This blog post was contributed by David Thomas, Teaching Fellow for Property law.
Guest v Guest [2022] UKSC 27
This blog concerns the important Supreme Court case of Guest v Guest, which has clarified the law relating to remedies in this developing area of law. The lead judgment is by Lord Briggs JSC; it is long, but provides a clear overview of the whole area, and would be a rewarding read for any student. The dissenting judgment is also clear and worth a read. Appeal judges are good at making their judgment appear to be the only possible outcome, whereas in fact of course almost any appeal court case might have gone either way; it is not often that the fact is demonstrated and the debate laid out in such a vivid fashion.
The elements needed for finding that there is a proprietary estoppel are reasonably well established now. Where a promise or assurance is made concerning property, and the promissee has relied upon that promise or assurance to their detriment, then when the promissor reneges on the promise in circumstances that render it unconscionable, an equity arises in favour of the promissee. The law has been less settled on the question of the appropriate remedy. There is no doubt that the remedy is flexible and will be shaped to fit the circumstances, but as Lord Briggs (with whose judgment Lady Arden and Lady Rose agreed) said, there has been in the last 25 years ’a fundamental divergence of view about which, as between satisfying [the promissee’s] expectation and compensating for the detriment, is or rather should be the true underlying aim of the remedy’ (para 5). The debate has been complicated, he said, by the well known dictum of Scarman LJ in Crabb v Arun District Council 919760 Ch 179 that the court’s remedy in that case was ‘the minimum equity to do justice.’
The broad outline of the facts in Guest v Guest is familiar in this area of law (c.f. Thorner v Major [2009] 1 WLR 1752 HL). A farmers’ son, David Guest, spent the best part of his working life on his parents’ farm, leaving school at 16 and working there for low wages for 33 years, living for most of that time with his wife in a cottage on the farm grounds. He received many assurances that he would inherit on his parents’ death. The facts differ from Thorner v Major in two significant respects; David has a brother and a sister, so the assurance was not that he will inherit the whole farm but that he will receive a sufficient part of it to enable him to operate a viable farming business; and the breach of the promise took place during their lives rather than on Andrew’s death. The parties fell out irrevocably in 2015. David was cut out from his parents’ wills and had to leave the farm and seek work elsewhere.
David brought a claim in proprietary estoppel. The judge found that there had been clear assurances, in reliance upon which David had acted to his detriment. The remedy he awarded was David’s expectation; he calculated the promised share (which was left unclear) at 50% of the farming business and 40% of the farm itself. A clean break was necessary, as the parties could no longer work together. The sums representing these proportions were to be paid to David, deducting tax and a notional life interest in the farm in favour of the parents.
David’s parents were given permission to appeal on the question of remedy alone. The Court of Appeal upheld the first instance judge, and the parents appealed again to the Supreme Court.
Part II of this blog available soon will consider the Supreme Court judgment in full.