Jane Steels v Darren Steels & Anor

Proprietary estoppel requires a sufficiently clear assurance concerning an interest in land, reliance, detriment and unconscionability. Detriment is assessed broadly and may include positioning one’s life around an assurance, rather than merely financial expenditure. However, a qualified assurance of future inheritance does not create an equity where the evidence does not establish detrimental reliance on that assurance. A later assurance of continued residence cannot be treated as an assurance of inheritance. Unconscionability must be assessed objectively when the expectation is defeated, and cannot be established by assuming that an interest accumulated over time.

The Appellant appealed against an order made by Mr Recorder Clayton following a trial of her claim for possession of The Meadows. The Respondents, her son and daughter-in-law, counterclaimed for a constructive trust or proprietary estoppel equity.

The Recorder rejected the constructive trust claim but found that the Respondents had an equity by proprietary estoppel, assessed at 27.5% of the equity, and made consequential buy-out or sale directions. Permission to appeal was granted on the existence of the equity and the remedy. The central issues were whether the assurances were sufficiently clear, whether the Respondents had suffered detriment in reliance on them, and whether it was unconscionable for the Appellant to recover possession without compensation.

Appeal allowed. The Recorder should have found that the Respondents had not established sufficient detrimental reliance to raise a proprietary estoppel equity. The Appellant was therefore entitled to seek possession on six months’ notice without compensating the Respondents.

1. The relevant requirements were a sufficiently clear assurance or encouragement concerning a right or benefit in land, reliance resulting in detriment, and the ultimate question whether it would be unconscionable for the owner to defeat the induced expectation. Detriment is broad and is not confined to financial loss. Positioning one’s life around an assurance may suffice: Suggitt v Suggitt [2012] EWCA Civ 1140.
2. The original assurance was qualified. The Respondents could live at the Property in the long term and there was a common expectation that, if the parents remained there until their deaths, the sons would inherit. That expectation was subject to unforeseen events requiring a sale. It was not an absolute assurance of residence until death or of inheritance.
3. The 2006 conversation encouraged the Respondents to remain at the Property because they already had accommodation and the First Respondent could work there. It did not assure inheritance. The Respondents’ decision not to buy another house was made in reliance on the continued-residence assurance, not on an assurance that they would inherit.
4. The evidence did not establish detriment arising from reliance on the 1997 assurance. The Respondents lived rent-free, had accumulated savings by 2006, and provided no reliable evidence that savings were later lost or that they could not obtain mortgage finance. The First Respondent’s business had moved to the Property before the 2006 assurance, without evidence that this was reliance on an inheritance expectation.
5. The Recorder’s conclusion on unconscionability depended on the unsupported finding that the Respondents had positioned their lives around an assurance of inheritance. That conclusion was unavailable on the evidence. The issue of quantum therefore required no determination. The Court would hear counsel on consequential orders, with any necessary hearing to take place within 28 days.

• High Court, Chancery Appeals — The appeal from the order of Mr Recorder Clayton dated 14 December 2022 was allowed. The finding of a proprietary estoppel equity was set aside in substance, and consequential orders were left for determination.