The Inherent Danger of a Proprietary Estoppel Claim

Will claim Solicitors, specialist no win no fee will dispute and will contest Solicitors, consider the inherent problems of a claim of Proprietary Estoppel

What is a Proprietary Estoppel claim and why make it?

Proprietary Estoppel is a claim relying on the court’s inherent “equitable” jurisdiction which in layman’s terms might be described as a court’s overriding jurisdiction to uphold what is “fair”. Whilst not entirely accurate, this description is probably the closest one can get to defining a concept which has been developed over many centuries.

We previously described it in a previous blog as follows:

It amounts to a way of enforcing “rights” over a property (including land) where there has been an agreement between the property owner and the party asserting the “right” over the property in question. Unfortunately, “the agreement” is not enforceable in the usual way because it has not been committed to writing, is not in the appropriate form if it is in writing (e.g it is not a “deed”) and/or because there has been no “consideration” for the property. In other words where the person asserting the right to the property hasn’t actually paid for it directly. This can be unfair in certain situations in consequence of which the court can sometimes be persuaded to step in under it’s equitable jurisdiction to enforce the “agreement”.

It seems to be applied in mainly farming cases; typically the promise to an eldest son to leave him the farm in consequence of which the son in question works for a pittance for many years only to find that his father has made a Will with a contrary intention at the last minute. In these circumstances the courts are often persuaded to rectify the unfairness to the son who after all has worked for many years and to his considerable detriment (because he worked for a pittance).

What is the inherent problem with Proprietary Estoppel cases?

Quite simply it is the evidence; the very thing which has lead to the claim, the lack of formality in relation to the agreement to gift the property, can completely undermine it.
This was exactly the problem in the recent case of Pickering v Hughes 2021 EWHC 1672 (Ch):

Whilst the court in Pickering accepted on multiple occasions the inevitable consequence of the nature of the dispute and the imperfect bargain it was being asked to rule on meant there would be a considerable reliance on the imperfect recollections of members of the same
family tainted by what ever side of the dispute they had sided with, it could not avoid finding that the failure to record the bargain over very many years completely undermined the claim. In this regard it had half an eye on the fact that these were business people (the family operated multiple businesses) used to having to record critical business matters. As per Andrew Lennon QC sitting as a Deputy Judge of the Chancery Division at paragraphs 83 and 85:

  1. The defendants’ explanations for the failure to record or assert the alleged 1984 Agreement were, in my judgment, unconvincing. Given the significance of the alleged agreement, affecting as it did, the ownership of the most substantial asset held by Nora and Charles and the home of John and his family, it was to be expected that there would be a record of it, albeit an informal one. It is, in my judgment, simply not credible that John and Lorraine would have left the issue of documentation of their ownership rights in abeyance for over 30 years. Even if nothing had been committed to writing at the outset in 1984, I would have expected John and Lorraine to have appreciated the need to ensure that their rights of ownership were documented after those rights were questioned by Lisa in 2002. Documenting the agreement would have been inexpensive and easy to do at any time. John and Lorraine accept that they never asked for legal steps to be taken or sought advice.
  2. It was submitted on behalf of the defendants that it is a common feature of constructive trust and proprietary estoppel cases that the agreement on which the claim is based is oral and undocumented and that disputes commonly arise when the party with legal title steps back from an oral agreement, understanding or promise made many years previously. I accept this as a general proposition but the inferences to be drawn from a failure to record or assert an oral agreement obviously depend on the particular factual context. As was submitted by Counsel for Lisa, in the case of an agreement made between two cohabiting partners in a romantic relationship, who may never have thought of seeking legal advice relating to the property they both occupy, a failure to document an oral agreement or representation may well not cast doubt on the fact that the agreement or representation was made. The context of this case was different. The Hughes family were business people who dealt with properties frequently. Nora and Charles gave extensive, explicit consideration to their testamentary intentions, made adjustments to their wills where needed, and formally transferred their interests in their properties over the years when they intended to do so. The idea that an agreement such as the alleged 1984 Agreement would never have been recorded by the parties within any form of document over the years is inconsistent with the overall evidential picture. In my judgment,
    the reason that there are no documents evidencing the existence of the alleged 1984 Agreement is that there was no such agreement.

So what is the conclusion?

Our conclusion in the context of dealing with a similar Will dispute or Will contest claim under a no win no fee agreement is that whilst some reliance has to be placed on the recollections of witnesses whose partiality is likely to be inevitable in relation to recalling details of the agreement, those recollections must to a large extent agree with the actions of the parties during the period. For instance, if the land owner has made a Will, there should be some record arising from that process about the bargain that he/she has made. Similarly in relation to the occupation of the land during the period in question by the person asserting a right over the land; he/she must not have signed up to a tenancy or if they have, no rent is actually paid (or very little).

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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