Wormall v Wormall

In proprietary estoppel, relief is discretionary but must be calibrated to the equity actually raised and limited to what is necessary to avoid an unconscionable result. An expectation is measured by the assurances reasonably created, not by a wider expectation of remaining indefinitely. Where assurances support occupation only while land remains a family farm, an event ending that status does not, without more, justify compensation for the resulting relocation. Once the equity is satisfied by a declaration of occupation for the relevant period, there is no separate outstanding equity supporting compensation for the same departure. Orders should avoid arbitrary end dates and may include practical protection against a premature disposal.

Robert Wormall owned Ibstock Grange Farm, where his daughter Jill operated an equestrian business. The recorder found that proprietary estoppel entitled Jill to remain in occupation for a limited period. She also awarded Jill £50,000 compensation for relocating her business, dismissed Robert’s possession claim and ordered him to pay the costs.

Robert appealed the compensation award and consequential provisions. The estoppel declaration itself was not challenged. The central issue was whether the limited equity found by the recorder could properly be supplemented by compensation because the breakdown of Robert’s marriage required Jill to leave earlier than she had expected.

1. Appeal allowed. Lord Justice Jonathan Parker held, with Lord Justice Neuberger and Lord Justice May agreeing on the essential result, that the £50,000 award was wrong in principle and had to be set aside.
2. The equity was defined by the reasonable expectation created by Robert’s conduct. That expectation was that Jill could continue using the farm for her business while it remained the family farm. It was not an assurance that she could remain for as long as she wished. The breakdown of Robert’s marriage caused the farm to cease being the family farm, but that event was not a consequence of any assurance or representation. Robert was therefore not liable to compensate Jill for the resulting relocation.
3. Once an equity has arisen, the court has a discretion as to the form of relief, applying the approach discussed in Jennings v Rice [2003] 1 P&CR 100 and the minimum-equity principle referred to in Gillett v Holt [2001] Ch 210. The relief must satisfy the equity raised and avoid an unconscionable result. Having satisfied the identified equity by a declaration of continued occupation, the recorder had no basis for awarding additional compensation for the same early departure.
4. Lord Justice May explained that the fixed dates in the recorder’s declaration were arbitrary. The substituted declaration should entitle Jill to remain for the purposes of her business until completion of any disposal of the farm, whether by sale to a third party or transfer between the spouses. Robert was to keep her informed of the disposal process and protect her against a premature disposal. Jill was to give up possession when the disposal completed, so that vacant possession could be delivered to the purchaser or recipient. Robert was awarded the costs of the appeal, while Jill retained her costs order below.

1. Court of Appeal (Civil Division): On 25 November 2004, the court allowed the appeal, set aside the £50,000 compensation award and directed that the declaration be modified so that Jill could remain until disposal of the farm. [2004] EWCA Civ 1643
2. Leicester County Court: On 12 May 2004, Recorder Kate Thirlwall QC found proprietary estoppel, dismissed Robert’s possession claim, awarded Jill £50,000 compensation and ordered Robert to pay her costs.