Guest & Anor v Guest [2022] UKSC 27

A son worked on his parents' farm for over 30 years at low wages, relying on promises that he would inherit a substantial share. After a family breakdown, he was disinherited and brought a proprietary estoppel claim. The Supreme Court clarified that the remedy aims to prevent detriment from reliance on informal promises, not to enforce non-binding promises.

Facts

Andrew Guest worked full-time on his parents’ farm, Tump Farm, from 1982 until 2015. Throughout this period, his father David repeatedly assured him that he would inherit a substantial share of the farm upon his parents’ deaths. Andrew worked for low wages and lived in a cottage on the farm with his family, relying on these promises of succession. In 2014, relations between Andrew and his parents broke down. The parents made new wills disinheriting Andrew, dissolved their farming partnership with him, and gave him notice to quit the cottage. Andrew brought a claim based on proprietary estoppel.

Issues

The central issues before the Supreme Court were: (1) what principles should guide the grant of a remedy in proprietary estoppel cases; (2) whether the aim of the remedy is to satisfy the claimant’s expectation or to compensate for detrimental reliance; and (3) what the appropriate approach should be where the promise concerns a future inheritance and is revoked before the promisor’s death.

Judgment

The Supreme Court allowed the appeal in part, holding that the trial judge had erred in failing to make adequate allowance for the acceleration of Andrew’s expected inheritance. Lord Briggs, delivering the lead judgment, rejected the theory that the aim of proprietary estoppel remedies is detriment-based compensation:

“In my view therefore this court should firmly reject the theory that the aim of the remedy for proprietary estoppel is detriment-based forms any part of the law of England.”

Lord Briggs explained that the true purpose of the remedy is to address unconscionability:

“The true purpose, as recognised by the Court of Appeal in the present case, is dealing with the unconscionability constituted by the promisor repudiating his promise.”

The court held that while fulfilment of expectation is typically the starting point, proportionality must be considered:

“In my view the best summary of the proportionality test is that the remedy should not, without some good reason, be out of all proportion to the detriment, if that can readily be identified.”

Lord Leggatt, in a concurring judgment with which Lord Stephens agreed, emphasised that the basal purpose of the doctrine is to prevent detriment to the claimant who has relied on the promise. He proposed awarding compensation calculated to put Andrew in the position he would have been in had he not relied on the promises, estimating this at £610,000.

The Court’s Approach to Remedy

Lord Briggs held that the judge’s order gave Andrew more than he was promised by accelerating the benefit without adequate discount. He concluded that the parents should be entitled to choose between two alternative remedies: either a reversionary interest for Andrew under a trust of the farm with the parents having a life interest, or a discounted monetary equivalent reflecting acceleration.

Implications

This decision provides significant clarification of proprietary estoppel principles. The Supreme Court confirmed that: (1) the doctrine does not exist to enforce non-binding promises but to prevent unconscionability; (2) fulfilment of expectation is normally the starting point, subject to proportionality; (3) where promises of future inheritance are revoked during the promisor’s lifetime, proper allowance must be made for acceleration and contingencies; and (4) the court must do justice to both parties, not just the claimant. The case represents the most authoritative statement of proprietary estoppel principles in English law and will guide future farming succession and domestic promise cases.

Verdict: Appeal allowed in part. The Supreme Court held that the trial judge’s order was flawed for failing to make adequate allowance for acceleration of Andrew’s expected inheritance. The parents were given a choice between providing Andrew with a reversionary interest under a trust (with life interest to the parents) or a discounted monetary payment reflecting the acceleration involved.

Source: Guest & Anor v Guest [2022] UKSC 27