Davies v Davies & Ors

Proprietary estoppel requires an assurance or representation, reliance and detriment. These elements are not separate compartments: the court must assess the circumstances in the round and ask whether it would be unconscionable to resile from the assurance.

Once an equity is established, the remedy is discretionary. It must be proportionate to the claimant’s expectation and detriment, while taking account of countervailing benefits and the parties’ wider circumstances. The court may satisfy the equity by awarding the expected property, but may exclude part of it where inclusion would be disproportionate.

The claimant, James Davies, sought a declaration that he had the beneficial interest in a family farm. He alleged that his father, with his mother’s assent, assured him from 1974 that he would inherit the farm if he worked it. He relied on those assurances by pursuing farming rather than another career, working for low remuneration, assisting with the construction of a bungalow and making substantial improvements to the farm.

The defendants relied on their parents’ 1999 wills, which placed the farm in trust for James until age 60 and thereafter required its sale and division among the children and James’s children. The central issues were whether the assurances were made, whether they induced reasonable reliance causing detriment, whether it was unconscionable to enforce the wills, and what remedy would satisfy any equity.

1. The claim based on proprietary estoppel succeeded. The court accepted, on the balance of probabilities, that the claimant’s father made clear assurances that the farm would be his if he worked it, and that the claimant’s mother assented to them.

2. The relevant elements were an assurance, reliance and detriment. Applying the approach in Thorner v Major [2009] UKHL18 and Gillett v Holt [2001] Ch 210, those elements had to be considered together. The fundamental question was whether it would be unconscionable, viewed objectively and in the round, for the defendants to rely on the testamentary provisions.

3. The claimant had relied on the assurances in making important life and farming decisions. His detriment included abandoning a possible police career, working long hours for low pay, contributing to the bungalow, improving the farmhouse and farm, acquiring nearby land and benefiting his parents through his work. The benefits he received did not eliminate the substantial balance of detriment.

4. The remedy was governed by the discretionary and proportionality principles reviewed in Jennings v Rice [2002] EWCA 159; [2003] 1 P&CR 8, and illustrated by Suggitt v Suggitt [2012] EWCA Civ 1140. Awarding the whole beneficial interest in the farm was not out of all proportion to the detriment. The bungalow was excluded because it had been intended as the parents’ retirement home and its inclusion would be disproportionate.

5. The claimant was entitled to the beneficial interest in the farm, excluding the bungalow. He was required to continue making the existing monthly payment to his mother for her life. Consequential matters were reserved for further argument.

This was a first-instance decision of the High Court (Chancery Division). No appellate history was stated in the judgment.