House of Lords
Published March 26, 2009
Thorner v Major and Others
Before Lord Hoffmann, Lord Scott of Foscote, Lord Rodger of Earlsferry, Lord
Walker of Gestingthorpe and Lord Neuberger of Abbotsbury
Speeches March 25, 2009
Oblique assurances could in the appropriate context constitute a sufficiently
clear and unequivocal representation to establish a proprietary estoppel.
The House of Lord so held in allowing an appeal by the claimant, David
Thorner, against a decision of the Court of Appeal (Lord Justice Ward, Lord
Justice Lloyd and Lord Justice Rimer) ([2008] WTLR 1289) allowing an appeal
by the defendants, Ena Joyce Major, Winifred Curtis and Lesley Dawn Heusen,
as personal representative of the deceased, Jesse Peter Thorner, from a
decision of Mr John Randall, QC, sitting as a deputy judge of the Chancery
Division ([2008] WTLR 155) that since the death of the deceased the
defendants had held his farm, Steart Farm, in Somerset on bare trust for the
claimant.
Mr John McDonnell, QC and Mr Michael Jefferis for Mr Thorner; Mr
Andrew Simmonds, QC and Ms Penelope Reed for the defendants.
LORD WALKER said that the appeal raised two issues. The first and main issue
concerned the character or quality of the representation or assurance made
to the claimant.
The other was whether, if the other elements for proprietary estoppel were
established, the claimant had to fail if the land to which the assurance
related had been inadequately identified, or had undergone a change, in its
situation or extent, during the period between the giving of the assurance
and its eventual repudiation.
The Thorners were a farming family living in Somerset. David’s father and
Peter were first cousins. From 1976 David began to help Peter at Steart
Farm. He continued to do so, without any remuneration, until Peter’s death
29 years later. He received pocket money from his father. David never
married. He worked very hard at Peter’s farm.
The deputy judge's crucial findings in his own words were: “During the 1980s
David came to hope that he might inherit Steart Farm. As he put it in
evidence, from 1985 Peter ‘made various noises that made me think that I
might well inherit, but nothing very definite’.
“One day in 1990, when Peter was still only in his early 60s, he handed David
a Prudential bonus notice, relating to two policies on Peter’s life which
appear then to have had a value of about £20,000 between them, and said
‘That’s for my death duties’.
“I am satisfied that in making such a remark, and handing such a document to
David to keep, Peter was intending to indicate to David that he would be
Peter’s successor to Steart Farm, upon his death, and that David’s
understanding to that effect was correct.
“I find that this remark and conduct on Peter’s part strongly encouraged
David, or was a powerful factor in causing David, to decide to stay and
continue his very considerable unpaid help to Peter at Steart Farm, rather
than to move away to pursue one of the other opportunities which were then
available to him, and which he had been mulling over.”
In 1997, Peter made a will, drafted for him by his solicitors. He left
pecuniary legacies totalling £225,000, and the whole of his residuary estate
to David. David knew nothing about that although he was named as sole
executor. But a year later, Peter fell out with one of the pecuniary
legatees and, apparently for that reason, telephoned his solicitor saying
that he wanted to cancel his will. He never made a new will and died
intestate.
At trial, David successfully pleaded proprietary estoppel. The deputy judge
ordered that David should receive the land, buildings, live and dead stock
and other assets of Peter’s farming business, including about £24,000 in the
farm’s current account, but should indemnify Peter’s personal
representatives in respect of inheritance tax payable on Steart Farm, parts
of which had development value exceeding the agricultural value.
The personal representatives appealed. In the Court of Appeal the argument
centred on whether the oblique assurances given by Peter to David, in 1990
and on numerous subsequent occasions, were sufficient to found a proprietary
estoppel.
Lord Justice Lloyd had said: “in order to work as an estoppel, the
representation must be clear and unequivocal, it must be intended to be
acted on, and in fact acted on”. It was ultimately on that ground that the
Court of Appeal decided that the appeal had to be allowed.
His Lordship would prefer to say, while conscious that it was a thoroughly
question-begging formulation, that to establish a proprietary estoppel the
relevant assurance had to be clear enough. What amounted to sufficient
clarity, was hugely dependent on context.
In the instant case, the context, or surrounding circumstances, had to be
regarded as quite unusual. The deputy judge heard a lot of evidence about
two countrymen leading lives that it might be difficult for many
city-dwellers to imagine; taciturn and undemonstrative men committed to a
life of hard and unrelenting physical work, by day and sometimes by night,
largely unrelieved by recreation or female company. The deputy judge seemed
to have listened carefully to that evidence and to have been sensitive to
the unusual circumstances of the case.
The Court of Appeal did not give sufficient weight to the advantage that the
trial judge had in seeing and hearing the witnesses. They concentrated too
much on the 1990 incident of the bonus notice. That was certainly an
important part of the narrative. For David it marked the transition from
hope to expectation. But it did not stand alone.
The evidence showed a continuing pattern of conduct by Peter for the remaining
15 years of his life and it would not be helpful to try to break down that
pattern into discrete elements, and then treat each as being, on its own,
insignificant.
The deputy judge did find that Peter’s assurances, objectively assessed, were
intended to be taken seriously and to be relied on. In the end, it was a
short point; there was insufficient reason for the Court of Appeal to
reverse the trial judge’s careful findings and conclusion.
His Lordship did not share the Court of Appeal’s apparent apprehension that
flood-gates might be opened, because such cases were fairly rare, and trial
judges realised the need to subject the evidence to careful, and sometimes
sceptical scrutiny.
It was a necessary element of proprietary estoppel that the assurances given
to the claimant, expressly or impliedly, or, in standing-by cases, tacitly,
should relate to identified property owned, or, perhaps, about to be owned
by the defendant.
That was one of the main distinguishing features between the two varieties of
equitable estoppel, that was promissory estoppel and proprietary estoppel.
The former had to be based on an existing legal relationship, usually a
contract, but not necessarily a contract relating to land. The latter need
not be based on an existing legal relationship, but it had to relate to
identified property, usually land, owned, or, perhaps, about to be owned by
the defendant.
It was the relation to identified land of the defendant that had enabled
proprietary estoppel to develop as a sword, and not merely a shield: see
Lord Denning, Master of the Rolls, in Crabb v Arun District Council([1976]
Ch 179, 187).
The deputy judge made a clear finding of an assurance by Peter that David
would become entitled to Steart Farm. The first, watershed assurance was
made in 1990 at about the time that Peter made an advantageous sale of one
field for development purposes, and used part, but not the whole of the
proceeds to buy more agricultural land.
Both Peter and David knew that the extent of the farm was liable to fluctuate,
as development opportunities arose, and tenancies came and went.
There was no reason to doubt that their common understanding was that Peter’s
assurance related to whatever the farm consisted of at Peter’s death, as it
would have done, barring any restrictive language, under section 24 of the
Wills Act 1837, had Peter made a specific devise of Steart Farm.
Lord Hoffmann, Lord Scott, Lord Rodger and Lord Neuberger delivered concurring
opinions.
Solicitors: Stephen Gisby & Co, Bristol; Gould & Swayne,
Highbridge.
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