Farming family disputes have been back in the spotlight in the past month with the High Court handing down its decision in Mate v Mate [2023] EWHC 238 (Ch). Over the course of 7 days, in the latter part of 2022, Andrew Sutcliffe KC considered claims founded in proprietary estoppel and unjust enrichment pursued by Julie Mate against her mother (Shirley) and two brothers (Robert and Andrew).
The judgment comes only a few months after the Supreme Court's decision in Guest v Guest [2022] UKSC 27, which considered the correct approach to remedy in successful proprietary estoppel claims (as discussed by my colleague Edward Rowntree in a 'Brew' here).
The judgment (no less than 90 pages) serves as a reminder of the legal tests that must be met in such claims and that each case will turn on its own facts.
Background
Shirley and Donald Mate had married in 1954; they had 5 children – 2 sons and 3 daughters. They ran a dairy farm and also a milk bottling and milk retail business. The sons became partners in the business shortly before their father passed away in 1992.
By the time of his death, Donald owned land (mostly jointly with Shirley) totalling around 140 acres and the partnership rented a similar amount again. Donald left his share of the farm business to Shirley, and his two sons, in equal shares. He also passed his share in other property that he owned jointly with Shirley, to his sons in equal shares.
Julie had been unhappy with their father's will, which left the sum of £36,000 to the daughters in equal shares. Such was the financial predicament of the farming partnership at the time, that this provision was later substituted with a gift of 3 cottages, because there were insufficient sums to pay the daughters. However, Julie did not challenge her father's will at the time and acknowledged during the trial that she ought to have done.
The Potential Development
In around 2007, Julie started looking into the potential development of around 40 acres of the farm (the Netherton Moor land). She identified a suitable planning consultant, Mr Hartley and arranged to bring him to a meeting at the farm with her mother and brothers. Following that meeting in June 2008, Shirley, Robert and Andrew agreed that Julie should engage the services of Mr Hartley to assist her in achieving the removal of the Netherton Moor land from the Green Belt with a view to such land being allocated for housing on the Council's Local Plan.
It was Julie's case that she worked on this project with Mr Hartley at various times between 2008 and late 2015, in reliance on promises made to her by Shirley that if she succeeded in removing the Netherton Moor land from the Green Belt and securing its allocation for housing, the proceeds of sale of that land resulting from its sale to a developer would be shared equally between Shirley and her five children.
In late 2015, the Council published its draft Local Plan which showed that part of the Netherton Moor land had been released from the Green Belt. Julie sent a letter to Andrew, copied to the rest of the family, informing them of this significant news.
By this time, Julie's mother and brother had entered into an option agreement with the house builder Persimmon, although Julie only found out about this after the event.
Proprietary Estoppel Claim
Julie claimed that her brothers knew of their mother's promises and that they, together with their mother, were aware of the steps that she was taking in reliance on those promises. Accordingly, she claimed that her mother and brothers were estopped from denying that on the sale of the farmland she and her sisters would receive with them an equal share of the proceeds of sale. This is Julie's proprietary estoppel claim.
Unjust Enrichment Claim
Julie's alternative claim was on the basis that her mother and brothers knew that she would not have been prepared to spend time and money on the work that she did in removing the Green Belt restriction from the Netherton Moor land and securing its allocation for residential housing development without recompense and that, unless she is rewarded for her work, they will have been unjustly enriched. By way of compensation, Julie claimed a share in the proceeds of sale of the Netherton Moor land, or such other compensation as the court thinks fit.
The Judge's Conclusions on Julie's claims
The starting point for the Judge (having set out an extensive account of the evidence/chronology) was to consider whether Shirley had made promises to Julie of sufficient clarity, such that it was reasonable for Julie to rely on those promises.
Having reflected on Julie's pleaded case, the Judge turned to the evidence and in particular the contemporaneous documentation, mainly consisting of letters and the extent to which they referred to the promises now alleged to have been made. The Judge found that there was no documentary evidence to support the suggestion that either specific or even generic promises had been made. This was despite letters having been written by Julie to her mother and her sisters during the relevant time. The Judge found that the content and tone of those letters would have been different if the promises had been made as alleged, in some instances finding the content "inconsistent" with Julie's allegations. The Judge found that Shirley was likely to have said that her daughters "would be looked after financially" if a windfall was achieved on the sale of the Netherton Moor land, but the promise/assurance went no further than that. In the context of proprietary estoppel, it was not a promise or assurance of sufficient clarity, such that it would be reasonable for Julie to rely on it.
