Adam Clive Scott v The Estate of Richard Norman Scott & Ors

A proprietary estoppel claim requires a sufficiently clear promise, reasonable reliance and detriment. These elements are interrelated, but each must be established. Where a promise is clearly withdrawn, later conduct cannot be reliance on it. Detriment is assessed on a net basis by weighing benefits against disadvantages, including non-financial disadvantages. In a post-death case, unconscionability is assessed by looking backwards from the point at which the promise fell due to be performed. Enforcement remains the normal starting point, subject to fairness and proportionality. A remedy should not, without good reason, be out of all proportion to the detriment.

For testamentary capacity, the common-law test in Banks v Goodfellow remains distinct from the statutory test under the Mental Capacity Act 2005. Capacity is considered in the context of the particular will, without converting capacity into a test of detailed knowledge and approval.

The claimant, Adam Clive Scott, brought three claims concerning his late father Richard Norman Scott’s estate and farming property. First, he alleged that promises made by Richard entitled him to proprietary relief over the Farm. Secondly, he challenged two wills made in September and December 2016 on testamentary-capacity and knowledge-and-approval grounds. Thirdly, Jennifer Scott alleged that two agricultural tenancies granted to Adam were shams.

The proprietary estoppel claim concerned promises embodied in a 1995 will, which Adam said induced his continued work on the Farm. The probate claim required determination of Richard’s capacity in the context of frontotemporal dementia with progressive nonfluent aphasia. The sham-tenancy claim required examination of whether the parties intended the documents to create the legal rights they appeared to create.

The court dismissed all three claims: the Proprietary Estoppel Claim, the Probate Claim and the Sham Tenancies Claim. The parties were directed to agree an order giving effect to the judgment, failing which consequential matters were to be dealt with at a further hearing within 28 days.

1. Proprietary estoppel. The necessary ingredients were a sufficiently clear promise, reasonable reliance and detriment. They were not watertight compartments, and the overarching concern was unconscionability. Richard had promised in 1985 to set Adam up in farming, but that promise concerned opportunities during Richard’s lifetime and did not confer a post-death ownership interest. In or around 1995, Richard promised that Adam would receive long agricultural tenancies and an option to purchase the Farm at probate value. Those promises were withdrawn in 2003 when Richard told Adam that his testamentary intentions had changed. Adam relied on them between 1995 and 2003, but not thereafter.
2. Adam suffered disadvantages, including long hours, lost career opportunities, reduced autonomy, relationship strain and personal risks. However, the benefits obtained during the relevant period, particularly Giantswood and substantial car-boot profits, outweighed the detriments. There was therefore no net detriment. It was also not unconscionable for Richard to depart from the promises in light of the changed family circumstances and Adam’s benefits. Enforcing the promises would in any event have produced a remedy out of all proportion to the detriment.
3. Probate. The common-law Banks v Goodfellow test applied. The court accepted that capacity must be assessed in the context of the particular will, while maintaining the distinction between capacity and knowledge and approval. Richard understood the nature of the wills, the general extent of his property and the claims of potential beneficiaries. His difficult and sometimes unfair decisions were attributable to his personality and family conflicts, rather than a disorder of mind that poisoned his affections or perverted his moral sense. He therefore satisfied all four limbs. The wills also represented his instructions and he knew and approved their contents.
4. Sham tenancies. A sham required an intentional mismatch between the apparent and true relationship, founded on a dishonest common intention that the documents would not create the apparent rights and obligations. Jennifer bore the burden of proof. The evidence did not establish that either the 1988 Tenancy or the 1993 Tenancy was a sham. They therefore took effect as secure agricultural tenancies under the Agricultural Holdings Act 1986.