When Is A Promise Binding – Another Look in Winter v Winter (2024)
Proprietary Estoppel
Typically proprietary estoppel is raised in farming cases where someone is promised a farm in return for unpaid labour and this renegaded on when the farmer dies.
Given the increasing value of land as a commodity it is not surprising that cases involving land is making law time and time again, and this is despite the growing importance of having everything recorded in writing.
In order to successfully bring a claim for proprietary estoppel, you need to prove the following:
- Assurance – a promise was made to you (which created an expectation on your part)
- Reliance – you must have relied on that promise
- Detriment – in reliance of that promise you did something to your detriment
Proprietary Estoppel is an equitable so the court will try and do what is just. On the one hand the court will try and give effect to the expectations of the party relying on the promise, and on the other hand the court will try to compensate the party to extent of the detriment that they have actually suffered.
The Court of Appeal was called upon in the case of Winter v Winter (2024) to clarify the law in this area
Winter v Winter (2024)
The Facts
In 1964 Albert married Brenda and bought “Bower Farm” in Bridgwater, Somerset. The couple lived in a bungalow on the farm and carried on a market garden business from it
They had three children, Richard, Adrian and Philip
In 1988, Bower Farm had been transferred into the joint names of Albert and Brenda. In the same year, a partnership known as Team Green Growers (“the Partnership”) had been established to run the market garden business. Albert, Brenda and their three sons had equal shares in the Partnership
In 2000, Albert and Brenda declared that they held Bower Farm on trust for the Partnership. A year later, Brenda died leaving a will pursuant to which her interest in the Partnership passed to her sons. Richard, Philip and Adrian thus came to have 26.66% shares. Their father retained a 20% share
In 2004 the market garden business was transferred from the Partnership to a company, Team Green Growers Limited (“the Company”), in which Albert and his sons each held 25% of the shares. The land which the Partnership owned remained with it
The children in the early 1990s were paid about £100-£200 per week which increased to £700 per week between 2009 and 2015. But they also lived at their properties at a subsidised rent of about £100 per week form 2009 onwards and various expenses were met by the business/their parent.
In around 2013/2014, Albert become closer to Philip and more distant to Richard and Adrian
On 17 July 2017, Albert died. He left a will dated 30 April 2015 under which he left a gift of £20,000 to his then partner and the residue of his estate, including his interests in the business, to Philip.
The Initial Judgment
The First Decision was handed down in a judgment dated 29 September 2023.
The judge found that
I conclude that, whether or not Albert or Brenda said in terms that everything would belong to their sons one day, that was the reasonable inference from what they said, and that this was
what the sons reasonably understood them to have meant. Specifically, I conclude that Albert and Brenda did make assurances to Richard, Philip and Adrian which were reasonably understood by them to mean that if they committed to working in the family business the business and its assets would ultimately – i.e. after Albert and Brenda had gone – be divided equally among them. Each son therefore had an expectation, reasonably induced by their parents’ assurances, that they could expect to receive a one-third share in the business and its assets.
The judge also accepted that
- Richard and Adrian had relied on their parents’ assurances
- They had suffered detriment
- It would be unconscionable for the estate to renege on the assurances made
The Appeal
Philip appealed on the basis that Richard and Adrian had suffered no detriment
Richard said that he would have pursued a career in the military and Adrian would have sought site/demolition work and eventually becoming an independent contractor
Judgment on the appeal was handed down in June 2024
The court reminded the parties that “the fact that the law relating to proprietary estoppel seeks to prevent unconscionable conduct does not mean that a claimant can succeed without having suffered detriment”
“In other words, the assurances and detrimental reliance must make it unconscionable to resile, but unconscionability will not found a claim in the absence of detrimental reliance”
The court has to balance where the reliance has resulted in benefits (as well as disadvantages)
The judge in the first instance was right to conclude that
balancing the detriment against countervailing benefits can be considered as part of the question whether any detriment was suffered at all, as much as in deciding upon the appropriate remedy
the Court must weigh any non-financial disadvantage against any financial benefit even where the disadvantage is not susceptible to quantification. The exercise may be a difficult one, but it still has to be undertaken
The Court dismissed the appeal and concluded that the first instance judge had conducted the appropriate balancing and evaluation and was entitled to have made the decision he did
The non-financial/unquantifiable detriment of not pursuing an alternative career did outweigh the financial benefits the brothers derived from the family business
Where the brothers had devoted their lives in reliance, the court was prepared to accept the loss of opportunity was detriment enough without them having to prove the alternative career would have been more financially beneficial.
Final remarks
It does not appear that there is definitive judicial guidance and much will turn on the facts of each case and what the minimum necessary to do justice is. Claims based on proprietary estoppel are not easy ones to bring or succeed in; this is due to the length of time involved, there usually being very little contemporaneous evidence in support and much reliance on parties’ recollection of historical verbal discussions. Given the likely time, expense and risk involved, it makes it a very unattractive business to litigate these type of cases.
Can these claims be avoided? The obvious answer is to not make any assurances or representations in the first place, knowing that whether intended or not, someone may rely on this to their detriment. It is important in the family context that all members are involved in any decision making so there is no ambiguity about who will get what. Finally, much of the risk can be minimised with properly drafted contracts/agreements, as well as a Will and letter of wishes explaining why decisions about inheritance has been made.
If you are facing a legal dispute involving proprietary estoppel or any other complex inheritance or property matter, our dispute resolution team is here to help. With extensive experience in resolving contentious legal issues, we can provide expert advice tailored to your situation. Contact us today to speak with one of our specialists. Call 0330 822 3451 or request a callback.