On 19th October 2022, the Supreme Court handed down its long-awaited judgment in the matter of Guest and another v Guest [2022] UKSC 27. The case was ultimately decided by a 3-2 majority after an in-depth analysis of the legal principle of proprietary estoppel. Whilst the recent judgment provides a useful insight as to how the Courts approach proprietary estoppel cases, it also serves as a reminder that this is complex and uncertain area of the law.
Background
The case of Guest and another v Guest concerned a promise made by parents, David and Josephine Guest, to their son Andrew that he would one day inherit the family farm (known as Tump Farm). Unfortunately, due to a turn in the success of the farming partnership and subsequent break down in relations within the family, Andrew was asked by his parents to leave the farm and around the same time, they also changed their Wills to exclude Andrew (save for a right to occupy a cottage on Tump Farm, which was later also revoked). As a result, Andrew began legal proceedings in 2017 seeking a declaration of entitlement to a beneficial interest in Tump Farm under the principles of proprietary estoppel. He claimed that his parents had promised him he would inherit a substantial part of Tump Farm and, given that he had devoted his life to working on the farm for a low wage, he had relied on their promise to his detriment.
The case went through the High Court, Court of Appeal and Supreme Court and will have cost all parties a huge amount in both money and emotions. The appeal to the Supreme Court by the parents was allowed, although it was limited to the issue of remedy. The Supreme Court had to consider the correct “true underlying aim of the remedy” and was asked to decide:
1) whether a successful claimant’s expectation was an appropriate starting point when considering remedy; and…
2) whether the remedy granted in this case went beyond what was necessary.
The final decision of the Supreme Court, led by Lord Briggs in a three-two majority, was that Andrew should either be given a lump sum payment, but at a reduced amount to that granted in the High Court (in order to take into account the accelerated receipt) or an award, on appropriate terms, of Tump Farm being placed into a trust for Andrew, subject to a life interest in his parents favour. It has been left to David and Josephine to decide which course of action to take.
The impact of Guest and another v Guest
The judgment in this case provides helpful commentary on how to fashion a suitable remedy in proprietary estoppel cases. However, it also widens the remit of such disputes by evidencing that a claimant can bring a successful proprietary estoppel claim within the defendant’s lifetime. Whilst perhaps seeking to operate in the interests of fairness, it could now be considered that this doctrine further limits the testamentary freedom afforded to testators in England and Wales. As cases under the Inheritance (Provision for Family and Dependants) Act 1975 continue to rise, it begs the question as to whether we are headed in the same direction as the many countries who operate the law of forced heirship.
Whilst there may be many differing opinions on the final judgment in Guest and others v Guest, what cannot be denied is that individuals should exercise great caution when making promises of this nature, particularly given the level of discretion afforded to the Courts.
The future of proprietary estoppel cases
At the time of writing this article, we await the decision of the High Court case concerning David Gladstone and Leigh White in respect of certain promises made over Wotton House. Miss White, previously a family friend of Mr Gladstone, claims that Mr Gladstone promised her that she would inherit Wotton House on his death. The case again is brought during the lifetime of the promisor rather than the dispute arising on death. The dispute is of considerable value, with Wotton House estimated to be worth £15 million and an additional two properties (which were also purportedly promised to Miss White) worth an estimated £5 million.
Within Guest and another v Guest, Lord Briggs said the following of proprietary estoppel claims generally “The aim remains what is has always been, namely the prevention or undoing of unconscionable conduct”. It was on this basis that the Supreme Court arrived at the remedy options provided to Andrew’s parents. Accordingly, if Miss White is able to prove that she relied on Mr Gladstone’s promises to her detriment, we would expect to see a similar remedy granted to that set out in Guest and another v Guest. However, the Supreme Court were keen to emphasise that any remedy should not be disproportionate to the detriment suffered by the claimant. Whilst Guest and another v Guest can be considered to be a somewhat claimant-friendly judgment, future claimants will need to bear in mind that the concept of “unconscionability” does not outweigh or diminish the need to evidence detriment.
It seems certain that proprietary estoppel cases will rise as those who have acted to their detriment start to take advice when they first begin to suspect they may lose what they believe is theirs. However as Guest and another v Guest highlights the importance of considering such claims on a case-by-case basis and the relevance of case-specific facts, it may serve as a source of encouragement for parties to settle outside of Court. Those who do proceed to trial must do so with the knowledge that the Court have a high level of discretion to prevent or undo what may be seen as unconscionable conduct and the outcome will be far from certain.
Guest and another v Guest reminds us of the importance of seeking specialist legal advice (especially in relation to informal family agreements) at an early stage in order to avoid potential future disputes.
Written by Caroline Miller (Partner) and Helena Taylor (Solicitor) from Wedlake Bell LLP.
