Propietary estoppel: A Cinderella story?
“One day, son, all of this will be yours…”
Proprietary estoppel is a remedy for modern-day Cinderellas, justice-based rather than magical, where Cinders either works hard or spurns other opportunities for the betterment of another who has made promises to her that she will eventually be “seen right”.
For such a claim to succeed, Cinders (the Claimant, C) must receive a clear assurance, either express or inferred, that an identified property will be her reward. Also, C must prove that on the strength of the assurance she laboured or acted to her real and not imagined detriment by placing reliance upon that assurance. In this respect, the fairy tale analogy must come to an abrupt end: C’s reliance must be reasonable rather than naïve or romantic, as judges tend to treat such claims with scrutiny and scepticism. Judges will also view such cases in the round, examining the essential elements all together, rather than in watertight compartments. Also, the detriment needs not be financial, but could affect C’s lifestyle.
In the Court of Appeal decisions in Davies v. Davies C was a farmer’s daughter who over time had been made several and different promises during a period of over 20 years of her working life that she would eventually own the dairy farm business that was, presumably due to at least some degree to her own efforts and skill, valued at £4 million. On the strength of the assurances made, and her being dissuaded from killing “the goose that lays the golden egg” by upping-sticks and going her own way by working for another business, she spent almost all of the relevant period working extremely long hours for the family business for no extra wages.
In her evidence, C stated that she loved working for the other business as she liked the social interaction. Furthermore, the hours and environment were more amenable to her own young family, with whom she would go to a nearby beach, whereas with the family business she would have been milking. The Court of Appeal found that putting a value on the various forms of detriment to C must not merely be “an exercise in forensic accounting” but regard should also be had to the adverse difference in lifestyle when C was working for the family business.
In making claims for proprietary estoppel on similar facts at the same time it may also be appropriate to claim for something called a Constructive Trust, for which it might be possible to get an immediate share of a promised asset. It is a common gripe that Courts dispense law but not always justice. Cases such as Davies are in no way straightforward to advance, and as in all litigation there may be risks as to legal costs, but they do illustrate how the courts may give a just result for the Cinderellas of this world, beyond formal and contractual relationships.
A Post-Script from Leslie Blohm QC of St. John’s Chambers, Leading Counsel for the Claimant in Davies:
Readers may also note that the Court of Appeal reduced Cinders’ award from £1.3 million (one-third of the net value of the farm and business) to £500,000, notwithstanding that the trial judge had sat through seven days of intense evidence before arriving at his conclusion. Which is the fair result? All one can say is that opinions differ. The Court of Appeal thought that ‘fair’ meant what Cinders had given up, plus a bit extra. The judge thought that ‘fair’ meant a fair chunk of what had been promised. It is difficult to know precisely where such claims will end up without precise analysis. Cinders’ present hope is that she will have a successful ball at the Supreme Court – she is waiting to see whether they will give her a ticket.
Should you have any further questions in relation to this article or any other matters please contact the contentious probate team on 01752 203500 or by filling in the contact form. This article is illustrative only and should not be relied upon as legal advice.