Court of Appeal Rules on Family Business Dispute

Winter vs Winter – Court of Appeal – [2024] EWCA Civ 699 – Case Summary

The Court of Appeal has delivered its judgment in the case of Winter vs Winter, addressing a proprietary estoppel claim arising from a family business dispute.

The case involved Richard and Adrian Winter, who claimed that their father, Albert Winter, had assured them that the family business and its assets would be divided equally among his three sons, including Philip Winter. The High Court had previously ruled in favor of Richard and Adrian, finding that they had relied on their father's assurances to their detriment.

Albert Winter had led his sons to believe that if they committed to working in the family business, they would ultimately receive equal shares of the business and its assets. Richard and Adrian devoted their working lives to the family business, working long hours for relatively low wages, with profits being reinvested into the business.

Following Albert's death in 2017, his will left the residue of his estate, including his interests in the family business, to Philip Winter. Richard and Adrian challenged this, arguing that it was contrary to the assurances given by their father.

The High Court found that Albert and Brenda Winter had made assurances to their sons that if they committed to working in the family business, the business and its assets would be divided equally among them. The court concluded that Richard and Adrian had relied on these assurances and had suffered detriment as a result. The court ordered that Albert's share in the Partnership and the Company be held on trust for Richard, Philip, and Adrian in equal shares.

Philip Winter appealed the decision, focusing on the issue of detriment. He argued that Richard and Adrian had not suffered detriment because they had derived substantial financial benefits from working in the family business. The Court of Appeal, however, upheld the High Court's decision, finding that the detriment suffered by Richard and Adrian outweighed the financial benefits they had received.

The Court of Appeal emphasized that the detriment suffered by Richard and Adrian was not limited to financial terms. The court noted that the lifelong commitment to the family business and the loss of opportunity to pursue alternative careers constituted significant detriment. The court also highlighted that the assurances made by Albert and Brenda Winter had induced Richard and Adrian to continue working in the family business for many years.

This ruling underscores the importance of proprietary estoppel in family business disputes and the need for clear and unequivocal assurances when making promises regarding the division of business assets. The decision provides valuable guidance for legal practitioners dealing with similar cases involving family businesses and proprietary estoppel claims.

The case was heard by Lord Justice Moylan, Lord Justice Newey, and Lady Justice Falk. Alex Troup KC represented the appellant, Philip Winter, while Hugh Sims KC and Michael Selway represented the claimant respondents, Richard and Adrian Winter. The second defendant, Clarke Willmott Trust Corporation Limited, did not appear and was not represented.

The judgment was handed down remotely on 21 June 2024.