Moore Estoppel - Court of Appeal Judgment
In 2016, in the pages of Agricultural Lore, we reported our success in the Court of Appeal (when I was assisted by Charlotte Razay) in Davies v Davies. Since then there have been a number of further High Court decisions in relation to estoppel cases applying to farms, including our success in the case of Moore v Moore (where I have been assisted by Rachel O'Connor).
The other side appealed the High Court decision in Moore and this week the Court of Appeal has given its Judgment. The finding of estoppel in favour of Stephen Moore has been upheld.
The case is instructive in many ways. Regular readers will already have on board that to succeed with a claim for proprietary estoppel it is necessary for there to be representations which were relied upon by a party to their detriment to the extent that the Court considers that it is unconscionable for the promises to be withdrawn. Where this arises, the Court then needs to undertake an exercise in deciding how to satisfy the "equity" created by the estoppel.
In the 2016 Davies Court of Appeal case, the only issue was how the equity was to be satisfied. The High Court had already decided at a separate trial that representations which were made and relied upon over a number of years entitled the Claimant to a lump sum payment of £1.3 million. The Court of Appeal reduced that to £500,000.
As in the Davies case, unusually with estoppel, in the Moore case the party making the representations was still alive at the time of the Trial. Most estoppel cases arise after the death of the party making the promises.
What happened in the Moore case is most unusual. Stephen's Father, Roger, farmed in partnership on an equal basis with his brother, Geoffrey. Although Geoffrey had two sons of his own, he decided that (subject to a payment, representing much less than the value of his interest), he would pass his share of the Partnership and the farms to Stephen, in anticipation that Stephen would also inherit his Father's share and secure the farming of the Moore family for yet another generation.
The Partnership's accountant advised in relation to Geoffrey's retirement and a local solicitor was instructed to deal with the consequential conveyancing. In the event, the property transfers were not all completed before the dispute arose. Some four years after Geoffrey's retirement, Roger gave notice to Stephen to dissolve the Partnership. Almost inevitably, there was no written Partnership Agreement. As a consequence, there was a dispute as to whether the Partnership could be dissolved. Eventually, the High Court Judge decided that the partnership between Roger and Stephen, following on from Geoffrey's retirement, was one for the joint lives of the parties. Plainly, it would have assisted to have had a Partnership Agreement.
Sadly, by the time that Roger gave his notice to dissolve the Partnership, his health was in serious decline. It was eventually disclosed that he was suffering from Alzheimer's and, since the Trial in the summer of 2016, he has been in care. During the litigation the Court decided that he did not have sufficient capacity to conduct the litigation and his wife, Pamela, was appointed as his litigation friend, effectively becoming the party in opposition to Stephen.
The High Court Judge was highly critical of the evidence of Pamela and others on her behalf. The Judge accepted the evidence of Stephen and his witnesses, including Geoffrey, finding that the estoppel was established. It was noteworthy that no witness statement for Roger was produced in the proceedings. The High Court Judge decided that the equity would be satisfied by providing accommodation for Roger and Pamela for the rest of their lives; payment of care fees (which Stephen had always offered); and an ongoing income.
In the Court of Appeal Pamela challenged every aspect of the Judge's decision: 13 grounds of appeal in all including whether there was estoppel at all. Pamela did succeed on only one of the 13 grounds of appeal. In the only Judgment delivered in the Court of Appeal, Lord Justice Henderson decided that the better approach to satisfy the equity was to have "a clean break solution". He said that Pamela should "be provided with a lump sum which will enable her to rehouse herself comfortably in appropriate accommodation of her choice, to enjoy a reasonable income, and have sufficient capital…to enjoy holidays and occasional luxuries, to provide for Roger (over and above the basic costs of his care), to make gifts to her daughter and grandchildren, and to have a cushion for contingencies". The Judge went on to say that this lump sum must be raised by Stephen. However, the Court of Appeal did not consider that it had the material to deal with this itself. Instead he decided that a determination as to the lump should be remitted to the High Court. Lord Justice Henderson added that his "strong inclination at the moment is to direct that the matter be remitted to the same Judge".
Further comment with regard to how this exercise will be played out would be inappropriate, as the proceedings are not concluded. However, the parallels, in reverse, with the Davies decision are that the Courts are increasingly using the mechanism of a lump sum payment to achieve a clean break between parties, whether that is paying the party who claims to have relied upon the representations or paying the party who made the representations.
One footnote. Every reported Court decision is a failure. It is a failure to achieve a resolution which remains the paramount objective of all solicitors. In the Moore case, the High Court Judge awarded indemnity costs in favour of Stephen from December 2015 as a consequence of the failure to accept an open offer of settlement which involved both the transfer of property and a lump sum payment. Sadly, for the Moore family, there will be more to report in relation to this dispute in due course.