Following the seminal decision in Guest v Guest (see our previous briefing note), February 2023 saw two further high profile judgments in the area of proprietary estoppel – Mate v Mate & others and Gladstone v White & others.
Background
Central to Gladstone was a Grade I listed family property (Wotton) estimated to be valued at £10-15 million. The claim was commenced as possession proceedings brought by David Gladstone, an 87 year old retired diplomat, and his nephew (one of four of the trustees of a settlement settled by David for the maintenance, preservation and repair of Wotton) against Leigh White, a solicitor. Alongside this was a claim to set aside the transfer of six investment bonds (worth around £800,000) on the basis that their transfer had been obtained by undue influence, as well as an order to remove Leigh as one of the trustees of the maintenance trust. Leigh counterclaimed in proprietary estoppel on the basis that she had been promised Wotton after the death of David and his first wife and sought an order that she be entitled to remain at Wotton until David's death and that it then be transferred to her. Further, she also sought an order that two other London properties be transferred to her as part of the assurance that she would have sufficient provision to maintain Wotton.
Mate v Mate was a proprietary estoppel claim in relation to what was farmland, being sold to a housing developer with significant uplift. The claimant, Julie, was one of five children of the first defendant Shirley. She had two brothers, the second and third defendants, and two sisters. The Court considered issues of both proprietary estoppel and unjust enrichment. Julie claimed that in around 2007 she was encouraged to look into development potential for part of the dairy farm run by her parents and, after her father's death, her mother and two brothers, following the farm having some financial difficulties. She then engaged a planning consultant and worked with him for many years with a view to removing the land from the Green Belt and its allocation for housing. The intention was to share the proceeds of sale between the family. In 2015, Julie discovered that the defendants had entered into an agreement with a developer to purchase part of the land for £9 million without informing her. She claimed that since the late 1990s, Shirley had made promises that if farmland was sold, the proceeds of sale would be shared equally between Shirley and the five children and that she had relied on those promises. She also claimed that Shirley and her brothers had been unjustly enriched.
As previously noted, a proprietary estoppel arises when:
- A person gives a promise or assurance to another person (the promisee) that they will be given an interest in a property or land;
- That promise is not legally binding;
- The promisee relies on that promise, and
- The promisee suffers a significant detriment when the promisor resiles or fails to keep that promise
The doctrine is one based on achieving fairness and equity between the parties.
A claim for unjust enrichment requires the following issues to be considered:
- Has the defendant been enriched?
- Was the enrichment at the claimant's expense?
- Was the enrichment unjust?
- Are there any defences available to the defendant?
Outcome
In Gladstone, Leigh was unsuccessful in her claim in proprietary estoppel. She had claimed on the basis of David having made promises or assurances that she would remain at Wotton, but it was found (based on evidence that post-dated the assurances she relied upon) that David's intention was that she have more of a managerial role in running Wotton, not akin to an "heiress". Even if that assurance had been made out by Leigh, she had not established the required detriment, and it would not have been unconscionable for David to change his mind. She therefore failed in her counterclaim and David was entitled to an order for possession of Wotton.
In Mate, Julie was also unsuccessful in her claim in proprietary estoppel. She had failed to make out that any promise or assurance of any clarity in relation to the land had been made. As such, the Court did not consider the remaining elements of reliance or detriment. However, Julie's claim in unjust enrichment did succeed. There was no doubt that the defendants had been enriched by the work undertaken by Julie to remove the Green Belt restriction and its allocation for residential development. This enrichment was at Julie's expense – she had not indicated that she would involve herself in the project without reimbursement and had paid the fees of the planning consultant. She had spent considerable time on the project and the defendants' enrichment was unjust. No defences had been pleaded – the brothers simply denied the claim.
Calculating the value of that enrichment was difficult but the calculation was made by reference to a commission fee of 7.5% of £8.7 million (the uplift in value of the land), meaning she was awarded £652,000.
Comment
These cases confirm that the nature of any promise or assurance is fundamental to subsequently establishing a claim in proprietary estoppel. Without this, the remaining limbs of the test do not require consideration by the court and any such claim will fail. Each case will very much turn on its facts and the outcome of a case difficult to predict with any certainty. We await further decisions with interest.