Proprietary Estoppel, Partnership Disputes, Family Fallouts and Fairytales.

Once Upon a Time in a land of fairytales and rainbows, promises were kept by most. When they were not, it was easily resolved, as the fibber’s nose grew immediately - alerting others to any wrongdoing. Those that worked in unison, such as the 7 dwarfs and Jack and Jill did so in harmony and for all time. If only the real world was so easy to navigate!

With a 3 year old daughter, I find myself immersed in a make-believe world for part of my day. However, I do often question the moral tale, lessons and legal ramifications of children’s literature and television.

A tiger trespasses and falsely imprisons a mum and a child, whilst consuming all their food and drink, with no ramifications - The victims end up buy a sack of tiger food in preparation for his menacing return.

A mouse deceives all he meets with an underlying threat of severe violence, even towards the Gruffalo’s child. Many criminal offences take place with such behaviour, along with civil harassment and public order offences.

As a civil litigator specialising in property, business and probate disputes, I do find myself ruminating on what civil claims could be brought in films and books I have enjoyed with my daughter.

In the Lion King, Pride Rock (the ‘Property’) was not large enough for the brothers to divide between them. To obtain possession of it all, Scar entered into a contract with the hyenas, offering them residency of the Property, if they helped him obtain possession. With Simba’s return Scar’s promise couldn’t be fulfilled causing him to be in breach of his agreement. The hyena’s took ‘action’ against him!

In the Aristocats, the butler overheard a conversation between Madame Adelaide Bonfamille and her lawyer - The cats were getting a life interest in Madame’s estate, allowing them, and presumably their kittens, to be looked after, no matter the cost, during their lifetime. The butler was the residuary beneficiary and therefore he or his estate would have inherited the fortune one day. However, the butler felt that he had been promised the fortune without the burden of looking after the cats, so he unsuccessfully attempted to manipulate the position by removing the cats from the house.

In the whimsical world of Bluey, we learn via the trials and triumphs of Bluey and Bingo, the essence of proprietary estoppel through their playful adventures and heartfelt promises. In series 3 Mum states “You can make promises, but you must keep them.”

Proprietary estoppel, much like Bluey's promise, requires a sufficiently clear assurance to be made, the recipient of the promise must rely upon it and, in so doing, the recipient must suffer a detriment in consequence of the reasonable reliance. In essence, it's a legal doctrine that prevents one party from going back on their word when the other party has reasonably relied on it.

It is said that fact is stranger than fiction. Many of our cases have facts and legal disputes which could be turned into tv dramas or a page turning books. At the heart of most proprietary estoppel claims you have tragedy, a desire for justice, an element of greed and often a goody and a baddy. I have set out a couple of cases from 2023, to test this theory.

Mate v Mate [2023] EWHC 238 (Ch) –10.02.2023

On a cozy farm nestled between rolling hills, there lived a kind-hearted girl, Miss Mate (M). M loved spending her days exploring the fields and helping her family with their chores.

One day, M had a brilliant idea to transform a piece of unused land into a development site. This idea was supported by her family with the promise of any enrichment from her endeavours being divided accordingly. She toiled day and night. Her heart swelled with pride as the once barren land blossomed into a plot of land fit for development.

But as time passed, M began to feel a little sad. Despite all her hard work, she hadn't received any reward or recognition for her efforts. She knew deep down that she deserved something for all the work and dedication she had poured into the land upon the back of a promise of such recompense.

So, M decided to talk to her family about it. She explained how she had worked tirelessly to develop the land, hoping they would understand her position. However, her family didn't agree that she should be rewarded for her efforts.

Feeling disheartened, M took her case to the wise old law firm to consider her position. The lawyer listened carefully to M's tale and nodded thoughtfully. "My dear," said the lawyer, "although the law of the land may not see your efforts as deserving of reward in one way, there may be another path to justice - The family has been enriched, the enrichment has been at your expense and the enrichment appears to be unjust.”

With the lawyer’s guidance, M took her case to the court. There, after much deliberation, the court ruled in M's favour. They agreed that while M's claim for proprietary estoppel did not succeed, M had indeed been unjustly denied her rightful reward for her efforts and her claim for unjust enrichment succeeded.

Morton v Morton[2023] EWCA Civ700 –20.06.2023

On a picturesque farm, there was a family running a business in partnership. The farm had been passed down through generations, and its lush green fields and friendly animals were admirable.

As time went on, there arose a disagreement between the parents. They couldn't agree on how the farm should be farmed and they decided that, for the benefit of all, they would go their separate ways dividing the farm accordingly. Unfortunately, the family could not agree upon what asset belonged to whom and which was bought by the partnership for the benefit of all.

The parties went on a quest to seek guidance from the all-knowing court. A judge at the court proclaimed which asset the parties owned. But there was a twist! The court also decided that the father had promised something special to his child many years ago and this had been relied upon to the detriment of the promise, and that such a promise should not be broken - It was called "proprietary estoppel." This meant that the child had the right to some of the farm, even though the promise wasn't written down anywhere.

However, just when everyone thought the matter was settled, the quest took another turn with further problems which required resolving. The families had agreed to buy out one of the partners who wanted to leave the farm. But there was a mix-up about when they had to pay him back. Pursuant to a historic parchment, the Partnership Act 1890 - S42, in cases where a partner in a firm has passed away or left, and the remaining partners continue the business without settling accounts, the departing partner or their estate may choose to receive a portion of profits attributable to their share of assets, or interest at 5% per annum, unless a contract grants the surviving partners the option to buy out the departing partner's interest, in which case further profit shares are not owed unless the option is not fully exercised, leading to liability under the same terms.

The Court of Appeal had to step in to solve this new puzzle. They said that the original judge had made a mistake and they decided that an interest payment was not required.

Often a fairytale happy ending can be reached via mediation or alternative dispute resolution. As lawyers, it is our job not just to act as your adversarial knight, defending your legal position, but to facilitate an early resolution where it is possible. Most civil claims do not make it to trial for this reason. Win, lose or settle, those involved in litigation can live happily ever after.

Blanchards Bailey

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