Lunchtime Briefing: Guest v Guest (2022) UKSC 27

Reference

Court: Supreme Court

Date: 19 October 2022

Facts

No more guessing on the principles governing the identification of appropriate relief to satisfy the equity of proprietary estoppel once established. The judgment of Guest v Guest [2022] UKSC 27 has been published.

Practice Area: Trusts, Wills & Estates

Read the Judgment

Appeal from [2020] EWCA Civ 387

• Appellants: David George Guest and Josephine Guest (the parents)
• Respondent: Andrew Charles Guest (the son)

The appeal is allowed to a limited extent.

• 108 pages
• 282 paragraphs
• I’ve read it so you don’t have to

Conclusions

Lord Briggs, with whom Lady Rose and Lady Arden agreed, gave the lead judgment, rejecting the parents’ argument that the trial judge was wrong to adopt an approach based on Andrew’s expected inheritance. However, the appeal was allowed in part, with the following alternative remedies:

• Placing the farm into trust for the children with a life interest to the parents.
• Paying equitable compensation, with a deduction for accelerated receipt.

The choice was left to the parents, and if they did not choose, the matter would be remitted to the Chancery Division for determination.

Background

“One day my son, all this will be yours.” Spoken by a farmer to his son during his teens and repeated for many years. Relying on that promise, Andrew worked on the farm for low wages, expecting to inherit it.

• In May 2014, his parents removed Andrew’s inheritance from their wills.
• In April 2015, after Andrew refused to negotiate a tenancy at a discounted rent, his parents dissolved the farming partnership and gave him notice to quit.
• Andrew sued, claiming entitlement to a share in the farm or its monetary equivalent due to proprietary estoppel.

The trial judge ordered the parents to pay £1.3 million to Andrew, calculated as:

• 50% of the dairy farming business
• 40% of the freehold land and buildings

The Court of Appeal upheld this decision, leading the parents to appeal to the Supreme Court.

Interesting Points

• Lord Briggs discusses a spectrum between expectation and detriment as a basis for relief, placing Guest v Guest at the expectation end.
• Pascoe v Turner [1979] is referenced regarding the principle of “minimum equity to do justice,” but Lord Briggs argues “minimum” does not mean cheapest.
• The ruling rejects compensating for detriment alone and instead focuses on remedying unconscionability by satisfying expectation.

Seven-Stage Test for Proprietary Estoppel (Lord Briggs)

1. Determine whether going back on the promise is unconscionable.
2. Assume the simplest remedy is to enforce the promise.
3. Allow monetary equivalent if specific enforcement is impractical.
4. Limit remedy if it is out of proportion to the detriment.
5. Do not seek to compensate precisely for the detriment.
6. Discount for accelerated receipt if the remedy involves a future promised benefit.
7. Consider if the proposed remedy does justice in the circumstances.