Financial Remedies: Proprietary Estoppel & Interveners – Article by Matthew Smith

The recent case of Teasdale v Carter & Teasdale [2023] EWHC 490 (Fam) provides a helpful reminder of the principles to be applied in a financial remedies hearing when a third party is joined in order for them to argue an interest in the family pot.

The case itself centred on whether the elder daughter was entitled to a transfer of a barn conversion situated at the family farm.  The daughter intervened and her claim for beneficial ownership was heard as a preliminary issue in accordance with TL v ML [2005] EWHC 2860 Fam.

At first instance, HHJ Shelton found that the daughter had made out her case for the barn (she had been repeatedly promised it would be hers and had contributed financially), but dismissed the rest of her case; and ordered the wife to pay 50% of her costs (the wife being the only party objecting to the daughter’s claim) in accordance with the principles set out by Wilson LJ in Baker v Rowe [2009] EWCA 1163 (Civ).  The wife appealed.

On appeal Moor J cited the well known case of Davies v Davies [2016] EWCA Civ 463 (which in itself cites the equally trite cases of Thorner v Major [2009] UKHL 18; Gillett v Holt [2001] Ch 210; Jennings v Rice [2002] EWCA Civ 159) to which the following principles derive and are summarised as follows:

• There are essentially 4 elements to a claim in proprietary estoppel:
• A promise of sufficient clarity made by the promisor to the promisee;
• That promise must be relied upon by the promisee;
• To the promisee’s detriment; and
• It would be unconscionable/unjust to allow the promisor to go back on the promise.
• The burden of proof is on the promisee, on a balance of probabilities.
• The detriment need not consist of expenditure of money, but must be something substantial and causative.
• The detriment is judged at the moment the promisor seeks to go back on the promise.
• There must be a proportionality between the remedy and the detriment. If the expectation is disproportionate to the detriment, the court should satisfy the equity in a more limited way having exercised a broad judgmental discretion.

Moor J ultimately dismissed the appeal.  Of note is the fact that on the factual issue of whether a promise was made, the husband was the sole owner of the land meaning that the wife could not have been a party to the promise; although it was found that she knew all about it and actually authorised it.

The detriment was clear: the daughter discharged the mortgage and was intimately involved in renovating the derelict barn; including financially.

The wife also argued that HHJ Shelton should have awarded a lump sum rather than a transfer as this was the minimum equity to do justice. Moor J found as follows:

I am clear that, if the test for proprietary estoppel is established in a situation such as this, the correct remedy is a transfer of the property as promised.

The costs order was also upheld on the basis that 50% reflected the fact that the daughter had succeeded on the barn, but lost on other issues: HHJ Shelton’s reasoning and decision making   cannot be criticised.

The following 3 takeaway points, for me, derive from the above:

1. Get your house in order: the daughter here not only had the witnesses, but also the documents to corroborate her case.

2. If the promise is a house, that is the equity, not something less.

3. Be careful on costs: if you seek too much and don’t get it all, you will not get all your costs.

Matthew R. Smith, Park Square Barristers

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