News

Proprietary Estoppel: Just an empty promise?

  • June 08, 2018
  • By Hunters Law

A number of 2018 cases have turned on the equitable principle of ‘proprietary estoppel’ in a farming context.

Under the principle of proprietary estoppel, the court may enforce an assurance or promise given by one person to another if that person has relied on it to their detriment. In well-publicised faming cases, such assurances have typically involved promises to inherit the farm on the farmer’s death or retirement, as a result of which the claimant has worked for nothing, or very little, over a long period of time in the expectation of receiving the farm ultimately.

The recent cases confirm that the evidential burden of proving a proprietary estoppel claim remains high, and mere passing comments are unlikely to be sufficient. What is required is an assurance or promise of future conduct intended to be acted upon. However, as each case will turn on its particular facts, property owners and potential claimants should be aware of the circumstances in which a claim might arise, keep them in mind (as the relevant facts often develop over many years) and, if necessary, keep records to support their positions.

Usually an assurance will be in the form of words or conduct that encourage the belief that property will pass to someone in the future. However, a recent case highlights that inaction on the part of an owner might also constitute an assurance if they have acquiesced to someone acting to their detriment in reliance on a belief that they have formed.

As above, where a claimant has worked on the farm for nothing or very little, detrimental reliance might be clear to spot. However, in another recent case, the claimant’s working habits were not unexpected for a normal person in her position, but still amounted to detrimental reliance.

A claim for proprietary estoppel might be seen as a last resort for a disappointed party and will usually be brought after the event which confirms their disappointment. Any claim will bring uncertainty, emotional stress and significant financial expense to the claimant and defendant. If you think you may be affected by the principles of proprietary estoppel in any way, either as a property owner or potential claimant, we would recommend taking legal advice before rather than after the event, as there may be alternative means of resolving the issue.

For more information, please contact the partner having responsibility for your affairs or any partner in the Private Client Department here.

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