A promise was made. But is that enough?

For a proprietary estoppel claim, you must prove not only that promises were made, but that you, in reliance of these promises, acted to your detriment. The recent case of Gee v Gee and another [2018] EWHC 1393 (Ch) explores these familiar principles of a proprietary estoppel claim, but also brings up some further interesting points to consider. As this case shows, this is a claim that you do not have to only bring upon death, as the son brought this claim during his father’s lifetime.

The Background

This case involved a son successfully bringing a claim against his father and brother, as he was not transferred the land and company (the farming business) that he expected from the years of promises made by his father. The father owned the farming business and land together with his wife (who owned a minority interest). The land was owned by the father, mother and company in the respective shares of 7/18ths, 7/18ths and 4/18ths. The company consisted of 24,000 shares, all of which were held by the father except for one share being held by the mother. The father therefore held the controlling interest in the business and the land.

The claimant (JM) helped his father with the farming business for over 30 years, unlike his other brother (Robert) who only started to contribute since 2012. JM did receive a wage throughout the years that he contributed to the farming business, at a rate that was “equivalent to the minimum wage for an agricultural worker set by the Agricultural Wages Board”.

JM and his father had a difficult relationship, but as the Judge pointed out in this case, this indicates further that JM’s time and efforts spent farming were in reliance that he would have a majority interest in the business, and land. In 2014, the father transferred his entire assets into the name of his other son Robert, as opposed to JM. In an attempt to restore some balance to the situation regarding the transfer to Robert, JM’s mother transferred her minority entitlement to JM.
 
JM began a claim under proprietary estoppel and was claiming for a greater entitlement to that which he received.

The Result

The Judge commented that some of the representations were made indirectly by JM’s father to JM and this meant that JM could not reasonably rely on it. However, he did find instances in where such assurances were seriously and directly made to JM. The Judge then decided that detriment and reliance had also been established as JM had been working for long periods of time “without adequate compensation” and that JM “gave up the chance to better himself and work elsewhere”.  The Judge recognised the farming enterprise would not have been what it was today without JM’s input. The Judge decided that on the merits of this case, a claim of proprietary estoppel was made out.

Does the fact that the father wants to change his mind about where his assets go not matter at all? The answer is it will depend on the facts of the case. In this matter, the Judge found that for the father to retract from the representations he made, it would be “inequitable to do so”. 

The Judge interestingly pointed out that even though JM had received gifts from his parents in the past, that these were “given to him as a result of his status as a family member, not as compensation for time and effort spent farming”. The Judge found that even though it is relevant that JM’s mother transferred her share to JM, it was not enough to make up for the promises made by JM’s father.

When considering what remedy would be right to award, the Judge confirmed he would base this on expectations held by JM. However, he took into consideration that JM was aware that his father was “changing his mind about how the farm was to devolve” and that Robert had also started to contribute towards the business, which called for a reduction in what was to be given to JM.

The Judge decided that JM should return what he was given by his mother, and he should receive “52% of the shares [in the business] and 46% of the land” instead. A successful result for the claimant; JM gained a controlling interest in the business, which was at the heart of the matter.

The Judge did note that his approach would leave the “company in the hands of multiple shareholders” which could case further “trouble for the future” but he felt that this was “unavoidable”. A clean break was not awarded because the value of the land could increase dramatically in the years to come.

What About You?

Have you “positioned [your] life” around promises made to you? Have you relied on these assurances to your detriment? Or is somebody claiming that you have been making such promises to them?

We Can Help

At MW Solicitors, Our Mission is "To make quality legal services accessible to everyone" and we can provide a case review to examine the merits of your case.  We can help progress a claim or defend against one depending on the evidence provided.

Our Estate and Trust Disputes Team are waiting to take your call.  Don't delay, call us today on 020 3551 8500 or tell us about your case using our Contact Us page

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