Shirt v Shirt

Proprietary estoppel requires a sufficiently clear representation, reliance and conduct making it unconscionable to resile from the assurance. General hopes of succession, particularly where the parties distinguish the farming business from the land, do not establish an enforceable equity. A constructive trust cannot be used to give a partner a personal succession right which falls outside the partnership’s property and duties. Partnership and trusteeship duties concerning a tenancy extend to preserving the partnership asset, but not necessarily to securing an individual’s statutory succession rights.

The claimant, Stanley Shirt, brought possession proceedings against his son Alan and Alan’s wife, Virginia, concerning land at Syda Farm. The possession claim was reformulated after it became accepted that Syda Farm was partnership property and that Alan was a co-owner. Alan counterclaimed for a proprietary estoppel or constructive trust giving him the farm, damages or relief for the loss of the Rufford Farm tenancy, and partnership accounts.

The principal issues were whether representations made during the family farming business created an equity in the freehold land, whether Stanley’s failure to preserve the Rufford tenancy breached a fiduciary duty owed to Alan, and how Marie Shirt’s Will affected the partners’ interests.

1. Possession claim. The possession claim failed. Alan was a co-owner of Syda Farm, and the alleged interference with Stanley’s enjoyment of the farm did not substantially impede his occupation or access.
2. Proprietary estoppel and constructive trust. The governing doctrine was reaffirmed in Thorner v Major [2009] 1 WLR 776. A representation may arise from words or conduct, but a representation by words must be sufficiently clear. Its meaning is assessed objectively where the representee reasonably understands it in a particular sense. Reliance may be inferred. The relevant question was whether the family discussions crossed the line from hope or aspiration into a sufficiently clear commitment on which Alan acted to his detriment.
3. The alleged statements that the farm would come to Alan were ambiguous. In context, the parties commonly distinguished the farming business from ownership of the land. Alan received a partnership interest and adequate reward for his work. The evidence did not establish a sufficiently clear promise or unconscionability. The proprietary estoppel and constructive trust claims therefore failed. The judge also rejected a remedial constructive trust as a free-standing doctrine, while recognising the practical similarity between relief for proprietary estoppel and a remedial trust.
4. Rufford tenancy. Stanley deliberately risked the loss of the tenancy by failing to pay rent after receiving the notice to pay. The tenancy was a partnership asset, so this was prima facie a breach of partnership duty during dissolution. However, Alan’s statutory succession rights under the Agricultural Holdings Act 1986 were personal rights, not partnership property. The partnership and trusteeship duties did not extend to securing those rights. No relief was therefore available for their loss.
5. Partnership and Will. The parties’ later business arrangement did not alter ownership of the land held by the earlier partnership. Under Marie’s Will, the gift to Stanley took effect because he survived her by 28 days; the later gifts did not operate. Alan retained a one-third interest in Syda Farm, subject to dissolution of the 1974 partnership. Partnership accounts were ordered if the parties could not agree, including accountability for receipts from partnership assets.

Not stated in the judgment.