Seminar 6 cases - land law PDF

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Thorner v Major [2009] UKHL 18 LAND LAW – PROPRIETARY ESTOPPEL – REQUIREMENTS Facts The claimant had worked on the defendant estate’s farm for over a decade without pay, believing that he would inherit the land when the defendant died. While the defendant once gave the claimant a bonus stating that it was for his ‘death duties’, he never explicitly told the claimant he would inherit. Under the original will, the property would have passed to the claimant, but the defendant retracted this will and died intestate. The claimant argued he should inherit the property due to proprietary estoppel. Issues A person will have an inchoate ‘equity’ in land if they can establish proprietary estoppel: that the land-owner made an unequivocal representation that the individual had an interest in the property, which that individual relied on to their detriment, such that it would be unconscionable for the landowner to renege on his assurance. The issue in this case was whether proprietary estoppel can arise in the absence of an explicit representation of proprietary interest. Held The House of Lords held that the claimant had established proprietary estoppel. The House of Lords held that it is possible for a representation to be made by conduct alone, so long as that conduct conveys the message to a reasonable person sufficiently clearly that the claimant was to have a proprietary interest in the land. This was to be determined by all relevant circumstances, including the context of any representations or conduct, the relationship between the parties and their understanding of the context. In most cases where the message behind the conduct is somewhat ambiguous, the House of Lords thought this would not normally act to defeat proprietary estoppel. 

Although no clear assurances had been made, proprietary estoppel requires only that assurances are ‘clear enough’, they need not be ‘clear and unequivocal’

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Proprietary estoppel can only operate on identified property, which may fluctuate in value

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The judge’s ruling that the farm should be inherited was restored by the House of Lords

On these facts, the conduct gave a sufficiently clear representation of proprietary interest to give rise to estoppel. Ashburn Anstalt v Arnold [1989] Ch. 1 LAND LAW – LEASE/LICENSE DISTINCTION Facts The defendant was the successor-in-title to a company which persuaded the claimant to sell his lease to the company in exchange for a promise that he would continue occupying the property rent-free until the defendant gave him one quarter’s notice to leave. No end-date was given. The defendant sought possession of the property without notice.

Issue The case of Street v Mountford held that a lease requires an exclusive grant of possession for a certain period of time and the payment of rent. The claimant argued that it had a valid lease over the property, binding the defendant by virtue of the ‘actual occupation’ overriding-interest provisions of Land Registration Act 1925. In the alternative, it argued that if the interest was a mere license, it should be a binding license or constructive trust. Held The Court of Appeal held that the claimant had a binding lease. The court held that the ‘period of time certain’ requirement would be satisfied if the lease terminated on a sufficiently certain event (such as after the expiry of notice). However, this case has been overruled on this point by the House of Lords in Prudential Assurance v London Residuary Body, and is therefore likely wrongly decided. The court’s second holding, that rent is not necessary for the creation of a tenancy, has yet to be overruled despite conflicting with the requirements of Street v Mountford. The court also held that if a lease had not existed, the license would not have bound the defendant, as licenses do not bind third parties. A constructive trust required it to be unconscionable to deny the claimant occupation, and the mere fact that the defendant knew about the license was insufficient to give rise to unconscionability. Gillett v Holt [2001] Ch 210; [2000] 3 WLR 815 Proprietary estoppel – assurances and detriment. Facts: The claimant Gillett, worked on Holt’s farm. Holt persuaded Gillett to abandon plans for college and to work for him instead. Holt stated several times that on his death the farm would be left to the claimant. The relationship between them subsequently soured and Holt executed a will in which the claimant did not receive the farm. After an investigation into how they were running the farm, the claimant was dismissed and subsequently claimed a proprietary estoppel. The trial judge found against the claimant, who appealed. Issues: Proprietary estoppel allows the claimant to claim an interest in land if the landowner makes a promise that the claimant will acquire an interest and the claimant acts to his detriment in reliance upon this. It was argued that there had been no irrevocable promise made by Holt who was free to change his mind if his circumstances changed. It was also alleged there was insufficient evidence of any detriment to the claimant. Held: The court found in favour of the claimant. There was no need for the defendant to do anything additional to make his promise irrevocable. In view of the promises made, reliance was presumed. The court pointed out that the three elements of the doctrine are often intertwined and are not separate. Whether there is a mutual understanding depends on all the factors. Detriment is not a narrow or technical concept and need not be financial. Gillett had been denied the opportunity of bettering himself by leaving school. Therefore, he had suffered a detriment in reliance upon Holt’s promise. Paragraph 245 Jennings v Rice [2002] Facts  The claimant (Jennings) worked as handyman for Rice. Over time, the claimant also looked after Rice, and for many years prior to Rice’s death, did so unpaid  Instead of payment, Rice promised that her house and furniture would become the claimant’s on her death  Rice died intestate Issue

