From a legal perspective, proprietary estoppel cases can be a source of great frustration. So often we see cases coming to court that, had steps been taken to document the promises and intentions of the involved parties, would not have needed to reach that point. The most emotionally challenging of these cases are often farming-related where whole families get caught up in a dispute over what was, or was not, promised to someone, usually a child, after the parents’ death, which can be hugely destructive of family relationships. Here we review three particular cases that resulted in trial before a court in 2023, in order for the parties to achieve a resolution - albeit one imposed by the respective judges.
One of the elements required to establish a proprietary estoppel claim is that the claimant has suffered detriment by relying on the promise made. Often ‘detriment’ is determined in financial terms whereby the claimant has lost out on years of earnings in expectation of inheriting the farm. In two of the cases we review below (Spencer and Winter), financial detriment was not the issue as both claimants had accrued significant assets from their involvement in their respective farming operations. However, in both cases the judge determined that the claimants had devoted their lives to their farms because they relied on promises made that they would inherit which prevented them from exploring alternative paths. The third case is rather different, where a proprietary estoppel claim resulted from the financial remedy proceedings in a divorce case.
Spencer v Spencer
Michael Spencer, having left school at 15 with no qualifications, worked with his parents on the family farm and went into partnership with them and his sister, Penny, when he was 19. Although the relationship with his father, John, was often fractious, his father promised him that he would inherit the farm, a promise that was reflected in his 1993 will in which he left all his freehold land and buildings to Michael. His mother and sister retired from the partnership in 1996, leaving Michael with a 95% profit share. Although Michael took minimal drawings from the partnership (which made substantial profits), a considerable amount was transferred to his capital account as well as a significant contribution to his pension pot. Nonetheless, Michael had devoted his entire working life to the farm, earned considerably less than his sister and the farmhand and, at the behest of his father, made major compromises about his living arrangements, such as living in a damp farm cottage with his family rather than buying a more suitable property in the neighbouring village.
After John’s death in 2018, his will revealed that he had reneged on his earlier assurances about leaving the land to Michael. Instead, he had left him his 5% share in the partnership and left all the freehold land and buildings to a discretionary trust for Michael and his sisters and then ultimately to their children. Michael brought a claim for proprietary estoppel on the grounds that he had been promised the farm, he had acted on that promise to his detriment, and it would be unconscionable for him not to receive it.
Counsel for the defendants argued that Michael had benefited handsomely from the profits from the business, having built up considerable assets in his capital account and pension. However, the judge noted: ‘where a parent promises a child a farm if they work on the farm until the parent dies, and the child does what they were asked to do, giving up the possibility of other options, and positioning their working life based on the assurances, that is likely to amount to detrimental reliance.’ ‘Looking at the matter in the round Michael has positioned his working life in significant part on the basis of the assurances that he will receive the farm. It is impossible now to unpick what he might have done differently with his life over 40 years if there had never been such assurances.’
The judge accepted Michael’s argument but excluded part of the farm on which planning permission had been sought, and gained, for mineral extraction. This, he felt would have otherwise amounted to an unintended windfall.
Winter v Winter
Mr & Mrs Winter ran a successful market garden business in Somerset and owned various other parcels of land that they had acquired over the years. Their three sons joined the partnership on the understanding that they would inherit the land and business in equal shares after their parents’ deaths. In the event, after Mr Winter’s death in 2017 (his wife had died in 2001) it transpired that he had changed his will in 2015, leaving his share of the business to his middle son, Philip.
Richard and Adrian (the eldest and youngest sons) issued a claim on two grounds. First, they challenged the validity of the 2015 will on the basis that their parents had made mutual (not mirror) wills in 2000 (leaving everything equally between the boys) which meant that their father would have been unable to alter his will at a later date. Mutual wills are rare and rarely used in modern-day will drafting; they are contractual in nature and impose limitations on the surviving party. Mirror wills are different and commonplace and can be changed without the consent of another party. The court could find no evidence that the wills drawn up in 2000 were indeed mutual so the claim was dismissed. Second, a claim of proprietary estoppel was advanced on the basis that, throughout their lives, all three brothers had been given assurances on numerous occasions by both parents that they would inherit equally.
