Proprietary Estoppel – Bradbury v Taylor [2012] EWCA Civ 1208

 In Probate, Wills

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Proprietary EstoppelIn this appeal the executors tried to argue that there had not been sufficient representations made by the deceased, nor had the defendants acted to their detriment on reliance of those representations for a successful claim for proprietary estoppel to arise.  They also argued that the award of the house was out of all proportion. Their appeal was rejected on all grounds and the original award of the house was upheld. Unusually, there was evidence from the deceased on the issue of proprietary estoppel as he had brought an action before his death and had given a witness statement.

The Facts

William Taylor (Bill, as he was known) lived in a large house in Cornwall called Lower Manaton.  In August 2001 at Bill’s suggestion his nephew and godson Roger Taylor moved from Sheffield along with his wife Denise Burkinshaw and their two children to live at Lower Manaton with Bill.  Although Roger was keen to move to Cornwall, Denise was less so as her family were based in Sheffield and claimed that she took some persuading by Bill to move.  Lower Manton was divided into two parts with Roger and his family occupying one part and Bill the other.  Roger carried out much work to improve the house and outbuildings.

When they moved into Lower Manton in 2001, Bill’s Will, dated 1998, permitted Roger and Denise to live at Lower Manton on various terms and conditions for a period of seven years following his death.  At the end of that period, if the executors (two of whom were Roger and Denise) felt that they had complied with the conditions, Lower Manton was to be transferred to them outright.  If not, it was to be sold and they would each receive a legacy of £5,000 instead.  Bill did not tell Roger or Denise the terms of this Will when they moved to Cornwall and they only found out its terms during the trial.

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In Bill’s November 2002 Will he allowed Roger and Denise to live at Lower Manton for their lives on certain terms and conditions.  On the death of the survivor the property was to be sold and the proceeds paid between named charities.  Each was to receive a legacy but neither were to be executors.  Bill told his solicitors he didn’t trust Roger to properly manage his own finances.  Bill’s 2005 Will reduced Roger and Denise’s right to stay at Lower Manton to six months following his death, but did leave them 30% of his residuary estate.  His final Will made in 2009 left them nothing in relation to Lower Manton and gave them a share of residue which was to be forfeited if they challenged the Will (and this forfeiture took effect).

A draft letter dated 23 July 2001 was found from Bill which set out conditions for Bill letting Roger and his family live at Lower Manton.  No rent was to be paid, but they would cover their own living expenses, help with maintenance and Roger was to remain solvent.  It stated that Roger had asked for Bill to sign a contract ensuring they could remain living there after Bill’s death, but Bill stated that there was no need for a contract as they were not paying rent.  Roger and Denise said they had never received any letter from Bill with any of those terms.  Denise said she had asked for a letter from Bill confirming that they would be allowed to live permanently at Lower Manton but this letter was never written despite Bill promising it.

In June 2009 Bill wrote to Roger and Denise telling them the essence of his 2009 Will and making it clear that they would have no right to stay in the property after his death.  Relations between the parties soured following this letter (and they had in fact been troubled in the past when Bill made Roger bankrupt after he was unable to repay a loan from Bill in the late 1960’s, although they had been reconciled by 2000.)

Bill brought proceedings in June 2010 for a declaration that Roger and Denise had no beneficial interest in the property, but were merely licensees or tenants.  He also sought an injunction denying them access to the property.  Bill died the day before the original trial at first instance was due so the claim was continued by Bill’s executors Garielle Bradbury, Peter Bradbury and Colin Hunter.  The executors produced the witness statement that Bill had made as part of their evidence. Roger and Denise counterclaimed that they were entitled to Lower Manton by proprietary estoppel and sought a declaration that it was held on trust for them.

