Davies & Anor v Davies

A proprietary-estoppel remedy must be a retrospective and proportionate response to the unconscionability arising when an assurance is not performed. Expectations are relevant, but they are not self-executing. The court must identify the particular expectation created, its clarity, conditions, duration and any later abandonment or replacement. It must also assess the claimant’s actual detriment and countervailing benefits. A broad monetary award cannot be justified without a reasoned analysis of those matters. Non-financial detriment may warrant compensation, but its recoverable extent depends on what was given up and whether it is irretrievable.

The respondent daughter had established a proprietary-estoppel equity against her farming parents in earlier proceedings. The High Court held that she was entitled to relief in principle: [2013] EWHC 2623 (Ch). An earlier appeal, confined to that threshold issue, failed: [2014] EWCA Civ 568, [2014] Fam Law 1252.

At the remedies hearing, the judge awarded the daughter £1.3 million: [2015] EWHC 015 (Ch). The parents appealed only the amount. The central issue was the proportionate monetary award required to satisfy the equity, given changing assurances about the farm, business, company shares and lifelong accommodation, the daughter’s work and underpayment, and the benefits she received.

1. Appeal allowed. The award was reduced from £1.3 million to £500,000. The remedy was properly monetary; there was no cross-appeal against that conclusion in principle.
2. Proprietary estoppel requires a retrospective assessment of the circumstances when the assurance falls due to be performed. The governing question is what relief is necessary to avoid an unconscionable result. The court must consider assurance, reliance and detriment as an integrated inquiry, and weigh detriment against countervailing benefits. Proportionality is central: an expectation may be the starting point, but it does not automatically determine relief. The court applied the approach in Thorner v Major [2009] UKHL 18, Henry v Henry [2010] UKPC 3, and Jennings v Rice [2002] EWCA Civ 159.
3. The judge had not analysed the daughter’s changing expectations with sufficient rigour. Her early expectation of inheriting the farm was conditional on continuing to work and was abandoned when she left. Her later belief that she was a partner, her expectation of company shares, the 2009 draft will, and the assurance of a home for life were distinct matters. Some expectations had been superseded or repudiated, and the company did not own the relevant land. This was unlike the repeated and unambiguous assurances considered in Gillett v Holt [2001] Ch 210.
4. The judge also failed adequately to analyse the parents’ £350,000 proposal. It already addressed accommodation, partnership profits, company value and historic underpayment. Some additional amount was justified for the limited expectation concerning land, non-financial detriment, and delay in payment. However, the loss of shorter hours and a better working environment lasted only four to five years and was not irretrievable. The fact that the parents resiled from assurances did not itself justify an uplift based on blame.
5. Adding £150,000 to the parents’ proposal produced a proportionate award of £500,000, with appropriate recognition that past losses may require an allowance for delay and future expectations require discount for early payment.

• Court of Appeal (Civil Division): Allowed the parents’ appeal and reduced the monetary award to £500,000: [2016] EWCA Civ 463.
• High Court, Chancery Division: Assessed the remedy for the established equity and awarded £1.3 million: [2015] EWHC 015 (Ch).
• Court of Appeal (Civil Division): Dismissed an earlier appeal limited to whether the daughter was entitled to some equitable relief: [2014] EWCA Civ 568, [2014] Fam Law 1252.
• High Court, Chancery Division: Held that the daughter had established a proprietary-estoppel equity in principle: [2013] EWHC 2623 (Ch).