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Proprietary Estoppel Explained

By April 24, 2018January 28th, 2021Dispute Resolution

Proprietary estoppel is a principle in law, where one person claims that they have been promised property and have put themselves at a disadvantage in expectation, but ultimately have not received what they claim they were promised. This is best explained by way of case authorities. One of the more famous cases is that of Davies & Anor v Davies [2016] EXCA Civ 463 which provided some guidance in relation to the courts view of claims based on proprietary estoppel.

The case involved a family who run a farming business. Representations were made to the daughter to the effect that she would inherit the family business. Throughout the years the family, like many others had disagreements and the intentions of the parties varied. The case was brought by the daughter to seek a stake in the business and the assets. She had placed reliance on the representations made by her parents and the reliance on these representations had led to detriment.

The judge at first instance held that the daughter had, as a result of her parents’ representations, formed a number of different expectations. At times she understood that she would inherit the farm and business and, for a period of some years, she believed that she had already been made a partner in the business.

In relation to the question of detrimental reliance, the trial judge found that this was not a case in which the daughter “positioned her whole life on the basis of her parents’ assurances”. The judge identified two broad strands in the detriment that she had suffered:

  1. working for long hours on the farm without full payment; and
  2. the loss of the career (with shorter hours and better pay) that she would have had, had she not worked on the farm.

In the first instance the court was satisfied that the daughter had a case and £1.3 million was awarded. The decision was appealed to The Court of Appeal and the award was reduced to £500,000.

The ingredients necessary to raise an equity are (a) an assurance of sufficient clarity (b) reliance by the claimant on that assurance and (c) detriment to the claimant in consequence of his reasonable reliance.

In deciding how to satisfy any equity the court must weigh the detriment suffered by the claimant in reliance on the defendant’s assurances against any countervailing benefits he enjoyed in consequence of that reliance.

Alison Rocca

Author Alison Rocca

Alison is a solicitor in our Litigation department.

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