The well-known phrase, handed down in the seminal and much quoted case of Crabb v. Arun District Council [1975] EWCA Civ 7, established that a remedy for proprietary estoppel must be ‘the minimum to do justice’ for the claimant. Well what does that actually mean?
Here are 5 key points which the court will consider:
- Proportionality lies at the heart of the doctrine of proprietary estoppel.
- The aim is prevent “unconscionable conduct”.
- The value will depend upon all circumstances and facts of the case, including a person’s expectation and the detriment suffered.
- Other benefits received will be balanced against the detriment suffered, which need not always be financial.
- The final result must be a just one, having weighed up a person’s expectation against the actual detriment suffered.
Assuming that the court has found in favour of someone alleging proprietary estoppel, when approaching the question of what to award, the court will consider the circumstances of each case.
Whilst the court’s discretion is very wide, and given the nature of such cases, the award may vary greatly from case to case, the court does like to justify any such award and provide science to the art of valuing proprietary estoppel claims. Two factors which are often key to determining how much to award a successful party in a proprietary estoppel claim include:
- a person’s expectation of what they were to receive; and
- the detriment which they have suffered in reliance upon that expectation.
Expectation
At face value, this is as simple as it sounds; “what did I expect to receive as a consequence of the promise made to me?” Citing the classic example of a farmer promising their children the farm on death in return for free labour, assuming the promise is clear and understood, then the expectation is that the children will receive the farm upon the farmer’s death.
As such, an award based on expectation would be an award to give the person exactly what they had reasonably expected to receive.
Detriment
If the person’s expectations are uncertain, extravagant or out of proportion to the detriment suffered, the court can recognise that the equity should be satisfied in another (and generally more limited) way.
Returning to the earlier example, if the farmer’s children only undertook one hour’s worth of work on the farm each day and then went about their normal lives, it is extremely difficult to see how the court would consider the detriment suffered (the daily one hour of work carried out) being proportionate to the expectation that they would receive, say, a farm worth £1m.
In that case, the court may look at the matter from a pure financial perspective, for instance by calculating the value of the hours worked in unpaid wages and then award that or, perhaps, the value of the hours worked to the farm/the person who made the promise, and awarding that.
Conversely, if a person worked 18 hours each day the court would be much more likely to consider the promise proportionate to the detriment suffered.
Other factors
Other benefits received by the person may also be taken into account by the court when considering how much to award.
So if the farmer’s children all received an annual gift of £5,000 a year whilst working on the farm, the court is likely to deduct £5,000 a year from every year the children worked for free on the farm.
Additionally, the court is not simply concerned with the financial detriment suffered (the hours spent working on the farm for free when the children could have been paid elsewhere) but will also consider all of the other relevant circumstances. For example, if the children worked in difficult conditions, at unsocial hours and undertook hard manual labour, the court is likely to consider these factors when deciding upon the appropriate award to make.
The parties’ behaviour, both during their lives and after legal proceedings are issued, will also be considered by the court. So if the farmer’s children deliberately misled the court about the amount of time spent working on the farm or if there were falsified documents, then the court can modify the award accordingly. As the doctrine is an equitable one, it is concerned to ensure a fair result is achieved.
The courts have shied away from setting out a comprehensive list of factors relevant to the exercise of the court’s discretion or a hierarchy of factors, preferring to allow each case to turn on its own facts in an effort to achieve a just result, having considered the expectation and actual detriment suffered, as well as the other factors discussed.
Summary
Come what may, the overarching principle is that proportionality lies at the heart of the doctrine and permeates its every application. Often judges cannot create formulas to calculate an award to the penny, instead, opting for an award that “is a fair reflection of the expectation and detriment and other factors set out above” to use the words of HHJ Jarman QC, who presided in the case of Davies and Davies v Davies [2015] EWHC 15 (Ch), where we successfully recovered £1.3m for our client.
