It’s a familiar tale. A son or daughter toils away for many years at the behest of their parents, perhaps on a farm, for little pay at the expense of sacrificing a career or even a social life.
Their anticipation of being duly rewarded for all their hard work is then shattered when they find the farm in whole or part has or will be left to someone else or perhaps to a charity.
What can they do? There have been a spate of such claims recently and they’re on the increase. Where a promise has been made, which is later relied upon to the detriment of another, it may be possible to ask the Court to step in and make the promise take effect.
What is proprietary estoppel?
Known as proprietary estoppel, which is an overly technical term which has no obvious link to its subject matter. In essence, such claims are to make good a promise but there are strict criteria to be met for them to be successful.
Whilst it is easy to make and break a promise, it can be an uphill legal struggle to hold it to its maker, either during their lifetime or often after their death. Typical scenarios involve farms, businesses or other property which are principally the subject of the dispute.
Example of proprietary estoppel
Farmer A promises child B that if they help him with the farm for little or no pay over a long period of time, then one day all this will be yours. In reliance, B may invest in the farm and/or gives up a chosen career and/or their social life, only to find much later it was left in A’s Will to his other children or a charity. Or perhaps there was no Will and the Estate passes by intestacy in equal shares to B and their siblings with whom they have little in common, except parents.
Does B resign themselves to receiving nothing or perhaps just a share of the farm to which they alone devoted so much money, time and energy? Or do they turn and fight for what they were promised? It’s never an easy decision as it often involves close family members. But if they choose to fight there will be three hurdles to overcome.
Proving the case
First, there had to be a promise which was clear enough on its face. Second, the promise has to be relied upon because there is no claim if B acknowledges they would have stayed and worked on the farm regardless of the promise. Thirdly, B must have acted to their detriment. This means they must have given up something tangible and substantial, like an alternative career.
Taken together, Farmer A must have acted unconscionably and if all the hurdles are crossed the court will make the promise stick, but with some important conditions.
Any award must be proportionate to the detriment suffered and the court will only award the minimum to do justice. If B lived at the farm rent free, that must also be taken into account.
Proprietary estoppel case law
Such claims will turn on their own facts. The recent well reported dispute in Davies v Davies [2015] provides a good example of how the promise/reliance/detriment factors must combine to lead to a successful claim, although it is currently subject to an appeal to be heard in April 2016.
More recently in Rawlings v Chapman [2015], the claimant was unsuccessful because the court concluded no promise had been made by the deceased and the closeness of his relationship was called in to question by the deceased’s longstanding and simultaneous relationships with other parties.
Both these cases also reinforce the notion that these disputes relate mainly to the farming community. However, that’s not the case and often the dispute concerns a typical family home.
But whatever the background and circumstances, specialist advice is always necessary. We regularly act for claimants and defendants in proprietary estoppel claims. If you think you may have grounds for such a claim or are facing such a claim, we would be pleased to speak with you.
How Nelsons can help
Kevin Modiri is a Partner in our Dispute Resolution team, specialising in inheritance dispute claims.
If you have any questions in relation to the subjects discussed in this article, please contact Kevin or another member of our expert team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.