I have published a couple of
articles recently on the legal principle of equitable estoppel, including the
example of a deceased relative who had made a number of promises to their niece
before they could change their Will to put these promises into effect (please
see my blog below dated 2 March 2015 on Lothian v Dixon and Webb [2014]).
Coincidentally, there has been another recent example of the right being
granted by the High Court, but this time it relates to a promise made by (and
enforced against) a living individual.
The case concerns a married
couple who owned a pedigree dairy farm in Wales worth almost £3.8
million. The couple had three children and had made a number of assurances to
one child, their daughter Eirian, that the farm would ‘one day be hers’. Eirian
relied on these assurances and had worked on the farm for many years, for very
long hours and at a low wage.
Unfortunately a family rift
developed and the couple decided to place the farm into a trust with the
residue to be split between all three children in equal shares. Eirian brought
a claim, claiming proprietary estoppel, in order to establish her interest in
the farm.
At first instance, Cardiff
High Court allowed Eirian’s claim (she was able to satisfy the requirements of
proprietary estoppel set out in my blog below) but left the value of her
interest to be decided by another court. Her parents tried to appeal the
decision but the Court of Appeal rejected their plea. Nevertheless, the court
did confirm that Eirian’s compensation need not take the form of an immediate
beneficial interest in the farm but could, instead, be satisfied by equity in
the farm or a cash payment.
The parties attempted to
negotiate a settlement but soon reached an impasse. The daughter returned to
the High Court this year which, it is reported, granted her £1.3 million
compensation (being a third of the value of the business).
The moral of the story… don’t
make promises you can’t keep, especially if you expect those promises will be
relied upon!