The living and the death: the rise of proprietary estoppel cases

The equitable doctrine of proprietary estoppel is thriving and increasingly relied on by claimants before a promisor’s death, as Matthew Duncan explains

Recent years have seen a substantial increase in the number of proprietary estoppel cases reaching the courts.

An interesting trend that has emerged is that many cases involve claims against living defendants – as opposed to claims against a deceased’s estate.

Often, a broken promise is not revealed until a deceased’s will has been read after their death and it becomes apparent that an asset the individual expected to inherit has been bequeathed to someone else.

At this point, parallel claims for contesting a will may be brought – under the doctrine of proprietary estoppel and or under the Inheritance (Provision for Family and Dependants) Act 1975.

Where the broken promise is revealed in the defendant’s lifetime, a proprietary estoppel case may be brought now, rather than waiting for their death (when it may be necessary to make the strategic decision whether to combine a proprietary estoppel claim with a claim under the 1975 Act as a fall-back provision).

The doctrine of proprietary estoppel maintains that if a claimant relied on a promise of land or property to their detriment, but was subsequently denied this promise, the court will provide a remedy. The three main elements required for a successful estoppel claim are:

• A representation or assurance made to the claimant;
• reliance on it by the claimant; and
• detriment to the claimant in consequence of their reasonable reliance.

A matter of evidence

There are clear advantages for deciding to bring a case to enforce promises made while the defendant is still alive, not least because it gives opportunity for the promisor to be cross-examined at trial.

It also enables a remedy to be granted now rather than at some unspecified, unknown time in the future. One of the greatest challenges of bringing an estoppel claim once the promisor has died is that potentially the most compelling witness is dead; and there may be few contemporaneous documents or written evidence on which to rely.

Most cases of proprietary estoppel have little written evidence available so the ability to question living witnesses about alleged promises is clearly preferable. There is also a growing number of inheritance claims under the 1975 Act; and judges have varied numerous wills in favour of claimants who have been assessed by the court as having received inadequate provision under the original wills.

As practitioners will know, the courts make a judgment based on the relationship of the claimant to the deceased; and what would be deemed by them to be reasonable financial provision for the claimant’s maintenance in the circumstances presented to them. Claims under the 1975 Act are often complex and no two cases are the same. This reflects the reality that no two families are the same.

The rise in estoppel claims reflects the growing recognition that in some cases, a claim under the 1975 Act would not be suitable or permissible, and the equitable remedy under the estoppel doctrine is more appropriate and likely to succeed.

In Habberfield v Habberfield [2019] EWCA Civ 89, for example, the claimant spent most of her life working on her father’s farm expecting, on the basis of a promise, she would inherit the farm on his death. However, her father’s will left his entire estate to his wife. The daughter brought a claim against her mother under the 1975 Act and on the basis of proprietary estoppel.

The court was satisfied she was entitled to an equitable remedy because, on the evidence, the promises made were longstanding and she had fulfilled her “end of the bargain over the relevant period of time”.

She had a legitimate expectation she would inherit, and she had carried on working at the farm with nothing but a promise from her father. She was awarded £1.17m in cash. Her claim under the 1975 Act was not needed as the proprietary estoppel claim was successful. But what about cases where the defendant is still alive?

The recent case of Guest v Guest [2019] EWHC 869 follows the recent line of cases involving decisions by the courts to grant a remedy where the defendant is living. The judge’s analysis of the evidence is particularly worth a read for practitioners who may be preparing for a contested estoppel claim.

Andrew Guest brought a claim against his parents in relation to the family farm and the farming business. He had worked fulltime on the farm until 2015 since leaving school in 1982; and had occupied a property on the farm with his wife from 1989 and had raised their children there. His parents had promised him he would inherit the whole farm.

Later, Andrew’s younger brother became involved in running the farm and the representation or assurance from his parents changed over time, so that he understood he would inherit the farm with his brother.

Relationships became challenging and, in 2014 following a disagreement with his father, Andrew’s parents changed their wills to disinherit him (save for a right to occupy the farm property he and his family lived in).

Relationships soured to such an extent that Andrew and his family moved out of the property in 2015 and he took up employment elsewhere. His parents then disinherited him altogether.

Andrew brought a proprietary estoppel claim. The court found that until 2014, the father had consistently led Andrew to believe he would succeed to the farming business.

His assurances were “clear enough” and over many years; and Andrew had reasonably relied on those assurances to his significant financial detriment. The parents had backed away from their assurances, but neither Andrew’s part in the breakdown of the relationship with his parents nor his ability to find alternative employment diminished the injustices of his parents’ actions.

Given the extent of the relationship breakdown, the court decided it was appropriate to identify a relief to achieve a clean break between them. It was not realistic to believe Andrew could continue to farm alongside his father and brother.

Consequently, the judge ordered that 50 per cent of the farming business and 40 per cent of the farming property should be paid as a lump sum to Andrew. The farm has no doubt had to be sold to realise the required sums needed to satisfy the judgment.

Wait until death?

The case demonstrates how the courts are prepared to deal with cases where the defendants are still alive. This is despite the fact that the assurances and representations made to Andrew were that he would inherit only on the parents’ deaths.

It also confirms that inter vivos claims cannot be defeated by an argument that the claimant may later have a claim under the 1975 Act.

Defending the claim, Andrew’s parents argued that while mindful of the difficulties an adult child may have bringing a claim under the 1975 Act, it was open for him to do so if they failed to make reasonable financial provision for him on their deaths. They said Andrew had a remedy under the 1975 Act so he should not bring a claim until they died.

His Honour Judge Russen QC was clear in his judgment that the principles governing a proprietary estoppel claim “also deal with the ‘here and now’ and, whether or not the claim comes to be pursued against his executors or any rival successors, they support a claim – an equitable cause of action – against the legal owner”.

While many of these cases are based on their particular facts, clear principles have emerged and the equitable doctrine of proprietary estoppel is alive and thriving.

Claimants should be advised if it’s appropriate to consider bringing lifetime claims rather than after the defendant’s death to accelerate the inheritance they believe has been promised to them. Parents beware!

Matthew Duncan is a partner at Druces druces.com