Can you rely on the promise of a lifetime? Revisited

Last year we reviewed the High Court case of Habberfield v Habberfield, which has since been subject to appeal and you can read here.

In essence, the case considered a claim brought by Lucy Habberfield, who had devoted her working life to the family farm which her father had assured her that she would take over when he retired. However, after a family argument, Lucy left the farm and received nothing upon her father’s death. Lucy successfully established a claim for proprietary estoppel and the High Court awarded her the sum of £1.17 million.

The decision of the High Court has since been appealed by Jane Habberfield (Lucy’s mother), on the grounds that the outcome was unfair. Jane contended that in 2008, Lucy had turned down an offer to run the farm in partnership with her parents and by doing so, had extinguished her right to rely on the doctrine of proprietary estoppel. It was therefore not inequitable or unconscionable for her husband to retract his assurances to Lucy. Further, Jane contended that the High Court’s award was disproportionate to the detriment suffered by Lucy and it was inappropriate for the court to order a lump sum payment during Jane’s lifetime.

The appeal was dismissed. The court held that Lucy’s rejection of the offer to work in partnership with her parents did not amount to a waiver of her rights. It was further noted that “Underpinning the whole doctrine of proprietary estoppel is the idea that promises should be kept. We were not shown any case in which the rejection of an offer meant that the claimant, who had kept her side of the bargain, received nothing”. The rejection of the partnership offer did not justify denying the claim in its entirety, it was merely a factor to be taken into account when determining how to satisfy equity.

The court considered the concept of proportionality in proprietary estoppel claims. It is not the expectation of the claimant that determines the amount of an award, but the need to balance the detriment suffered by the claimant with the remedy awarded. It was decided that the detriment suffered by Lucy during the 30 years on the farm was not susceptible to quantification and therefore her expectation was an important factor in deciding how to satisfy the equity, even if such expectation had to be scaled down.

Regarding the timing of the payment, the Lord Justices acknowledged that the farm would have to be sold to raise the sum payable, however it was apparent that there would be sufficient income remaining after the sale for Jane to house herself and to make up any shortfall in income. As Lucy was aged 51 at the date of the trial, it was necessary to award the payment during her mother’s lifetime to ensure that she could begin farming on her own account, before it was too late. Further, a clean break was considered desirable considering the breakdown of the relationship between the parties.

The Court of Appeal judgment provides useful clarification of the doctrine of proprietary estoppel and the way in which the courts consider proportionality when determining an award.

This article has been co-written by Olivia Shenton-Taylor and Natalie Powers.