The Supreme Court has handed down its long-awaited judgment in the case of Guest v Guest, providing practitioners with new guidance as to the remedies available in proprietary estoppel claims.
Proprietary estoppel claims are brought to enforce a promise made (and later broken) in respect of property or land. The case of Thorner v Major  established three key elements necessary to successfully bring a claim:
- that an assurance has been made to the claimant,
- that the claimant has relied on it, and
- that the claimant has suffered a detriment as a result of the reliance.
Guest v Guest is a fairly classic example of a family farm dispute which has led to a claim of proprietary estoppel.
The claimant, Andrew Guest, brought a claim against his parents on the basis that he had worked for over 30 years on the family farm for little reward, on reliance of their promise that he would one day inherit a substantial (but unspecified) portion of the farm.
Andrew fell out with his parents and, in 2014, they made new wills which excluded Andrew from their estates entirely.
The following year, Andrew’s parents made an offer to Andrew to continue working on the farm under a farming business tenancy. Andrew felt he could not afford to accept the terms offered and left the farm that year.
Andrew brought a claim against his parents in 2017 for a share of the farm or a lump sum of equivalent market value.
The judge at first instance found in his favour and ordered Andrew’s parents to pay him a lump sum equivalent to 50% of the farming business and 40% of the value of the farm itself – the total being £1.3m. Andrew’s parents would need to sell the farm (where they lived as well as worked) in order to make this payment.
Andrew’s parents appealed to the Court of Appeal but were unsuccessful and they thereafter appealed to the Supreme Court.
The Supreme Court’s decision
The key issue for the court’s consideration was the appropriate remedy, and in particular:
- was the claimant’s expectation / understanding of what they had been promised the correct starting point?
- did the remedy granted to Andrew go beyond what was necessary in the circumstances?
Andrew’s parents argued that Andrew should only be compensated for the detriment of working for low pay on the farm for three decades.
On the parents’ case, their promise had been made on the basis Andrew would receive a share on their death in the future, and that he was therefore receiving an additional benefit by obtaining the money now.
The Supreme Court allowed the appeal in part, accepting that the remedy should reflect the benefit gained by receiving the sum much sooner than Andrew otherwise might have.
It was held that Andrew’s parents could choose to either hold the farm on trust for Andrew such that he would inherit either on their death or its sale. Alternatively, Andrew’s parents could pay him a discounted lump sum to reflect that he was essentially receiving his inheritance during their lifetime.
Guest v Guest demonstrates the creative approach the courts are prepared to take in dealing with proprietary estoppel claims.
The solution compensated Andrew whilst offering his parents an opportunity to stay in their home and continue with the family farming business during their own lifetimes.
Whilst this result perhaps provides claimants and defendants with little certainty as to quite how their case might be determined, it should hopefully encourage parties to reach a settlement through out of court negotiations.