The recent case of Haberfield v Haberfield, reported in the national press, is an example of the application of the legal doctrine of proprietary estoppel, and how the court will go about quantifying an award.
Estoppel is an evidential rule preventing a person from denying or contradicting something previously asserted which he or she has encouraged or permitted another party to rely upon, to their detriment.
Over the years there have been a string of cases where an adult child brought a claim against their father’s estate. The claims were that the child was encouraged to work on the farm for little or no wages on the basis that they would eventually inherit the farm. However, the Will actually divided the estate quite differently.
In Haberfield v Haberfield it was Lucy, the daughter, who devoted her time to working on the farm and re-introduced dairy farming on a significant scale. Lucy’s siblings did not work the farm to the same scale.
Lucy claimed that her father had encouraged her investment of her time and energies in this way and made a number of representations that when he became unable to run the farm himself, she would take over. In addition, the cows and responsibility for maintaining and upgrading the dairy facilities would be hers.
The deceased farmer’s wife and claimant’s mother, defended the claim, and denied that these representations were ever made by her husband and that they had always intended to treat their children equally rather than favouring Lucy.
The judge found that the constituent parts of proprietary estoppel were present in that the representations were made, and that Lucy relied upon them to her detriment in that she devoted roughly 50–80 hour working weeks for 30 years, for wages lower than typical remuneration for someone doing that work.
In finding that there was proprietary estoppel, the court’s task was then to decide what relief to award Lucy. The court has a wide discretion in these cases to achieve whatever is thought to be the fair outcome in all the circumstances. In its considerations the court looked at:
- Can the detriment be fairly quantified such that if the claimant receives full compensation for that detriment? In this case the judge thought not, and compensation for the claimant having committed to the farm for three decades instead of going elsewhere and building a different life was not readily quantifiable;
- How certain were the claimant’s expectations? The judge found in this case that Lucy’s argument that she expected to receive 100% of the entire farm was not certain and that her expectation was something less, namely to receive a viable dairy farm;
- Was the level of the claimant’s expectations fairly derived from the relevant assurances? The judge’s conclusion was yes, Lucy was promised a viable dairy farm
The judge also recognised that detrimental reliance for a long time (i.e. until her father became incapable) would be necessary to result in an award of something more than just compensation for that reliance, otherwise there would be potential unfair results if for example, the father had died just a few months after making the first representation with Lucy having worked just a short time, would it be fair in that scenario for Lucy to receive the whole dairy farm?
Taking everything in to consideration the court decided that Lucy should be compensated by a sum equivalent to the value of the farm land and buildings without the main farmhouse, i.e. the part of the farm which had contained the dairy business that the judge ruled had been promised to Lucy.
Nockolds has succeeded in resolving many disputes regarding proprietary estoppel arguments and disputes over wills and inheritance, and currently have a number of ongoing instructions regarding such claims.