MENU

by • May 31, 2016 • RectificationComments (0)174

Proprietary Estoppel: Expectation or Detriment

NOTE: This article was published in May 2016 and reflects the law as it stands on the date of publication and not at any later date.

Introduction

Proprietary estoppel claims can give rise to a particular issue: should the measure of the claimant’s relief be compensation for detriment or, more generously, enforcement of the relevant promise or assurance?

Detriment not expectation

The court’s primary task is to compensate the claimant for detriment incurred in reliance on an assurance. It is not to give effect to the assurance. The task is not simply, necessarily, or even in principle, to satisfy the claimant’s expectations Jennings v Rice [2002] EWCA Civ 159, at [49]-[51].

Proportionality

The courts have also emphasised that the award should not be disproportionate to the detriment suffered. A claimant’s expectations should be satisfied in a more limited way if they are “uncertain, or extravagant, or out of all proportion to the detriment which the claimant has suffered” Jennings v Rice, at para. 50.

Recent trend toward enforcement of expectation

There has been a recent trend to award relief which gives effect to the claimant’s expectations, and which is not limited to detriment Suggitt v Suggitt [2011] 2 FLR 875; Lothian v Dixon, Westlaw, 28 Nov 2014; Davies v Davies [2015] EWHC 1384.
The purpose of this article is to attempt to reconcile these authorities with a detriment-based approach, in order to show that detriment remains the key concept.

Range of cases

 The claimant expends money on another’s property: award limited to detriment

If the claimant has spent £100 in reliance upon a promise to transfer a property worth £1 million, detriment can be quantified with reasonable precision (Jennings v Rice, at 114). The claimant should be repaid £100, or granted an equitable charge securing that sum.

 The claimant’s detriment not limited to expenditure, but is substantial and quantifiable: award limited to detriment

Detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is substantial. However, it does not necessarily follow that the claimant will be entitled to enforcement of the promise.

In Jennings v Rice [2003] 1 P & CR 8, the claimant worked for, and cared for, the deceased unpaid for 8 years in reliance upon assurances that the deceased’s house and furniture, valued at £435,000, would one day be hers’. The claimant was awarded £200,000, on the basis that full-time nursing care would have cost £25,000 per year over 8 years. The claimant was, therefore, awarded compensation equal to the value of the detriment.

The claimant’s detriment is substantial and not readily quantifiable: no enforcement of promise

It may not be possible to put so precise a figure on the value of the detriment suffered. The court will then have a degree of latitude in valuing the detriment, and can do so at a lesser value than that of the promise, if enforcement would confer a benefit on the claimant which is disproportionate to the detriment.

In Ottey v Grundy [2003] EWCA Civ 1176 the claimant had given up her job to care for the deceased, for a period of two to three years, in reliance upon a promise that she would receive property worth about £250,000. The expectation of benefit was disproportionate to the detriment suffered. The claimant’s career prospects were not that good, and the interruption in her career only lasted 3 years. £100,000 was awarded. In effect, the claimant was awarded a sum equal to the assessed value of her detriment.

The claimant’s detriment is substantial and fulfilment of promise would not be disproportionate: enforcement of promise

There are a number of cases where the claimant has worked for many years for the promisor, perhaps on a farm, for little or no pay, or has provided care and assistance over a considerable period, or has subordinated their interests to those of the deceased. It may then be appropriate to enforce the promise on the basis that the detriment is so substantial that its enforcement is not disproportionate.

In Davies v Davies a promise was made by a father to his son that the son would inherit the family farm, on which the son had worked for some years at low pay. The balance of detriment suffered by the son was substantial. The son was awarded the whole farm (excluding a bungalow).

The Court of Appeal following Suggitt v Suggitt [2012] EWCA (Civ) 1140, considered the key question to be whether the enforcement of the promise would be out of all proportion to the detriment suffered, not whether there was a relationship of proportionality between the level of detriment and the relief awarded. The presumption is, therefore, in favour of enforcing the promise, unless enforcement would clearly be disproportionate.

Conclusion

Even in cases such as Davies v Davies, the primary concept is detriment. The claimant is, in effect, being awarded compensation for detriment: enforcement of the promise is, in the circumstances, equivalent, or roughly equivalent (not disproportionate) to the detriment suffered.

Where there is an express agreement to confer a benefit in return for a detriment, the court may reasonably treat the expected benefit and the expected detriment as being (in a general, imprecise way) equivalent (Jennings v Rice [2003] 1 P&CR 8, at para. 48). Such notional equivalence is easier to justify if no precise figure can be put on the value of detriment.

In Lothian v Dixon, Westlaw, 28 Nov 2014, the claimants had cared for and assisted the deceased, who had inoperable cancer, for 2 years, in reliance upon a promise that they would inherit her entire estate (which they were awarded). The parties had entered into a bargain whereby they considered that the expected detriment equated to the promised benefit. It was, therefore, reasonable to equate the two.

Comments are closed.