Andrew Guest worked on his parents’ farm for over 30 years at low wages, relying on promises he would inherit a share. After a family falling-out, his parents disinherited him. The Supreme Court considered the correct principles for remedying proprietary estoppel, holding the aim is to prevent unconscionability, starting from the claimant’s expectation but subject to proportionality and practical adjustments.
Background
Andrew Guest, the eldest son of David and Josephine Guest, worked full-time on Tump Farm near Chepstow from 1982, when he left school aged 16, until 2015. Over many years, his father assured him that he would inherit a sufficient share of the farm to carry on a viable farming business after his parents’ deaths. Andrew relied on these assurances, accepting low wages and forgoing alternative career opportunities. His brother Ross also worked on the farm and had similar, though distinct, expectations of inheritance.
In 2012, separate farming partnerships were created for Andrew and Ross. Relations between Andrew and his father subsequently broke down, principally over disagreements about the direction of the business and control of it. In 2014 the parents made new wills cutting Andrew out, and in 2015 they dissolved their partnership with Andrew and gave him notice to quit Granary Cottage. Andrew left the farm with his family, found alternative employment as a senior herdsman, and brought proceedings based on proprietary estoppel.
At trial, HHJ Russen QC found all elements of proprietary estoppel established. He ordered the parents to make an immediate lump sum payment to Andrew comprising 50% of the farming business and 40% of the freehold land and buildings (after tax), reduced only by crediting a life interest in the farmhouse to the parents. On expert valuations, the pre-tax award was approximately £1.3 million. The Court of Appeal upheld the judge’s order. The parents appealed to the Supreme Court.
The Issue(s)
The principal issues before the Supreme Court were:
1. The proper aim of the remedy for proprietary estoppel
Should the court’s remedy aim to fulfil the claimant’s expectation (i.e. enforce the promise), compensate for detrimental reliance, or pursue some other objective? This was described as the resolution of the ‘lively controversy’ first identified by Lewison LJ in Davies v Davies [2016] EWCA Civ 463.
2. The correct approach where the promise is of a future inheritance and the promisor is still alive
In particular, whether the judge’s order was flawed by failing to discount for the acceleration of Andrew’s interest—giving him immediately what was only promised upon his parents’ deaths—and by failing adequately to protect the parents’ continuing needs and interests.
The Court’s Reasoning
Lord Briggs (with whom Lady Arden and Lady Rose agreed)
Lord Briggs conducted an extensive review of the authorities from the 19th century onwards, concluding that for over 150 years, the courts of equity had approached proprietary estoppel remedies by seeking, prima facie, to hold the promisor to his promise. The remedy was aimed at preventing or undoing the unconscionability constituted by the promisor’s repudiation of the promise, not at compensating for the detriment per se. He stated:
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. It is wrong to treat the unconscionability question as limited to the issue whether or not an equity arises, and then to leave it out of account when framing the remedy.
Lord Briggs firmly rejected the detriment-based theory of the remedy:
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.
He accepted, however, that proportionality between the remedy and the detriment serves as a useful cross-check against injustice, adopting Robert Walker LJ’s formulation from Jennings v Rice [2003] 1 P&CR 8 that the question is whether the proposed remedy is ‘out of all proportion to the detriment’. He emphasised that this is not to be applied by detailed mathematical calculation.
Lord Briggs set out a structured remedial approach. First, the court determines whether the repudiation is unconscionable at all. Second, the remedy normally starts from the assumption that the simplest way to address the unconscionability is to hold the promisor to his promise. But the court must listen to reasons why something less than full enforcement would negate the unconscionability—such as the need for a clean break, the early receipt problem, or the interests of third parties. The burden is on the promisor to demonstrate that full enforcement would be disproportionate to the detriment. Proportionality is a cross-check, not the governing principle.
Applying these principles, Lord Briggs held that the judge had erred in one material respect: the order gave Andrew more than his expectation because it gave him an immediate share without adequate discount for early receipt. Andrew had been promised an inheritance, not an immediate transfer during his parents’ lifetime. There was no general discount for acceleration beyond the notional life interest in the farmhouse. Lord Briggs stated:
While there may have been a debate about whether the aim of the remedy is detriment or expectation-based, there has never been any doubt that there is no equity to give a claimant more than his promised expectation, either in terms of simple amount or accelerated receipt.
