England and Wales Court of Appeal upholds removal of widow from her home of 40 years

Tuesday, 28 May 2019
A proprietary estoppel judgment, in which the England and Wales High Court awarded most of a family farming business to the family's youngest daughter, has been upheld on appeal, even though it will force her 82-year-old mother to sell the home she has occupied for 40 years.

The dispute concerned the Woodrow Farm farming business carried on by Frank and Jane Habberfield since the 1970s. They had four children. Frank died in 2014, leaving his entire estate to Jane by a will he made in 1998. As joint owner, she would in any case have inherited the GBP2.5-million property by survivorship.

However, their youngest daughter, Lucy, then brought a claim based on proprietary estoppel, alleging that both parents had promised her ownership of the farm when they retired. Her mother (Jane Habberfield) denied that any such promises had been made by either parent.

The case was heard in February 2018, in the England and Wales High Court, where Birss J accepted Lucy Habberfield's claims and awarded her a cash sum of GBP1.17 million representing the value of her share of the land, to be paid immediately. This excluded a piece of land and the farmhouse where Jane Habberfield lived, but Jane would still have to sell her share in order to pay Lucy, and there would be a capital gains tax liability arising from the sale. Moreover, Jane's income had dropped sharply when the farming business came to an end on the death of her husband.

Birss's judgment gave rise to much unease among legal sources, and Jane Habberfield appealed on the grounds that it was clearly unfair to her.

However, the England and Wales Court of Appeal (EWCA) has now agreed that the High Court was within its rights in delivering a result so far tipped in Lucy Habberfield's favour. Although it described the outcome as 'hard' for Jane Habberfield, it was within the first instance judge's discretion, said Lewison LJ, backed by Moylan LJ and Rose LJ.

Another ground of appeal raised by Jane Habberfield was that she and her husband had, in 2008, made Lucy an offer that would have resulted in her ultimately receiving a viable dairy farm, but Lucy turned the offer down. This, claimed Jane, meant that it was not inequitable or unconscionable for Frank and Jane to resile from their earlier assurances, and that Lucy's rights under proprietary estoppel were thereby extinguished.

However, this argument was rejected by both the High Court and by the EWCA: 'Underpinning the whole doctrine of proprietary estoppel is the idea that promises should be kept', said Lewison LJ in the EWCA judgment. 'We were not shown any case [law] in which the rejection of an offer meant that the claimant, who had kept her side of the bargain, received nothing...If Lucy is to be taken to have waived whatever rights she might have had by 2008, it would have been necessary for her to have known that she had such rights; and to have communicated the fact that she was giving them up. None of that happened on the facts.'

The EWCA accordingly rejected Jane Habberfield's appeal, and ordered her to pay Lucy her share of the equity (Habberfield v Habberfield, 2019 EWCA Civ 890).

Sources

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