‘Law of Proprietary Estoppel’

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The following principles were stated by Mr Andrew Sutcliffe KC in Armstrong v Armstrong & Anor [2024] EWHC 2989 (Ch) (22 November 2024): https://www.bailii.org/ew/cases/EWHC/Ch/2024/2989.pdf

  • Testamentary freedom is firmly rooted in English law.
  • It is a well established principle that a private individual is entitled to dispose of his property in any way he chooses: see Blathwayt v Baron Cawley [1976] AC 397.
  • In order [for C] to establish his claim in proprietary estoppel, he must prove that [T] made him an unambiguous promise which reasonably appeared intended to have been taken seriously and which [C] could reasonably have understood as being one on which he could rely (the promise requirement); he reasonably relied on that promise and as a result of such reasonable reliance, he suffered substantial detriment (the reliance and detriment requirements).
  • In order to fulfil the promise requirement [C] must prove that he believed the promises or assurances made to him by [T]  were binding and irrevocable. Neither statements made to [C]  as to [T’s]  current intention nor mere encouragement by [T]  to believe that he would inherit the farm would be enough.
  • What is required is a promise which was intended to be taken as such.
  • The stringency of the need for the relevant statement to be made with the intention of it being taken as a serious promise which could reasonably be relied on is illustrated by the decision in Cook v Thomas [2010] EWCA Civ 227, in which the Court of Appeal upheld the trial judge’s finding that words substantially along the lines of the property in dispute “all going to be yours when I am gone” were insufficient to constitute a promise on which an estoppel could arise but were rather an indication of the deceased’s then expectation that if all proceeded smoothly the defendants would be allowed to live at the farmhouse after the deceased’s death: see [35] and [36].
  • Similarly, in James v James [2018] EWHC 43 (Ch), the court found that statements made to the claimant by his father that he would inherit the farm after his death were insufficient to fulfil the promise requirement as they were merely a statement of his then current intentions: see [24].
  • That was so notwithstanding that the court accepted that the claimant, as the only son of a farming family, reasonably expected to inherit his father’s farm and that such expectation was shared by other members of the family: see [30].
  • The question of how clear the promise or assurance must be is dependent on the context in which it was made. As Lord Walker said in Thorner v Major [2009] 1 WLR 776, HL at [56]: “I would prefer to say (while conscious that it is a thoroughly question-begging formulation) that to establish a proprietary estoppel the relevant assurance must be clear enough.
  • What amounts to sufficient clarity, in a case of this sort, is hugely dependent on context. I respectfully concur in the way Hoffmann LJ put it in Walton v Walton [1994] (in which the mother’s “stock phrase” to her son, who had worked for low wages on her farm since he left school at 15, was “You can’t have more money and a farm one day”). Hoffmann LJ stated, at para 16: “The promise must be unambiguous and must appear to have been intended to be taken seriously.
  • Taken in its context, it must have been a promise which one might reasonably expect to be relied upon by the person to whom it was made.”
  • The relevant promise must be made by the person with the interest himself or with his actual authority. If that actual authority is missing, it makes no difference if a claimant believes that the person making the promise had such authority: see Fielden v Christie-Miller [2015] EWHC 87 at [25]-[26].
  • The reliance and detriment requirements 12 13 14 15 Any detriment which a claimant suffers is only relevant to the issue of proprietary estoppel to the extent that it was carried out in reliance on the promisor’s promise.
  • The reliance requirement therefore raises an issue of causation: see Snell’s Equity (34th Ed.) at (12-043). In order for the reliance element to be fulfilled it is necessary to establish that the course of action which is said to have given rise to the detriment was undertaken on the faith of the promise and not merely in its belief: see Taylor’s Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133 at 156C.
  • The reliance requirement is generally stated as requiring proof of a “sufficient causal link between the assurance relied on and the detriment asserted”: see Gillett v Holt [2001] Ch 210 at 232E-F.
  • In practice, this amounts to the “but for” test (i.e. but for the promise would the claimant have acted in the way that is said to have given rise to the detriment): see Snell’s Equity (34th Ed.) (at 12-043) and The Law of Proprietary Estoppel (2nd Ed.) by Ben Macfarlane (at 3.112-3.113 and 3.174-3.187).
  • As to detriment, this must result directly from the reasonable reliance: see Thorner v Major at [29]. It must also be detriment suffered by the claimant directly. Detriment suffered by parties related to him is not relevant: see The Law of Proprietary Estoppel (2nd Ed.) by Ben Macfarlane (at 4.107 to 4.112). Detriment is “not a narrow or technical concept.
  • The detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial”: see Gillett v Holt at 232D-E.
  • In testing detriment, the court does not undertake an exercise in forensic accounting but must “stand back and look at the matter in the round”: see Gillett v Holt at 233H.
  • In assessing whether the requirement of substantial detriment has been met, the court must take into account any countervailing benefits acquired by the claimant as a result of his reliance: see Snell’s Equity (34th Ed.) (at 12-044).
  • This requires the court to weigh the disadvantages suffered by the claimant against any countervailing advantages: see Henry v Henry [2010] 1 All ER 988 at [53].

Case summary:

A farmer [‘C‘] succeeded in his proprietary estoppel claim against the estate of his late father (Armstrong v Armstrong, 2024 EWHC 2989 Ch). The testator [‘T‘] made a new will in January 2020 only months before his death, thereby repudiating his son’s reasonable expectation of inheriting his farm in accordance with promises made to him for more than 35 years. The High Court also concluded that T failed to make reasonable financial provision for his son in his will.

