The recent decision in Davies & Anor v Davies  EXCA Civ 463 has provided some further guidance in relation to the courts view of claims based on proprietary estoppel. Paragraphs 38 and 39 of the Judgement of Lord Justice Lewison offers some very useful commentary.
The case involved a family who run a farming business. Representations were made to the daughter to the effect that she would inherit the family business. Throughout the years the family, like many others had disagreements and the intentions of the parties varied. The case was brought by the daughter to seek a stake in the business and the assets. She had placed reliance on the representations made by her parents and the reliance on these representations had led to detriment.
In the first instance the court was satisfied that the daughter had a case and £1.3 million was awarded. The decision was appealed to The Court of Appeal and the award was reduced to £500,000.
Lord Justice Lewison in his judgement reviewed the position in law and set out, in deciding whether an equity has been raised ...it is a retrospective exercise looking backwards from the moment when the promise falls due to be performed and asking whether, in the circumstances which have actually happened, it would be unconscionable for a promise not to be kept either wholly or in part: Thorner v Major UKHL 18,  1 WLR 776 at  and .
The ingredients necessary to raise an equity are (a) an assurance of sufficient clarity (b) reliance by the claimant on that assurance and (c) detriment to the claimant in consequence of his reasonable reliance: Thorner v Major at .
Detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether repudiation of an assurance is or is not unconscionable in all the circumstances: Gillett v Holt at 232; Henry v Henry at .
There must be a sufficient causal link between the assurance relied on and the detriment asserted. The issue of detriment must be judged at the moment when the person who has given the assurance seeks to go back on it. The question is whether (and if so to what extent) it would be unjust or inequitable to allow the person who has given the assurance to go back on it. The essential test is that of unconscionably: Gillett v Holt at 232.
The essence of the doctrine of proprietary estoppel is to do what is necessary to avoid an unconscionable result: Jennings v Rice EWCA Civ 159;  1 P & CR 8 at .
In deciding how to satisfy any equity the court must weigh the detriment suffered by the claimant in reliance on the defendant's assurances against any countervailing benefits he enjoyed in consequence of that reliance: Henry v Henry at  and .
Proportionality lies at the heart of the doctrine of proprietary estoppel and permeates its every application: Henry v Henry at . In particular there must be a proportionality between the remedy and the detriment which is its purpose to avoid: Jennings v Rice at  (citing from earlier cases) and . This does not mean that the court should abandon expectations and seek only to compensate detrimental reliance, but if the expectation is disproportionate to the detriment, the court should satisfy the equity in a more limited way: Jennings v Rice at  and .
The judge at first instance held that the daughter had, as a result of her parents' representations, formed a number of different expectations... At times she understood that she would inherit the farm and business and, for a period of some years, she believed that she had already been made a partner in the business. In relation to the question of detrimental reliance, the trial judge found that this was not a case in which the daughter "positioned her whole life on the basis of her parents' assurances". The judge identified two broad strands in the detriment that she had suffered: i. working for long hours on the farm without full payment; and ii. the loss of the career (with shorter hours and better pay) that she would have had, had she not worked on the farm.