Gee and Gee and another

  Land – Proprietary estoppel – Representations – Claimant working on family farm throughout working life in reliance on representations by parents that farm would be his on their deaths – Father transferring interest in farming company and land to second defendant – Breakdown in relations between claimant and defendants – Whether proprietory estoppel operating in favour of claimant entitling him to farm – Claim allowed The claimant and the second defendant were two of the surviving children of the first defendant and his wife. A dispute arose concerning the family farm in Cumnor, Oxfordshire, known as Denman’s Farm. The farm included about 200 acres of freehold land and a tenancy of about 130 acres. The farming business was undertaken by a company, which farmed the land under a tenancy agreement with the owners of the freehold. By 2014, the first defendant owned the entire shareholding of the company, save for one share held by his wife. The freehold reversion of the land was owned by the first defendant, his wife and the company. The claimant had worked on the farm all of his working life, until he was dismissed in 2016. Until recently, the claimant’s brother (the second defendant) had been a builder and property developer. He did not farm the land and there was a dispute about the extent of his involvement with the farm business. In 2014, the first defendant transferred all of his property and land holdings to the second defendant, including his shareholding in the company and his interest in the freehold reversion of the farm. At the same time, his wife transferred her share in the freehold to the claimant, together with her single share in the company. Since that time, the second defendant had been managing the farm and working on it. The claimant brought proceedings against the defendants, claiming a proprietary estoppel in respect of the farm. The claimant’s case was that, from about 30 years old, the first defendant had repeatedly assured him that he would inherit the lion’s share of the farm and that he relied on those representations to his detriment, essentially by devoting his working life to the farm and working long hours for low wages. The 2014 transfer to the second defendant was contrary to those assurances and unconscionable. Based on the doctrine of proprietary estoppel the claimant contended that an equity had arisen in his favour and that to satisfy the equity he should receive the whole farm (land and shares in the company) or at least the company and the lion’s share of the land. Held: The claim was allowed. (1) The doctrine of proprietary estoppel was based on three main 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. Looking at the evidence as a whole, the claimant had made out a proprietary estoppel over the farm. Over a twenty-year period, the first defendant had made it clear to the claimant that he would succeed his father as the farmer and owner albeit that some provision would be made for the second defendant. Particularly focussing on the early years, representations were made by the first defendant to encourage the claimant to remain on the farm and farm the land. Unlike some other cases, the representations here had not been frequently repeated or a stock phrase. Nevertheless, what the claimant was told by the first defendant had been a material consideration in the claimant staying on the farm and making his life there. The representations had been clear enough to be relied on and, in fact, the claimant had relied on what he had been told and stayed farming the land. While the representations had not entered into the details of shareholdings or land holdings, that had not rendered them insufficiently certain to be relied on. The representation related to the farm, both as a business, and as a piece of land. Both land and shares would be transferred and a clear part of them involved the proposition that the claimant would have to buy out his siblings in due course if he wanted to be the sole owner. Equally, part of the same representation had involved the implicit proposition that the split would make a buy-out feasible. In terms of timing, it was clear that the claimant would take over as farmer once the first defendant was not able to do so. The freehold reversion would presumably be transferred on the first defendant’s death. On the facts, the claimant had acted to his detriment in reliance on the representations. The first defendant had resiled from the representations he had made and it had been inequitable to do so. The events which led to the claimant’s dismissal from the company did not amount to a material factor capable of lending any justification to the first defendant resiling from his representations. They happened in the context of the present hotly disputed claim and after the first defendant had already made the transfer to the second defendant. They demonstrated that the second defendant and the claimant could not work together but that did not justify the first defendant turning his back on the representations. None of the factors relied on by the defendants justified the first defendant resiling from the representations. An equity arose and the right way to satisfy the equity would, if it was feasible as a matter of law, be to direct a series of transfers starting with an undertaking from the claimant to transfer the shares and land holding back to the first defendant’s wife and ending up with the first defendant transferring to the claimant 52% of the shares in the company and 46% of the land. That would leave the wife’s landholding intact. The freehold land holdings should be entirely separated from the company. The result would be that the shares and land not in the claimant’s hands would be held by the first defendant and his wife who could then dispose of those assets, other than to the claimant, as they saw fit: Gillett v Holt [2001] Ch 210, Thorner v Major [2009] 2 EGLR 111 and Davies v Davies [2016] P & CR 10; [2016] PLSCS 148 applied. Leslie Blohm QC (instructed by Thrings) appeared for the claimant; David Rees QC (instructed by Royds Withy King, of Oxford) appeared for the defendants. Eileen O’Grady, barrister Click here to read a transcript of Gee and Gee and another