Proprietary estoppel life interest upheld by Court of Appeal

The Court of Appeal recently dismissed an appeal by a personal representative against the judgment of HHJ Hellman which concluded that an equity arose in favour of the deceased’s wife pursuant to the doctrine of proprietary estoppel which was to be satisfied by the grant of a life interest in the matrimonial home.The case relates to the estate of the late Ferdinand Anagahara, referred to as “the Chief” to reflect his title in Nigeria. The Chief had three wives, Grace (his statutory wife) and Alice and Benedith (his customary wives). Alice is the first Defendant and the Claimant was Obinna, son of the Chief and Benedith, and the PR of the estate.Alice had continuously lived in a property purchased by the Chief in 1976 since 1984, initially with their three children and latterly with their son and his wife (the second and third Defendants). The Chief predominantly lived in Nigeria but required Alice to remain in the property in London to maintain it and pay for the outgoings. By 2000 the Chief only visited the property a few times a year.The Chief died in 2007. Following a delay in extracting Letters of Administration the Claimant served notices to quit on the Defendants in 2018. Alice’s defence that the property was held on a constructive trust for her was dismissed at trial, however, she was granted a life interest in the property. The Judge at first instance found that an equity arose in Alice’s favour because it would be unconscionable for the Claimant to resile from the representations made by the Chief, the gist of which was that the property was “her house” and that the equity was best satisfied by granting her a life interest. The Claimant appealed that conclusion.The appealThe Claimant contended that the Judge erred in law in the exercise of his discretion to grant Alice a life interest for the following reasons:(1) The Judge appears to have awarded a life interest in line with Alice's expectations. That was not a sufficient reason to grant a life interest, as the aim of the relief is to satisfy the equity, not the  expectations.(2) Even in cases of a clear expectation, the court should not give effect to it where it is extravagant or out of all proportion to the detriment suffered, which was the case here.(3) The lack of proportionality here is demonstrated by the fact that, for very limited detriment. Alice was awarded a life interest with a commercial value of £30,000 per year.Zacaroli J in his judgment agreed that the function of relief in proprietary estoppel cases was to satisfy the equity and not the expectation. He found, however, that the nature of the expectation plays an important part and referred to the Court of Appeal decision of Davies v Davies [2016] P & CR 10. In Davies the Court of Appel used a sliding scale – the clearer the expectation, the greater the detriment and the longer the passage of time during which the expectation was reasonably held, the greater the weight to be given to the expectation. With this in mind the Judge found that considerable weight should be given to the fact that i) Alice had an expectation that she could live in the property for life based on the representations of the Chief; and ii) the expectation was held over a long period of time (since 1984) and at no time did the Chief do anything to contradict that assurance.The contention that in giving effect to the equity was extravagant or out of all proportion to the detriment suffered was dismissed and it was held that the equity was best satisfied by satisfying Alice’s expectation.The case of Anaghara v Anaghara & Ors [2020] EWHC 3091 (Ch) serves as a welcome reminder as to the principles applicable to a claim based on proprietary estoppel and the judgment can be read in full here.

If you have any questions regarding this article issues that have been raised in this article, please contact Sally Goodger.

The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.

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