Having found for the claimant on the grounds of proprietary estoppel, what value of award was the claimant entitled to? Decision  £200,000 Reasoning  Rice’s house and furniture were collectively worth £435,000, but a proportional judgment between a claimant’s expectation and detriment must be made  £200,000 was the judge’s calculation of the claimant’s detriment, and was a proportionate outcome  Two principles were outlined to assist with satisfying the equity generated through proprietary estoppel: 1. A court will only award the minimum equity to do justice 2. Where character of reliance falls not far short of an enforceable contract, a claimant’s expectation may be fulfilled; but if not, the claimant’s expectation interest value will constitute the maximum value of the award 

Davies & Another v Davies [2016] EWCA Civ 463 The appellant parents sought to appeal the decision at first instance as to the quantum of equitable relief that should be granted to their daughter following her successful proprietary estoppel claim against them. The net worth of the whole farming enterprise owned and run by the parents was £3.15m net of CGT; of which the great majority was attributable to the land owned outside of the business. The judge at first instance held that the daughter had, as a result of her parents' representations, formed a number of different (and sometimes mutually incompatible) expectations over the period from 1985 (when she was in her late teens) to 2012 when she left the farm for the last time. 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: i. working for long hours on the farm without full payment; and ii. the loss of the career (with shorter hours and better pay) that she would have had, had she not worked on the farm. In his first judgment the judge at first instance held that, in principle, the daughter was entitled to some form of equitable relief; a decision that was upheld on appeal. His second judgment, the subject of this appeal, decided the nature of the remedy. The judge rejected the claim that the farm should be transferred to the daughter in specie. He also rejected a claim that some lesser part of the farm should be transferred in specie, instead deciding that the daughter's equity should be satisfied by means of a monetary award, which he put at £1.3m. The sole question for the appeal was the size of the lump sum. Held In respect of the daughter's expectation Lewison LJ considered the case of Jennings v Rice [2002] EWCA Civ 159 observing that it was a "useful working hypothesis" to take a sliding scale, by which the clearer the expectation, the greater the detriment, and the longer the period over which the expectation was reasonably held, the greater the weight that should be attached to the expectation. The judge at first instance found that the essence of the expectation was that the daughter was the only person who could fulfil her parents' wishes of keeping the business in the family after their death. The Court of Appeal held that this conclusion did not take into account the trial judge's findings as to the changing nature of Mr. and Mrs. Davies' wills, which left their estate to all three sisters, and subsequently to a discretionary trust.

The parents' offer of £350,000 had been calculated so as to reflect the value of their daughter's expectations in relation to inheriting the business (as opposed to the land). Lewison LJ held that the judge had not properly analysed the parents' offer noting that the only bases upon which departure from the offer could be justified were: firstly, the daughter's disappointment at not inheriting the land and second, her non-financial detrimental reliance While observing that neither factor was capable of precise valuation, Lewison LJ found that an increase of £150,000 on the offer made by Mr. and Mrs. Davies would be sufficient. The appeal was thus allowed, and the judge's award was reduced from £1.3m to £500,000....