High Court Rules on Proprietary Estoppel: Clarity of Assurance and Detrimental Reliance Key Issues

Introduction

In the case of Jane Steels v Darren Steels & Anor [2023] EWHC 2985 (Ch), the High Court of Justice was presented with an appeal against the order of Mr Recorder Clayton concerning a property dispute founded on the principles of proprietary estoppel. This case delves into the complex areas of assurances, detrimental reliance, and the unconscionability of decisions impacting property rights. The judgement rendered by MR JUSTICE FANCOURT provides a judicious analysis of these principles and details their application in the resolution of the dispute. This article aims to dissect the legal principles in play and articulate the implications of the court’s findings.

Key Facts

The case centers on a property known as The Meadows, where Jane Steels, the Appellant, sought possession of the property, and the Respondents, Darren and Emma Steels, counterclaimed for a declaration of their beneficial ownership or interest based on constructive trust or proprietary estoppel. A key element of the Respondents’ case was the assertion that there had been a promise or assurance that they would inherit the property which they relied upon to their detriment. Initially, the trial judge found that there was no constructive trust but established an equity for the Respondents under proprietary estoppel, assigning them a 27.5% interest in the property’s equity.

The Appellant contended that there was no clear promise, no detriment suffered by the Respondents, and no unconscionable act by the Appellant in seeking to sell the property, as well as challenging the proportionality of the remedy provided.

Legal Principles

The legal principles under review in this case are chiefly those encapsulated in the doctrine of proprietary estoppel. This includes the necessity of a clear assurance, detrimental reliance upon that assurance, and the unconscionability test that would make it inequitable to deny the expected interest in the property.

Assurance

The court considered whether the Recorder was entitled to find that there had been a sufficiently clear assurance made that the Respondents could reside at and inherit a share of the property. An assurance must be clear and concern a right in property.

Detrimental Reliance

Another key point of analysis was whether the Respondents acted to their detriment in reliance on the alleged assurances. While detrimental reliance does not have a narrow definition, it must be significant and in direct correlation to the assurance given.

Unconscionability

Lastly, the court dissected whether it would be unconscionable for the Appellant to act in defiance of the expectation the Respondents claimed was created by the alleged assurance. This test is objective and considers all the circumstances at the time the right is to be defeated.

Outcomes

The appeal was allowed, with the court determining that the Recorder should have found an insufficiency in evidence regarding the detrimental reliance on the limited assurances to create a proprietary estoppel. MR JUSTICE FANCOURT concluded that it was not unconscionable for the Appellant to seek possession without compensating the Respondents, given their financial situation over the years and the limited assurance provided.

Conclusion

The High Court’s judgement in the Steels’ case solidifies the standard for proprietary estoppel, particularly emphasizing the need for a clear promise or assurance regarding the interest in property and the unequivocal necessity of detrimental reliance. The court’s meticulous analysis serves as a guide for assessing claims founded on proprietary estoppel, aligning the need for concrete assurances with identifiable detriment directly linked to those assurances. This judgment underscores the importance of clarity in family arrangements related to property and inherence expectations, setting a precedent for future cases with similar disputes.