Archive for the ‘Proportionality’ Category

Proprietary estoppel: expectations and proportionality

May 25, 2016

In Davies v Davies ([2016] EWCA Civ 643, CA (Eng)) a couple owned a farm. E, the second of three daughters, lived with the parents for much of the time up to the time of her final falling out with them. E worked for her parents for little money, although her pay increased over time. Around 1985 her parents assured E that the farmhouse would be hers one day. She later fell out with them and moved out.  E was later reconciled with her parents but left the farm a second time after another falling out. E’s father induced her to return by promising that she could live rent free in the farmhouse. During part of the time that she lived away from the farm she worked as a technician for a company that provided livestock reproduction services. She enjoyed this work and was good at it. After a third dispute with her father, he brought proceedings to evict her from the farmhouse. She relied on proprietary estoppel to claim some interest in the farmhouse and / or the business. The Court of Appeal had already considered the threshold question as to whether or not E had established a right to some form of relief and decided that she had (see here ). These proceedings were concerned with the question as to the form that the relief should take.

The parents made an offer to their daughter which was calculated by reference to the detriment that she had suffered in reliance on the assurances made to her. The daughter sought a much larger sum that would reflect the expectations induced by the assurances. Lewison LJ gave the only full judgment. He set out some core propositions about the law of proprietary estoppel ([38]). He referred to the controversy as to whether expectations or detriment should govern the relief ([39]) and the proportionality test in Jennings v Rice and to the idea that in ‘bargain’ type proprietary estoppel  cases the claimant’s expectations represent a starting point([40]). But where to go from there if the expectation is only a starting point? Lewison LJ accepted the following proposition suggested by counsel as a useful working hypothesis:

‘there might be a sliding scale by which the clearer the expectation, the greater the detriment and the longer the passage of time during which the expectation was reasonably held, the greater would be the weight that should be given to the expectation.’ ([41]).

The assurances that had been given envisaged that the daughter would work long-term in the family farming business but she left the business (twice temporarily and then permanently). This was not like the decades-long arrangements in Gillet v Holt or Thorner v Major ([48]). While E had some expectation of inheriting the business, it was relatively vague and so a modest award would suffice ([64]). Modest sums were also in order in respect of the ‘non-financial detrimental reliance’ involved in giving up her work as a technician and moving from her home to the farmhouse ([65] and to reflect the delay in receiving payments relating to past expectations (such as her unmet expectation that she would be a partner in the farming business) ([68]). So a modest uplift from the payment offered by the parents was in order but this would fall far short of a payment that would reflect E’s expectations in full.

Michael Lower

 

Proprietary estoppel. Detriment: balancing advantages and disadvantages. Proportionality of relief.

November 9, 2012

In Henry v Henry ([2010] UKPC 3, PC) G owned a half share in a plot of land. She promised C, her grandson, that he would inherit the property if he cultivated it and looked after her until she died. He satisfied these conditions. C, however, sold the property to T. C claimed to be entitled to the half share on the grounds of proprietary estoppel. The Privy Council looked at whether there had been detrimental reliance (more than simple reliance). C had, it is true, benefited substantially from the arrangement during G’s lifetime (rent-free accommodation and living off the produce of the land). The court had, however, to look at whether there had also been detriment and to conduct a balancing exercise ([53]). This would lead the court in the present case to acknowledge that C had given up opportunities to better his life elsewhere and this outweighed the benefits ([61] – [62]). The claim was made out as against G.

The resulting equity was capable, in principle, of binding a successor such as T (a fact that was confirmed by section 28 of the Land Registration Act (St Lucia)). It was open to T to argue that there was nothing on the facts of the case to make it unconscionable for her to ignore C’s claim but she had not done so.

Proportionality is a relevant factor when granting the relief: ‘Proportionality lies at the heart of the doctrine of proprietary estoppel and permeates its every application.’ ([65] Sir Jonathan Parker) and so C should not get all of G’s half share in the plot but only half of that ([66]).

Proprietary estoppel: disproportionate to fulfil expectations?

October 17, 2012

In Bradbury v Hunter ([2012] EWCA Civ 1298, CA (Eng)) B invited R (his nephew) and D (R’s partner) and their family to move from Sheffield and live with him in his large house in Cornwall. He told them that they would inherit his house after his death if they agreed to move. They did agree to move but R and D discovered that B had changed his mind and did not intend to leave the property to them. They claimed to be entitled to the house relying on proprietary estoppel. R and D succeeded and were awarded the house (but subject to the Inheritance Tax liability atributable to it). B died and his executors appealed. The English Court of Appeal (Lloyd L.J.) said that the case raised no issue of law but only concerned the application of the law to the facts ([6]). It is, nevertheless, an interesting illustration of such a case and the approach to some aspects of proprietary estoppel.

An oral assurance was effective even though R and D had asked for and expected written confirmation that B would not change his mind. There was detriment even though the couple and their family had enjoyed rent-free accommodation in a very pleasant house. They had moved from Sheffield which D had been reluctant to do, provided some care for B and done work to improve the property (though they had benefited from this improvement).

It was not disproportionate to give them the whole house. The difficulty of deciding on whether or not there was a net detriment seems to have been a factor. The first instance judge had looked at the appropriate issues:

‘So long as the judge has the facts clearly in mind, with the material elements of advantage or disadvantage to those concerned, as this judge plainly did, and has understood the law correctly, as, again, this judge did, the parties having been in agreement in their submissions on that, it is inherently difficult to show that the judge has misdirected himself in coming to a conclusion as to the appropriate remedy.’ (Lloyd LJ at [52]).

Proprietary estoppel: detriment and proportion

August 23, 2012

In Suggitt v Suggitt ([2012] EWCA Civ 1140, CA (Eng)) a father promised his son that he would give his son the farm that the father owned and a place to live. In his will, the father gave all of his estate to his daughter with a power (but no trust) to transfer the farm to her brother if she decided that he had the ability to farm it. The father died and the son sought to enforce the lifetime promise, relying on proprietary estoppel.

The daughter contended that her brother had incurred no detriment in reliance on the promise. The father had provided him with food, a home, money and business opportunities well into adult life. However, the son had returned to the farm and had done at least some work. The first instance judge thought that this did amount to ‘real and substantial detriment’ and this finding could not be said to be perverse ([39]).

Was it unconscionable for the father to go back on the promise? Arden L.J. said: ‘[U]nconscionability in this context is unconscionable conduct in failing to give effect to the assurance.’ ([41]) It is unconscionable to go back on an assurance that has resulted in detrimental reliance. There was no real issue here then.

Was the first instance award (the farm and a farmhouse) disproportionate, going beyond the minimum required to satisfy the equity? The question, after Jennings v Rice, was whether the award was ‘out of all proportion’. Was it ‘clearly wrong’? ([44]) Arden L.J. held that the award could not be criticised on this ground:

‘Since the promise was that John should have the farmland unconditionally, I do not consider that to grant him the farmland … could be said to be out of all proportion.’ ([45])

Should John simply have received a cash payment for his services? This was plainly the wrong approach:

‘That would have done the minimum … but it would not have done justice to the claimant given the assurances he had … been given and his acting to his detriment.’ ([42])

Michael Lower