Extract from the judgment:

The Proprietary Estoppel Claim

6                 Testamentary freedom is firmly rooted in English law. It is a well established principle that a private individual is entitled to dispose of his property in any way he chooses: see Blathwayt v Baron Cawley [1976] AC 397. Alan was fully entitled to change his will shortly before his death by leaving the farm to his grandson and nothing to Richard, unless Richard is able to establish that Alan was prevented from doing so by the doctrine of proprietary estoppel or that he has a claim on Alan’s estate by virtue of the provisions of the 1975 Act. I consider first Richard’s proprietary estoppel claim because it is his primary claim. His claim under the 1975 Act is only brought in the alternative.

The law on proprietary estoppel

7                 In order to establish his claim in proprietary estoppel, Richard must prove that:

7.1           Alan made him an unambiguous promise which reasonably appeared intended to have been taken seriously and which Richard could reasonably have understood as being one on which he could rely (the promise requirement);

7.2           he reasonably relied on that promise and as a result of such reasonable reliance, he suffered substantial detriment (the reliance and detriment requirements).

The promise requirement

8                 In order to fulfil the promise requirement, Richard must prove that he believed the promises or assurances made to him by Alan were binding and irrevocable. Neither statements made to Richard as to Alan’s current intention nor mere encouragement by Alan to Richard to believe that he would inherit the farm would be enough. What is required is a promise which was intended to be taken as such.

9                 The stringency of the need for the relevant statement to be made with the intention of it being taken as a serious promise which could reasonably be relied on is illustrated by the decision in Cook v Thomas [2010] EWCA Civ 227, in which the Court of Appeal upheld the trial judge’s finding that words substantially along the lines of the property in dispute “all going to be yours when I am gone” were insufficient to constitute a promise on which an estoppel could arise but were rather an indication of the deceased’s then expectation that if all proceeded smoothly the defendants would be allowed to live at the farmhouse after the deceased’s death: see [35] and [36]. Similarly, in James v James [2018] EWHC 43 (Ch), the court found that statements made to the claimant by his father that he would inherit the farm after his death were insufficient to fulfil the promise requirement as they were merely a statement of his then current intentions: see [24]. That was so notwithstanding that the court accepted that the claimant, as the only son of a farming family, reasonably expected to inherit his father’s farm and that such expectation was shared by other members of the family: see [30].

10             The question of how clear the promise or assurance must be is dependent on the context in which it was made. As Lord Walker said in Thorner v Major [2009] 1 WLR 776, HL at [56]:

“I would prefer to say (while conscious that it is a thoroughly question-begging formulation) that to establish a proprietary estoppel the relevant assurance must be clear enough. What amounts to sufficient clarity, in a case of this sort, is hugely dependent on context. I respectfully concur in the way Hoffmann LJ put it in Walton v Walton [1994] CA Transcript No 479 (in which the mother’s “stock phrase” to her son, who had worked for low wages on her farm since he left school at 15, was “You can’t have more money and a farm one day”). Hoffmann LJ stated, at para 16:

“The promise must be unambiguous and must appear to have been intended to be taken seriously. Taken in its context, it must have been a promise which one might reasonably expect to be relied upon by the person to whom it was made.”

11              The relevant promise must be made by the person with the interest himself or with his actual authority. If that actual authority is missing, it makes no difference if a claimant believes that the person making the promise had such authority: see Fielden v Christie-Miller [2015] EWHC 87 at [25]-[26].

The reliance and detriment requirements

12              Any detriment which a claimant suffers is only relevant to the issue of proprietary estoppel to the extent that it was carried out in reliance on the promisor’s promise. The reliance requirement therefore raises an issue of causation: see Snell’s Equity (34th Ed.) at (12-043). In order for the reliance element to be fulfilled it is necessary to establish that the course of action which is said to have given rise to the detriment was undertaken on the faith of the promise and not merely in its belief: see Taylor’s Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133 at 156C.

13              The reliance requirement is generally stated as requiring proof of a “sufficient causal link between the assurance relied on and the detriment asserted”: see Gillett v Holt [2001] Ch 210 at 232E-F. In practice, this amounts to the “but for” test (i.e. but for the promise would the claimant have acted in the way that is said to have given rise to the detriment): see Snell’s Equity (34th Ed.) (at 12-043) and The Law of Proprietary Estoppel (2nd Ed.) by Ben Macfarlane (at 3.112-3.113 and 3.174-3.187).

14              As to detriment, this must result directly from the reasonable reliance: see Thorner v Major at [29]. It must also be detriment suffered by the claimant directly. Detriment suffered by parties related to him is not relevant: see The Law of Proprietary Estoppel (2nd Ed.) by Ben Macfarlane (at 4.107 to 4.112).

15              Detriment is “not a narrow or technical concept. The detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial”: see Gillett v Holt at 232D-E. In testing detriment, the court does not undertake an exercise in forensic accounting but must “stand back and look at the matter in the round”: see Gillett v Holt at 233H.

16              In assessing whether the requirement of substantial detriment has been met, the court must take into account any countervailing benefits acquired by the claimant as a result of his reliance: see Snell’s Equity (34th Ed.) (at 12-044). This requires the court to weigh the disadvantages suffered by the claimant against any countervailing advantages: see Henry v Henry [2010] 1 All ER 988 at [53].