Introduction
The judgment of the UK Supreme Court in Guest v Guest ([2022] UKSC 27) provides an authoritative review of the fundamental aims of proprietary estoppel and the principles governing equitable relief. The majority judgment was given by Lord Briggs (with whom Lady Arden and Lady Rose agreed).
This blog post provides a description of the facts and of the outcome. The next blog post looks at the account of the fundamental principles concerning equitable relief and the structured approach proposed by the majority of the Supreme Court.
Facts
A father (David) owned Trump Farm (‘the farm’) and promised one of his sons (Andrew) that on the death of his parents, Andrew would inherit enough of the farming business, and of the farm where the business was carried on, to establish a viable farming business. In response, Andrew worked for many years for low pay on the farm and did not pursue any alternative career opportunities.
Andrew and David fell out and David made it clear that Andrew would not receive the promised inheritance. Andrew brought proceedings in proprietary estoppel. The claim succeeded but there was disagreement as to the approach to be taken to the relief to be awarded.
At first instance and in the Court of Appeal, Andrew was held to be entitled to a monetary payment equivalent to 50% of the market value of the farming business and 40% of the market value of the farm. This sum was to be reduced by the value of the parents’ entitlement to a life interest in the farmhouse (see [88] in the Supreme Court judgment).
The problems with this were that the order would probably require the parents to sell the farm during their lifetimes and it meant that Andrew would enjoy accelerated receipt of the sum, in effect giving him more than his expectation.
The Supreme Court therefore gave the parents an option either:
- The creation of a trust over the farm and business under which the parents were to have a life interest with Andrew to be entitled to 50% of the farming business and 40% of the farm only on their death, thus overcoming the accelerated receipt problem. Andrew would not be entitled to compensation for being off the farm in the meantime ([101] – [102]); or
- The original first instance award but with a sufficient discount for early receipt built in ([103]). The first instance approach of reducing the award by the value of a notional life interest in the farmhouse could be taken as the discount if the parents agreed. This would avoid the costs of a further dispute over the discount ([105}).
It was appropriate to allow David to make the choice since:
‘Either remedy if afforded to Andrew would draw the sting of unconscionability from the outright repudiation of their promises to him. Since the aim of the remedy is to prevent or remove unconscionability, then where there are two different ways of doing so the persons against whom the equity is asserted should in principle be the ones to make that choice.’ (104)
Conclusion
This post describes the facts and the outcome in Guest. Its importance lies in its approach to the roles of expectation, detriment and other factors in the design of equitable relief. The next blog post looks at what the majority judgment had to say about these fundamental issues.
Michael Lower