“Moore Estoppel”

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Case: Moore v Moore [2018] EWCA Civ 2668

This article first appeared on Lexis Nexis, immediately following the decision of the Court of Appeal in Moore v Moore [2018] EWCA Civ 2668 in December 2018

What are the practical implications of this case?
    1. The Court of Appeal’s judgment is the latest in a series of cases concerning proprietary estoppel. The Court of Appeal considered, once again, the complex legal principles which stand behind the basic premise of establishing a case in proprietary e This principle is that 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by a party to their detriment, to the extent that the court considers that it is unconscionable for the promises to be withdrawn.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.
    1. As the High Court judge had done so before, Lord Justice Henderson considered the guidance of Lord Justice Lewison in the case of Davies v Davies. When considering the broad judgmental discretion to be applied, Lord Justice Henderson quoted Lord Justice Lewison at [39] where he explained the two approaches:

‘One line of authority takes the view that the essential aim of the discretion is to give effect to the claimant’s expectation unless it would be disproportionate to do so. The other takes the view that [the] essential aim of the discretion is to ensure that the claimant’s reliance interest is protected, so that she is compensated for such detriment as she has suffered. The two approaches, in their starkest form, are fundamentally different: see Cobbe v Yeomans Row Management Limited [2006] … (reversed on a different point). Much scholarly opinion favours the second approach… Others argue that the outcome will reflect both the expectation and the reliance interest and that it will normally be somewhere between the two… Logically, there is much to be said for the second approach. Since the essence of proprietary estoppel is the combination of expectation and detriment, if either is absent the claim must fail. If, therefore, the detriment can be fairly quantified, and a claimant receives full compensation for that detriment, that compensation, ought, in principle, to remove the foundation of the claim… Fortunately, I do not think that we are required to resolve this controversy on this appeal.’

    1. The Court of Appeal, not for the first time, was content not to decide which test was the correct one to be applied and instead echoed the sentiment of previous courts as to the fact-specific nature of the case. Lord Justice Henderson saying at [26]: ‘… although the second approach is logically attractive, I would be wary of according it primacy in a field where cases are so fact sensitive and proportionality has such a prominent role to play.’
    1. 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. Of course, this is a central consideration of the court when deciding how the equity is to be satisfied.
    1. There are clear parallels between this latest decision from the Court of Appeal and the case of The courts are increasingly using the mechanism of a lump sum payment to achieve a clean break between parties where the party who made the promises is still alive, whether that is paying the party who claims to have relied upon the representations or paying the party who made the representations.
    1. In this case, Lord Justice Henderson referred to the judgment of Robert Walker LJ in Jennings v Rice [2002], when considering the appropriateness of a solution which provides a clean break between the parties. Lord Justice Henderson quoted Robert Walker LJ saying at [52]:

‘… The court ‘cannot compel people who have fallen out to live peaceably together’. Although no doubt primarily directed to cases where the warring parties are living under the same roof, the practical wisdom of this recognition applies with the same or scarcely less force in situations where they are living in close proximity to each other and in a relationship of continued financial dependence.’

What was the background?
    1. The Moore family had a long history of farming at Manor Farm, a substantial arable farm comprising some 650 acres near Salisbury. Stephen Moore represented the fourth generation, having grown up living and breathing farming on Manor Farm where he lived with his father, Roger, his mother, Pamela and his sister, Julie.
    1. When Stephen began his working life on Manor Farm, Roger farmed in partnership on an equal basis with his brother, Geoffrey. Stephen later joined his father and uncle as a partner in the business. When Geoffrey made the decision to retire from the partnership, 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 farm to Stephen, in anticipation that Stephen would also inherit his father’s share, securing the next generation of the Moore family to farm at Manor Farm.
    1. 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 a dispute arose between Roger and Pamela on the one side, and Stephen on the other side.
    1. Some four years after Geoffrey’s retirement, Roger gave notice to Stephen to dissolve the partnershi There was no written partnership agreement. As a consequence, there was a dispute as to whether the partnership could be dissolved. Stephen brought a counterclaim in estoppel, on the basis that Roger had promised Stephen that the farm would be his one day to enable him to carry on the Moore family farming legacy.
    1. By the time that Roger gave his notice to dissolve the partnership, his health was in serious decline. Roger was suffering from Alzheimer’s. 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.
    1. The issues between the parties were tried at the High Court, Chancery Division in Bristol. 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.
    1. The High Court Judge was highly critical of the evidence of Pamela and others on her behalf. The High Court Judge accepted the evidence of Stephen and his witnesses, including Geoffrey, finding that the estoppel was established. No witness statement for Roger was produced in the proceedings.
    1. The High Court decided that the equity should be satisfied by accelerating Stephen’s inheritance of the farm and the farming partnership assets. This would enable him to continue the farming operation which, the High Court Judge found, was always Roger’s intention, while at the same time providing accommodation for Roger and Pamela for the rest of their lives, meeting all of the costs of running their home including utility bills and maintenance, payment of care fees and an ongoing income for
What did the court decide?
    1. In the Court of Appeal, Pamela challenged every aspect of the High Court’s decision. There were 13 grounds of appeal in total, including whether there was an estoppel at all.
    1. The finding of an estoppel in favour of Stephen Moore was upheld by the Court of Appeal. Pamela succeeded on only one of the 13 grounds of appeal. That was how the equity should be satisfied.
    1. 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 at [103] 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’.
    1. The Judge went on to say that this lump sum must be raised by Stephen.
    1. The Court of Appeal did not consider that it had the material to deal with the question of how to satisfy the equity itself. Instead, it decided that a determination as to the lump sum should be remitted to the High Court. Lord Justice Henderson added at [108] that his ‘strong inclination at the moment is to direct that the matter be remitted to the same judge…”.

                                                                                                                                                                                                                                            © P R Williams

                                                                                                          December 2018

P R Williams, Ebery Williams – author of Scammell, Densham and Williams Law of Agricultural Holdings

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