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Proprietary estoppel - when is a promise not a proprietary promise?

5 min Read

Lessons to learn from Windsor-Clive v Rees [2021]

Proprietary estoppel claims are brought to enforce a promise made (and later broken) in respect of property or land. The textbook example involves an adult child who has spent years working for a low wage on their parents’ farm on the promise that they would one day inherit the farm, only to later find that the farm has been left to someone else in the Will.

The case of Thorner v Major [2009] established three key elements necessary to successfully bring a claim.

  1. That an assurance has been made to the claimant;
  2. That the claimant has relied on it; and
  3. That the claimant has suffered a detriment as a result of the reliance.

Such claims can be tricky as they usually turn on witness evidence and whose version of events is most persuasive to the judge.

The recent case of Windsor-Clive v Rees [2021] provides a warning to prospective claimants that the assurance relied upon must have been sufficiently specific as to the property purportedly promised.

Facts of the case

The claimants in this matter were landlords of a farm in Cardiff. The second defendant’s late father, Jenkin Rees, lived and worked on the farm under tenancies dating back to the 1960s. The second defendant, Philip Rees, left school in 1977 and worked on the farm with his father. Jenkin Rees died in September 2021 and so Philip Rees was thereafter substituted as a defendant as his father’s personal representative, as well as being a defendant in his own right.

In 2016 and 2017 the claimants obtained planning permission for a substantial housing development on the farm and surrounding land, to be carried out in phases over a 20 year period. The claimants were required to pay the Reeses a statutory compensation of five times the rent (being £45,000) in order to take possession of the farmland; in fact they offered to pay the Reeses £500,000 for possession of the land, but this offer was not accepted.

In 2018 the claimants served notices to quit in respect of each tenancy, which included the farmhouse in which Philip Rees lived with his mother. Jenkin Rees was unsuccessful in his attempts to challenge the notices to quit and the claimants subsequently brought a claim for possession of the farm in October 2020.

Jenkin Rees filed a defence in January 2021 which argued that he had relied on assurances made by the agents of the claimant to his detriment. He claimed that the claimants promised that they would only seek possession of the farm on several, ultimately unfulfilled, conditions.

  1. No part of the farm would be taken back by the claimants until required to be built on.
  2. He and his wife would not have to give up possession of the farm house.
  3. Phillip Rees would succeed to the tenancy of the farm.
  4. He and/or Philip would be offered fair compensation and, if available, further land on the estate to continue their farming business or to be compensated for the costs of relocating their farming business.

It was argued that the Reeses had acted to their detriment in that they had taken on extra responsibilities, they had not objected to the claimants’ applications for planning permissions, they gave up some land to the claimants for the development, and Phillip had committed to remain at the farm in his 40s and 50s rather than securing a livelihood elsewhere.

Unusually, the Reeses did not quantify the share of the farm to which they thought they were entitled. Rather, they sought a declaration that the claimants’ ability to recover possession of the farm was subject to an equity in favour of the Reeses, or such satisfaction of the equity as the court sees fit.

The High Court’s decision

The Rees’ claim for proprietary estoppel failed in the High Court and the judge found in favour of the claimants, allowing them to take possession of the farm.

His Honour Judge Jarman QC considered Thorner v Major [2009] which established that a proprietary estoppel claim can only be successful where the relevant assurance is sufficiently clear and relates to “identified property owned (or, perhaps, about to be owned) by the defendant”. Philip Rees accepted in cross-examination that, although relocation to land on the claimants’ estate was mentioned as part of the promises, no specific land was ever identified as available. Philip also accepted that he and his father knew that they may have to leave and find an alternative farm, but that was again on unidentified land. Philip and Jenkin had also expected to be tenants of any such alternative farm though they hoped that they would be provided with compensation to buy at least some of the land. The Reeses were therefore unable to demonstrate that they had been made a promise that was proprietary in nature.

His Honour Judge Jarman QC commented that, even if there was a sufficient proprietary element to the promises, the promises were not sufficiently clear or certain. Accordingly, the only available remedy to Philip Rees and his father’s estate would be monetary rather than proprietary in nature.

Although the proprietary claim had failed at the first hurdle of the test as set out in Thorner v Major, the judge went on to consider whether detrimental reliance had been established for completeness. The first head of detriment, namely that the Reeses carried on farming in a good manner, was dismissed as they were contractually obliged to do so in any event. Although additional tasks were taken on as a result of the development, the Reeses were paid for the additional work. Philip Rees was also unable to persuade the judge that he had forgone the opportunity to pursue alternative career paths as, on examination, he told the court that he had carried on farming because he didn’t know any different and it was what he had grown up with. As to not objecting to the planning permissions, in fact Philip Rees accepted when the documentation was put to him that he had in fact made objections.

Take home lessons

The case of Windsor-Clive v Rees serves as a warning to parties seeking to advance a proprietary estoppel claim that the promises relied on must relate to a specific piece of land. Where that may cause difficulty, there are alternative estoppel claims which may be more appropriate to pursue, for example, promissory estoppel or estoppel by representation. However, with any estoppel claim, the promise relied upon must still be sufficiently clear.

Prospective claimants also need to consider carefully whether they have actually suffered any real detriment in reliance of the promises made to them. Clearly it will not be sufficient to have taken steps one was already contractually obliged to take. Nor is a judge likely to be persuaded by a claimant who simply says he might have pursued an alternative career, for example, without evidence setting out details of alternative career plans.

On a more practical point, this case demonstrates the importance of engaging in alternative dispute resolution and considering any offers made very carefully. The Reeses declined an offer of £500,000 in 2016, only to spend the next five years embroiled in expensive litigation which ultimately resulted in a loss at trial.

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Briefings Individuals & families Proprietary estoppel inheritance disputes estoppel