Thorner v Major & Ors

The House of Lords allowed the appeal and restored the deputy judge's finding that proprietary estoppel had arisen in favour of the claimant, Mr David Thorner. The court confirmed the conventional three elements of proprietary estoppel—an assurance or representation, reliance and detriment—but emphasised that the required assurance need only be "clear enough" in its factual context rather than expressed in a precise formula. It held that oblique or indirect assurances may suffice if, judged objectively against the parties' relationship and background, they would reasonably be taken as intended to be acted upon and were in fact relied on to the claimant's detriment. The court also held that changes in the extent of the land between assurance and death do not necessarily defeat relief: the assurance can operate in relation to the identifiable property as it exists when the equity crystallises (noting section 24 of the Wills Act 1837).

The appellant, David Thorner, worked unpaid for many years on Steart Farm owned by his cousin Peter. He claimed that Peter had, by words and conduct over a long period (beginning with handing over a life policy bonus notice in 1990 and accompanied by various oblique remarks), assured him that he would inherit the farm, and that by relying on that assurance and refraining from pursuing other opportunities he had suffered detriment. The deputy judge (Mr Randall QC) found the assurance, reasonable reliance and detriment established and ordered that Peter's personal representatives hold the farm and farming assets on trust for David. The Court of Appeal ([2008] EWCA Civ 732) reversed, holding that the implicit statement was no more than a statement of present intention and that the judge had not found the assurance was intended to be relied upon.

The House of Lords reinstated the trial judge. The appeal raised two principal issues:

• Whether oblique or indirect assurances, judged in context, can satisfy the quality of assurance required for proprietary estoppel, and whether the claimant must prove the representor subjectively intended the representee to rely on the assurance.
• Whether uncertainty or subsequent changes in the extent of the farm defeated an equitable remedy.

The House held that assurance must be "clear enough" in its context; interpretation of oral assurances is fact-sensitive and the trial judge who heard the witnesses was entitled to find that Peter's conduct and remarks would reasonably be understood as an assurance intended to be relied upon. It was unnecessary that Peter had foreseen the claimant's specific acts of reliance. On the property point, the court held that an assurance relating to an identified property may properly be satisfied in relation to that property as it exists when the equity crystallises.

Relief sought: a declaration that the claimant had acquired a beneficial interest in the farm (proprietary estoppel/remedial constructive trust). Issues framed by the court: (i) sufficiency and quality of the assurance; (ii) reasonableness of reliance/detriment; (iii) certainty of the subject matter and effect of changes in the land's extent. Reasoning: the House gave weight to the trial judge's advantage in assessing oral evidence and background context; applied an objective test for how assurances would reasonably be understood; accepted that indirect statements may amount to an assurance; and held that the remedy can be adjusted to the identifiable property at the date the equity arises.

Appeal allowed. The House restored the deputy judge's order that proprietary estoppel (or a remedial constructive trust) had been established in favour of the claimant: the oblique assurances, judged objectively in their familial and factual context, were sufficiently clear to be relied upon, the claimant reasonably relied to his detriment, and the equity could be satisfied by awarding the beneficial interest in the farm as it existed at the representor's death.

First instance: Deputy Judge (Chancery Division) judgment, [2007] EWHC 2422 (Ch), in which the judge found assurance, reliance and detriment and declared the farm and farming assets to be held for the claimant. Court of Appeal: appeal allowed, [2008] EWCA Civ 732 (Lloyd LJ giving the leading judgment). House of Lords: appeal allowed, [2009] UKHL 18.