Analysis
The court was concerned with the claim of Richard and Adrian Winter to challenge the dispositions made by their father, Albert Winter, in his will dated 30 April 2015 (the 2015 will) which left the residue of his estate to their brother, Philip. The principal asset in Albert’s estate was his share in a market garden business operated by the family for many years, and since 1998 as a partnership between Albert, his late wife Brenda, the claimants and the first defendant. In January 2004 the partnership business was transferred to a company.
The claim was put on two principal bases. The first was the contention that the deceased and Brenda had made mutual wills in the same terms as the will Brenda had made in 2000. The second was on the basis of proprietary estoppel. The claimants contended that Brenda and Albert made numerous assurances to them to the effect that, if they committed their lives to working in the family business, the parents would leave everything (or, at least, their share of the land and farming business) to the sons equally, and that the claimants relied to their detriment on those assurances. In the alternative the claimants sought to enforce an option to purchase Albert’s share under the partnership agreement.
The learned judge engaged in detailed consideration of the law and the elements required to establish a claim in proprietary estoppel and observed that the question of the appropriate remedy must now be determined in accordance with the decision of the Supreme Court in Guest v Guest [2022], taking the approach set out by Lord Briggs at paras 74 to 80. He found that to establish a proprietary estoppel, the relevant assurance must be ‘clear enough’ and what amounts to sufficient clarity is ‘hugely dependent on context,’ Thorner v Major [2009] applied.
Held:
The assurances given by Albert and Brenda throughout their lives were sufficient to give rise to proprietary estoppel in favour of the claimants.
Where informal assurances were made within a family, particularly over a very long period, such as in this case, the context was very important. There were three aspects of the context which were critical in determining the claim. First, there was no doubt that the business started by Albert and Brenda, which they built up over many years with the help of their sons, was always intended by them to be a family business, and only a family business. The fact that at no stage had there been any contemplation by the parents of leaving the business to anyone other than their sons provided important context for what they did say over the years. Second, Albert and Brenda had always spoken in terms that the sons would be treated equally. Third, Albert and Brenda had said things on many occasions to encourage their sons to continue working in the business, as justification for the long hours for relatively low remuneration and the reinvestment, not distribution, of profits for many years.
Where there was an absence of formality in what parents say to their children, it was difficult to distinguish a mere statement of intention from an assurance. However, where statements were made in order to encourage the children to commit to working in the family business, it was easier to characterise what was said as an assurance sufficient to support a proprietary estoppel.
While it was correct that an assumption made by the sons that they would inherit everything on their parents’ death was not enough to found an estoppel, there was a fine line between a mere assumption and an assumption (or belief) induced in the sons by things said to them by their parents over a long period. The present case fell on the right side of that line so as to be sufficient foundation for an estoppel.
As to the submission that Albert could not have made the assurances found to have been made and that Albert believed he was free to deal with his share of the partnership as he wished, such a submission was far from determinative, given that the binding nature of the assurances arose not because they were intended by the promisor to be binding, but as a result of detrimental reliance on them by the promisee. That element of reliance was clearly established and the element of detriment was satisfied in this case. The dicta of Rajah J at para 96 of Spencer v Estate of John Mitchell Spencer [2023] supported the conclusion that balancing the detriment against countervailing benefits can be considered part of the question whether any detriment was suffered at all, as much as in deciding upon the appropriate remedy. The Spencer case reinforced the point that it is not possible to put a monetary value on the unquantifiable detriment of committing an entire working life to a family business, giving up the chance to build an alternative life elsewhere, and that such commitment is likely to constitute detrimental reliance.
It would be unconscionable for Albert’s estate to renege on the assurances that were made to the claimants, and upon which they relied by devoting their lives to the family farming business.
Adopting the starting point suggested by Lord Briggs in Guest, the appropriate remedy in a case where assurances were made, and acted on, over a period of some 40 years was to give full effect to the assurances.
In determining the subject matter of the assurances, the estoppel related to Albert’s and Brenda’s interests in the assets and business of the partnership, and Albert’s share in the company, but not to their personal estate. The estoppel entitled each of the claimants to a beneficial interest in a one-third share of those assets.
The claimants’ case was not barred by contractual estoppel by virtue of their entry into the partnership agreement and the option under clause 13 of the partnership agreement for continuing partners to buy the share of an outgoing partner. Noting the difference between Horsford v Horsford [2020] and the instant case, there was no inconsistency in this case between the fact that the partnership agreement contained an option entitling the continuing partners to buy out the share of a deceased partner, and the claimants having relied on assurances as to what would happen to their parents’ share on their death. The notice purporting to exercise the option under clause 13 of the partnership agreement was ineffective.
The contention that Albert and Brenda had made mutual wills was rejected. While it was unnecessary to consider the alternative claim based on mutual wills, where one testator made a binding agreement with another testator that both would make their wills in a particular form (which may, but do not have to be, the same) and that they would not revoke them or (depending on the terms of their agreement) change them without giving the other the opportunity to do the same, then upon the death of the first to die, the survivor is bound by a constructive trust to give effect to their agreement, which could be found by making inferences from the circumstances. However, the mere fact that two testators have made wills in the same form provides no basis for inferring an agreement that the second to die is irrevocably bound not to alter their will after the death of the first to die. There was a material difference between parents being in agreement as to the division of their estate between their children on their death and making implicit assurances to their children over a long period to that effect, and the parents agreeing between themselves that the survivor could not in any circumstances change their will.
JUDGMENT MR JUSTICE ZACAROLI: Introduction [1] The claimants, Richard Winter and Adrian Winter and the defendant, Philip Winter are brothers. The claim is brought to challenge the dispositions made by their father, Albert Winter, in his will dated 30 April 2015 (the ‘2015 Will’). For convenience, and without intending any disrespect, I will refer to …Continue reading "Winter & anr v Winter & anr [2024] WTLR 327"