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Proprietary Estoppel: The Common Sense Continues

Posted on 16 November 2020

Proprietary estoppel, despite having a jargonistic name, is a common sense doctrine, developed in recognition of the fact that people do not live their lives in ways that lawyers advise – that is, by formalising agreements with the assistance of qualified professionals. It recognises that where there has been (a) an assurance of sufficient clarity in relation to the assuror's property (b) reliance by the claimant on that assurance and (c) detriment to the claimant in consequence of her reasonable reliance then an "equity" in favour of the claimant arises.

This doctrine has developed, and is continuing to develop, to ensure a fair result is achieved. For example, the assurance neither need be recorded in writing, nor explicated by the assuror: for example, in Thorner v Major [2009] UKHL 18, despite the assuror's oral remarks about the claimant inheriting the farm in question being "oblique" these did not fail to be sufficiently clear for the purposes of the doctrine, since the assuror, Peter, was "taciturn" and "in the habit of saying so little, it was scarcely to be expected that he would ever address the matter directly". These assurances were "clear enough" to the claimant "whom he was addressing and who had years of experience in interpreting what he said and did, to form a reasonable view that Peter was giving him an assurance that he was to inherit the farm and that he could rely on it."

Furthermore, the satisfaction of the "equity" – if a proprietary estoppel is established – is done so in a proportional way, taking into account all the relevant circumstances. Therefore, in Jennings v Rice [2002] EWCA Civ 159, it was held that it would be disproportionate to reward the claimant, Mr Jennings, who provided significant assistance without pay to the deceased (Mrs Royle) during the closing years of her life, his expectation of Mrs Royle's house and its contents, worth at least £435,000. Instead, he was awarded £200,000 on the basis that to reward "an employee on the scale of £420,000 was excessive", the comparison of "the cost of full-time nursing care, [of] £200,000, with the value of the house", the fact that "Mr Jennings would probably need £150,000 to buy a house" and the fact that the quality of assurance was somewhat ambiguous, Mrs Royle saying she would "see him all right".

Furthermore, the detriment need not be quantifiable in monetary terms; hard work over a long period, during which other opportunities are not pursued, in reliance on a promise, can be enough to create an award significantly higher than the value of the labour. For example, in Habberfield v Habberfield [2019] EWCA Civ 890, the claimant, Lucy, suffered a quantifiable detriment of £220,000 in reliance on a promise that she would be given the family farm, but was awarded £1,170,000 in light of the fact that "the three decades of her life that Lucy spent on the farm are not susceptible of quantification."

A more recent High Court case, Wills v Sowray [2020] EWHC 939 (Ch) has underscored the common-sense impetus of the doctrine. In this case, one of the claimants, Matthew Mills, sought a declaration that the beneficial interest in a farm was held by him. Matthew argued that he suffered detriment because, among other reasons he expended money on work on the farm, including on spraying. The defendant – the daughter of the owner of the farmer, Tony, who was hoping to inherit it under the intestacy rules – challenged this on the basis that this did not result in a benefit to her father. The judge gave short shrift to this argument, stating "the court is concerned with considering the detriment to Matthew and not whether there was a benefit to Tony as a result of the spraying or indeed any other item of detriment relied upon by Matthew". This makes sense –  consider the following hypothetical example that underscores the correctness of this approach: A mother makes a clear promise to her daughter she will in inherit a cottage that she (the mother) does not use; in reliance on that promise the daughter spends a significant amount of time and money ensuring the cottage does not fall into disrepair. To hold that an equity does not arise because the mother never used the cottage would gainsay natural justice.

What these cases show is that the courts are willing to ensure that common sense and fairness prevails, notwithstanding the lack of a formalised agreement.

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