Murphy v Rayner & Ors

Proprietary estoppel requires an assurance that is clear enough in context, reasonable reliance, and substantial detriment causally connected with that reliance. The court assesses the circumstances retrospectively, asking whether it would be unconscionable to depart from the assurance. A promise of rent-free occupation may found an equity. However, dishonest conduct which procures the assurance, destroys the relationship on which it implicitly depends, or makes reliance unreasonable may prevent any equity arising. Persistent dishonesty on a central issue may also engage the clean-hands doctrine. Where an equity is established, relief is limited to the minimum required to do justice and need not take the form of an interest in property.

The claimant had cared for the first defendant, a disabled former auctioneer, for more than twelve years. She claimed proprietary estoppel interests in a Knightsbridge flat owned by the second defendant and investments controlled through the third defendant. She alleged assurances that she would be housed during the first defendant’s lifetime and provided for after his death.

The first defendant denied the claim and counterclaimed for sums paid for the education and housing of a woman whom the claimant had represented as her daughter, delivery up of papers, and other alleged misappropriations. The central issues included remuneration, misrepresentation, fiduciary duty, undue influence, clean hands, reliance, detriment and unconscionability.

1. Claim and counterclaim. The claimant’s proprietary estoppel claims failed entirely. Her claims concerning the precious stones and the Duke of Windsor’s box also failed. The first defendant obtained judgment for payments made for education and Bangalore properties, an order for delivery up of identified papers, and directions for an account of other monies.
2. Proprietary estoppel. Applying Thorner v Major, the court held that an assurance must be “clear enough”, assessed in its context. Reasonable reliance and substantial detriment are required, with a sufficient causal connection between them. The court must look backwards from the point when performance is due and ask whether departure would be unconscionable. A promise of rent-free occupation can be sufficient to found an equity.
3. The later assurances concerning occupation and provision were capable of founding an estoppel, but they implicitly depended on the claimant remaining the first defendant’s carer and maintaining the relationship. The claimant’s false representation that Veena was her daughter procured payments and materially induced the intended provision. She therefore knew that discovery of the deception could terminate the relationship and could not reasonably rely on the assurances.
4. The claimant was paid throughout her employment. Her alleged unpaid work, lost career, lost accommodation and lack of retirement provision were not established as detriment caused by reliance on the assurances. The court found no unconscionability in the first defendant’s refusal to provide further benefits after discovering the deception and unauthorised removal of papers.
5. Undue influence. Applying Royal Bank of Scotland v Etridge (No 2), the court found a relationship involving dependence and vulnerability on one side and ascendancy and control on the other. The scale of the intended provision called for explanation. The claimant used threats to leave and emotional pressure to obtain increased provision. The assurances were consequently the product of undue influence and could not support an equity.
6. Clean hands and fiduciary duty. The claimant owed fiduciary duties of loyalty and good faith as a carer entrusted with money and personal affairs. She breached those duties by removing papers and procuring payments by false pretences. Her persistent false evidence that she had not been paid bore an immediate and necessary relation to the equitable relief sought and independently justified refusal of relief under the clean-hands doctrine.
7. The first defendant was entitled to judgment for £25,900 in education payments supported by cheque stubs and £17,041.60 for the two Bangalore property payments. Other payment claims were left to the account. The claims for the stones and box were dismissed.

Not an appeal. No prior decision is stated in the judgment.