Posted by: RM | October 12, 2009

Proprietary Estoppel Revisited

Fairly hot on the heels of the House of Lords’ decision in Thorner v Majors [2009] UKHL 18 (for earlier discussions of this case see here and here) the High Court has, in MacDonald & Anor v Frost [2009] EWHC 2276 (Ch), revisited the topic of proprietary estoppel. Geraldine Andrews QC, sitting as a High Court Judge, acknowledged that Thorner v Majors is now to be regarded as the leading modern authority on proprietary estoppel.

The facts of this case, although a little convoluted, can be relatively briefly stated. The claimants were sisters who brought a claim against their step mother as executrix of the estate of their father. They claimed that they were entitled to his estate because he (and their mother, when she was alive) had given assurances that they [the claimants] would inherit their parents’ estate in equal shares upon the death of the last surviving parent. Their mother pre-deceased their father by a number of years (she died in 1995) and he remarried in 2002. Shortly after his marriage their father changed his will leaving his entire estate to his new wife with substitutionary gifts in the event that she pre-deceased him in favour of the grandchildren then living.

Wills are, of course, ambulatory. In the absence of some agreement which prevented the claimants’ father from changing his will, he was clearly entitled to do so. The claimants claimed that in 1986 an agreement was made whereby each of them would pay their parents (and, latterly, their father following their mother’s death) £100 per month, which they each did until their father died in 2006. They claimed that in reliance upon a representation that they would inherit their parents’ estate in equal shares they acted to their detriment in making these monthly payments without reference to their parents’ need to receive the money or their ability to pay.

The court found, as a matter of fact, that the monthly payments were connected to a property transaction which was completed at the time the payments began (in 1986) and were referable to that transaction rather than being some form of detrimental reliance based upon any assurance of future inheritance. The court did not dispute that there were conversations when it was undoubtedly true that future testamentary intentions were spoken of. However, the court found that those discussions were not linked to the payments made by the claimants.

The interesting point discussed (very briefly) in this case concerned the continuing sustainability of Re Basham as an authority in this area of the law (or, more accurately, equity). In Thorner v Majors the House of Lords was invited to determine that Re Basham had been wrongly decided on the basis that the subject matter of the proprietary estoppel claim in that case (the residuary estate of the representee) was not “identifiable property” (in contrast to the farm in Thorner v Majors). Their Lordships, however, declined that invitation. In the present case Geraldine Andrews QC did state that “in light of the decision in Thorner … I consider that Re Basham is a decision that now has to be treated with the utmost caution”. It was unnecessary for her to say more than that because, on the facts, the argument that the claimed detrimental reliance, represented by the monthly payments, was connected to a representation about their future inheritance was rejected which meant that no close analysis of whether or not their father’s estate could constitute the subject matter of a properietary estoppel claim was engaged in. However, Geraldine Andrews QC did then go on to say that whilst “the reasoning in Re Basham is difficult to reconcile with the requirement reiterated in Thorner that the property should be sufficiently identified, it is important to bear in mind Lord Neuberger’s warnings about approaching cases of this nature practically and sensibly”.

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