What can a beneficiary do when a will does not honour verbal promises made about property? Katie Alsop, Partner at Wright Hassall, explains what proprietary estoppel is and outlines what needs to be considered in a claim.

What is proprietary estoppel?

A claim for proprietary estoppel can be brought if a will does not honour promises made by the deceased concerning property and if a claimant believes their reliance on that promise has caused detriment.

Many contested wills feature valuable estates that include farms and/or land. The combination of a high-value estate and a will containing different terms to those promised may well result in a proprietary estoppel claim from a disappointed beneficiary.

There have been numerous cases before the Court in respect of proprietary estoppel claims and it is now well-established law that to bring a proprietary estoppel claim, it’s necessary to show:

• a promise or assurance has been made
• the promise was reliedon
• reliance on the promise caused the claimant to suffer detriment

It’s worth noting that proprietary estoppel claims are nearly always associated with the agricultural sector, and the case law is testament to this.

What is meant by a ‘promise’ in a proprietary estoppel claim?

A broken promise is usually revealed when the provisions in the deceased’s will are discovered and an asset that an individual expected to inherit is bequeathed to someone else. At this point, the claims for contesting a will, if there is reason to think the will may be invalid, and proprietary estoppel may become intertwined.

“One day, all this will be yours” is a standard piece of evidence in proprietary estoppel cases. Claimants will maintain that a promise in one form or another was made, usually over a period, leading the claimant to believe they will receive property, land or a business. The court will hear evidence about how the promise or assurance came about, and the context in which it was made.

There are no hard and fast rules as to what amounts to a promise, but unsurprisingly, any evidence put before the court from an independent third party in support of the claimant’s position is generally found to be helpful when assessing if a promise has been made. Evidence from third parties with nothing to gain from the litigation is naturally especially valuable.

It’s common that proprietary estoppel claims are very much a case of a consideration and assessment of one party’s recollection of events against the facts and the recollection of those who usually have a competing interest.

What is meant by ‘reliance’ in a proprietary estoppel claim?

When a promise has been made, it must be relied on by the claimant, who must believe it to be effective. The court will also expect the claimant to have used the promise as part of a decision-making process when making certain life or career choices. For example, moving to a property on the basis it is close the land or farm which has been promised to the claimant.

What is meant by ‘detriment’ in a proprietary estoppel claim?

The claimant must have suffered a detriment by relying on the promise. A detriment can come in various forms, but typically the detriment is financial. Equally, detriment could be the claimant having been prevented from pursuing a more lucrative career elsewhere, or in a different sector.

The court will consider the extent of the detriment suffered. In circumstances where it’s argued that an alternative career would have been pursued had it not been for the reliance on the promise, the claimant should provide evidence demonstrating the comparable gain from the alternative career.

When assessing detriment, the benefit gained by the claimant must also be considered to weigh up the overall position. The benefit does not necessarily have to be direct financial gain; it could be, for example, accommodation provided free of charge.

How much is a claimant entitled to in a proprietary estoppel claim?

If all the elements of proprietary estoppel are established, and the court deems that it’s unconscionable to let the deceased break a promise, the court may consider making an award.

The award to which the claimant is entitled may not necessarily be the whole of the property that they say was subject to the promise. The court will consider how best the promise which was made can be compensated by an aware. As a result of proprietary estoppel being an equitable remedy, the court’s role is to address the fact it would be unconscionable to allow the deceased to go back on the promise made to the claimant. In practice, this means that an award will be made to achieve that result, rather than conducting a strict financial analysis of monetary loss and awarding ‘compensation’ on that basis. Claimants should be made aware of this, to manage expectations.

How much does a proprietary estoppel claim cost?

Proprietary estoppel claims are often hostile, and therefore costs can be significant. Costs usually follow the event, which means that the losing party will be responsible for the winning party’s costs. Therefore, clients should be encouraged, where appropriate, to consider alternative dispute resolution. There are mediators who specialise in proprietary estoppel claims (and the agricultural sector, if relevant to the case).

Associated acts

It’s not unusual for a proprietary estoppel claim to be coupled with a claim for provision under the Inheritance (Provision for Family and Dependants) Act 1975. The reason for this is that if a claimant is not successful with their proprietary estoppel claim, it is quite possible that it will leave the claimant in a financial position such that he or she could properly bring a claim pursuant to the Act. If this is the case, it’s important to be aware of the period in which those claims should be made.

Summary

Although a proprietary estoppel claim has distinct elements as set out above, courts consider these claims having regard to all the elements combined, which is understandable given that they are ordinarily inter-linked with one another. Irrespective of that, all three elements are needed to succeed with a claim.

Detailed witness evidence is important, and enquiries should be made at the outset, especially where a witness is elderly. It has been suggested that where time is particularly short in terms of the life expectancy of a witness, video evidence may suffice.

About the author

Katie Alsop is a Partner at Wright Hassall and specialises in contested wills, disputed estates and the removal and substitution of executors. She has a keen interest in proprietary estoppel matters and her work in this area is recognised in the Legal 500 and Chambers & Partners.

See also

Challenging the myths of the Inheritance (Provision for Family and Dependants) Act 1975

Disputing a will - the practical considerations

What information does a trustee have to disclose to a beneficiary?

Find out more

Inheritance (Provision for Family and Dependants) Act 1975 (Legislation)

Image: Getty Images

Publication date: 7 December 2021

Any opinion expressed in this article is that of the author and the author alone, and does not necessarily represent that of The Gazette.