Whilst finding yourself on the receiving end of a broken promise can be irritating and sometimes upsetting, in other cases this change of heart constitutes a serious betrayal that results in significant personal detriment.
This was evident in the recent case of Spencer v Spencer, in which Michael Spencer won a claim against the estate of his late father, John Spencer, on the basis that he had been promised he would inherit the family’s Lincolnshire farm. Despite these assurances, his father made a third and final Will before his death which saw the farmland passed into a trust rather than his son.
Whilst this would be an upsetting revelation in any case, the impact of such a decision is only intensified when it’s made on the back of multiple promises to the contrary – promises that the individual relied on to their own detriment.
In response to this decision, Michael submitted a type of claim known as ‘proprietary estoppel’ in a bid to be compensated for the detriment endured. Although the Supreme Court eventually ruled in favour of Michael, achieving such an outcome is far from straightforward as experienced by individuals that have brought forward similar cases.
In light of this recent judgment, important questions stand; what is proprietary estoppel, how is it contested and what does either party need to prove or disprove?
What does the law state?
A ‘proprietary estoppel’ claim is well explained in the case Thorner v Major [2009], where the claimant had worked on the defendant’s estate for over a decade without pay, believing he would inherit the land later down the line. Whilst this would have been the case under an earlier will, the defendant later retracted this will – an action that was successfully contested by the claimant.
In this case, the House of Lords held that it was possible for a representation to be made by conduct alone, so long as the conduct conveys the message to a reasonable person sufficiently clearly that the claimant was to have a proprietary interest in the land.
According to the wording of the law, the claimant must establish the following key elements to be successful:
- that a representation or assurance has been made to the claimant
- that the claimant has relied on it
- that the claimant has suffered a detriment as a result of the reliance
Once these elements are established, the court will consider whether fairness demands a remedy and what that remedy should be. It’s important to remember that the majority of failed claims occur as they stumble at one of these three hurdles – there is very little room for leniency in cases of this kind.
Context and clarity
The clarity and context in which assurances are made will also play a critical role in determining the outcome, as demonstrated in previous cases. In Habberfield v Habberfield [2018], it was shown that a proprietary estoppel could only be established if the relevant assurance was ‘clear enough’.
In this case, Lucy (the claimant) had worked on the family farm until her father’s death in 2014 at which point the entire estate was left to her mother, despite numerous assurances that she would take over the farm within her lifetime. Although these representations were ambiguous, the judge found that in context they were sufficiently clear to convey the idea that there would be a transfer of freehold property.
In other cases, clarity or a lack thereof, can be the reason for a judge dismissing a case and ruling on the side of a defendant. This was seen in the case of James v James [2018], where after a falling out, the father-son partnership was dissolved and Raymond (the son) was subsequently disinherited despite working on the farm his entire adult life.
Despite Raymond’s understanding of the arrangement, he was unable to present sufficiently clear and reliable evidence of an assurance that he would inherit the farm, as the judge differentiated between a state of ‘current intentions’ and a ‘promise of that conduct’. Effectively, saying that you intend to do something is not the same as promising to do it – a subtle yet important distinction that could make all the difference to a case.
Given that proprietary estoppel claims aim to achieve fairness, the court has the discretion to decide an outcome shaped by the context itself. In the case of James v James, the judge found that the father’s comments did not amount to assurances, noting that the father was generally reluctant to make promises in his communications.
Finding the appropriate remedy
In successful claims, the court has the discretion to decide what is fair compensation. However, there is still a lot of debate surrounding the extent of this – should the claimant’s expectation be compensated or the detriment suffered?
In the most recent case of Spencer v Spencer, it transpired that at one point in time Michael was very close to purchasing a truck stop as his own private venture, but was warned by his father that their relationship and his future inheritance would be impacted as a result.
This was supported by evidence from the family friend who owned the truck stop, who said that John had told Michael if he showed any interest in another business he would be removed from the will. As such, Michael pulled out of the deal and continued to work at the farm on a much lower wage than his colleagues – a decision that was obviously detrimental to his personal situation and was noted during the case.
In response to all the evidence, Justice Rajah stated that any benefits Michael had accrued from remaining on the farm did not outweigh the hardship he had suffered in return. He determined that a promise had been broken to the claimant detriment and awarded him the disputed farmland.
Always seek legal advice…
Cases of this kind can be difficult to navigate, especially when much of the evidence is anecdotal with a lack of documentation to prove or disprove either side.
Of course, these matters are made even more complex and stressful when it’s family members at the centre of the dispute and are further intensified when estate’s value is in the hundreds of thousands if not millions of pounds.
In this situation, cool heads are needed to sort through the various elements of the case, ensuring no stone is left unturned so that the client’s position is clearly and accurately represented throughout.
If you find yourself in a similar position, then it’s always best practice to contact an experienced team of agricultural legal experts from the outset – this will give you peace of mind that the case is being handled with your best interests first.
