We often answer questions about being left out of a will which reveal that there may be a proprietary estoppel claim, such as:

• What can I do if I have been left out of a will?
• What can I do if your siblings have been left the property you were promised?
• How can I prove a proprietary estoppel claim?
• Can I bring a claim for proprietary estoppel before my parents have passed away?

What is Proprietary Estoppel?

Proprietary estoppel is a legal doctrine whereby a promise is made by the promisor, which is relied on to the detriment of the promisee. In plain English, the scenario nearly always relates to a farm and the situation whereby a parent has promised a farm to a child, who then works on the farm for little or no pay, on the basis the farm would be theirs.  An event then takes place such as a falling-out or the death of the parent and the farm does not pass to the promise as they had led to believe would be the case.

Historically, proprietary estoppel claims nearly always came to light after death but we are seeing more and more cases now, which are brought during lifetime due to the promisor having a change of heart; whether that be because of a fallout or some other persuasive factor.  Indeed the case law is following the same trend and many of the judgements which are being handed down, are in cases whereby all parties are personally involved, rather than the executors of a deceased’s estate.

Elements of a proprietary estoppel claim

To succeed with an estoppel claim, you must be able to show:

1. A promise or assurance that you would receive some identifiable property or land;
2. That you relied on that promise or assurance being made; and
3. That some detriment (not necessarily financial) has been suffered due to the reliance on the promise or assurance.

Although there are distinct elements which will need to be proved to the Court, a trial does not take the form of checking that each of the elements are properly made out.  The Court takes a more holistic approach and looks at the elements ‘in the round’.  They do though, all have to be sufficiently evidenced either on the documents or by way of witness evidence, or a combination of both, to be successful with a proprietary estoppel claim.

The case law

There are a number of cases which both set out the elements of a proprietary estoppel claim and the threshold which must be met to prove a claim.  Turning first to the bare bones of an estoppel claim, Lord Walker in Thorner v Major [2009], explains that the doctrine of proprietary estoppel is:

 “based on three main elements, although they express them in slightly different terms: a representation or assurance made to the claimant; reliance on it by the claimant; and detriment to the claimant in consequence of his (reasonable) reliance…”. 

In the same case, guidance is given about what might satisfy the need to demonstrate that the alleged promises or assurances of future inheritance are sufficiently clear such that they can be relied upon:

“…What amounts to sufficient clarity, in a case of this sort, is hugely dependent on context. I respectfully concur in the way Hoffmann LJ put it in Walton v Walton [1994] … “The promise must be unambiguous and must appear to have been intended to be taken seriously. Taken in its context, it must have been a promise which one might reasonably expect to be relied upon by the person to whom it was made.””

In England and Wales, a person is able to dispose of the estate as they see fit without being restricted by for example, forced heirship regimes which apply to other jurisdictions. For that reason, it is quite possible for someone to make a statement about how they intend to leave their estate, without it amounting to a promise or assurance which can then then be relied on for the purpose of making out an estoppel claim.  It also goes without saying that someone cannot effectively promise to give something away, which they do not yet own for example, in circumstances where they themselves are acting on expectation of inheriting.

The next element to be proved, is that of detrimental reliance. It needs to be capable of demonstration to the Court, that there is a “sufficient causal link between the assurance relied upon and the detriment asserted” as confirmed in Gillet v Holt [2001]. This very often takes the form of someone working for little or no pay, in reliance on a promise that the farm will pass to them on their parent’s death. Detrimental reliance can take various forms and is not limited to financial detriment; it does however, need to be substantial. In some cases, the claimant may have received some benefits despite receiving no wages for their work, such as rent-free accommodation. It is a balancing act for the Court to assess if these ‘countervailing benefits’ offset the detrimental reliance. 

The key cases of 2023, are discussed in detail here and the most recent case considering ‘countervailing benefits’, here.

Will I get all of the farm if I win?

The case of Guest v Guest [2022] has recently come before the Supreme Court and the Court was asked to determine the basis on which a remedy in an estoppel claim should be assessed.  There are two key points to consider when it comes to remedy: firstly, the true extent of the promise must be demonstrated to the Court, as in Wills v Sowray [2020] where only part of the farm was properly claimed (and subsequently awarded to the claimant); and that in cases where an entire farm is subject to the claim, the purpose of the doctrine is ‘to remedy unconscionability mainly by satisfying the expectation” (see judgment in Guest).  In plain English, that is to say that the correct way to assess remedy is by ensuring that effect is given to the promise which was made and in most cases, that will amount to an award of the farm.  That having been said, in cases where a promise has been made by parents to a child and the parents as still alive, as in Guest, discount will need to be applied for accelerated receipt i.e. the child receiving the benefit during their parents’ lifetime when the original promised was predicated on receipt on death.

A word of warning can be taken from the case of Horsford v Horsford [2020] however, in which there was a written partnership agreement which effectively agreed terms between the parties.  The Court took the view in that case, the son was attempting to negotiate the terms a second time by way of an estoppel claim and his claim was dismissed.  In contrast, there are many estoppel cases in which partnership agreements exist but typically, they are historic documents and do not reflect the decades of which have been devoted to the farm for no pay, by the time an estoppel claims comes to the fore.

Wills, partnerships and proprietary estoppel

Although wills, partnerships and proprietary estoppel often go hand-in-hand, that is most often because the combination of all three lead to a dispute when they do not align with one another on the papers, or verbal promises or assurances which have been given to a promisee.  It is also not unusual to see claims pursuant to the Inheritance (Provision for Family and Dependants) Act 1975 run alongside proprietary estoppel claims, or pleaded in the alternative to give a claimant a fighting chance to get some provision from an estate, if the estoppel claim fails.  Unlike estoppel claims, there are time limits which determine by when a claim pursuant to the Act should be issued and for that reason, it is important to act promptly if something is amiss.

Costs

There are a number of ways in which you might be able to fund an estoppel claim and as a firm, we pride ourselves on being innovative when it comes to the funding arrangements we are able to offer.  We also ensure we fully advise on the availability of After the Event Insurance and third-party funding or litigation loans.  You may also find you have benefits from existing farming insurance providers. 

We often consider acting on a deferred payment basis in estoppel cases, where the merits of the case and the security which is available, lends itself to a funding arrangement of that nature. 

Mediation in proprietary estoppel claims

Mediation in proprietary estoppel claims has a high success rate.  Estoppel claims lend themselves well to negotiation in a formal setting where an independent mediator shuttles between the parties in a bid to find some middle ground.  Practically speaking, it also allows for terms to be agreed which may not be open to the Court to award as a remedy, and gives the parties the opportunity to consider any implications of the settlement terms as far as they relate to for example, the Sustainable Farming Incentive scheme and the current use of the farmland.

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