Boris Ignachkov Legal principles and points:
- In Habberfield v Habberfield, the Court of Appeal overruled the decision in Suggitt v Suggitt [2012, and held that in a successful proprietary estoppel claim, the relief granted must be proportionate to the detriment which the party seeking to rely on the doctrine suffered.
Facts of the case
- C’s parents owned a farm. C’s parents promised her that she would take ownership of a part of the farm when her father retired, and that she would inherit the farm in its entirety on the death of both parents.
- C worked on this farm in reliance on the assurance which her parents made.
- Some time after the promises were made to C, her parents removed her from their inheritance following a breakdown in her and her parents’ relationship. Her parents did offer a settlement with C, though C refused.
- When C’s father died, C sought to sue her mother, D, for the property on the basis of proprietary estoppel.
- The trial judge found that she had a successful claim, and awarded her £1,170,000, because she relied to her detriment in the assurances made to her.
Issues for the Court of Appeal in Habberfield v Habberfield
- D appealed, on the grounds that, inter alia, (i) C’s refusal of the settlement acted as a bar to her proprietary estoppel claim and (ii) the judge’s award was disproportionate to the detriment C suffered.
CA held:
- Her refusal to accept her parents’ settlement offer did not prevent her from rely on proprietary estoppel.
- Relief in a proprietary estoppel claim is to be quantified in terms of its proportionality with the detriment. Proportionality is not a question calculable by maths alone; there is a flexible degree judgmental discretion.
- C’s detriment in this case was £220,000, yet she was awarded £1,170,000- but- there were unquantifiable detriments too. C had spent three decades at the farm, something which was not susceptible to quantification.
Lord Justice Lewison:
- On the refusal to accept the settlement: [37] “The decision to stop dairy farming in 2015 was nothing to do with Lucy, and she should not be penalised by any reduction in the value of her equity in consequence of that decision.”
- On the issue of proportionality: [58] “In my judgment the question that Arden LJ posed at the end of that paragraph is the correct question. The relevant comparison for the purposes of proportionality is a comparison between detriment and remedy. Nevertheless, proportionality is not a question of mathematical precision. Like all cases in which the court decides how to satisfy an equity, it must exercise a judgmental discretion, and may do so in a flexible way.”
- [61] “To some extent, this part of the appeal raises the unsolved question: what is the objective that the court pursues in deciding how to satisfy an equity of this kind?”
- [71] ”It follows that the expectation is not determinative of the relief to be granted. Accordingly, the judge was also right to consider whether that expectation interest should be scaled down.”
