Davies & Anor v Davies

Proprietary estoppel requires an assurance, reasonable reliance and consequent detriment, assessed together in the round by reference to whether repudiation of the assurance would be unconscionable. Detriment is a broad concept. It may include low remuneration, long hours, restricted career choices, an undesirable working environment and loss of a better lifestyle. Benefits received in reliance on the assurance must also be considered, but need not always be valued precisely.

The existence of detrimental reliance is an evaluative factual judgment. An appellate court should interfere only where the trial judge’s assessment is perverse or clearly wrong. Establishing the threshold equity does not determine the nature or extent of the relief required to satisfy it.

The respondent worked for many years on her parents’ dairy farm following repeated assurances that the farm and business would eventually be hers. She received wages and benefits, including periods of rent-free accommodation, but the trial judge found that these did not fully compensate her contribution. She also relinquished employment offering shorter hours, better remuneration and a more congenial lifestyle.

After the relationship broke down, the parents sought possession of the farmhouse. The respondent counterclaimed in proprietary estoppel. Following a trial of preliminary issues, HHJ Milwyn Jarman QC held in [2013] EWHC 2623 (Ch) that she was entitled to a beneficial interest in the farm or business, with its nature and extent to be decided later.

The parents appealed, principally disputing reliance and substantial detriment. The central issue was whether the respondent had crossed the threshold for some equitable relief, rather than the eventual form or value of that relief.

1. Appeal allowed only to vary the declaration. The respondent had established an equity over the farm or farming business under proprietary estoppel. The declaration of an existing beneficial interest went beyond the preliminary issues tried. Its nature, extent and means of satisfaction remained for the subsequent hearing. Possible relief could include money, a licence to occupy the farmhouse or another appropriate remedy: per Floyd LJ, with whom Underhill and Richards LJJ agreed.

2. The trial judge was entitled to find reasonable reliance. The original assurance linked eventual ownership to continued work on the farm. A temporary departure following a family dispute did not negate the earlier reliance. When the respondent returned, her acceptance of low pay and unpaid additional work was coupled with repeated assurances that the farm would eventually be hers. The judge’s findings, read in context, necessarily accepted continued reliance.

3. Detriment in proprietary estoppel is broad and must be assessed holistically. It is not confined to expenditure or precisely quantifiable financial loss. The court must consider whether the detriment was substantial and whether repudiating the assurance would be unconscionable, applying Gillett v Holt [2001] Ch 210.

4. The judge’s assessment was not an exercise in forensic accounting. The respondent’s alternative employment demonstrated a career she could have pursued without the obligations of farm work. Relevant disadvantages included long hours, the difficult working relationship and the loss of a more attractive lifestyle, as well as remuneration. The judge also considered the countervailing benefits, including free accommodation, and was not required to assign that accommodation a precise value.

5. The finding of net substantial detriment resulted from a careful evaluative exercise. Such an assessment ordinarily belongs to the trial judge. Appellate intervention is justified only where the conclusion is perverse or clearly wrong. That standard was not met.

6. Obiter: a split trial of essentially factual preliminary issues will not normally suit a proprietary-estoppel claim. The doctrine requires the assurance, reliance, detriment and unconscionability to be examined together in the round.

• Court of Appeal (Civil Division): In [2014] EWCA Civ 568, the appeal was allowed only to vary the declaration. The respondent was declared entitled to an equity over the farm or farming business, while the extent and means of satisfying that equity remained for a later hearing.
• High Court, Chancery Division: In [2013] EWHC 2623 (Ch), HHJ Milwyn Jarman QC held after a trial of preliminary issues that proprietary estoppel entitled the respondent to a beneficial interest in the farm or farming business, with its nature and extent to be determined subsequently.