Trumped by a promise

The recent case of Davies v Davies and others [2015] EWHC 1384 (Ch) is an important illustration of the need for a testator to give serious consideration to any potential proprietary estoppel claims, when making a will.

The case relates to a farm in Wales that was owned by the late Mr Tom Davies, who died in 1999. He and his widow had five children, one of whom, Mr James Davies, was the claimant in this case.

When Tom's will was made public in 2012 (having been concealed for 13 years at his widow's request) it transpired that Tom had left the farm on trust for James, until he reached the age of 60 or died, and thereafter, for it to be divided equally between James' siblings and the remaining one fifth share to go to James' children.

On discovering the contents of the Will, James brought a proprietary estoppel claim in relation to the farm. He argued that his late father had wanted him to work on the farm, and that in 1974 when James had just completed his GCSE's and was contemplating his future, his father had made promises to him that if he worked on the farm, it would eventually be left to him.

James argued that as a result of these promises he decided to work on the farm, and give up his ambition of pursuing a policing career. He worked on the farm for long hours and at low wages (at one point, 10p per hour). After his parents had semi retired from the farm, James continued to work on it largely on his own and carried out improvements to it, worth around £177,000. In contrast, his siblings had all left the farm and pursued alternative careers.

Two of James' siblings and his mother (all executors of Tom's estate) denied that any promises had been made to James.

The judge found that the promises had indeed been made by Tom to James, which along with Tom's conduct, had led James to believe that he would inherit the farm. She awarded James the entire beneficial interest in the farm, on the basis that it would now be 'unconscionable' for the promises not to be kept.

The judge reiterated in accordance with earlier case law that while proprietary estoppel is based on three elements (a representation/assurance, reliance, and detriment to the claimant as a result of that reliance) the fundamental principle is that the court must look at the matter 'in the round'.

She ruled that giving James the entire beneficial interest in the farm (except for one residential property) 'was not out of all proportion to the detriment suffered,' and proceeded to make such an award.

The case appears to apply and reaffirm previous case authorities relating to proprietary estoppel claims. The facts of the case are interesting however, being a situation which could easily occur within a family context, particularly where family members are involved in business with one another.

The case highlights the need for clients to give proper consideration when they are providing instructions for a will, as to whether any promises have been made (however historic) which could form the basis of a proprietary estoppel claim.

It illustrates that in certain situations, it may be important for a testator to be open with family members about the intended provision in his/her will, and that the testator's will should reflect any understandings reached. This can of course be difficult where a testator fears that discussing his/her intentions regarding testamentary disposition with family members may result in arguments and upset.

Furthermore being open and documenting any promises made can avoid hundreds or potentially thousands of pounds being incurred in litigation fees.

While English law allows freedom of testamentary disposition, clients should understand this will often be at odds with, and subservient to the principles of equity in an estoppel situation.

In this case, Tom did not approve of James' wife, which is likely to have been the reason why Tom left a will in the terms that he did. Despite this potentially rational reasoning behind his will, this did not override the principles of equity, where proprietary estoppel had been established.

Rajvinder Kaur is a solicitor in the wills, trusts and estates team at Thomson Snell and Passmore