Unjust enrichment as an alternative to proprietary estoppel

Dispute Resolution Partner Melissa Worth discusses the decision recently handed down by the High Court in the case of Mate v Mate bringing family farming disputes back into the spotlight

Unjust enrichment as an alternative to proprietary estoppel

In a decision recently handed down by the High Court in the case of Mate v Mate [2023] EWHC 238 (Ch) — bringing family farming disputes back into the spotlight following the judgment of the Supreme Court in Guest v Guest [2022] UKSC 27 — the doctrine of proprietary estoppel was again considered in detail, this time in the context of broken promises over the sale of family-owned land.

This case provides a useful reminder of the evidential hurdles that a Claimant must clear for a Defendant to be estopped from reneging on their promise, not least that any assurances must be sufficiently clear on which to found such claim. It also examines, where the elements of estoppel cannot be satisfactorily made out, how an alternative claim for unjust enrichment can still succeed.

The facts of the Mate case

Arising as a result of what was previously farmland being sold for a greatly uplifted value to a residential housing developer, the Mate case concerned various members of a West Yorkshire farming family. The Claimant, Julie Mate, was one of five children of the First Defendant, Shirley Mate, and sister to Andrew and Robert, the Second and Third Defendants, the two brothers to whom 50% of the farm business and land had been left by their late father. The remaining 50% had been bequeathed to Shirley, with the three daughters entitled to an equal share of a nominal cash sum.

The Claimant maintained that having identified a large piece of farmland that she considered could be sold off for development — and with the knowledge and encouragement of all three Defendants, including her engaging and paying for the services of a planning consultant — she worked over a number of years to achieve this. Indeed, following the removal of the land from the green belt and this being officially allocated for housing by the council, the land was sold for the purposes of development at an £8.7 million uplift. This represented the difference between £300,000 which was the agricultural value of the land and the price paid of £9 million by Persimmon Homes Ltd.

It was the Claimant’s case that she had worked on this project at various times between 2008 and 2015 in reliance on promises made by her mother that, if she succeeded in removing the land from the green belt and securing its allocation for housing, the proceeds of sale of that land resulting from its acquisition by a developer would be shared equally between Shirley and her five children.

The court’s findings in the Mate case

In determining the primary claim for proprietary estoppel, the first issue for the court to decide was whether the First Defendant had made promises of sufficient clarity that it was reasonable for the Claimant to rely on those promises. While Mr Andrew Sutcliffe KC, sitting as a High Court Judge, was satisfied that the land had been sold at a greatly uplifted value largely as a result of the Claimant’s work, he was not persuaded that the promises made by the mother were clear enough to entitle her daughter to believe that she would be receiving an equal share of the proceeds of sale.

The HC Judge accepted that the First Defendant may well have made general comments to the Claimant over the years that she expected her daughters to benefit if the farmland ever came to be sold but, whatever was said — such as "the money will be shared with the girls" and "the girls will be looked after" — was too vague and unspecific a promise for it to have been reasonable for the Claimant to rely on this. The Judge also found that the First Defendant did not make any promise which was intended to bind the two brothers, nor was there any evidence that the Second and Third Defendants were aware of what their mother may have said to the Claimant. As such, they could not be taken to have agreed to whatever vague assurances may have been given in any event.

Accordingly, the fact that no promise of sufficient clarity was made by the First Defendant to the Claimant meant that no equity arose on which a claim in proprietary estoppel could be founded.

However, in the alternative and based on the same factual matrix, the court accepted that the three key questions as to whether unjust enrichment was proven had been satisfied. The Defendant’s had:

• been enriched by the work undertaken by the Claimant, namely the removal of the green belt restrictions and its allocation for residential development;

• the enrichment was clearly at the Claimant’s expense, evidenced by the hundreds of hours spent by the Claimant and thousands of pounds paid by her personally in planning consultant fees; and

• the enrichment was unjust, where the Defendants had clear notice of the work undertaken by the Claimant and had understood that she expected some reward for her services, yet no attempt was made to put a stop to the work being undertaken or to reward the Claimant for her efforts.

The damages awarded in the Mate case

The Defendants had freely accepted the Claimant’s services and knew that the Claimant was not providing those services gratuitously. In ordering the Defendant’s to pay the sum of £652.500, it was held that the Claimant should be awarded a sum equal to 7.5% of the £8.7 million uplift.

The fee of 7.5% represented the market value of the services performed by the Claimant, taking the figure at the lower end of the range, namely 15% and halving that figure to reflect the fact that 1) the Claimant was not a professional land promoter, 2) there was no formal arrangement in place and 3) she had not played any role in the grant of planning permission in the final stages of the process.

Legal disclaimer

The matters contained within this article are intended to be for general information purposes only. This blog does not constitute legal advice, nor is it a complete or authoritative statement of the law in England and Wales and should not be treated as such.

Whilst every effort is made to ensure that the information is correct, no warranty, either express or implied, is given as to its’ accuracy, and no liability is accepted for any errors or omissions.

Before acting on any of the information contained herein, expert advice should always be sought.

©Melissa Worth, January 2023

To discuss any of the above further, please feel free to contact Melissa Worth: melissaworth@bexleybeaumont.com  |  07828 773892