Understanding Proprietary Estoppel and Inheritance Claims: Insights from Guest v Guest Supreme Court Ruling
7 minute read
“One day my son, this will all be yours”
The Supreme Court judgement in Guest v Guest (2022) shone a light on the equitable doctrine of proprietary estoppel and the remedies available to a claimant whose claim for proprietary estoppel is established.
Proprietary estoppel provides a remedy for a claimant who has not realised property that they believe they are entitled to, due to the words and/ or conduct of the owner of the property.
There are three essential elements, all of which must exist, for proprietary estoppel to be proved:
- There must have been a representation made to the claimant, by the owner of the property, that ownership of the property will pass to them;
- The claimant must have acted in reliance of that representation;
- They must have acted to their detriment.
Due to the nature of this type of claim, a significant number of proprietary estoppel claims relate to agricultural property. However, anything can be the subject matter of a propriety estoppel claim. I recently defended a claim where a public house was being fought over.
A claim for proprietary estoppel does not have to be made on death and indeed in Guest, the claimant son of the property owners issued proceedings when he realised that his parents had changed their wills, to his exclusion. Most claims do however arise from death.
The other common way to seek suitable provision from an Estate, is to make an application pursuant to the Inheritance (Provision for Family and Dependants)(NI) Order 1979. Claims under the 1979 Order must be made within six months of the issue of the Grant of Representation in the challenged Estate.
The 1979 Order identifies a pool of potential claimants, who may make an application if they believe that reasonable provision has not been made for them in the will or in the intestacy of the Deceased. The potential claimants are:
(a) the spouse or civil partner of the Deceased;
(b) a former spouse or former civil partner of the Deceased;
(c) a child of the Deceased;
(d) any person (not being a child of the deceased) who was treated as a child of the Deceased
(e) any other who person who, immediately before the death of the Deceased, was being maintained, either wholly or partly, by the Deceased;
(f) any person, for two years before the death of Deceased, was living with the Deceased as if they were the Deceased’s spouse or civil partner.
A spouse of the Deceased will be treated to a different standard than the other categories, but all claimants must prove that reasonable financial provision had not been made for them.
The term “reasonable financial provision” would suggest that there the claimant needs to have had some financial reliance on the Deceased prior to death but the Courts have generally applied quite a wide interpretation to what is meant by this term.
In the seminal case of Ilott -v- Blue Cross (2017), the Supreme Court affirmed that Judge at first instance’s decision to make an award to the adult daughter of the Deceased who had been estranged from her mother for many years. Claims will therefore be very much judged on their individual merits.
In this jurisdiction, the majority of people do not have a will. The rules of intestacy, which determine how an estate will be distributed when no will exists, are enshrined in the Administration of Estates (NI) Order 1955. Whilst there have been some amendments to this legislation since it was enacted, still no provision has been made for the likes of co-habiting partners or stepchildren.
The Courts in this jurisdiction very much respect the principle of testamentary freedom – the right to leave your estate to whomever you choose – and the existence of a will will provide very helpful guidance to the Court, in the event of claim. The importance of a will cannot be understated, however the will is only one element that the Court will need to consider.
As society moves away from what is viewed as the traditional family model, disputed estate claims are only set to rise. To help prevent a challenge, and to ensure that that your estate is distributed in accordance with your wishes, it is important to have your affairs in order – principally by putting a suitable will in place, after having considered:
- Have you made a promise to anyone, in relation to your property, which it would be inequitable to break?
- Is anyone reliant on you who will be financially impacted by your death?
Having done this, it is crucial that your will is accompanied by a careful note outlining any reasons and rationale for excluding someone who may expect to be named in your will but isn’t or why they don’t benefit to the extent that they would expect.