Stephen Jourdan KC and Caroline Shea KC in farming proprietary estoppel claim
On 9 August 2023, Rajah J gave judgment in Spencer v Spencer [2023] EWHC 2050 (Ch), a farming proprietary estoppel claim. Stephen Jourdan KC and Caroline Shea KC appeared for the claimant and defendants respectively. Stephen led Christopher Jones, instructed by Tim Russ of Roythornes, and Caroline led Sarah Haren KC instructed by Russell Reeves of Thrings.
The claimant, Michael Spencer, claimed that his late father had promised that he would inherit the freehold land comprised in the farm on his father’s death, about 405 acres in all, and that he had relied on those promises in a way which made it unjust for his father to break that promise. Until shortly before his death, his father’s wills had left the land to Michael. But in a new will made shortly before his death the land was left to trustees on a discretionary trust for his children and grandchildren.
The claim was defended by John’s estate, represented by his two daughters.
The Judge identified the key components which the Court must consider in a claim of this kind:
(1) There must be an assurance by the father to the son that the son will inherit specified property. This must be reasonably understood by the son to be unambiguous and intended to be taken seriously. The father’s subjective intention in making the statement is not relevant; what matters is how the statements were reasonably understood. The assurance does not need to be expressed to be irrevocable. But it is important to distinguish between mere statements of present revocable intentions and statements tantamount to a promise. It is not reasonable to rely on the former. The latter, on the other hand, may be reasonably understood as intended to be taken seriously and therefore reasonably relied upon.
(2) There must be a sufficient link between the assurance and the conduct which constitutes the detriment. The assurances do not have to be the sole inducement the son’s conduct; it is sufficient if they are an inducement.
(3) The conduct of the son induced by the assurances must be such that it would be detrimental to him if the assurance was not honoured. Detriment must be pleaded and proved, but it is not a narrow or technical concept. It need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial. The issue of detriment is judged at the moment when the assurance is repudiated. The broad inquiry which then arises is whether the repudiation of the assurance is or is not unconscionable in all the circumstances.
(4) If an equity has arisen then the Court must decide how it should be satisfied. One starts with the assumption that the simplest way to remedy the unconscionability is to hold the promisor to the promise. But if the promisor asserts and proves (the burden being on him for this purpose) that specific enforcement of the full promise would be out of all proportion to the cost of the detriment to the promisee, then the court may be constrained to limit the extent of the remedy. However, where the reliant detriment has had lifelong consequences, a detriment valuation will generally fall upon stony ground. It is where the detriment is specific and short-lived, and in particular, shorter than the parties are likely to have contemplated, that it is likely to serve a useful purpose. The question of proportionality is not to be carried out on the basis of a purely financial comparison.
The Judge accepted Michael’s evidence that his father had promised him that he would inherit the farm even though “his memory of events particularly as to when things occurred and in what sequence was very unreliable.”
He held that those promises had been a significant inducement to continue working with his father on the farm, despite their difficult working relationship. Michael had “…positioned his working life in significant part on the basis of the assurances that he will receive the farm. It is impossible now to unpick what he might have done differently with his life over 40 years if there had never been such assurances”.
As to detriment, Michael had rent free accommodation and the payment of most of his living expenses and had ended up with a partnership capital account and pension fund together worth over £2.1 m. But the Judge held that, even so, his conduct in reliance on the promises would be detrimental to him unless the promises were kept: “As Mr Jourdan says, however, where a parent promises a child a farm if they work on the farm until the parent dies, and the child does what they were asked to do, giving up the possibility of other options, and positioning their working life based on the assurances, that is likely to amount to detrimental reliance. It is not possible to put a money value on the unquantifiable detriment of committing a life to a farm and not building a different life elsewhere, nor to recreate a world without the assurances”. The
Judge held that this was “a quasi-bargain between father and son and Michael has done what was asked of him. As pithily put by counsel in Habberfield; if you get what you asked for, you should give what you offered.”
As to satisfaction of the equity, the Judge made special provision for land where permission had been granted after John’s death for the extraction of minerals. He referred to this as the “New Quarry Land”. He said that land was different from other agricultural land which had the potential for alternative uses, because in respect of the New Quarry Land the hope value had crystallised and was being crystalised when John died and it would be an unintended windfall for Michael if it were to pass to him. Although permission to extract minerals was not granted until nearly 2 years after John’s death, the Judge held that it would be wrong to ignore it. Although detriment may be judged from the date of repudiation of the assurance: “the appropriate remedy has to be determined by a court of equity having regard to all the circumstances at the time at which it is called upon to satisfy the equity.”
He said that the provisional remedy he had in mind was the transfer of the farm excluding the New Quarry Land to Michael. In respect of the New Quarry Land Michael would be entitled to the agricultural value of the land so that he could replace those fields if he could.
A copy of the judgment can be downloaded here.
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