Habberfield v Habberfield

  Proprietary estoppel – Representations – Remedy – Claimant claiming entitlement to farm on death of father on basis of proprietary estoppel – Whether representations or assurances being made to claimant – Whether claimant acting to detriment in reliance on representations – Whether claimant entitled to entire farm – Claim allowed A dispute arose concerning a family farm called Woodrow which was close to Yeovil in Somerset. The claimant was one of four children of the defendant and her late husband (F). The farm was purchased in 1961. Initially farmed by a partnership of F and his two brothers, in 1975 the farm was transferred to F and the defendant. From then on the farming business was a partnership between F and the defendant. The total acreage was now about 220 acres including 104 acres of land at Mudford which was bought in 1989. The holding, including the business and all the land and buildings including the farm house, was worth about £2 5 million. F died in April 2014. Since F and the defendant held the property as beneficial joint tenants, she became the sole owner of the farm. In any case, by his will, F left his entire estate to the defendant. The claimant brought proceedings claiming to be entitled to the whole farm or to such lesser share of it as the court thought fit. The basis of the claim was, amongst other things, proprietary estoppel. The claimant’s case was that she had devoted her working life for 30 years to the farm because her father assured her that she would eventually take it over when he retired. The defendant argued that no such assurance or promises were made. In any event, even if the assurances alleged were proved, they were insufficient to found a basis for proprietary estoppel. Detriment was denied on the basis that the claimant had exaggerated her work on the farm and her contribution and minimised the work by her siblings and the employees. Even if a case was made out, to pass the entire farm to the claimant would be disproportionate. At best a modest cash payment would satisfy any equity established. Held: The claim was allowed. (1) The doctrine of proprietary estoppel was based on three elements: a representation or assurance made to the claimant; reliance on it by the claimant; and detriment to the claimant in consequence of his (reasonable) reliance. Detriment had to be judged by looking back from the moment the person who had given the assurances sought to go back on them. In deciding how to satisfy the equity the court had to exercise a broad but not unfettered discretion. There was a lively controversy about the essential aim of the exercise of that broad judgmental discretion. The difference was between giving effect to the expectation or compensating for the detriment suffered. Just because the level of the expectation was fairly derived from the relevant assurances, it could not be right that that alone justified an award of expectation. An approach whereby (amongst other things) the longer the expectation was reasonably held, the greater would be the weight given to the expectation, was a useful working hypothesis. The level of the claimant’s expectation in a case like this effectively stayed the same throughout the period when the claimant was working to fulfil the promise made to him. It was not simply that an expectation reasonably held for a long time necessarily justified giving greater weight to the expectation over the reliance loss, an important factor (if true) was that the long period of time amounted to fulfilling what the person promised was told they had to do in order to secure what they had been promised. That seemed to be an equitable approach: Thorner v Major [2009] 2 EGLR 111 and Davies v Davies [2016] EWCA Civ 463; [2016] PLSCS 148 applied. Gillett v Holt [2001] Ch 210, Fielden v Christie-Miller [2015] EWHC 87 (Ch); [2015] PLSCS 52 and James v James [2018] EWHC 43 (Ch) considered. (2) In the present case, the representations relied on had been proven. The various representations used different words and were not always explicit, but they fitted together and amounted to a coherent promise to the claimant that she would inherit a viable dairy farm. Furthermore, the claimant had relied on the representations to her detriment. The detriment overall could be summarised as pay lower than she could have reasonably expected for her work, long hours, few holidays and the continued commitment to the farm. That applied for all the time she was at the farm. Examining the value and nature of the various elements of the farm as well as the figures relating to detrimental reliance, the claimant’s case based on proprietary estoppel had been established and an equity had arisen in her favour. (3) The appropriate compensation was a cash payment rather than a transfer of property. The court was not satisfied it would be fair to require the farmhouse to be split from the rest of the holding. Nor should the court make an order for transfer which inevitably forced the defendant to leave her home. It might not be possible to raise the money due without selling all the property but at least by making the award in that way allowed for the possibility. The defendant had to pay the claimant a cash sum equivalent to the value of the farmland and farm buildings (excluding the Mudford land and the farmhouse). Based on a valuation in the February 2017, that sum would be £1,170,000. The only adjustment necessary was to take account of any change in property value between that date and the date of the judgment. If the parties could agree a sum representing the value at the date of the order then that would be the sum to be awarded. Leslie Blohm QC (instructed by Stephens Scown, of Exeter) appeared for the claimant; Richard Wilson QC (instructed by Wilsons Solicitors LLP) appeared for the defendant. Eileen O’Grady, barrister Click here to read a transcript of Habberfield v Habberfield