As with many cases in Equity, Proprietary Estoppel has grown up as a common law remedy to fill in the gaps beyond the realms of the purely contractual domain. It is accordingly a jurisdiction bound up in developing case law and has evolved to rectify substantial injustice as perceived by the courts.
Proprietary Estoppel provides a potential remedy where (1) assurances have been made (2) which induce a party to act to his or her detriment (3) in circumstances where the law considers it unconscionable to stand by. As its name suggests at its core it is concerned with interests in property.
As Lord Walker said in Thorner v Majors [2009] UKHL 18 the “relevant assurance must be clear enough” and “context” can be everything. That case dealt with hardworking farmers described as “taciturn” and “undemonstrative” used to a life of unrelenting physical work. Lord Walker went on to say “the promise must appear to have been intended to be taken seriously” and “one which one might reasonably expect to be relied upon”.
Whilst the vast majority of proprietary estoppel cases concern interests in land it is suggested that it can also in principle apply to chattels and choses in action. See Lord Scott’s dicta in Cobbe v Yeoman’s Row Management Ltd [2008] 1 WLR 1752. Lord Briggs himself at para 76 in Guest v Guest [2022] UKSC 27 gave an example of an assurance concerning Faberge jewellery worth millions. One might opine a fabulous Faberge egg. Case law beyond the realms of land is however far more fragmentary and might be ripe for further judicial pronouncement.
It is not an understatement to say that proprietary estoppel case law is dominated by cases concerning land and in particular assurances and promises relating to the inheritance of farms. In both Thorner and Guest the claimants who all proved assurances made to them and detrimental reliance had worked industriously on farms for little or no reward for decades (29 years and 32 years respectively). It is understandable within the context of such detriment that the courts should consider that substantial remedies were in order. The spectrum of detriment and remedy was explored in Guest (see below).
A significant number of my own mediated cases have concerned farms and landed estates but many have also concerned houses and flats. Sometimes of course proprietary estoppel is run in conjunction with diverse contentious probate or Tolata cases.
Parties would do well as a first step and concise summary to look at the observations set out by Lewison LJ at para 38 in Davies v Davies [2016] EWCA Civ 463. This is of course subject to the clarification upon remedy and proportionality set out in Guest.
As to the question of assurance and reasonable reliance some purported promises have been characterised as “statements of current intention” as opposed to assurances which can be relied upon. This issue is commonly raised where a statement is made as to what is set out in a current will.
As HHJ Matthews put it in James v James [2018] EWHC 43:
“A statement of current intentions as to future conduct is not a promise of that conduct, let alone a promise intended to be acted upon” (para 24) and “In my judgment, there is a sufficient place in our legal system for a landowner to be able to express a present intention to leave property by will to another person but without making any promise to do so” (para 38)
The wider context of discussions and representations may however be very telling on this point.
Lord Briggs began Guest with the following proposition: “One day my son, all this will be yours” spoken by a farmer to his son.
Would going back on the promise be unconscionable? What should happen? As Lord Briggs noted at para 4 “One of the principal functions of equity is to put right injustice to which the law is otherwise blind”.
In Guest which extends to 108 pages Lord Briggs examined the previous case law in depth. The decisions in many of the previous cases were interpreted and characterised by Lord Briggs under the banner of proportionality. Indeed the decision is littered with comments about this.
There does of course need to be a causal connection between the assurance and detriment. It is often noted that the detriment must be “substantial”. The types of detriment are not however fixed. Detriment does not have to be purely financial. Examples frequently cited include farming, other labour and the provision of care.
At para 10 of Guest, Lord Briggs made the following further comment:
“Detriment is relevant to both the arising of the equity and to the remedy. Without reliant detriment there is simply no equity at all. This reflects the notion that it is the reliant detriment which makes it unconscionable for the promisor to go back on his promise. Detriment is relevant to remedy because a slavish enforcement of the promise may be so completely disproportionate to the detriment that it goes much further than necessary to put right the unconscionability inherent in the repudiation of the promise.”
The question of detriment was itself explored at length in the recent case of Winter v Winter [2024] EWCA Civ 699. Newey LJ observed:
“Whether there is detrimental reliance in any given case is an evaluative judgment on the facts, which normally lies within the exclusive province of the trial judge. This court can only interfere with the judge’s assessment of that issue if it is perverse or clearly wrong: Suggitt v Suggitt [2012] EWCA Civ 1140 per Arden LJ”
Perhaps more significantly Newey LJ stated that where a claimant’s reliance on an assurance has resulted in both disadvantages and benefits, the Court must have regard to both and he then continued at para 52:
“My own view, as I have indicated earlier in this judgment, is that, to succeed in a proprietary estoppel claim, a claimant needs to show sufficiently substantial net detriment of whatever kind.”
Parties would do well to read the paragraph in full particularly if an issue of balance arises.
Following Guest the centre of gravity or certainly the starting point has changed in terms of considering potential remedy. Parties should remember however that any equitable remedy is “discretionary” as reaffirmed by Lord Briggs in Guest (paras 5 & 28). A decision is always of course subject to findings of fact. Different judges may have different views.
Where a judge decides on the facts that a Proprietary Estoppel arises the normal starting point following Guest is an assumption (not presumption) that the simplest way to remedy the unconscionability would be to hold the promisor to the promise (para 75). This can be “tempered by circumstances” (para 61) and is subject to the “proportionality test” as propounded by Robert Walker LJ in Jennings v Rice [2002] EWCA Civ 159.
At para 72 of Guest Lord Briggs stated as follows:
“In my view the best summary of the proportionality test is that the remedy should not, without some good reason, be out of all proportion to the detriment”.
Numerous examples of proportionality were given in Guest comparing lifelong to relatively short-lived consequences (paras 10, 45 & 72). Lord Briggs also referred to “Lord Walker’s spectrum” from the “almost contractual” at one end which is likely to generate the strongest equitable reason for the full specific enforcement of the promise to the “less certain” at the other end where there may be much greater scope for departure. Other matters which may affect remedy include the effects on third parties and accelerated receipt.
Lord Briggs concluded with the following:
“I recognise that, in a case where there is perceived to be a large gap between the respective values of the promise and of the detriment this may leave the judge with a wide range of options” (para 79)
“In the end the court will have to consider its provisional remedy in the round, against all the relevant circumstances, and ask itself whether it would do justice between the parties, and whether it would cause injustice to third parties” (para 80)
Lord Briggs was of course at the helm of the Civil Justice Review and I have had the pleasure of chairing a Conference with him.
Mediation of course enables parties to resolve cases far more rapidly, with less stress and cost and perhaps more importantly a certainty of outcome determining the risks and vagaries of the judicial system as well as any potential adverse cost consequences.
Suspicion is of course rife in many cases particularly in relation to the representations and assurances relied upon as well as the detriment suffered.
Isolated comments unless incredibly clear will be much more difficult to substantiate.
It is often helpful if comments and representations are repeated over a course of time demonstrating that they can and should be relied upon. The context in which assurances are made can be everything.
There is of course one unconscionable truth: Evidence is key not only in the propulsion of cases but in facilitating party engagement. Witness evidence as well as contemporaneous letters and notes will all add flavour, context and weight to the discussions and negotiation and help to shape the settlement. Don’t forget of course to get office copies and valuations of the property or properties in question.
Good Luck.