More on Proprietary Estoppel

Will claim Solicitors, specialist no win no fee will dispute and will contest Solicitors, explore another recent decision on Proprietary Estoppel

What is a Proprietary Estoppel claim

These are claims which rely on the court’s inherent “equitable” jurisdiction to uphold what in layman’s terms is or ought to be a fair outcome, given the circumstances or because of a nonbinding “agreement” between parties. In general a party relying on Proprietary Estoppel in Will dispute or Will contest claims must show that either he/she received a representation in relation to the property or shareholding interests that he is claiming or that the Defendants knew that he/she believed he/she had an interest in those properties/shares and allowed him to continue in that belief. Further that he/she reasonably relied on the representation or belief and to his/her detriment. Finally that it would be unconscionable (unfair) not to afford him/her relief.

We provide some information about these matters in previous blogs, for example:

Another recent decision – Nazir v Jagota and others 2021 EWHC 2291

Here is another helpful recent decision:

We interrogate this decision for you below. It provides a useful snapshot on what can’t be the subject of a proprietary estoppel claim. We already know that it usually applies to properties and/or land. In Nazir the court also considered whether it could apply to “partnership” interests. It found it couldn’t because of the complexities of such arrangements which involved the mutual enforcement of rights and interests which an estoppel might conceivably prevent.

As per Mr Nicholas Thompsell (sitting as a Deputy Judge of the High Court):

Whilst it is established that the doctrine of proprietary estoppel does not apply only to land, but also can apply to other types of asset including choses in action, neither counsel were able to refer me to any case where the court considered whether the doctrine can apply to a partnership interest. I think it is open to doubt whether a partnership interest is a suitable asset to be the subject of a proprietary estoppel claim, given that partnership involves much more than just property rights – it gives rise to a plethora of mutual rights and duties and involves a personal relationship between the parties, not just rights in property. There was another problem. The properties it was supposed to apply to were owned by a company and not by those allegedly making representations (or the subject of acquiescence) which (allegedly) induced the Claimant to act substantially to his/her detriment. Although the
court conceded this could be departed from, plainly to a neutral observer, it could create a significant difficulty and water down the strength of ones case in this difficult area of law.

Again, what follows are the observations of Mr Thompsell:

  1. There is an obvious objection that applies to all the properties (except possibly the properties at Darras Road Newcastle, which are held in the legal ownership of TPL but where it was not clear to the court whether TPL is holding them on trust for Seema and Javaid). These properties are not owned by Seema and Javaid. They belong to TPL or Jaspia. Logically, an estoppel against Seema or Javaid therefore will not operate to give an equity in these properties to Parwaiz.
  2. This is not one of those rare occasions on which the corporate veil can be ignored under the “concealment” or “evasion” principles outlined by Lord Sumption in Prest v Petrodel Resources Ltd [2013] UKSC 34. Both companies have a real existence. TPL has shareholders other than Seema and Javaid, and has or has had employees. Both companies have creditors (including secured creditors) who rely on these companies owning their properties. I do not think there is any suggestion or evidence that these companies were interposed in order to defeat Parwaiz’ claim.
  3. I said at [202] that, for proprietary estoppel to apply, generally the property in question will belong to (or be property to be acquired by) the defendant making the representation or promise or acquiescing in the false belief. However, this general rule, can be departed from. This was shown by the Court of Appeal’s decision in Lloyd and MGL (Rugby) Limited v Sutcliffe [2007] EWCA Civ 153. I was referred to this case during closing submissions on the last day of the trial, although unfortunately there was not time for either counsel to address me on the implications of that case.

In general then this case reveals once again that some precision is required for the court to make an award based on the doctrine of Proprietary Estoppel and that the more complex the factual circumstances in these Will dispute and Will contest claims, the more difficult it is likely to be to prove and/or bring a generally consistent case and win it!

If you consider any of these facts and matters are of interest, are likely to apply to you, or you would like to ask us for more information about our no win no fee arrangement, or you simply want us to assess your claim, then please do not hesitate to contact us for a confidential no strings chat.

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