Although the detriment necessary to establish a proprietary estoppel did not have to be viewed narrowly, it did need to be established through clear evidence.
In 1997, The Meadows, Grove Lane, Retford was purchased by the appellant and her late husband to provide a family home for themselves, their adult son and his partner (the respondents) and their other adult son. In 2021, the appellant wished to sell the property and downsize and so gave notice of this to the respondents and then commenced possession proceedings. The respondents counterclaimed for a declaration of their beneficial ownership of the property arising from either a constructive trust or proprietary estoppel.
In Steels v Steels and another [2023] EWHC 2985 (Ch); [2023] PLSCS 194 Mr Justice Fancourt considered whether the judge below had been correct to find that there had been sufficient evidence of detrimental reliance to give rise to a proprietary estoppel such that it was unconscionable for the appellant to seek possession without paying compensation.
In this case, the respondents said they had relied to their detriment on two assurances about their interest in the appellant’s property which rendered it unconscionable for her to try to defeat the expectations created.
The 1997 assurance was that “if things worked out” the first respondent and his brother would inherit the property and that they could live at the property as long as they liked (subject to the understanding that events might require the property to be sold).
The second assurance was said to have been made in 2006 when the respondents were considering moving out of the property and purchasing their own home. At that time the appellant’s late husband queried why they thought that was necessary when they had everything there at the property and the first respondent did not have to travel to work.
The trial judge’s finding that there was sufficient detrimental reliance depended on there being an assurance of an inheritance and the respondents then positioning 25 years of their life around the assurance that they were going to get a share in the property. Although correct that detriment is to be viewed broadly and not as a purely financial concept, the trial judge had erred as there was no sufficient evidence that the respondents incurred detriment. They paid no rent and the contributions they made were to running costs. The first respondent’s business was moved to the outbuildings at the property in 2001, which move was not based upon the assurances.
Although it was said that they had lost the opportunity to buy their own house, there were no findings of fact to support the conclusion that they had acted to their detriment. There was no evidence that the savings they had accrued and been spent (and, if so, on what) and there was no evidence that they would have difficulty obtaining a mortgage.
Further, even if there had been detrimental reliance on the 1997 assurance, that assurance was qualified. In so far as any equity had arisen in favour of the respondents from the limited assurances made, it had long since dissipated when the appellant gave notice to the respondents to terminate their rent-free occupation of the property for good reasons. The appeal was allowed.
Elizabeth Haggerty is a barrister