Estoppel generally arises where one party has been induced to behave in a certain way on the basis of a proposition, promise or a statement made by someone else, and then the person who the statement tries to go back on their word. If a claim of estoppel is successfully it generally means the party who made the statement has to honour it.
Essentially in the right circumstances it prevents parties from going back from statements or promises that they have made to others. A famous quote by a judge on the topic estoppel says "the law should not permit an unjust departure by a party from an assumption of fact which he has caused another party to adopt or accept for the purpose of their legal relations". In most cases the law of estoppel operates as a shield (that is to say a defence) and rarely as a sword (that is as a form of attack).
There are various forms of estoppel, which were developed in both the courts of law and equity. In all of them a party (A) is unlikely to be able to rely upon an estoppel against another party (B), unless it can show:
- A clear and unequivocal communication from (B) as to a particular state of affairs, or a shared understanding between A and B.
- B must objectively have intended A to rely upon that statement or promise.
- A reasonably relied upon the communication or understanding to its detriment.
- B now seeks now does not wish to honour the original communication/understanding.
In recent case in the Court of Appeal (CoA), the High Court (HC) had previously made a ruling as to whether two sons had proved detriment by committing their working lives to the family business even though they had also received substantial financial rewards for doing so.
Three brothers A, B and C had all worked for the family farming business for most of their lives. In the initial years A and B worked long hours for low wages with profits being ploughed back into the business. Further to a reorganization of the business in 2014 and B taking over the management, they began to receive earnings of over £100,000 with significant pension contributions and were also given property. After the death of their mother (M), the relationship between the father (F) and two of the sons (A and B) deteriorated. On F's death, he left his entire estate to C.
The HC had decided that the parents had led their sons to believe that, if they committed to working in the market garden business, it would be left to them all equally. The judge felt that all the elements of estoppel had been established. The parents had made assurances, which were relied upon to the sons' detriment. It would therefore be unfair for F's estate to go back on the assurances that had been made to A and B. As such the HC awarded one third of F's estate to each of the three sons. C then appealed the decision. C’s argument focused on “detriment” and whether this could be proven where his brothers had, in fact, received substantial financial benefits including homes and pensions, and had potentially earnt more money than if they had chosen other careers.
Ultimately the appeal was unsuccessful, and the CoA agreed with the original HC decision. The CoA felt that A and B's commitment to the family business had been detrimental in affecting decisions about education, training or career which have lifelong consequences.
As ever, cases of this nature are always decided based on their individual facts and circumstances, and legal advice should always be sought.