A recent case on the difficult area of proprietary estoppel demonstrates that when it comes to who will inherit your estate, you may not be able to change your mind if the potential beneficiary has already relied on the promise.
Proprietary estoppel arises where an assurance is given that property will be left to the claimant when the promissor dies, that assurance has been relied on by the claimant and the claimant has suffered detriment as a result of that reliance. If the claimant proves those elements, they will have a beneficial interest in the property that can be enforced by the court. In most cases the claimant will only find out that they have lost the promised inheritance after the promissor has died. In the case of Gee -v- Gee  EWHC 1393 (Ch), however, the promissor (while still alive) changed his mind about who should inherit, and transferred the property to another family member.
The case concerned a farm near Oxford which was owned by Mr and Mrs Gee and run through a company of which Mr Gee owned nearly all of the shares. He had three children, the eldest of whom, John, had lived and worked on the farm for most of his life, and was in his 60s by the time of trial.
In Nov 2014, Mr Gee transferred all the company shares and the majority share in the land to John’s brother Robert. John was then excluded from the business and dismissed from his employment with the company.
John issued proceedings claiming that for decades (since at latest 1988) Mr Gee had assured him that he would inherit the lion’s share of the farm, and in reliance on those assurances, John had devoted his entire working life to the farm, working long hours for low wages. John claimed all the shares in the company previously owned by Mr Gee and Mr Gee’s share of the land.
Mr Gee and Robert denied the claim, saying that no assurances had been given, that John had not relied on any assurances, and that even if he had, there was no detriment to John in doing so.
The judge found that Mr Gee did intend the farm to pass to John until fairly recently. Robert had only had very recent involvement on the farm, which had previously been farmed by John full time for 30 years. At least some of the representations that John would inherit the farm had been made, and over a 20 year period, Mr Gee made it clear to John that he would succeed as farmer and owner, albeit that some provision would have to be made for John’s siblings. Those representations caused John to stay on the land working the farm. Mr Gee changed his mind in about 2012 but that did not affect what had occurred and been said before.
From about 1992, John was paid less than he would have been paid elsewhere given his qualifications and experience. The hours he worked on the farm impinged significantly on his life, and various other factors meant that his reliance on the representations was to his detriment. There was therefore a proprietary estoppel.
Despite the fact that Mr Gee had changed his mind about who should inherit the farm, it was too late for him to do so. The fact that John had relied to his detriment on the promises made meant that Mr Gee could not go back on those promises.
John was awarded a majority shareholding and controlling interest in the company of 52% and a 46% share of the land, with the balance divided between his siblings. The shares and land that had been transferred to Robert have to be transferred back so that they can be given to John.
Proprietary estoppel can lead to property being removed from estates, or to whole estates being transferred to claimants who have relied on a promise of inheritance. It is never easy to prove these claims, and the court will need clear evidence of the promise and the detriment that it has caused. But where those things are shown, the court will enforce the promise, regardless of the promissor changing his mind.
Ben Parr-Ferris, Senior Litigator