Spencer v Spencer: Inheritance Promise Dispute

Spencer v Spencer & Others [2023] EWHC 2050 (Ch)

In August 2023, the High Court found that a son's claim of proprietary estoppel against his late father's farm was successful, and as a result, the son was to inherit the farm.

Background

The father in this case, John (‘J’), had a farm in Lincolnshire, part of which was rented, and part of which was owned by J himself.

J worked the land with the help of his son, Michael (‘M’) and had done since 1983. Despite their turbulent relationship, J made promises to M throughout his lifetime such as ‘all this will be yours one day…’ and ‘you are going to inherit it, so I don’t know what your problem is with the amount of money you are earning…’ and even made two Wills to that effect during his lifetime.

In 2018, M was diagnosed with multiple sclerosis and in light of this, J, unbeknownst to M, changed his Will disinheriting his son and leaving the farm to be put into a discretionary trust upon his death. Later that same year, J died.

When the Will was read and it became clear that M had been disinherited, he decided to challenge the Will, ultimately falling out with his older sisters who represented their late father’s estate.  The basis for M’s claim was that he was entitled to have the farm transferred to him on the ground of proprietary estoppel.

Proprietary Estoppel

The doctrine of proprietary estoppel arises whereby a party (B) seeks to assert a proprietary right to land belonging to someone else (A) when B has been lead to believe through the words, conduct or promises of A that they will have or can expect to have such an interest over the land in question.

The leading authority for proprietary estoppel is the case of Thorner v Major [2009] UK HL 18 whereby it sets out that in order for a proprietary estoppel claim to be successful, you must be able to establish three key elements: assurance, reliance and detriment.

Assurance

It was the argument of the Defendants in this case (M’s sisters) that no such assurances were ever made by J. However, the Court held that although general in their nature, J had made assurances on which M could subsequently rely.

Detrimental Reliance

In combining the second and third elements needed for a successful claim of proprietary estoppel, M argued that he had relied on the assurances made by his father to his own detriment. This was claimed on the basis that he had felt unable to pursue other career opportunities throughout his life, so much so, that he had worked the farm with his late father for 40 years despite their difficult relationship.

The Judge ultimately agreed with this conclusion, stating that 'it is an example of M having to give up other opportunities and an example of him having to accept the will of his father against the express threat that if he pursued the venture (other opportunities) he was “finished” and would be out of the farm…’

Unconscionability

The Court found that the unconscionability should be judged from the date of repudiation of the assurances. In this instance this was found to be J’s Will upon his death in 2018. Therefore, the 2018 Will was held to be unconscionable as it reneged on J’s side of the bargain.

Remedies

As proprietary estoppel seeks to remedy unconscionability by satisfying the original expectation, the majority of the farmland was consequently transferred to M.

The only piece of farmland M was not found to be entitled to, was a piece of land whereby planning permission had been obtained for mineral extraction, vastly increasing its value.  The judge highlighted that if this parcel of land had also been transferred to M, then it would have created a windfall to which was beyond the realms of M’s original expectations.

Considerations

This case highlights the importance of equity within the law but especially regarding agricultural inheritance disputes.  In order to avoid such disputes, it is essential to have a clear and well-communicated succession plan in place for your estate, agricultural or otherwise.

If you need assistance putting such a plan in place, we  will be more than happy to assist you with this.