Katie Turney, Wedlake Bell
Only weeks after the Supreme Court (SC) handed down its decision in Guest v Guest, another case of proprietary estoppel is attracting considerable press coverage.
Leigh White, a solicitor, is suing David Gladstone, a wealthy former diplomat, to honour his "promise" that she would inherit his £20m estate, including the historic Wotton House in Buckinghamshire, on his death. The proceedings were brought by way of counter-claim to Mr Gladstone issuing possession proceedings against Ms White who moved into the Grade I listed property in 2017 and now refuses to leave.
This article considers the parties' chances of success and what this might mean for inheritance planning.
Leigh White's Claim
If Ms White is to succeed in her claim, she must establish three inter-related elements:
Promise: Ms White argues that between 2007 and 2017 Mr Gladstone repeatedly promised that Wotton House would be hers after his death. This seems to be confirmed by an entry in Mr Gladstone's diary in October 2011 which states "Wotton is promised to Leigh". It is rare for there to be written evidence in these types of cases and it will not harm a potential claim if the 'promise' was only given orally.
Reliance and detriment: A gratuitous promise cannot be enforced unless Ms White changed her position in reliance upon it and it was reasonable for her to do so. Ms White argues that by taking on the responsibility of managing Wotton House for Mr Gladstone (having previously been a solicitor at a leading City firm), she acted to her detriment. The Court will also consider whether it was reasonable for Ms White to rely on conversations with Mr Gladstone in which he asked her to "take on Wotton" when he died and whether she had in fact changed her position in reliance on these discussions.
Relief: If the two elements above are proved, Ms White will have established an interest in the property. The Court then has broad discretion to decide what relief is appropriate to satisfy that entitlement. Proprietary estoppel cases are fact-specific and the outcomes are therefore unpredictable. Indeed, one of the questions for the SC in Guest was how discretion should be exercised. The SC confirmed that Courts should adopt an "expectation-based approach", checked against the detriment suffered, with an overall regard to ensuring proportionality and avoiding an unconscionable result.
Although the full facts are not yet public, this does not seem to be a case where Ms White toiled for Mr Gladstone for many years without remuneration. The pair bonded over mutual interests and it is asserted that over time Ms White came to be treated as a daughter by Mr Gladstone. It seems that she took over the running of the house gradually, taking more responsibility for Mr Gladstone's affairs following the deaths of his first wife and son. Furthermore, Ms White and her family have occupied Wotton House rent free as their "main residence" since 2017; arguably a benefit not a detriment.
That said, it seems likely that Ms White will succeed in establishing an interest in Wotton House but transferring the freehold title could be considered disproportionate and she might be more appropriately compensated with cash. In Guest, however, the SC left the decision as to the ultimate remedy to the parties and it will be interesting to see whether a similar choice is presented in this case.
David Gladstone's Claim
Mr Gladstone moved temporarily to Cumbria with his new wife during the pandemic and argues that he cannot return to Wotton House due to the Whites' occupation and the breakdown in the relationship. Ms White's position is that Wotton House would pass to her on Mr Gladstone's death so even if she is successful in establishing an estoppel, it would be surprising if the Court allowed Ms White to remain in the property whilst Mr Gladstone is alive, as this would exceed what is necessary to satisfy the equity of the case.
Implications for Inheritance Planning
Like Guest, what is striking about this case is that the claimant is seeking to enforce a promise expressed to take effect on the death of the promisor before that person has died. The Court's apparent willingness to allow these claims is difficult to reconcile with the concept of testamentary freedom: even if the promisor has made a Will reflecting the promise, in England & Wales an adult can change their Will at any time until their death provided they retain testamentary capacity. Whilst a testator must consider the moral claims on his/her estate, relationships change and, in theory, one is free to update their Will to reflect their current wishes. Increasingly, this theory is being challenged and all clients should be warned that beneficiaries may no longer be prepared to wait until after death to claim "their" inheritance.