After hearing the evidence of the three brothers and various witnesses, the judge was persuaded that Mr & Mrs Winter fully intended that the partnership and business assets would be divided equally between their sons. The creation of the 2015 will followed a falling out between Mr Winter and Richard and Adrian but this did not negate Mr Winter’s clear intention up until this point to leave the business equally to all his sons. Ultimately the judge found that all three had relied on assurances that they would inherit to their detriment – they had devoted long hours to the business and received minimal remuneration in expectation of their promised inheritance. The judge found that the assurances given by Mr & Mrs Winter ‘were sufficient to give rise proprietary estoppel in favour of Richard and Adrian’ in relation to the partnership assets and business but not Mr Winter’s personal estate.
On a final note, counsel representing Philip contended that his brothers had not suffered detriment because of the ‘countervailing benefits’ they had received, namely the value of the partnership assets and company shares valued at c.£2m each, which more than made up for the detriment of long hours and poor pay. In dismissing this argument, the judge referred to Spencer v Spencer where counsel maintained that ‘it is not possible to put a money value on the unquantifiable detriment of committing an entire working life to a family business, giving up the chance to build an alternative life elsewhere, and that commitment is likely to constitute detrimental reliance.’
Philip appealed the decision on the question of detriment which was heard by the Court of Appeal in June 2024. The Court upheld the original Judgment.
Teesdale v Carter
This proprietary estoppel claim was ancillary to a financial remedy proceedings in the family court involving a farming couple who were getting divorced after a long marriage. At the centre of the dispute lay the beneficial ownership of Cow House, a formerly dilapidated barn on Burne Farm which was jointly owned by Mr & Mrs Teasdale. It had been renovated by their daughter Rebecca on the basis of her father’s promise (which her mother knew about) that it would be hers.
The family court had ruled that Cow House should be transferred to Rebecca on condition that she discharged the mortgage. Her mother appealed, arguing that Cow House should remain as part of the farm, rather than being individually owned in case it ended up being sold to a third party, and that Rebecca should receive a lump sum rather than the house.
Moor J dismissed the appeal on all grounds, upholding the finding of proprietary estoppel. The evidence that Rebecca had been promised Cow House was supported by several witnesses (including her sister) and she had relied on that promise to invest considerable time and money in renovating Cow House and subsequently paying the mortgage. As such, to give Rebecca a lump sum would not be equitable, and would effectively amount to a compulsory purchase.
As Moor J commented, this was ‘one of the most regrettable pieces of litigation that I have ever come across’ where the cost of litigation far outweighed the value of the property at the centre of the dispute and where a once close family had become irrevocably alienated. He went on to suggest ways in which costs in ancillary legislation could be better managed and where everyone involved would understand the extent of their financial exposure.
Pursuing a proprietary estoppel claim
The decision about whether or not to pursue a claim will be influenced by several things, not least the cost. If your claim has merit, it is important to review the different types of funding options that might be available to you, one of which is deferred payment. Proprietary estoppel claims tend to lend themselves to deferred payment arrangements as money from the deceased's estate becomes available once probate is granted, unlocking the funds to pay costs. you can find more information about different funding options here.
However, a word of caution - legal costs are payable irrespective of whether your claim is successful, which is why you need to consult a lawyer who is experienced in dealing with claims of this sort and able to judge the likelihood of success. If you would like to discuss a potential claim in confidence, do please get in touch.
The information provided in this article is provided for general information purposes only, and does not provide definitive advice. It does not amount to legal or other professional advice and so you should not rely on any information contained here as if it were such advice.
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The information published across our Knowledge Base is correct at the time of going to press.
