Proprietary Estoppel – Can a promise made during your lifetime give rise to a claim against your estate?
The Court of Appeal in the case of Habberfield v Habberfield ( EWCA Civ 890) has sought to clarify the issue of proportionality in deciding the level of an award in proprietary estoppel claims.
Claims for proprietary estoppel are usually associated with the farming industry and claims of this nature were brought by claimants who had worked on the farm for a number of years on the promise that their work would be reflected in any inheritance (or transfer of the land) they had thought they were to receive.
For the doctrine of proprietary estoppel to be applied, the following has to be established:
- A representation or assurance was made to the claimant;
- They relied on that assurance; and
- Suffered a detriment as a result of the reliance.
If the above criteria is satisfied then the Court must determine an appropriate relief.
This recently appealed decision was based on a claim by a daughter (Lucy) against the estate of her late father (Frank). Following the death of her father in 2014, the entirety of the estate was left to his wife (Jane).
Lucy’s claim for proprietary estoppel was based on assurances she claimed her father had made that as she had worked her entire working life on the farm, she was to take over when he was to retire. This was denied by Jane. Lucy had worked on the farm from early 1980’s until approximately 2013. She had relatively low wages and took limited holidays during this period.
In 2013 she left the farm due to an internal family dispute.
During the trial of Lucy’s claim in the first instance, her claim was substantiated by representations over a period of time and evidence of future planning by the family to include Lucy as the eventual owner of the farm after the death of her parents.
The Court found in favour of Lucy relying on the representations made by her parents. The reliance of these representations led to her suffering a detriment based on her low wages and lack of holidays over the extended period. As a result, Lucy was awarded a cash lump sum equivalent to a large portion of the farm that she believed she was going to inherit.
The case was brought before the Court of Appeal by Jane who sought to argue that the decision was unfair. The basis for the appeal was that Lucy has extinguished her right to bring a claim for proprietary estoppel as she had rejected the opportunity to run the farm with her parents in 2008. The point Jane had tried to assert was that upon this refusal, any representations made could have therefore been retracted by Frank.
Further, as a result of the award, this was disproportionate to Jane’s position given the size of the award and payment (as the farm was to be sold).
The appeal was dismissed. The Court held that the rejection of the partnership offer back in 2008 did not justify denying the claim in its entirety, it was merely a factor to be taken into account when determining how to satisfy equity.
The court considered the concept of proportionality in proprietary estoppel claims. The court indicated that it is not the expectation of the claimant that determines the amount of an award, but the need to balance the detriment suffered by the claimant with the remedy awarded.
This case highlighted the Court’s approach to the doctrine of proprietary estoppel and the impact of promises made during a person’s lifetime and lengthy and costly litigation if clear provisions are not set out in the terms of a valid will.