2011, Mary amended her Will (by way of a codicil) and this left the Farm to Steven and John instead. In 2015, for inheritance tax purposes, Mary entered into partnership with Steven and John.

Over the course of 2016 and 2017 Mary made further revisions by way of a codicil which resulted in the estate reverting back to the terms of her 2006 Will.

In 2020, Mary died.

The Claims

Following her death, Mary's grandsons (Steven and John) made various claims against the estate that:

• They were entitled to the farm based on promises made to them by Mary which they had relied upon ("the Proprietary Estoppel claim");
• An Order that Mary lacked capacity to make the 2016 and 2017 codicils;
• The 2016 and 2017 codicils be set aside due to undue influence;
• Mary lacked knowledge of what she was signing when executing the 2016 and 2017 codicils and therefore did not approve their content.

The probate claims (2-4 above) all failed, but what about the Proprietary Estoppel claim?

Proprietary Estoppel

Proprietary estoppel typically arises where a party asserts a right to land or property belonging to another where they have been led to believe that they have (or can expect to) acquire an interest in the land or property.

The three limbs to it are:

• a party has made a promise or assurance to another ("the Promise")
• there has been reliance upon that expectation by the receiving party ("the Reliance")
• the receiving party has suffered detriment as a consequence of that reliance ("the Detriment")

So, were these limbs satisfied on the facts of Maile?

The Promises

What amounts to a clear enough promise depends very much on the context. Here, the claimants relied on statements made by Mary that "one day this will all be yours" and "who else will it go to".

On the fact of this case, the Court was not persuaded these were specific enough to bind the estate. These representations were taken as being very generalised statements of intention and they could not reasonably be interpreted as Mary meaning her grandsons would inherit directly from her.

Reliance

To establish reliance there needs to be a causal connection between the promises and the detriment. In other words, a claimant needs to show that they would not have acted in the way they did if the representations had not been made.

The Court found there was no reliance here.

The Court found that the grandchildren continued to work and live on the farm even after they found out that Mary had changed her mind in 2016 and Steven even admitted that he would have entered into the partnership even if he had not received the assurances about inheriting the farm.

Detriment

The Court was not persuaded they had suffered any detriment.

Whilst it was accepted the grandsons had worked on the farm, they had received substantial financial benefits from the partnership.

A Cautionary Tale

This case is a stark reminder that bringing a successful claim in reliance on proprietary estoppel is no easy feat. Although each claim will turn on its own facts, to succeed a claimant will need to establish clear and unequivocal promises. General statements of intent will not do.

Claimants thinking about running such a claim will (and should) expect to be tested robustly on their evidence and will need to show they would have actually behaved differently and suffered detriment as a result of any promises made.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.