The Judge concluded therefore that no equity arose, and the issues of reliance and detriment did not fall to be considered.
The Judge then turned to Julie's unjust enrichment claim. Given that the Defendants did not rely on any defences (other than to simply deny the claim for unjust enrichment), the Judge considered the following questions: (1) have the Defendants been enriched? (2) was the
enrichment at Julie's expense? (3) was the enrichment unjust? If the answer to each of those questions is in the affirmative, it would then be necessary to consider (4) the appropriate remedy?
The Judge was satisfied on the evidence that the first 3 questions could be answered in the affirmative. It was clear that the work undertaken by Julie was material in unlocking the development potential in the Netherton Moor land; that she expected to be compensated; and that the enrichment was unjust.
In order to determine the appropriate remedy, the Judge considered the input of the experts, whose expertise lay in planning matters. The evidence included the significance of the work undertaken by Julie and Mr Hartley and the extent to which it impacted the Council's decision making in relation to the Netherton Moor land and also how to value the work undertaken.
The Judge concluded that Julie's work was of great significance:
"I find that, had Julie not raised the possibility of removing the Green Belt restriction in relation to the Netherton Moor land in the discussion with her brothers at the funeral tea in March 2004 and then worked on the project from 2008 onwards, no one else in the family would have done so. Moreover, neither Andrew nor Robert nor anyone else in the family would have taken steps to engage specialist consultants to assist them in removing the Green Belt restriction. As a result, no developer or other third party would have come forward to express an interest in the development of the Netherton Moor land and the land would therefore remain undeveloped." (para.260)
As to how to value Julie's services, the Judge concluded:
"In the circumstances it is appropriate for Julie to be paid for her services on a quantum merit basis calculated in the same way that a land promoter's fee would be calculated, in other words on a commission basis by reference to an objective valuation of the services she and Mr Hartley in fact performed. That is the price which a reasonable person in Andrew and Robert's position would have had to pay for those services. In light of my finding that Julie's role was akin to that of a land promoter and that, like a land promoter, she took the risk of not being remunerated, she is entitled to be rewarded on the basis of a fee set as a percentage of the sale proceeds received by Shirley, Andrew and Robert from Persimmon." (para.283)
"The experts were agreed that, following the grant of planning permission, a land promoter would have received a fee of between 15% and 30% of the uplift in value. I accept Mr Creighton's evidence that such uplift in value was £8.7 million, being the difference between £300,000 which was the agricultural value of the land (assessed by reference to the average price achieved on sales of agricultural land in the vicinity between 2016 and 2019) and the price paid by Persimmon under the option agreement of £9 million." (para.293)
The Judge took into consideration that Julie was not in fact a professional land promoter appointed under a contract, nor did she play any role in the later stages of the planning process which resulted in the grant of planning permission:
"Accordingly I conclude that the objective market value of the benefit of the services provided by Julie to Andrew and Robert should be assessed by reference to a commission fee of 7.5% of £8.7 million (being the amount of the uplift in the market value of the land from £300,000 to £9 million). On that basis, she is entitled to be paid £652,500." (para.299)
Key takeaways
- Each component of the test for proprietary estoppel must be proven in order to mount a successful claim. Unless a Claimant is able to establish that a promise or assurance of sufficient clarity has been made in addition to demonstrating detrimental reliance and detriment, a claim will fail.
- The court will necessarily attach weight to the presence (or indeed absence) of contemporaneous documentation and its contents. This is particularly the case where witnesses are giving evidence of matters alleged to have happened many years ago. Here, the court had in mind the guidance provided in recent authority regarding the inherent unreliability of memory: R(on the application of Dutta) v General Medical Council [2020] EWHC 1974 (Admin) at [39]-[40].
- Where, as in this case, the Defendants knew of the work that was being undertaken by Julie for their benefit and that she expected to be remunerated for it, yet failed at any stage to inform her that she should stop the work, this will likely contribute to a conclusion that the enrichment has been unjust.
- Where a party wishes to challenge a will, they should seek legal advice at an early stage and address matters promptly. The feeling of 'injustice' around her father's will was clearly a motivating factor for Julie, leading to a situation where some 30 years later, in this litigation, she was seeking to redress the balance.
- These cases do take their toll on families; the Judge observed that this litigation had 'torn' this family 'apart'. By the time that the trial came around, Shirley, (now 89; 88 when she gave evidence) had abandoned her original defence and substituted it for one which admitted her daughter's claims. The result of which was that her sons and their children were no longer visiting or speaking to her.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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