Proprietary Estoppel: Quantifying An Interest

Author:Mr Michael Gouriet and Jemma Thomas
Profession:Withers LLP
 
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In May 2014 I wrote a blog about the dairy farming case of Davies v Davies [2014] EWCA Civ 568 (click here to view). Almost exactly 2 years later, the Court of Appeal judgment quantifying Eirian's claim has been published.

The essence of the doctrine of proprietary estoppel is to do what is necessary to avoid an unconscionable result. The judge at first instance found that the appropriate equitable relief would be a financial award to Eirian from her parents, rather than a transfer of property, licence to occupy or interest in the farming business. Whilst neither party questioned that decision, Mr and Mrs Davies appealed the amount. They had offered their daughter £350,000, but the judge decided that they should pay £1.3m. The Court of Appeal ruled that the award was too high, and instead ordered them to pay £500,000.

The Court of Appeal paid particular attention to Eirian's expectations during her relationship with her parents. Unlike many other proprietary estoppel cases, there was not a consistent promise or assurance that was relied upon by the claimant. In this case Eirian had at different times expected different things: to inherit the farm and land; to succeed her parents in running the farm when they retired; to attain an interest in the farming partnership; or to attain a shareholding in the family company. Some of these expectations were relatively short lived - for example Eirian acknowledged in evidence that she effectively gave up any notion of inheriting the farm when she chose to marry against her parents' wishes in 1989.

The Court of Appeal confirmed the requisite ingredients of proprietary estoppel as being (a) an assurance (promise) of sufficient clarity, (b) reliance by the claimant on that assurance and (c) detriment to the claimant in consequence of reliance on the assurance. Lewison LJ approved of the idea that there should be a sliding scale by which the clearer the expectation, the greater the detriment and the longer the passage of time during which the expectation was reasonably held, the greater would be the weight that should be given to the expectation. Given this was a case where expectations moved significantly over time, and where the Court of Appeal emphasised the need for proportionality of remedy sought to detriment suffered, it is un surprising that the Court concluded that the original award of £1.3m was too high.

The Court has to look at...

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