Guest v Guest  UKSC 27 is a long-awaited judgment and the first time that the Supreme Court has considered proprietary estoppel and its appropriate remedies. It concerned a family farm, as is highly common in these types of claims, and provides useful analysis into a notoriously uncertain area of law.
The Appellants were David and Josephine Guest. They had owned several acres of farmland since 1992, known as Tump Farm, and managed a farm business on said land. The Respondent was their eldest son Andrew, who had diligently worked on the farm business full-time since he was a teenager, and he was provided with a wage and accommodation in return.
Andrew had left school at 16 years old and worked for 33 years on the family farm whilst being paid a wage below that of the minimum rate for agricultural workers.
As a result of his hard work, David and Josephine led Andrew to believe that he would inherit a share of the business on their deaths. This was made clear by them during several conversations, secretly recorded by Andrew, held on the assumption that he would one day own the land. David has also made a series of indirect statements over several years, amounting to a promise. These supported Andrew’s expectations that he would one day own Tump Farm.
Following a falling out over the running of the business, David and Josephine executed new wills that disinherited Andrew, and he was given notice to leave his accommodation on the land. In retaliation, Andrew brought a claim in proprietary estoppel over Tump Farm against them.
The First Instance Decision
First instance judge, HHJ Russen QC, found in favour of Andrew in the High Court as he had satisfied the elements of a successful proprietary estoppel claim. These are:
- There was clear and unequivocal evidence that the Appellants had given assurances over a substantial period of time that the Respondent would indeed inherit the land; and
- The Respondent had relied on these assurances to his detriment.
As a result, David and Josephine were ordered to make a payment of £1.3 million, which was made up of an immediate lump sum of 50% of the value of the business and 40% of the value of the land (after tax). This would be less the value of a notional life interest in the farmhouse situated on the land in favour of the David and Josephine. In order to make payment, it was inevitable that David and Josephine would have had to sell the farm, and with it the family business.
HHJ Russen QC aimed to try to assist a clean break for the parties. This would have to balance the need to compensate Andrew for his detriment as well as with his parents’ need to remain living in the farmhouse.
The Court of Appeal
David and Josephine appealed the first instance decision in the Court of Appeal in February 2020, based on the injustice that the judgment would have caused them to suffer. Their argument was that this would not be a proper remedy for proprietary estoppel, as Andrew would be receiving more than the value of what he was promised, that being advancing him a lump sum now rather than inheriting the land after their deaths. This appeal failed, with Floyd LJ, Newey LJ and Arnold LJ concurring that the decision and remedy should be upheld.
The Supreme Court Decision
David and Josephine made a further appeal in the Supreme Court on the basis that the appropriate remedy for proprietary estoppel should not accelerate the Andrew’s interest in the farm before their deaths. The issues for consideration surrounded the Andrew’s expectation of the promise made to him, and whether the remedy instructed by HHJ Russen QC went further than what was necessary in the circumstances.
On 18 October 2022, Lord Briggs, Lady Arden, Lord Leggatt, Lord Stephens and Lady Rose handed down judgment. A bare majority of the court (3:2) agreed that the appropriate remedies would be to:
- Either put 40% of the farm in trust, under which the parents had a life interest and the remainder was for Andrew; or
- Pay an immediate sum of money to Andrew calculated as 40% of the value of the farm, with a reduction to reflect the parents’ life interest.
David and Josephine were given a choice as to which remedy they would prefer, which is highly unusual.
This solution strikes a balance between the Andrews’ expectations, as well as ensuring that he was not placed in a better position than he would have been had he inherited on his parents’ deaths. Had David and Josephine been forced to sell the land to satisfy the remedy ordered by the trial judge, he likely would have received more than he would be due had he received his inheritance in due time.
Any remedy must be proportionate to the detriment. This can be difficult if the detriment is not easily identifiable, or contingent on several eventualities such as in this present case. This is complicated by the fact that monetary remedies are not always sufficient.
This is often often due to claimants in these types of cases making non-monetary sacrifices such as giving up their lives and other ambitions in order to work on the farm. This judgment highlights that proportionality appears to be less important where the detriment cannot be quantified, which will be of particular advantage to clients who have made such non-monetary personal sacrifices.
The Supreme Court rejected an approach in which the remedy would be based on compensation for detriment suffered, preferring instead one which was based on performance. The two dissenting judges, however, preferred an approach based on awarding the Respondent a sum of money for the detriment suffered as a result of him having worked on the farm in reliance on the promises made by the Appellants.
This judgment provides guidance to practitioners on the approach to be taken when pursuing a remedy for proprietary estoppel, particularly where there is a situation in which a claimant’s interest is accelerated and the defendant is still alive.
The Supreme Court considered at length the existing cases on proprietary estoppel remedies, which had never before been considered by the highest appellate court. The remedies conjured by the Supreme Court resolved the issue of the Appellants being forced to sell their family land and business in order to pay their son.
Ultimately, a remedy for proprietary estoppel will hinge on the facts of any case, and this case highlights just how difficult it can be to put a value on the detriment suffered by a claimant.
Nonetheless, the judgment provides further guidance as to the Court’s approach to proprietary estoppel claims to both practitioners and trial judges, and it could assist parties in reaching settlement before court proceedings are issued as they have a better understanding of what they stand to win (or lose) at trial.