Lord Briggs proposed that the parents should be given a choice between two alternative remedies: (a) a trust of the farm under which Andrew receives a reversionary interest (40% of the land and 50% of the business) falling into possession on his parents’ deaths, with the parents retaining a life interest; or (b) an immediate financial settlement, but with a proper discount for acceleration—specifically, a notional life interest of the parents in the whole farm (not merely the farmhouse) must be deducted.
Lord Leggatt (with whom Lord Stephens agreed)
Lord Leggatt agreed in the result that the appeal should be allowed and the judge’s order set aside, but differed significantly from Lord Briggs on the underlying principles. Lord Leggatt’s analysis emphasised that the ‘basal purpose’ of the equitable doctrine—drawing on Dixon J in Grundt v Great Boulder Pty Gold Mines Ltd (1938) 59 CLR 641—is to prevent detriment to the claimant arising from their change of position in reliance on the promise. He stated:
The equity is to be protected from detriment that B will suffer if the promise is not kept. By making a promise on which, although it is not legally enforceable, B has reasonably relied, A comes under a responsibility to ensure that B’s change of position does not operate as a detriment to B.
Lord Leggatt rejected the characterisation of proprietary estoppel as a mechanism for enforcing informal promises. He emphasised that detrimental reliance cannot make a non-binding promise legally enforceable, particularly where statutory formality requirements apply. He argued for what he termed a ‘property expectation claim’, shedding the label ‘estoppel’. In his view, the remedy should be the minimum necessary to prevent detriment, with two alternative methods: fulfilling the expectation or compensating the reliance loss. Where both are practicable, the court should adopt whichever imposes the lesser burden on the defendant.
On the facts, Lord Leggatt considered that since Andrew could never return to Tump Farm, his expectation could not be fulfilled even approximately. The only practicable remedy was monetary compensation for reliance loss. He assessed this at £610,000, comprising estimated lost earnings of approximately £267,748 plus compound interest of approximately £342,162, calculated in a detailed appendix.
Practical Significance
The Supreme Court has, for the first time, provided authoritative guidance on the proper approach to remedies in proprietary estoppel claims. While the Justices differed in their underlying reasoning, the following points of practical significance emerge:
- Rejection of a purely detriment-based approach: Lord Briggs (majority) firmly held that the aim of the remedy is not to compensate for detriment but to remedy the unconscionability of the promisor’s repudiation. The expectation generated by the promise is the normal starting point for fashioning a remedy.
- Proportionality as a cross-check: Proportionality between the remedy and the detriment remains relevant, but only as a safeguard against injustice, not as the governing principle. The burden lies on the promisor to show disproportionality.
- Discount for early receipt: Where the promise is of a future inheritance and the remedy is sought during the promisor’s lifetime, a proper discount for acceleration is essential. A court cannot simply award the full value of the expectation interest early without adjustment.
- Clean break vs. reversionary interest: The court recognised that where a clean break is needed, the choice between a discounted lump sum and a reversionary interest under a trust may be appropriate. In this case, the parents were given the choice between the two.
- Limits of judicial discretion: The case emphasises the need for judges to give clear reasons for the remedy chosen, to show their workings, and to enable appellate review. The wide discretion inherent in equitable remedies must be exercised in a principled, transparent way.
Verdict: The appeal was allowed in part. The Supreme Court held that the judge’s order was flawed because it failed to make an adequate discount for the acceleration of Andrew’s interest. The majority (Lord Briggs, Lady Arden, Lady Rose) ordered that the parents be given a choice between two alternative remedies: (1) a trust under which Andrew receives a reversionary interest in 50% of the farming business and 40% of Tump Farm, with the parents retaining a life interest in the whole farm; or (2) an immediate financial settlement calculated on the same basis but with a proper discount for accelerated receipt, reflecting a notional life interest of the parents in the entire farm (not merely the farmhouse). If figures cannot be agreed, the matter is to be remitted to the Chancery Division. Lord Leggatt and Lord Stephens would instead have substituted a lump sum award of £610,000 based on compensation for Andrew’s reliance loss.
