22 February 2024 by Selina Atim

Proprietary Estoppel: Fixing a broken promise

Proprietary estoppel is a legal doctrine which can be used to enforce a promise of property ownership made by a landowner. These claims often arise after the death of the landowner, as a claimant will uncover at this stage that a promise has not been kept. However, we are seeing an increase in proprietary estoppel claims when the landowner is alive and there has been a breakdown in relationships, leading the claimant to suspect he won’t receive what has been promised.

The three key elements required for a successful proprietary estoppel claim are:

  1. A clear promise is made in relation to an identified property owned or to be owned by a promisor.
  2. The claimant relies upon the promise.
  3. The claimant suffers a detriment as a result of his reasonable reliance on the promise.

A few common scenarios where a proprietary estoppel claim can arise are:

  • Where an individual has spent money renovating a property relying on an informal promise the property owner made that they would receive an interest in the property.
  • Where an individual worked for a reduced wage after being promised they would inherit a property/business.
  • Where an individual gave up working to care for a property owner who promised them a share of their property in return.

A landmark case that demonstrates a successful proprietary estoppel claim is the case of Guest v Guest [2022] UKSC 27, [2022] 3 WLR 911.

Background facts

Briefly, the case revolves around a family farm (Tump Farm) owned by David Guest and Josephine Guest. David and Josephine had three children.

Andrew Guest, their eldest son, worked with his parents on the farm from a young age and lived in a cottage on the farm with his family up until 2017.

Andrew worked on the farm for a reduced wage, relying on David’s promise that one day he would inherit a significant proportion of the farm.

David executed a Will in 1981, leaving the farm in equal shares to Andrew and his younger brother.

In 2014, after an unfortunate breakdown in relations, David and Josephine executed new Wills leaving Tump Farm solely to Andrew’s brother.

The Claim

Consequently in 2017, Andrew brought a proprietary estoppel claim against his parents,asserting that they had promised him a share of Tump Farm and that he had relied on this promise to his detriment by dedicating his whole life to working on the farm for a low wage.

The judge in the High Court at first instance found in Andrew’s favour, stating a clean break remedy was required, and ordered that the farm be sold and a lump sum payment be made to Andrew to reflect his expectation.

David and Josephine appealed the decision, asserting that the relief given had been incorrectly assessed and that the award to Andrew should be based on the detriment to Andrew rather than his expectations. They also argued that Andrew should not have receivedan award while David and Josephine were alive.

The case was later heard in the Supreme Court and it was found that the starting point with any proprietary estoppel claim is to prevent or remedy an unconscionable event. The majority found that the promise and Andrew’s expectation should be enforced but, as Andrew was receiving a remedy while his parents were still alive, they should have the choice in remedy. The judges concluded that either Andrew’s share in the farm was to be held on trust for him until his parents’ death or for the farm to be sold immediately and a lump sum paid to Andew, but a discount applied for his early receipt.

Conclusion

Overall, proprietary estoppel claims are complex and difficult to predict. The court has a wide discretion and in most cases success is very much dependent on the specific facts of a case and the evidence at hand.

The promises made to a potential claimant are usually verbal and are made over severalyears. In these types of cases, a lot depends on the precise conversations, actions, and credibility of each party.

It is important to receive expert advice at an early stage and, at Bolt Burdon, we are able to advise on the merits of a case and the likelihood of success.

If you would like an initial conversation regarding proprietary estoppel claims, please do contact our Disputed Wills and Trusts team at Bolt Burdon.

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