Another example of equitable estoppel…

5 May, 2015
by: Cripps Pemberton Greenish

I have published a couple of articles recently on the legal principle of equitable estoppel, including the example of a deceased relative who had made a number of promises to their niece before they could change their Will to put these promises into effect (please see my blog below dated 2 March 2015 on Lothian v Dixon and Webb [2014]). Coincidentally, there has been another recent example of the right being granted by the High Court, but this time it relates to a promise made by (and enforced against) a living individual.

The case concerns a married couple who owned a  pedigree dairy farm in Wales worth almost £3.8 million. The couple had three children and had made a number of assurances to one child, their daughter Eirian, that the farm would ‘one day be hers’. Eirian relied on these assurances and had worked on the farm for many years, for very long hours and at a low wage.

Unfortunately a family rift developed and the couple decided to place the farm into a trust with the residue to be split between all three children in equal shares. Eirian brought a claim, claiming proprietary estoppel, in order to establish her interest in the farm.

At first instance, Cardiff High Court allowed Eirian’s claim (she was able to satisfy the requirements of proprietary estoppel set out in my blog below) but left the value of her interest to be decided by another court. Her parents tried to appeal the decision but the Court of Appeal rejected their plea. Nevertheless, the court did confirm that Eirian’s compensation need not take the form of an immediate beneficial interest in the farm but could, instead, be satisfied by equity in the farm or a cash payment.

The parties attempted to negotiate a settlement but soon reached an impasse. The daughter returned to the High Court this year which, it is reported, granted her £1.3 million compensation (being a third of the value of the business).

The moral of the story… don’t make promises you can’t keep, especially if you expect those promises will be relied upon!