The Law

From Thorner v Majors [2009] 1 WLR 776 for proprietary estoppel to be successful there has to be:

  • A sufficiently clear representation of an identifiable interest in land
  • That is reasonably relied on by the claimant
  • Who then suffers detriment in consequence of this reliance
  • And the total effect of this is that it would be unconscionable for the testator to have gone back on their lifetime representations

At first instance the executors had argued that if proprietary estoppel was established then it would be disproportionate to award the whole property to Roger and Denise.  Griggs HH looked at Jennings v Rice [2002] EWCA Civ 159 when considering this aspect.

The Decision

At first instance Griggs HH dismissed the executors’ claim and granted the counterclaim of Roger and Denise as he accepted the proprietary estoppel argument.  He declared Lower Manton as being held for Roger and Denise, subject to Inheritance Tax (IHT).

The executors appealed the decision not by challenging the law of proprietary estoppel, but on the application of the principles of proprietary estoppel to the facts and the findings of fact which Griggs HH had made.

At first instance Griggs HH had been critical of Bill’s witness statement, having been able to assess it against some documents in evidence and said he would need to treat his evidence with care.  He pointed out that Bill contending in his witness statement that he would never leave Lower Manton to Roger conflicted with the terms of his 1998 Will. Griggs HH had been very critical of Roger’s evidence saying that he had “considerable reservations about his evidence as a whole”.    Denise’s evidence was criticised too, although he had said she was a more impressive witness than Roger.

Griggs HH had found that as part of persuading Denise to move (as she had been the reluctant party) Bill had promised her that they would be allowed to live at Lower Manton for seven years following his death and Denise moved in reliance of this promise.

“I am wholly unpersuaded that the effect of the [23 July 2001] letter or any equivalent oral representations that Bill made at the time had the effect of reserving for him the right to dispose of his estate as he saw fit. …….. I am quite satisfied that he was keen to have Roger, Denise and their family living in the house at Lower Manton and that he knew that they realised that if they accepted his offer of living there it was on the basis that he would in due course leave the property to them on his death.”

Griggs HH had found that Roger and Denise had relied on Bill’s representations to their detriment as the move itself amounted to detrimental reliance as Denise would be less close to her family, together with them providing care for Bill and making improvements at their own expense to Lower Manton.

Griggs HH had not sought to “evaluate the various benefits and detriments suffered” but in applying Jennings found that the benefit and detriment were general and were not disproportionate so, as Roger and Denise had moved in reliance of the promise of being left Lower Manton, it should be awarded to them, subject to IHT.

On appeal the executors argued that there had not been enough representation by Bill and that the 2001 draft letter showed there was no basis in the evidence for any finding of representation on the facts.  Lloyd LJ did not agree with this and held that there had been sufficient representation by Bill to Denise orally and that the draft letter did not show a lack of representation about what the position was to be following his death.

The executors also argued on appeal that Roger and Denise had not shown detrimental reliance and that an award of the house was “altogether disproportionate and wrong in law”. Again Lloyd LJ did not agree with either of these arguments and all points of the appeal were rejected.  He found that Roger and Denise had acted to their detriment in moving to Cornwall.  He agreed with Griggs HH that the detriment and benefits of living at Lower Manton for Roger and Denise could not be given an exact value and held that Griggs had not misdirected himself on the appropriate award.

Practice Points

  1. It is always preferable for clients to obtain written assurances from the person making the representation before they rely on it to their detriment.
  2. Ask clients if they have told anyone either explicitly or in general terms that they will leave them their property/ies in their Will.  If they have, clarify the testator’s wishes if the Will instructions do not match this and warn them about proprietary estoppel and the sizeable costs to the estate of defending any claim. Try to help the parties reach an amicable compromise during the testator’s lifetime.
  3. If a client wants to claim proprietary estoppel it is essential to gather as much evidence as possible, both written and oral.
  4. Consider asking for old Will files for the deceased to be disclosed, although balance whether these will show damaging evidence.
  5. If there has been a sufficiently clear representation by the deceased which was reasonably relied on by the claimant to their detriment, making it unconscionable for the deceased to have gone back on their word, the award may be bigger than a mere calculation of the value of the detriment less any benefits.

 

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